In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write the index where the answer starts. If multiple answers seem to exist, write the index of the answer that is the most plausible. If multiple indices must be used to answer the question, the output should be a common separated list of indices.
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Question: VIRTUAL ITEM PROCESSING SYSTEMS, INC. 2525 Northwest Expressway, #105   Oklahoma City, Oklahoma 73112

OUTSOURCING AGREEMENT   BETWEEN   VIRTUAL ITEM PROCESSING SYSTEMS, INC.   And   BROKERS NATIONAL LIFE ASSURANCE COMPANY

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OUTSOURCING AGREEMENT   This Outsourcing Agreement ( Agreement) is executed as of this 1 st  day of May 2006, by and between Virtual Item Processing Systems, Inc. (VIP), with its principal place of office at 2525 NW Expressway, Suite 105 Oklahoma City,  Oklahoma 73112, and Brokers National Life Assurance Company (BNL), with its principal place of office at 7010 Hwy. 71 W., Suite 100, Austin, Texas 78735.   WHEREAS, VIP is engaged in the business of providing Electronic Data Processing services (EDP Services) and related consultation and services to insurance companies pursuant to computer software systems developed and owned by VIP , (the VIP System);   WHEREAS, BNL is an insurance company domiciled in the State of Arkansas and licensed to do business in numerous additional states; and   WHEREAS, VIP desires to provide EDP Services to BNL; and   WHEREAS, BNL desires to obtain EDP services from VIP for the processing and administration of its insurance policies;   NOW, THEREFORE, in consideration of the above premises and in consideration of other good and valuable consideration, the receipt and sufficiency is hereby acknowledged, the parties agree as follows:   1. PURCHASE OF EQUIPMENT.  BNL at its expense shall obtain, install, maintain and upgrade as necessary any and all hardware, software, data and telephone lines, other communications equipment and any other equipment (hereinafter collectively referred to as the Equipment) which it determines is necessary to allow it to use and access the VIP System pursuant to the terms of this Agreement. Such Equipment shall be fully compatible with the VIP System. VIP will provide BNL such information as is reasonably necessary to allow BNL to acquire all such Equipment which meets the requirements of this paragraph. If requested by BNL and at BNL's expense, VIP shall inspect all such Equipment and acknowledge its compatibility in writing prior to its use with the VIP System.   2. VIP's EQUIPMENT AND SERVICES.   A. During the term of this Agreement, VIP shall provide BNL such access as necessary to the VIP System to allow BNL to attach one data communication line and up to seventy (70) addressable data communications devices to said VIP System. Should BNL desire to attach additional communication lines or additional communication devices to the VIP System, BNL shall pay to VIP the additional fees set forth in paragraph 5(F) of this Agreement.   B. VIP, at its sole discretion and expense, may, but is not obligated to, make appropriate enhancements to the VIP System. Any such enhancements shall be deemed to be included in the EDP Services and VIP System to be provided to BNL, whether developed by VIP before or during the time when services are to be provided by VIP pursuant to this Agreement. During the term of this Agreement, VIP shall be responsible at its expense for the proper maintenance and documentation of the VIP System.     3 .SCHEDULED AND UNSCHEDULED DOWN TIME. BNL acknowledges that there will be scheduled downtime for the routine preventive maintenance of VIP's System performed by either VIP or its vendors. VIP shall give BNL reasonable advance notice of all such scheduled downtime. BNL further acknowledges that there will also be unscheduled down-time that might occur as a result of electrical power failures and equipment failures and other acts outside of the control of VIP as contemplated in paragraph 16(J). In the event that any such down-time extends for more than two (2) consecutive working days, VIP, at its expense, will make available to BNL access to a backup facility designated by VIP for the continued processing of BNL's business. To ensure that a backup facility will be available in

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  case of such a failure, VIP will maintain disaster and/or business interruption insurance adequate to establish alternate site processing, as provided for in paragraph 12(A) of this Agreement.   4. INCLUDED SERVICES IN THE VIP SYSTEM. It is agreed and understood by BNL that:   A. It has reviewed and inspected the VIP System existing as of the Effective Date of this Agreement, which VIP System includes (i) a New Business System, (ii) a Policy Administration System, (iii) an Agency Administration System, (iv) a Financial  Administration System. (v) a Claims System, (vi) a Vendor Provider System, (vii) a Transaction Tracking System and (viii) a Mail Tracking System;   B. Such VIP System as identified in paragraph 4(A) is adequate to meet the needs of BNL;   C. VIP shall provide EDP Services to BNL for such Initial Policies and policies identical thereto and renewals thereof by the use of such VIP System existing as of the Effective Date of this Agreement, except as such VIP System may be modified from time to time by VIP , at the discretion of VIP;   D. BNL has reviewed the security system (Security System) included in the VIP System existing as of the Effective Date of this Agreement;   E. BNL acknowledges and agrees that such Security System is adequate to protect the confidential information and data of BNL processed by the VIP System;   F. BNL, throughout the term of this Agreement, shall be solely responsible for choosing, implementing and utilizing any or all of such of the security measures and protections offered by said Security System for the use of or access to the VIP System by any of its officers, directors, shareholders, employees and agents;   G. VIP shall not have any duty to either monitor or enforce such security measures and protections chosen, implemented or utilized by BNL; H.

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BNL shall be solely responsible for any acts or omissions of any of its officers, directors, shareholders, employees and agents;   I. Notwithstanding anything to the contrary in this Agreement, VIP at any time during the term of this Agreement may change the platform upon which the VIP System is operated and through which the EDP Services are provided to BNL by VIP under this Agreement. Before VIP shall make such platform change VIP shall give BNL prior reasonable written notice of such change, and VIP's warranties under this Agreement shall continue notwithstanding such change and VIP agrees to pay any cost created for or imposed on BNL for equipment, training or similar matters arising from such change.   5. PAYMENTS TO VIP.     A. For EDP Services provided pursuant to this Agreement, BNL will pay to VIP the charges set forth in the Payment Schedule attached hereto as Schedule B: provided however and notwithstanding anything to the contrary herein. The minimum monthly fee shall not be less than five thousand dollars ($5,000) per month (as applicable, Minimum Fee).     B. For any additional VIP Services provided hereunder, BNL will pay to VIP the charges set charges set forth in the Payment Schedule attached hereto as Schedule A.     C. The fees due hereunder are subject to the following provisions:   1. The fee for each new policy submitted into the VIP System is set forth in Schedule B.   2. VIP will process all policies that have thirteen (13) or more months expired from their original policy date at the annual rates set forth in Schedule B. with a separate fee for each renewal base policy and each rider, for each plan, prorated to the actual number of months each policy is represented to be in force on the VIP System. Such representation of policy status includes the grace period and Late payment offer that each policy may enjoy and in which case exceeds a time frame not bound by each policy's actual paid for period. The payment amount for each group of policies in a rate category will be calculated by determining the actual number of policies and riders in force that are included in the rate category, as set forth in Schedule B at the end of each calendar month and then multiplying the number of policies by the base policy renewal amount and the number of riders by the rider renewal amount then adding the totals together and dividing the resulting amount by twelve (12). The amounts calculated for all rate categories are added together and this amount is the fee payable in advance at the beginning of the month.   3. VIP shall not be obligated to process any amended policies or new products that

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are written or acquired by BNL unless and until the parties hereto have mutually executed a written addendum to this Agreement modifying Schedule B to include the fees for any such products.     D. Any sum due VIP hereunder for which a time for payment is not otherwise specified will be due and payable within ten (10) days after the date of the postmark for an invoice therefor from VIP. If BNL fails to pay any amount due within ten (10) days from the date of the postmark for the invoice, late charges of 1-1/2% per month, or the maximum amount allowable by law, whichever is less, shall also become payable by BNL to VIP.     E. In addition to the communication line and devices which BNL is authorized to attach to the VIP System pursuant to paragraph 2 of this Agreement, BNL may, for the monthly fee(s) hereinafter set forth, attach additional communication lines or the following devices to the VIP System. The monthly fee(s) for such additional lines) or devices is as follows:   1. each communication line and adapter $200,   2. each visual station whether CRT, PC or similar device $25, 3. each addressable printer under 299 lines per minute (LPM) $25   4. each addressable printer over 299 LPM $150.   F. There are certain other expenses which are directly related to VIP's performance of this Agreement that are directly billable by VIP and payable by BNL. The purpose and intent of this provision is not to describe all contemplated charges covered by this provision, but rather to identify some of the charges that may fall into this category . Such charges include but are not limited to the following:     1. Cost of all business forms, continuous or non-continuous used by BNL;     2. All telephone calls initiated on behalf of BNL business and operations;   3. All travel, food and lodging expenses incurred by VIP personnel related to the performance of this Agreement, subject to BNL's prior written approval;   4. All postage and shipping expenses for materials used by BNL;   5. All expenses incurred for computer output micro-film COM which is contracted by VIP with a service bureau independent of VIP , subject to BNL' s prior written approval;   6. Any other charges directly related to BNL ' use or benefit of the VIP System pursuant to this Agreement is subject to BNL ' prior written approval.   G. All sums due under this Agreement are payable in U.S. dollars.   6. PROPRIETARY AND RELATED RIGHTS.

A. CLIENT DATA. Any original documents or files provided to VIP hereunder by BNL (BNL Data) are and shall remain BNL's property and, upon the termination of this Agreement for any reason, such BNL Data will be returned to BNL by VIP, subject to

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the terms hereof. Subject to paragraphs 4(F) and (G), VIP agrees to make the same effort to safeguard such BNL Data as it does in protecting its own proprietary information. BNL Data will not be utilized by VIP for any purpose other than those purposes related to rendering EDP Services to BNL under this Agreement, nor will BNL Data or any part thereof be disclosed to third parties by VIP , its employees or agents except for purposes related to VIP's rendering ofEDP Services to BNL under this Agreement or as required by law, regulation, or  order of a court or regulatory agency or other authority having jurisdiction thereover. Notwithstanding the foregoing, VIP shall have the right to retain in its possession all work papers and files prepared by it in performance of EDP Services hereunder which may include necessary copies of BNL Data. VIP shall have access to BNL Data, at reasonable times, during the term of this Agreement and thereafter for purposes related to VIP's 'rendering of EDP Services to BNL pursuant to this Agreement, or as required by law, regulation or order of a  court or regulatory agency or other authority having jurisdiction thereover. Notwithstanding the foregoing, the confidentiality obligations set forth in this paragraph will not apply to any information which (i) is or becomes publicly available without breach of this Agreement, (ii) is independently developed by VIP outside the scope of this Agreement and without reference to the confidential information received under this Agreement, or (iii) is rightfully obtained by VIP from third parties which are not obligated to protect its confidentiality.   7. TERMINATION FOR CAUSE. This Agreement may be terminated by the non- breaching party upon any of the following events:   A. In the event that BNL fails to pay any sums of money due to VIP hereunder and does not cure such default within thirty (30) days after receipt of written notice of such nonpayment from VIP , provided that if BNL notifies VIP in writing that BNL disputes a billing and BNL pays any undisputed portion of such billing VIP shall not institute formal proceedings by arbitration or judicial review or terminate this Agreement with respect to such disputed billing until after VIP has afforded BNL an opportunity for a meeting to discuss such dispute.   B. In the event that a party hereto breaches any of the material terms, covenants or conditions of this Agreement (other than a breach under paragraph (A) above) and fails to cure the same within thirty (30) days after receipt of written notice of such breach from the non-breaching party.   C. In the event that a party hereto becomes or is declared insolvent or bankrupt, is the subject of any proceedings relating to its liquidation, insolvency or for the appointment of a receiver or similar officer for it, makes an assignment for the benefit of all or substantially all of its creditors, or enters into an agreement for the composition, extension, or readjustment of all or substantially all of its obligations or admits of its general inability to pay its debts as they become due.   D. In the event of termination under this section, VIP will give BNL, at its request and

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direction, such copies of BNL data maintained on the VIIP system in a format and in a manner as designated by BNL. BNL shall pay a fee to VIP for preparing such data. Such fee shall be $100 per hour for programming time and $150 per hour computer processing time.   8. INDEMNIFICATION.   A. BNL agrees to indemnify, defend and hold VIP and its officers, directors, stockholders, employees, agents and representatives harmless from any and all claims, actions, damages, liabilities, costs and expenses reasonable attorneys' fees and expenses arising out of or relating to (i) any acts or omissions of BNL pertaining to the EDP Services, including without limitation any breach of this Agreement by BNL or (ii) any information provided by or on behalf of, or any instruction, approval or decision by, BNL pertaining to the EDP Services relied upon by VIP .   B. VIP shall indemnify, defend and hold BNL and its officers, directors, stockholders, employees, agents and representatives harmless from any and all claims, actions, damages, liabilities, costs and expenses, including reasonable attorneys' fees and expenses, arising out of any third party claims of infringement of any United States patents, or a trade secret, or any copyright, trademark, service mark, trade name or similar proprietary rights alleged to have occurred related to VIP's providing of EDP Services pursuant to this Agreement or relating to the VIP System used in providing such EDP Services.   C. Subject to the limitations set forth in paragraphs 9(E), 9(F) and 9(G) of this Agreement and not including the claims covered by paragraph 8(B) of this Agreement, VIP shall indemnify, defend and hold BNL and its officers, directors, stockholders, employees, agents and representatives harmless from any and all claims, actions, damages, liabilities, costs and expenses, including reasonable attorneys' fees and expenses, arising out of or relating to (i) any acts or omissions of VIP pertaining to the EDP Services, including without limitation any breach of this Agreement by VIP , or (ii) any information provided by or on behalf of, or any instruction, approval or decision by, VIP pertaining to the EDP Services relied upon by BNL.   D. The provisions of this paragraph 8 shall survive the termination of this Agreement.   9. VIP REPRESENTATIONS AND WARRANTIES: DISCLAIMER: LIMITATIONS.  In  addition to the other obligations of VIP under this Agreement VIP represents, warrants and covenants to BNL both at the execution of this Agreement and at all times during the term of this Agreement that:   A. VIP is and will remain duly organized and validly existing as an Oklahoma corporation (or another state) authorized to engage in the business of providing EDP Services to its customers;

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B. VIP is not a party to or otherwise subject to any note, debenture, shareholder agreement or other contractual arrangement, Order, Judgment Decree or Adjudication which prohibits any act or conduct of VIP contemplated by this Agreement or which would cause VIP to be in violation of or default respect thereto;   C. VIP owns all necessary rights and interests in and to the VIP System and related programs to fulfill its obligations under this Agreement. The VIP System does not infringe on any United States patent or any trade secret, copyright, trademark, service mark, trade name or similar third party proprietary right; and   D. VIP warrants that all EDP Services shall be performed in a prompt and workmanlike manner. Furthermore, the VIP System contains no programming condition which will limit the VIP System's use after a period of time elapses (such as a fixed calendar limit) and thus thereafter prevent BNL ' s use of the VIP System without further maintenance.   E. Except as set forth in paragraphs 9(a) through 9(d) inclusive of this agreement, with respect to its EDP services or other work provided under this agreement, VIP makes no warranties, express or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose except as set forth in paragraphs 9(a) through 9(d) inclusive of this agreement, VIP does not warrant that the services shall meet BNL's requirements or that the services shall be uninterrupted or error-free.   F. Limitation of liability. VIP shall have no liability with respect to its obligations under this agreement or otherwise for consequential, exemplary, special, indirect, incidental or punitive damages even if it has been advised of the possibility of such damages in any event, other than claims covered by paragraph 8(b) or paragraph 6(a) of this agreement (which claims are excluded from this paragraph 9(f) limitation), the liability of VIP to BNL for any reason and upon any cause of action or claim in contract, tort or otherwise shall be limited to the amount paid by BNL to VIP in the twelve (12) month period prior to the accrual of the action or claim for the specific service which is the subject of the action or claim (or, if such accrual occurs during the first twelve (12) months of the initial term, then the liability shall be limited to the minimum fees payable by BNL to VIP during the first twelve (12) months of the initial term). except for the claims excluded by the preceding sentence, this limitation applies to all causes of action or claims in the aggregate including without limitation breach of contract, breach of warranty, negligence, strict liability, misrepresentation and other torts. BNL and VIP acknowledge and agree that the limitations and exclusions contained herein represent the parties' agreement as to the allocation of risk between the parties in connection with VIP's obligations under this agreement. the payments payable to VIP in connection herewith reflect this allocation of risk and the exclusion of consequential damages in this agreement.   G. Notwithstanding anything to the contrary in this Agreement, VIP shall not be liable in

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any manner to BNL for any costs, expenses, injury or damages of any kind or nature which are caused by any of the following:   1. The failure of computer hardware which are not covered by the standard warranties and indemnification's of such manufacturers;   2. Software designated and supplied by the computer hardware supplier; or by software designed and implemented by other parties at BNL' request for which the integrity of said software is BNL' sole responsibility;   3. Erroneous data input or otherwise provided by BNL and/or failure of BNL to monitor and for the failure of BNL to respond to the auditing controls of the system;   4. A breach by BNL of any of the terms, covenants, representations or conditions of this Agreement;   5. The failure by BNL to report to VIP in writing an error within a reasonable time after BNL discovers or reasonably should have discovered such error.   10. COVENANTS AND REPRESENTATIONS OF BNL.  In addition to the other obligations of BNL under this Agreement BNL covenants and warrants to VIP both at the execution of this Agreement and at all times during the term of this Agreement that:   A. It is and will remain a duly organized and validly existing corporation and insurance company under the laws of the State of Arkansas (or another state) and is otherwise authorized to do business in the State of Arkansas;   B. It holds and will continue to hold all permits, licenses and other governmental authorization necessary for it to conduct its insurance business; and   C. It is not a party to or otherwise subject to any note, debenture, shareholder agreement or other contractual arrangement, Order, Judgment, Decree of Adjudication which prohibits any act or conduct of BNL contemplated by this Agreement or which would cause it to be in violation of or default with respect thereto.   BNL acknowledges that BNL, and not VIP, has the responsibility for compliance with the maintenance and environmental standards for the operation of the on-site user Equipment specified in paragraph 1.





11. BNL LIMITATION OF LIABILITY.  BNL shall have no liability with respect to its obligations under this agreement or otherwise for consequential, exemplary, special, indirect, incidental or punitive damages even if it has been advised of the possibility

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of such damages. in any event, other than claims covered by the next sentence, the liability of BNL to VIP for any reason and upon any cause of action and claim in contract, tort or otherwise shall be limited to the amounts paid by BNL to VIP in the twelve (12) month period prior to the accrual of the action or claim for the specific service which is the subject of the action or claim (or, if such accrual occurs during the first twelve (12) months of the initial term, then the liability shall be limited to the minimum fees payable by BNL to VIP during the first twelve (12) months of the initial term) claims by VIP for the minimum fees and other fees and expenses owing by BNL under paragraphs 5, 15(a) and 15(c), or for a breach by BNL of VIP's proprietary rights as set forth in paragraph 13 are excluded from this paragraph II limitation except for the claims excluded by the preceding sentence, this limitation applies to all causes of action or claims in the aggregate including without limitation breach of contract, breach of warranty, negligence, strict liability, misrepresentation and other torts.  VIP and BNL expressly acknowledge and agree that the limitations and exclusions contained herein represent the parties' agreement as to the allocation of risk between the parties in connection with BNL's obligations under this agreement the payments payable to VIP in connection herewith reflect this allocation of risk and the exclusion of consequential damages in this agreement.   12. VIP OBLIGATION. During the term of this Agreement, in addition to its other obligations set forth in this Agreement, VIP shall:   A. Maintain property insurance in an amount sufficient to replace or reconstruct the hardware, software, data and facilities necessary for VIP to operate the VIP System and otherwise provide the EDP Services set forth in this Agreement and, upon written request, shall provide BNL with evidence of the coverage, including all applicable limits and conditions, and, upon written request, shall provide BNL with evidence of all renewals, cancellations, expirations or modifications of the coverage;   B. Update on a daily basis, sets of back-up data files for the BNL Data in the VIP System at an off-site location and/or fire-proof safe that provides for its safety from destruction or theft. BNL will pay its prorata share based upon the number of the total users of the VIP System of the cost of storage and/or transportation of back-up data files to and from the storage facility;   C. At BNL' s option and sole expense, micro-film, all reports or other records as so designated by BNL and store the same in a safe facility on or off the operational location of VIP;   D. Except in instances beyond VIP's reasonable control under paragraph 16(J) or as provided in paragraph 3, ensure the availability of the VIP system for BNL ' use at least during the hours of7:00 a.m. through 5:00 p.m. (central time) each day Monday through Friday.   13. OWNERSHIP OF THE VIP SYSTEM. The VIP System and related programs

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(including software in connection herewith), are and shall at all times remain the sole and exclusive property of VIP. During the term of this Agreement or any extension thereof, BNL shall have a non-exclusive license to use the VIP System on-line as designated by VIP. BNL shall not use the VIP System except as authorized by this Agreement Upon the expiration or earlier termination of this Agreement, neither BNL nor any third party shall have any further right to use the VIP System after the retrieval of the BNL data pursuant to paragraph 6(A) of this Agreement.   14. ADDITIONAL SERVICES.   A. Subject to the terms of paragraph 14(C), and for the sums set forth in paragraph 14(B) hereof, VIP , during the term of this Agreement, agrees to provide the following added services to BNL upon request:   1. All consultation, systems development, conversion services, programming, debugging and testing of software, hardware, and for other services other than the VIP System and which are unique to BNL products and/or method of doing business;   2. All machine time used in connection with systems development, conversion services, programming, debugging and testing of software, hardware and other vendor services which are unique to BNL products and/or method of doing business;   3. Assistance of VIP in connection with the termination of either parties of its services under this Agreement and the implementation of EDP service by BNL with another data processing company;   4. Additional processing resulting from changes in regulatory requirements;   5. Special, unscheduled, and/or non-standard system application processing;   6. Bank draft processing.   B. VIP will provide BNL the above enumerated additional services at the hourly rates set forth in Schedule A Schedule of Charges and Fees for Additional Services, for the initial twelve (12) months of this Agreement. After the initial twelve months of this Agreement, VIP may adjust the rates in Schedule A to VIP's then current standard rates for such services, provided that it provides BNL with notice of any such adjustment not less ~han thirty (30) days prior to any such adjustment and that such rates shall not increase by more than ten ( 10% ) percent per year .   C. VIP performance of such additional services for BNL is subject to availability of resources and the development of a schedule for delivery of such services which is agreeable to both parties. VIP agrees to make a best effort attempt to develop the required schedules with BNL.

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15. TERM.   A. The initial term (Initial Term) of this Agreement shall be for one year commencing on the 1st day of May, 2006 (Effective Date). Payments under this Agreement by BNL shall commence as provided in paragraph 5(A) hereof.   B. Unless either party gives written notice to terminate this Agreement at least six (6) months prior to the end of said Initial Term, this Agreement shall continue on a year to year basis (Extended Term(s)) until terminated by either party by giving written notice of termination thereof to the other party at least six (6) months prior to the end of the then current Extended Term.   C. However, if, after the Initial Term, BNL terminates this Agreement during an  Extended Term by giving less than six (6) months notice, in addition to any other sums due VIP under this Agreement, BNL shall pay to VIP a cancellation fee equal to the greater of (i) the Minimum Fee multiplied by the remaining number of months in the then current term, (ii) the average of the monthly billings for the six (6) month period immediately preceding the date upon which the notice of termination is received by VIP from BNL multiplied by the remaining number of months in the then current term or (iii) thirty thousand dollars ($30, 000).   E. From and after notice of termination is received by VIP, any new reports or other services provided by VIP other than routine processing services which have been done for BNL under this Agreement shall be deemed to be additional services and shall be performed by VIP at VIP's then current rates for such termination services as specified on Schedule A.   F. Upon termination or expiration of this Agreement, BNL shall return all software and related manuals, if any, provided by VIP to BNL during the term of this Agreement.   16. MISCELLANEOUS.   A. ADVERTISING. During the term of this Agreement BNL consents to the use of the name of BNL by VIP in identifying BNL as a client, in advertising, publicity, or similar materials distributed to prospective clients. Except as set forth in this paragraph 16(A), the terms of this Agreement shall be kept confidential.   B. AMENDMENTS. No amendment, change, waiver, or discharge hereof shall be valid unless in writing and signed by an authorized representative of the party against which such amendment, change, waiver, or discharge is sought to be enforced. Any provision  of BNL' purchase' order or other request for services shall not bind VIP. VIP's failure to object to any such provision shall not be construed as a waiver of the terms and conditions of this Agreement nor as acceptance of any such other provision(s).

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C. ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or its breach, or its validity or interpretation, except claims for injunctive relief and claims involving necessary third parties who refuse to participate, shall be settled by binding arbitration in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association ( AAA) subject,  however, to the following:   1. The location for the arbitration shall be at such location reasonably designated by the arbitrators.   2. Such arbitration shall be heard and determined by a panel of three (3) arbitrators in accordance with the then current rules or regulations of the AAA relating to commercial disputes. One arbitrator shall be appointed by each party to serve on the panel. One neutral arbitrator shall be appointed by the AAA and shall serve as chairperson of the three arbitrator panel. Such neutral arbitrator shall be an attorney with experience in handling disputes relating to the providing of out sourced electronic data processing services.   3. The arbitration award shall be binding on the parties and may be enforced in any court of competent jurisdiction.   4. The prevailing party in such arbitration shall be entitled to recover its reasonable attorneys' fees and costs incurred in such arbitration proceeding.   D. ASSIGNMENT. Neither party to this Agreement shall assign, subcontract, or otherwise conveyor delegate its rights or duties hereunder to any third party without the prior written consent of the other party hereto, such consent not to be unreasonably withheld.   E. ATTORNEY FEES. In the event that litigation is instituted between the parties in connection with any controversy or dispute arising out of or relating to this Agreement, the prevailing party in such litigation shall be entitled to recover its reasonable attorney fees and costs.   F. BINDING. This Agreement is binding on, and shall inure to the benefit of VIP, BNL and their respective successors and assigns.   G. CHOICE OF LAW. This Agreement and performance hereunder shall be governed by the laws of the State of Oklahoma without regard to conflict of laws. Subject to the requirement for arbitration under paragraph 16(C), VIP and BNL hereby agree on behalf of themselves and any person claiming by or through them that jurisdiction and venue for any litigation arising from or relating to this Agreement shall be in the appropriate federal or state court located in Austin, Texas, or in Oklahoma City, Oklahoma, and that any arbitration shall be conducted in the location selected pursuant to paragraph 16(C)(1).

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H. COUNTERPARTS. This Agreement may be executed in several counterparts, all of which taken together shall constitute one single agreement between the parties hereto.   I. ENTIRE AGREEMENT. This Agreement, including any Schedules referred to herein or attached hereto, each of which is incorporated herein for all purposes, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and no prior or contemporaneous representations, inducements, promises, or agreements, oral or otherwise, between VIP and BNL with reference thereto shall be of any force or effect.   J. FORCE MAJEURE. Notwithstanding anything to the contrary in this Agreement, but except to the extent provided in paragraph 2, VIP shall not be liable to BNL for any delay or failure to perform any of the EDP Services or other obligations set forth in this Agreement due to cause(s) beyond its reasonable control, including, without limiting the generality of the foregoing, (i) accidents, (ii) acts of God, (iii) labor disputes, (iv) BNL's failure to submit data or information in the prescribed form or in accordance with the agreed upon schedules; (v) special requests, outside the VIP Systems' functions routinely utilized by BNL, by BNL or any governmental agency authorized to regulate or supervise BNL or any authority having jurisdiction over BNL; (vi) BNL's failure to provide any equipment, software, facility or performance called for by this Agreement, and the same is necessary for VIP's performance hereunder, (vii) BNL's material breach of any of the terms, covenants, or representations set forth in this Agreement or (viii) the actions of any government agency or common carrier or other third party over whom VIP has no control. Performance times shall be considered extended for a period of time equivalent to the time lost because of such delay.   K. HEADINGS. The paragraph headings used herein are for reference and convenience only and shall not enter into the interpretation hereof.   L. INDEPENDENT CONTRACTOR. VIP and BNL are strictly independent contractors. Neither party has the right to bind the other in any manner, and nothing in this Agreement shall be interpreted to make either party the agent or legal representative of the other or to make the parties joint venturers or partners.   M. LIMIT A TIONS OF ACTIONS. Any claim of action of any kind which one party to this Agreement may have against the other party relating to or arising out of this Agreement must be commenced within two (2) years from the date such claim or cause of action shall have first accrued. N. NOTICES. Any notice provided pursuant to this Agreement, if specified to be in writing, shall be in writing and shall be deemed given (i) if by hand delivery, upon receipt thereof (ii) if mailed, three (2) days after deposit in the United States mails, postage prepaid, certified mail return receipt requested, or (iii) if by next day delivery service, upon such delivery .All notices shall be addressed to a party at the address first set forth above or at such other address as either party may in the future specify in writing to the other .

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0. SERVICES FOR OTHERS. BNL understands and agrees that VIP may perform for third. parties similar services using the same personnel, subject to VIP's confidentiality obligations hereunder, and that VIP may utilize such personnel for rendering services for BNL hereunder.   P. SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby and each remaining provision shall be valid and enforceable to the fullest extent permitted by law.   Q. SURVIVAL. All provisions of this Agreement relating to confidentiality and indemnity shall survive the termination of this Agreement.   R. NO THIRD PARTY BENEFICIARY.  No third party is intended to be nor shall any such third party be deemed to be a third party beneficiary of this Agreement nor shall any third party acquire any rights or remedies under or through this Agreement.   S. WAIVER, Any waiver by a party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of that provision itself or a waiver of any other right(s) under this Agreement.   The parties agree and acknowledge that they have read this Agreement. The persons signing below on behalf of the respective parties represent and warrant that they have the authority to bind the party on which behalf they have executed this Agreement. This Agreement is executed on the dates shown below and effective as of the Effective Date identified above.   VIRTUAL ITEM PROCESSING SYSTEMS INC.  BROKERS NATIONAL LIFE ASSURANCE COMPANY

      /s/ David A. Siekman       /s/ Barry N. Shamas By: _____________________________________ By: _________________________________ David A. Siekman     Barry N. Shamas President      Executive Vice President     May 17, 2006      May 18, 2006 Date: ___________________________________ Date: _______________________________

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SCHEDULE A   SCHEDULE OF CHARGES AND FEES   FOR ADDITIONAL SERVICES   SYSTEMS AND PROGRAMMING SERVICES     HOURLY RATE   1. CONSULTATION         $100.00   2. SYSTEMS DEVELOPMENT        100.00   3. SYSTEMS REQUIREMENTS DEFINITION      100.00   4. SYSTEMS ANALYSIS         100.00   5. COMPUTER PROGRAMMING:   SENIOR ANALYST         100.00 JUNIONANALYST         85.00   COMPUTER TIME FOR SYSTEM DEVELOPMENT 6. COMPUTER CHARGED TIME        $150.00 TERMINATION SERVICES   7. CONSULTATION          $100.00   8. PROGRAMMING          $185.00   9. COMPUTER CHARGED TIME        $250.00   ADDITIONAL REGULATORY PROCESSING   10. COMPUTER CHARGED TIME        $150.00   SPECIAL OR NON-STANDARD APPLICATION PROCESSING   11. COMPUTER CHARGED TIME        $150.00   EDUCATION AND HELP   12. EDUCATION: IN VIP OFFICES       $ 50.00   13. EDUCATION: ON-SlTE         90.00   14. PROCEDURAL HELP VIA TELEPHONE       50.00   BANK DRAFTS         UNIT RATE   15. BANK DRAFT PROCESSING (PER DRAFT)      $ .06

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  SCHEDULE B   SCHEDULE OF PROCESSING FEES   PLAN NAME   OF CATEGORY   All BNL Plans   Fee = $.305/per policy per month 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

Answer: 24214


Question: Exhibit 10.1

Execution Copy

SPONSORSHIP AGREEMENT

dated January 29, 2007

between

FIRST DATA MERCHANT SERVICES CORPORATION,

WELLS FARGO BANK, N.A.

and

iPAYMENT, INC.







SPONSORSHIP AGREEMENT

This Sponsorship Agreement (this Agreement) dated as of January 29, 2007 (the Effective Date) is by and between iPayment, Inc. (ISO), First Data Merchant Services Corporation (FDMS), and Wells Fargo Bank, N.A. (Bank). Under this Agreement, FDMS and Bank will collectively be referred to as SERVICERS.

RECITALS

A.   Bank is a Member of Visa and MasterCard, and, as such, is authorized to sign agreements enabling Merchants to accept Visa and MasterCard Bank Cards from their customers in accordance with the terms and conditions of their respective Rules and regulations.

B.   ISO is a registered independent sales organization with Visa and a registered member service provider with MasterCard and is in the business of developing and marketing Merchant Bank Card programs, originating Merchant relationships, and providing Merchant Bank Card management services.

C.   In conjunction with the processing services rendered to ISO by FDMS pursuant to the Service Agreement dated as of July 1, 2002 by and between ISO and FDMS, as amended (the Service Agreement), ISO and SERVICERS desire to establish the sponsorship of a Merchant processing Program on the terms and conditions set forth in this Agreement.

D.   ISO, as assignee of Transaction Solutions, LLC, and Concord Transaction Services, LLC, successor in interest to EFS National Bank and an Affiliate of FDMS, are parties to that certain ISO Services and Marketing Agreement dated as of April 17, 2002, as amended (the TS ISO Agreement). The parties now desire to terminate the TS ISO Agreement and to incorporate the services provided thereunder into this Agreement and the Service Agreement.

E.   ISO, as assignee of Petroleum Card Services, Inc., and CTS Holdings, LLC successor in interest to Concord Payment Systems, Inc. and National Payment Systems, Inc. and an Affiliate of FDMS, are parties to that certain Processing Service Agreement dated as of April 16, 2001, as amended (the PCS ISO Agreement). The parties now desire to terminate the PCS ISO Agreement and to incorporate the services provided thereunder into this Agreement and the Service Agreement.

F.   Bank is the acquiring bank for the transactions processed under the TS ISO Agreement and the PCS ISO Agreement.

AGREEMENT

In consideration of the foregoing and the covenants and conditions contained herein, the parties agree as follows:

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SECTION 1 DEFINITIONS

As used in this Agreement (including the recitals set forth above), the following terms shall have the meanings set forth below (each of which includes the singular and the plural):

ACH shall mean the electronic transfer of funds through an automated clearing house system.

Affiliate shall mean any entity that directly or indirectly controls, is controlled by or is under common control with a party.

Applicant shall mean a Merchant who submits an Application.

Application shall mean the Merchant application used by ISO, as provided by and/or approved by SERVICERS and ISO, and other existing Merchant applications assigned to Bank as part of the initial BIN/ICA transfer.

Application Materials shall mean the Application and all other materials developed to facilitate the execution of Merchant Processing Agreements, as approved by SERVICERS and ISO. ISO shall cease its use of any Application Materials that become unacceptable to SERVICERS within ninety (90) days of receipt of written notice from SERVICERS or such shorter period of time as may be required to comply with the Rules or to prevent a loss to SERVICERS.

Approved Merchant means any Merchant that:

  (a)   Is solicited by ISO (or ISO's Other MSP's or IC's) for participation in the Program;

  (b)   Meets the established criteria for participation in the Program, including the Merchant Processing Policy; and

  (c)   Enters into a Merchant Processing Agreement.

Approved Merchants may also include Merchants converted to the Program as part of the initial BIN/ICA transfer and/or subsequently acquired Merchants that meet the established criteria for participation in the Program, including the Merchant Processing Policy, and whose sponsorship is assigned to Bank.

Bank Card shall mean a credit card or debit card issued by a member of MasterCard, Visa or any other association or card issuing organization (including Debit Networks) and bearing its respective trade names, trademarks, and/or trade symbols.

Business Day shall mean any day on which Bank is open for business, other than Saturdays, Sundays, or state or federal holidays.

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Change of Control means a change in the power to direct the management or affairs of ISO or the beneficial ownership of more than 51% of the equity securities; provided, however, that becoming a public company with the same management team or changing the beneficial ownership of more than 51% of the equity securities while maintaining the same management team will not constitute a change in control.

Confidential Information shall mean non-public information about, and proprietary materials of, any party as defined and more fully described in Section 9.1.

Deconversion shall mean the activities performed by SERVICERS at the request of ISO to effect a Program Transfer, which activities and associated fees/costs will be set forth in a written plan developed before any such activities are begun and in good faith by ISO and SERVICERS that is designed to complete the Program Transfer within 6 months, at SERVICERS' then-current fees/costs. If ISO requests no services from SERVICERS in connection with the deconversion, then there will be no fees/costs to ISO other than any pass-through Bank Card association fees, if any.

Effective Date is defined in the first paragraph of this Agreement.

Eligible Merchant shall mean a Merchant that meets the Merchant Processing Policy and is solicited for the Program by ISO or ISO's Other MSP's or IC's.

FFB means FDMS's Affiliate, First Financial FFB, an industrial bank formed under the laws of the State of Colorado.

IC shall have the meaning provided in Section 2.4.

Including whether capitalized or not, means including but not limited to.

Intellectual Property shall mean copyrights, Marks, trade secrets, patents or other proprietary rights of a party.

ISO includes ISO's wholly-owned subsidiaries that are either independently registered with Visa and MasterCard or solicit Merchants under the ISO's registration, and also includes, when the context so requires, ISO's Other MSP's and IC's.

Losses shall mean any losses, damages, liabilities, judgments, orders of restitution, and penalties (including civil monetary penalties and Visa and MasterCard fines and penalties).

Marks shall mean the trademarks or service marks of a party.

MasterCard shall mean MasterCard International, Incorporated.

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Material when used with reference to information, a fact or circumstance, a course of action, a decision-making process or other matter, shall be limited to information, facts and circumstances, courses of action, decision-making processes or other matters as to which there is a substantial likelihood that a reasonable person would attach importance.

Member shall mean an acquiring member of Visa and MasterCard.

Merchant shall mean an individual or entity that engages in, or desires to engage in, Bank Card transactions with its customers.

Merchant Account shall mean the account relationship established between ISO, Bank and an Approved Merchant pursuant to a Merchant Processing Agreement.

Merchant Discount Amount shall mean the portion of the face amount of Bank Card transactions submitted by Approved Merchants and processed through the Program that is paid to SERVICERS. Further, this portion shall be determined by application of the Merchant Discount Rate that is reflected in each Merchant Processing Agreement.

Merchant Discount Rate shall mean a percentage rate to be applied to determine the portion of the face amount of a Bank Card transaction that will be charged to the originating Merchant, which rate shall be reflected in each Merchant Processing Agreement and subject to change from time to time pursuant to the terms of the Merchant Processing Agreement.

Merchant Portfolio shall mean the group of Approved Merchants participating in the Program pursuant to this Agreement.

Merchant Processing Policy shall mean the merchant policy, guidelines and standards established by SERVICERS under which SERVICERS will enter into a Merchant Processing Agreement with a Merchant as it may be modified by SERVICERS in their discretion from time to time during the term of this Agreement. Attached as Exhibit B is a list of certain categories of Merchants who are always unacceptable under the Merchant Processing Policy, along with a summary of other policy guidelines and standards.

Merchant Processing Agreement shall mean a written agreement among ISO, Bank and an Approved Merchant that governs the Approved Merchant's participation in the Program, as provided by and/or approved by SERVICERS and ISO. ISO shall cease its use of any form of Merchant Processing Agreement that becomes unacceptable to SERVICERS within ninety (90) days of receipt of written notice from SERVICERS or such shorter period of time as may be required to comply with the Rules or to prevent a loss to SERVICERS. For the avoidance of doubt, ISO shall be responsible for effecting any necessary and appropriate amendments to the Merchant Processing Agreement that may become necessary as a result of subsequent amendments to the Rules or SERVICERS' requirements. In the event a Merchant refuses to consent to any such amendment during the applicable ninety (90) day period, ISO will notify SERVICERS,

Page 4







and Bank or FFB will have the right to terminate its sponsorship of such Merchant and the applicable Merchant Processing Agreement.

Merchant Reserve Account shall mean one or more accounts maintained by SERVICERS as security against Merchant liabilities to ISO or SERVICERS.

Minimum Balance shall have the meaning provided in Section 6.1(a).

Net Program Participation Fees shall mean, at any point in time, all Program Participation Fees minus the sum of:

  (a)   All compensation and other amounts (including unreimbursed chargebacks and payments to the Reserve Account) due SERVICERS;

  (b)   [***]

  (c)   Pass-Through Costs and Interchange.

Offset Account shall mean an account at Bank that is established and maintained by FDMS to allow SERVICERS to credit and debit funds as provided in Section 6.

Other MSP shall have the meaning provided in Section 2.4.

Pass-Through Costs and Interchange shall mean the amounts charged by MasterCard, Visa, and other networks or Bank Card associations (including interchange fees, dues and assessments) in connection with the Approved Merchant transactions, the liability for which shall be the sole responsibility of ISO except as otherwise described herein.

Payment Date means: (i) for Merchant Accounts originally covered by the TS ISO Agreement and the PCS ISO Agreement, the [***] day (or first Business Day thereafter if such day is not a Business Day) of each calendar month during the term of this Agreement; and (ii) for all other Merchant Accounts on the FDMS Omaha platform covered by this Agreement, the first Business Day after the day the funds are available and in Bank's settlement account, but in no event later than [***] [***] days after the end of each month.

Processing Year 1 means the period commencing on the Effective Date and ending on June 30, 2007.



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

Page 5







Processing Year means each twelve (12) calendar month period commencing on the first day of July and ending on the last day of the following June, except for Processing Year 1 which is specifically defined.

Program shall mean ISO's sales and marketing activities on behalf of itself and SERVICERS, the processing of Merchant Applications, and the provision of Bank Card transaction processing services to Approved Merchants under the terms of their Merchant Processing Agreements.

Program Participation Fees shall mean all fees owed by Merchants to Bank and ISO under the applicable Merchant Processing Agreements, including the Merchant Discount Amounts or transaction fees, which amounts shall be recommended by ISO, but in all cases will be subject to final approval by Bank, which approval shall not be unreasonably withheld or delayed.

Program Standards means the policies and procedures established by SERVICERS to be used by ISO in connection with the solicitation of prospective Merchants and other policies, procedures, fines and penalties established by SERVICERS that are designed to promote the financial safety or soundness of the Program. The Program Standards may be modified by SERVICERS from time to time in their sole discretion; provided, however, that SERVICERS will discuss in good faith any concerns that ISO may have that any such change will adversely affect ISO's ability to add Approved Merchants to the Program. The current form of the Program Standards are attached hereto as Exhibit D.

Program Transfer shall mean Bank's transfer and assignment of the Merchant Portfolio and the dedicated BINs/ICAs, including Bank's interest in all Merchant Processing Agreements, to a third party designated by ISO in accordance with Section 10.4.

Promotional Materials shall mean all written solicitations and advertisements and other communications (including telemarketing scripts) used to market, promote, and solicit the establishment of Merchant Processing Agreements with Merchants.

PS ISO Agreement is defined in Recital E of this Agreement.

Reserve Account shall mean the account at Bank that is to be established by ISO and fully controlled by SERVICERS as described in Section 8.1 to insure payment of chargebacks, fees and other amounts due to SERVICERS.

Residual Account shall mean an account established and maintained by (and in the name of) ISO to allow Bank to credit funds as provided in Section 6.

Rules shall mean the by-laws, regulations and/or requirements that are promulgated by Visa, MasterCard, Debit Networks and/or other Bank Card associations.

Page 6







Service Agreement is defined in Recital C of this Agreement.

Termination Reserve Account shall mean a reserve account to be established upon notice of termination of this Agreement to insure the payment of chargebacks and credit/fraud losses related to transactions with an acquirer's processing date on or before the effective date of termination of this Agreement, fees and other amounts which may become due to SERVICERS following termination of this Agreement.

TS ISO Agreement is defined in Recital D of this Agreement.

Visa shall mean VISA USA Incorporated.

SECTION 2 PROGRAM SERVICES

2.1  SERVICERS' Services/Pricing.

  (a)   SERVICERS shall provide the services specified in this Agreement and the exhibits and shall be compensated therefor as set forth in the Service Agreement and in Exhibit A hereto. Any and all processing and related services rendered by SERVICERS to an Approved Merchant in the Merchant Portfolio covered by this Agreement (including without limitation Merchants initially processed under the TS ISO Agreement and the PCS ISO Agreement) will be rendered pursuant to and billed at the rates set forth in the Service Agreement. Any and all sponsorship, clearing and related services rendered by SERVICERS in connection with an Approved Merchant in the Merchant Portfolio covered by this Agreement (including without limitation Merchants initially processed under the TS ISO Agreement and the PCS ISO Agreement) will be rendered pursuant to and billed at the rates set forth in this Agreement. Any Approved Merchant added to the Merchant Portfolio and Program covered by this Agreement will be subject to all terms and conditions of this Agreement.

  (b)   Any service described in this Agreement is subject to periodic revision by SERVICERS to reflect changes (i) to the SERVICERS' systems or the services provided by SERVICERS and offered generally to SERVICERS' customers and (ii) in the specific services provided to ISO; provided, however, that SERVICERS will not implement any changes or improvements to the services if such action will materially degrade the quality of the services being provided to ISO by SERVICERS hereunder unless such change is required by the VISA or MasterCard rules and regulations.

  (c)   SERVICERS may from time to time pass through to ISO actual increases in the Pass-Through Costs and Interchange, to reflect any increases in such fees, costs and charges to SERVICERS, upon thirty (30) days prior written notice to ISO (or, if SERVICERS receive less than thirty (30) days notice of such increase, as much prior notice as is practicable under the circumstances).

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  (d)   In the event of any fee increases to ISO, SERVICERS shall provide reasonable assistance to ISO in passing such fee increases through to Merchants under the Merchant Processing Agreements.

  (e)   From time to time and in their sole discretion, SERVICERS may also perform certain risk management services, such as periodic credit reviews, fraud reviews and monitoring and collections, with respect to Applicants and Approved Merchants; provided, however, that SERVICERS will not contact such Applicants or Approved Merchants directly and will request any reasonably necessary information or documentation from ISO. SERVICERS' participation in any such activity shall not in any way relieve ISO from its responsibility for credit and fraud losses which may result from or be related to the Program.

  (f)   SERVICERS will provide ISO with a point of contact to address issues that arise in connection with this Agreement, which will be one or more employees of FDMS.

2.2  ISO Obligations.

  (a)   ISO shall perform all sales and marketing activities in furtherance of the Program, subject to the terms of this Agreement. It is understood that (at all times) SERVICERS have the ultimate approval right for ISO's solicitation procedures, Application Materials, Application processing procedures, Merchant qualification criteria, transaction processing procedures, Merchant Processing Agreements, Program terms, Program Participation Fees, and other Program policies, all of which must be approved in advance by SERVICERS in writing.

  (b)   ISO shall also perform all initial Merchant credit review and underwriting on Applicants in a manner consistent with Section 4 of this Agreement, including the Merchant Processing Policy. ISO shall at all times comply with the Program Standards.

  (c)   ISO will use reasonable efforts to convert the sponsorship and clearing of all Merchants processing on the FDMS system under the Service Agreement to the sponsorship and clearing of Bank under the terms and conditions of this Agreement; provided, however, that ISO will not be required to attempt to convert any such Merchants if the Merchant refuses to be sponsored by Bank, if the applicable Other MSP or IC refuses to board accounts on the FDMS System or be sponsored by Bank, or if the conversion of such merchants would not make economic or strategic business sense to ISO.

  (d)   For the avoidance of doubt, the parties acknowledge that ISO may utilize SERVICERS' services under this Agreement on a non- exclusive basis and there are no minimum fees or utilization commitments under this Agreement.

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2.3  BIN and ICA Assignment. SERVICERS will utilize BINs (Bank Identification Number) and ICAs (Interbank Card Association) dedicated solely to ISO to facilitate the Program, and no merchants other than Program Merchants will be under the dedicated BIN/ICA. The initial BINs/ICAs to be transferred to Bank from ISO's current sponsoring Member as part of the Program launch are listed on Exhibit E. ISO shall be responsible, and shall reimburse SERVICERS, for all actual, documented fees and costs imposed by third parties associated with obtaining, installing and maintaining the BIN/ICA on the FDMS system, including any Visa and MasterCard fees and assessments. Upon a Program Transfer in accordance with Section 10.4, Bank will transfer the dedicated BINs/ICAs used in connection with the Program to a Visa and MasterCard Member designated by ISO.

2.4  Use of Other Independent Sales Organizations/Independent Contractors.

  (a)   Except as expressly set forth herein, ISO shall not subcontract, assign, license or in any other manner extend or transfer to any third party any right or obligation ISO has with respect to SERVICERS' Program. If ISO desires to use the services of any other independent sales organization/member service provider (Other MSP), such Other MSP must be (i) reviewed and approved by SERVICERS, in their sole discretion, (ii) contracted with SERVICERS or Bank upon mutually agreeable terms, and (iii) registered with Visa and MasterCard by Bank in accordance with the Rules. If ISO desires to use the services of an individual independent contractor who represents himself or herself as working for ISO using ISO's legal/business name (IC), then ISO shall enter into a written agreement with each such IC that (i) requires the IC to comply with all applicable terms of this Agreement and all applicable Rules, laws and regulations, and (ii) prohibits the making of any representation or creating any liability on behalf of SERVICERS.

  (b)   ISO's currently utilizes the Other MSP's and IC's listed on Exhibit E attached hereto in its Merchant processing business. The parties agree to work together expeditiously and in good faith to transfer the registration or re-register all such entities with the appropriate Bank Card associations as required under the Rules. All Other MSP's must be appropriately registered before boarding accounts under Bank's sponsorship.

2.5  SERVICERS' Obligations.

  (a)   Bank will sponsor ISO, at ISO's expense, as an ISO for Visa, as an MSP for MasterCard and, to the extent applicable, as similarly required for all other Bank Card associations and, to the extent required by any Bank Card association, Bank also agrees to sponsor for registration with Visa and/or MasterCard those Other MSP's, IC's, subsidiaries and marketing representatives of ISO which are approved by SERVICERS. Unless otherwise disallowed by a Bank Card association, Bank agrees to maintain such sponsorships throughout the term of this Agreement and until the first of either to occur: (i) [***] days after the



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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      expiration or earlier termination of this Agreement, or (ii) the effective date of the assignment of all of the Merchant Processing Agreements or all of the BINs/ICAs and other items specified and contemplated in Section 10.4.

  (b)   From time to time, and within a reasonable time from Bank's receipt of notice of an amendment to the Rules that is not otherwise available to ISO, Bank will advise ISO, who shall, in turn, notify each Merchant, of any change in the Merchant Program imposed by the Rules.

  (c)   At ISO's request, Bank will obtain copies for ISO of any Bank Card association manuals and publications (including Rules) that are available to acquiring members and that are not otherwise available to ISO and that are allowed to be shared with ISO under the Rules. Bank will forward to ISO all information routinely provided by each Bank Card association that is not otherwise available to ISO that are allowed to be shared with ISO under the Rules that would be helpful to ISO in fulfilling its obligations under this Agreement.

  (d)   Bank will maintain all cardholder information under its control and/or possession in a safe and secure manner in compliance with the Rules, and will report to Bank Card associations as required by the Rules relating to internal policies and procedures related to cardholder information security. Furthermore, Bank agrees to inform the ISO immediately regarding any breach of information security that may have an adverse effect to the ISO or to its Merchants.

  (e)   Bank, as the acquiring principal member, agrees to represent ISO's interest in disputes that might arise from time to time with a Bank Card association over compliance with Rules and fines; provided, however, that ISO shall pay any fines or other charges imposed on Bank by a Bank Card association relating to the Merchant Program and any and all costs reasonably incurred by Bank in disputing the same, including reasonable associated legal fees.

  (f)   FDMS has entered into an agreement with FFB, pursuant to which FFB will sponsor (or assume the sponsorship of) Merchants, FDMS and its customers, including ISO, into certain networks (Debit Sponsorship). ISO agrees to the additional terms and conditions relating specifically to the Debit Sponsorship, as set forth in Exhibit G.

SECTION 3 MARKETING AND COMPLIANCE

3.1  Application Materials. ISO shall use reasonable efforts to ensure that each Application completed by an Applicant is current and contains accurate and complete information. ISO's Application Materials shall comply with all applicable Rules, laws and regulations. All Application Materials and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond [***] [***] days unless such changes



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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    are voluminous. The initial approved Application Materials are attached hereto as Exhibit C.

3.2  Compliance Responsibility. ISO shall be responsible for ensuring that the Application Materials, the marketing plans, the Promotional Materials and all services performed by ISO hereunder comply, and remain in compliance with, all applicable Rules, laws and regulations; provided, however, that SERVICERS will in good faith inform ISO of issues or concerns with ISO's materials or practices observed by SERVICERS that SERVICERS reasonably believe may be in violation of applicable Rules. All documents and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days.

3.3  Promotional Materials. ISO shall be responsible, at its sole expense, for the development of all Promotional Materials and shall bear the cost of the development and the printing and distribution of the Promotional Materials. The Promotional Materials shall comply with all applicable Rules, laws and regulations. All Promotional Materials and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days. ISO and ISO's Other MSP's and IC's will not use SERVICERS' or SERVICERS' Affiliates' Marks in any advertising, promotional or display materials without SERVICERS' prior written approval, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days.

SECTION 4 APPLICATION AND UNDERWRITING PROCEDURES

4.1  Applications. ISO shall solicit Applications from Eligible Merchants at ISO's sole expense and shall provide each Applicant with Application Materials. ISO shall collect completed and signed Application Materials and Merchant Processing Agreements from Applicants and shall forward them to SERVICERS within [***] [***] Business Days after the merchant is boarded (which may be accessed by SERVICERS online or forwarded to SERVICERS via ISO's automated application system or to a facsimile number designated by SERVICERS, provided such complies with the Rules and applicable laws, rules and regulations) or to any other place(s) as SERVICERS may designate for processing and document storage. ISO shall retain copies of all Application Materials, Merchant Processing Agreements and documents forwarded to SERVICERS. ISO shall provide SERVICERS with access to ISO's automated application system and ISO's online Merchant Account system (BAMS, or any such successor or replacement system) at no cost to SERVICERS.

4.2  Underwriting. ISO shall underwrite, perform a credit review and conduct a site inspection, when applicable, for each Application as required by this Agreement, the Merchant Processing Policy and the Rules to determine whether each Applicant is an Eligible Merchant. ISO may conduct such credit review without notification to and participation by SERVICERS, except as otherwise provided below (i.e., for any



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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    prospective Merchant that falls within the risk and volume parameters set forth in this Section 4.2), provided that ISO performs the credit review in accordance with the Merchant Processing Policy, the terms of this Agreement and the Rules. In accordance with and as permitted by this Agreement, a third-party service provider approved by SERVICERS may perform site inspections for ISO. In order to assist ISO in its underwriting hereunder, SERVICERS shall assist ISO with checking Merchants and prospective Merchants against the Terminated Merchant File/MATCH List or any similar list maintained by any entity. ISO shall be responsible for all credit and fraud losses associated with the Merchant Portfolio or the Program, regardless of any services or assistance that may be provided by SERVICERS. For any high risk Merchant who in good faith ISO anticipates will have annual Visa and MasterCard transaction volume equal to or greater than $[***] and any low risk Merchant who in good faith ISO anticipates will have annual Visa and MasterCard transaction volume equal to or greater than $[***], ISO shall advise SERVICERS and permit SERVICERS to conduct their own credit review prior to boarding the account. Upon receipt of a complete underwriting package from ISO, SERVICERS will respond to ISO within [***] [***] Business Days as to SERVICERS' acceptance or rejection of such Merchant. SERVICERS' participation in any credit review will not in any way relieve ISO from its responsibility for credit and fraud losses which may result from a Merchant's transaction processing. SERVICERS may at any time require that a Merchant relationship be terminated by ISO and Bank may cease the provision of services to any such Merchant pursuant to the terms of the Merchant Processing Agreement. SERVICERS shall have the right and authority to accept or reject any Application. ISO shall obtain prospective Merchants' authorization for ISO and/or SERVICERS to obtain all reports (including personal and business credit reports) and other information necessary in connection with the Application. ISO shall have the right, subject to and pursuant to the terms and conditions of the Merchant Processing Policy, to cause any Eligible Merchant with transaction card volume processing limits up to but not more than $[***] per month, that has been approved by ISO, to be activated immediately in SERVICES' systems. SERVICERS agree to provide ISO with a final approval decision (i.e., acceptance, rejection or required modification of the submitted Application) on submitted and complete Merchant Applications for Eligible Merchants that are not classified as high risk on the High Risk Merchant List attached hereto as Exhibit F and which seek approval for transaction card volume processing limits in excess of $[***] per month but not more than $[***] per month, within [***] [***] Business Days after SERVICERS' receipt of such completed Merchant Application and documentation.

4.3  Credit Decisions. ISO shall employ the Merchant Processing Policy guidelines provided by SERVICERS in making credit evaluations. SERVICERS reserve the right, in their sole and absolute discretion, to:

  (a)   Change the Merchant Processing Policy;

  (b)   Reject the Application of any Applicant who SERVICERS determine does not satisfy SERVICERS' Merchant Processing Policy; and



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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  (c)   Terminate the Merchant Processing Agreement with respect to any Merchant at any time, according to the Merchant Processing Agreement terms.

Notwithstanding anything contained herein, so long as all of the following are true with respect to a Merchant or Merchant Account, SERVICERS agree that, except as required by the Rules, SERVICERS shall neither terminate nor make any change with respect to the discount or reserve of said Merchant or Merchant Account that will have an adverse effect on the Merchant or Merchant Account without the prior written consent of ISO:

  (i)   The Merchant or Merchant Account is not in a Bank Card association monitoring program;

  (ii)   The Merchant or Merchant Account is not engaged in, or aiding and abetting, any illegal activity or fraud;

  (iii)   The Merchant or Merchant Account is in compliance with the Merchant Processing Policy;

  (iv)   The Merchant or Merchant Account is not processing transactions where products are delivered or services rendered more than one (1) year (on the average, based upon transactions of the immediately preceding three (3) months) following the date of the transaction;

  (v)   No Bank Card association nor any regulatory agency has requested that the Merchant or Merchant Account be terminated;

  (vi)   In its sole judgment, SERVICERS do not feel that they may be at financial risk as a result of the activity of a Merchant or Merchant Account; and

  (vii)   The Merchant or Merchant Account is not causing reputational harm or risk to either of SERVICERS in their reasonable judgment.

In the event SERVICERS decide to terminate or make any such adverse change with respect to a Merchant or Merchant Account, SERVICERS shall first attempt to give ISO notice of SERVICERS' decision.

4.4  Merchant Reserve Accounts. ISO shall be responsible for determining the amount of any Merchant Reserve Accounts. ISO shall also be responsible for ensuring all Merchant Reserve Accounts are adequately funded. All Merchant Reserve Accounts, along with any other monies or collateral collected from Approved Merchants, shall be deposited with Bank. [***] ISO will monitor daily Merchant account activity and if in ISO's reasonable judgment certain Approved Merchants and/or certain transactions are possibly fraudulent or otherwise not in



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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    compliance with the Rules or in violation of the Merchant Processing Agreement, ISO will instruct SERVICERS to change the Merchant bank account information to cause funds otherwise due such Merchant to be diverted and deposited into the Merchant Reserve Account for such Merchant. ISO will thereafter promptly investigate each such suspicious incident and, upon request, promptly notify SERVICERS of the result of any such investigation. If in any case ISO's investigation determines that no violation occurred, ISO will promptly request SERVICERS to release any funds diverted to the Merchant Reserve Account to the Merchant's deposit account. Once monies or other collateral are deposited in a Merchant Reserve Account, SERVICERS shall control the disbursements of such funds which are to be (a) paid to ISO or SERVICERS to cover losses incurred in connection with the applicable Approved Merchant or (b) returned to the applicable Approved Merchant upon a reduction in the potential risk to ISO and SERVICERS arising from the provision of services to such Merchant within two (2) Business Days after receipt of a written request by ISO. From time to time, ISO may request SERVICERS to disburse monies held in a Merchant Reserve Account to ISO or an Approved Merchant as set forth in the preceding sentence, and SERVICERS shall consider such requests in good faith. Bank may draw against any Merchant Reserve Account to cover any Losses or credit and fraud losses incurred by SERVICERS with respect to an Approved Merchant without the consent of ISO or the applicable Approved Merchant.

4.5  Maintenance of Underwriting Staff. ISO shall at all times maintain an adequate and qualified staff to perform underwriting and credit reviews of Program Merchants.

SECTION 5 PROPRIETARY RIGHTS

5.1  General. To the extent required by the Rules, legal title to all Merchant Applications, Merchant Processing Agreements and Merchant Accounts and records shall be in the name of Bank, subject to its obligations to effect a Program Transfer pursuant to Section 10.4 of this Agreement; provided, however, that Bank acknowledges and agrees that ISO shall own and maintain the Merchant relationship during the term of this Agreement and thereafter. ISO acknowledges and agrees that all Merchant Applications, Merchant Processing Agreements and Merchant Accounts and records may not be transferred, assigned, sold or exchanged by ISO except as set forth in this Agreement or the applicable Merchant Processing Agreement. Bank shall be exclusively responsible and entitled to receive all payments, collections, and other amounts due from Merchants, subject to its payment obligations to ISO. Each of ISO's and Bank's rights shall survive the termination of this Agreement by either party and for whatever cause. For the avoidance of doubt, the parties acknowledge and agree that ISO owns all Merchant Processing Agreements, Merchant Accounts and Merchant relationships except as otherwise specifically set forth herein.

SECTION 6 SETTLEMENT AND PAYMENT

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6.1  Offset Account.

  (a)   FDMS shall establish and maintain the Offset Account at Bank during the term of this Agreement to facilitate the making of all payments due to SERVICERS from ISO and to ISO from SERVICERS. ISO agrees that the initial amount of the Offset Account will be $[***] and, thereafter, the Offset Account will, at all times, maintain collected funds in an amount at least equal to the amount then due SERVICERS hereunder (which shall be referred to herein as the Minimum Balance).

  (b)   If the collected funds on deposit in the Offset Account at any point in time are less than the Minimum Balance, SERVICERS may fund the Offset Account with any monies or funds belonging or payable to ISO which are in SERVICERS' possession. SERVICERS will promptly notify ISO after making any such transfer.

  (c)   ISO hereby grants SERVICERS a security interest in the Offset Account to secure all of ISO's obligations to SERVICERS under this Agreement.

6.2  Settlement Procedures.

  (a)   SERVICERS shall settle each Merchant Account in accordance with the terms of the applicable Merchant Processing Agreement, remitting to each Approved Merchant, by ACH or other acceptable method, all settled funds due to the Approved Merchant after first deducting from such settled funds all applicable Program Participation Fees and any other amounts owed or withheld under the applicable Merchant Processing Agreement. Merchant Account settlement is included in the fees set forth in Exhibit A and will not incur an additional fee.

  (b)   On each Payment Date, SERVICERS shall credit ISO's Residual Account in an amount equal to all Net Program Participation Fees collected by SERVICERS since the immediately preceding Payment Date and which have not otherwise been paid to ISO.

  (c)   In the event that the Net Program Participation Fees are insufficient to pay any amounts due to SERVICERS' under this Agreement (including compensation, funding the Offset Account, funding the Reserve Account, or paying third party processing fees), then ISO shall provide sufficient additional funds to SERVICERS upon demand.

  (d)   [***]



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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      [***]

6.3  Payment Deferrals. In addition to any rights now or hereafter granted under this Agreement or applicable law and not by way of limitation of any such rights, SERVICERS are hereby authorized by ISO, at any time and from time to time, without notice or demand to ISO or to any other person (any such notice and demand being hereby expressly waived), to setoff, recoup and to appropriate and to apply any and all monies or funds belonging or payable to ISO which are in Bank's possession against and on account of ISO's obligations to SERVICERS under this Agreement (including funding the Offset Account, the Reserve Account, the Termination Reserve Account or funding chargebacks), whether such obligations are liquidated, unliquidated, fixed, contingent, matured or unmatured.

6.4  Expenses. Except as otherwise provided, each party shall bear its own administrative costs and overhead expenses arising out of its performance of this Agreement.

6.5  Liability for Losses. Unless any Losses are caused by SERVICERS or are attributable to the negligence or willful misconduct of SERVICERS, SERVICERS shall have recourse from ISO, and ISO shall fully reimburse SERVICERS, for any Losses to SERVICERS that are caused by:

  (a)   Chargebacks, purchase returns, refunds, credits, adjustments, fees or Bank Card association fines, costs and expenses related to Approved Merchants, Eligible Merchants, or any Merchant activity hereunder; and

  (b)   Amounts remaining due to SERVICERS after the deduction of SERVICERS' compensation as provided herein.

6.6  Bank Card Association Assessments/Fees. ISO shall pay or fund when due all Bank Card association assessments/fees, including any and all quarterly assessments/fees.

6.7  Survival. The provisions of this Section 6 shall survive the termination or expiration of this Agreement.



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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6.8  Assignment of Merchant Losses. SERVICERS agree that after SERVICERS have been fully reimbursed by ISO for a Merchant loss pursuant to this Agreement, and provided that the Merchant Account resulting in the Merchant loss has been terminated, that SERVICERS will, at the request of ISO, assign to ISO any and all of SERVICERS' subrogation rights under or related to the Merchant Processing Agreement (including guarantees, security or otherwise) related to the indebtedness of such Merchant under the Merchant Processing Agreement (including guarantees, security or otherwise), so that ISO may pursue collection recovery activities in connection with such Merchant loss. Any such collection recovery activities shall be conducted in the name of ISO and shall be subject to the indemnification obligations of ISO. Bank agrees to execute and deliver to ISO such assignment documents as reasonably requested and required by ISO to vest such collection loss(es) recovery right to ISO and as reasonably required in connection with such collection recovery activities.

SECTION 7 REPRESENTATIONS AND WARRANTIES OF ISO

    ISO represents and warrants to SERVICERS that, as of the date of this Agreement, the following are true and correct:

7.1  Organization and Good Standing. ISO is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to carry on its business as it is now being conducted. ISO is and will be qualified as a foreign corporation in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its properties requires the qualification.

7.2  Execution and Effect of Agreement. ISO has the corporate power and authority to enter into this Agreement and the execution and delivery of this Agreement and the performance of ISO's obligations hereunder have been duly authorized by all necessary corporate action. This Agreement has been duly executed and delivered by ISO and constitutes a legal, valid, and binding obligation of ISO, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally.

7.3  Restrictions. Neither the execution and delivery of this Agreement nor the conduct of the Program contemplated hereby will:

  (a)   Violate any of the provisions of the charter or by-laws of ISO; or

  (b)   Conflict with, or result in a breach of, or give rise to a right of termination of, or accelerate the performance required by the terms of any judgment, court order or consent decree, or any agreement, including a restrictive covenant or covenant against competition, indenture, mortgage, or instrument to which ISO is a party or to which its property is subject, or constitute a default thereunder, except where the conflict, breach, right of termination, acceleration or default would not

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      prevent or have a Material adverse effect on the conduct of the activities contemplated hereby.

7.4  Consents. Except for filings, consents, waivers, approvals, and authorizations that the failure to obtain or make would not have a Material adverse effect on ISO or the Program, no filing, consent, waiver, approval, or authorization of any governmental authority or of any third party other than Visa and MasterCard, or notice to, or filing with, any governmental authority or any third party on the part of ISO is required in connection with the execution and delivery of this Agreement or the conduct of the activities contemplated hereby.

7.5  Litigation. To the knowledge of ISO and except as disclosed in public filings with the Securities and Exchange Commission, there is no action at law or in equity, arbitration, proceeding, or governmental investigation pending, or to the knowledge of ISO threatened, by or before any court, any governmental or administrative agency or commission, or arbitrator, against ISO regarding this Agreement or any of the transactions contemplated hereby that could reasonably be expected to prevent or have a Material adverse effect on the conduct of the activities contemplated hereby.

SECTION 8 ADDITIONAL COVENANTS

8.1  Reserve Account.

  (a)   ISO expressly authorizes SERVICERS to establish a Reserve Account pursuant to the terms and conditions set forth in this Section 8.1. The initial amount of such Reserve Account shall be [***]. In addition, the amount of the Reserve Account may be increased by SERVICERS from time to time based upon any reasonably anticipated risk of loss to SERVICERS, material breach of the Agreement by ISO, or any material adverse change in the financial condition of ISO. Such Reserve Account shall be established and maintained at Bank. [***]

  (b)   The Reserve Account shall be fully funded upon five (5) Business Days' notice to ISO. Such Reserve Account may be funded by all or any combination of the following: (i) one or more debits to the Offset Account or any other accounts of ISO held by Bank or any of its Affiliates; (ii) one or more deductions or offsets to any payments otherwise due to ISO; or (iii) ISO's delivery to SERVICERS of a letter of credit issued by a bank acceptable to SERVICERS and in a form acceptable to SERVICERS.



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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  (c)   If ISO's funds in the Reserve Account are not sufficient to cover the chargebacks, adjustments, fees and other charges due to SERVICERS from ISO or Merchants, or if the funds in the Reserve Account have been released, ISO agrees to pay SERVICERS such sums within five (5) Business Days of any such request by SERVICERS. In the event of a failure by ISO to fund the Reserve Account, SERVICERS may fund such Reserve Account in any of the manners set forth above.

  (d)   To secure ISO's obligations to SERVICERS under this Agreement, ISO grants to SERVICERS a lien and security interest in and to any of ISO's funds in the Reserve Account or otherwise related to this Agreement now or hereafter in the possession of SERVICERS, whether now or hereafter due or to become due to ISO from SERVICERS. ISO agrees to duly execute and deliver to SERVICERS such instruments and documents as SERVICERS may reasonably request to perfect and confirm the lien, security interest, right of setoff, recoupment and subordination set forth in this Agreement.

8.2  Inspection.ISO will, at any and all reasonable times, permit SERVICERS' employees, agents, attorneys, auditors, or bank regulators to inspect ISO's place of business to audit its operations for compliance with all Rules, laws, regulations, and directives of any governmental regulatory agency or Bank Card association, all at SERVICERS' expense.

8.3  Cooperation.SERVICERS and ISO will each timely furnish to the other any and all information and materials that the other may, from time to time, reasonably request in connection with all matters contemplated by this Agreement. Each party also shall take the action as the other may, from time to time, reasonably request in order that the purposes of this Agreement will be fully accomplished and that all matters contemplated hereby will comply with all Rules or other applicable statutory, regulatory or other legal requirements. ISO shall promptly deliver to SERVICERS after receipt by ISO a copy of all non-routine notices or correspondence that it receives from MasterCard, Visa, or other networks or Bank Card associations, or any other third party, which in any way relates to any Merchant's or ISO's participation in MasterCard, Visa, and other networks or Bank Card associations under this Agreement.

8.4  Compliance With Rules. ISO also covenants to the following:

  (a)   ISO will obtain copies of all available Rules from Visa and MasterCard and any other Bank Card association that makes its Rules available to ISOs. For all Rules not reasonably available to ISO, SERVICERS will provide ISO with information regarding such Rules and compliance therewith. ISO understands and agrees to comply fully with all Rules and applicable laws and regulations.

  (b)   On an ongoing basis, ISO will regularly provide SERVICERS with the current addresses for all its offices.

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  (c)   In the event of any inconsistency between any provision of this Agreement and the Rules, the Rules in each instance shall be afforded precedence and shall apply.

  (d)   ISO acknowledges and agrees that Visa and/or MasterCard are the sole and exclusive owner of Visa and/or MasterCard marks. ISO agrees to never contest the ownership of these marks and Visa and/or MasterCard may at any time immediately and without advance notice prohibit ISO from using their respective marks.

  (e)   ISO acknowledges and agrees that Visa and/or MasterCard shall have the right, either in law or in equity, to enforce any provision of the Rules and to prohibit ISO's conduct that creates a risk of injury to Visa and/or MasterCard or that may adversely affect the integrity of Visa's and/or MasterCard's systems, information or both. ISO agrees to refrain from taking any action that would have the effect of interfering with or preventing an exercise of these rights by Visa and/or MasterCard.

  (f)   ISO agrees not to use any marks of Visa and/or MasterCard on its own behalf in the furtherance of the Program. ISO also agrees not to suggest, imply or in any manner create an impression that it is a Member or an authorized representative of Visa and/or MasterCard or that it is other than an independent sales organization or member service provider for a Member. Further, ISO may not create an impression that Visa and/or MasterCard in any way endorses ISO or the Program it coordinates through SERVICERS.

  (g)   ISO may use one or more of Visa's or MasterCard's marks under the following conditions:

  (i)   The marks are used in accordance with the Rules; and

  (ii)   The marks are used pursuant to the express written permission of Bank.

  (h)   Except as expressly set forth herein, ISO may not subcontract, sublicense, assign, license, franchise or in any other manner extend or transfer to any third party any right or obligation ISO may have in connection with the Program. ISO agrees to provide services under the Program only with ISO's employees, Other MSP's or IC's in accordance with Section 2.4. An employee of ISO is defined as an individual who, while providing services for the Program (i) represents himself or herself as working for ISO while using only ISO's legal or doing business as name(s) as registered with Visa and/or MasterCard, and (ii) receives compensation for services rendered for the Program from ISO. An employee may not extend or transfer to any third party any right or obligation the employee may have regarding the Program as an employee of ISO. ISO will provide SERVICERS with a list of the names of all of its employees and IC's and such additional information as SERVICERS may reasonably request from time to time regarding any employee or IC. ISO will conduct appropriate background checks

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      (including credit and criminal background checks) on all employees, Other MSP's and IC's.

  (i)   ISO further agrees to the following:

  (i)   ISO will not use Visa's and/or MasterCard's equipment and software (V/MC Systems) and Visa and/or MasterCard information identified or reasonably understood to be confidential or proprietary (V/MC Confidential Information) for anything other than to perform its duties on behalf of SERVICERS and definitely not for its own use or for any other purpose;

  (ii)   To treat the V/MC Systems and V/MC Confidential Information in at least as careful and confidential a manner as ISO treats its own or the SERVICERS' systems and confidential or proprietary information;

  (iii)   To acknowledge that access to the V/MC Systems and V/MC Confidential Information does not convey to ISO any right, title, interest or copyright therein or any license to use, sell, exploit, copy or develop them further;

  (iv)   To limit access to the V/MC Systems and V/MC Confidential Information to only those ISO employees and Other MSP's with a need to have access for the ISO to perform services under the Program and to implement and maintain reasonable and appropriate safeguards to prevent unauthorized access to or use of the V/MC Systems or V/MC Confidential Information;

  (v)   Solely with respect to the Program and this Agreement, upon request by SERVICERS, or, absent such requests, upon termination of ISO's performance under the Program, to immediately cease any and all use of V/MC Systems and promptly thereafter deliver to SERVICERS all V/MC Confidential Information then in the possession or control of ISO or, upon request by Visa and/or MasterCard, to immediately cease any and all use of the V/MC Systems and promptly thereafter deliver all V/MC Confidential Information that was provided by SERVICERS then in its possession or control to Visa and/or MasterCard; and

  (vi)   To immediately advise both SERVICERS and Visa and/or MasterCard if any unauthorized person or external entity seeks access to the V/MC Systems or V/MC Confidential Information whether by legal proceeding or otherwise.

  (j)   Visa and/or MasterCard may at any time conduct financial and procedural audits of ISO. ISO agrees to cooperate with and promptly supply Visa and/or MasterCard with all information and material requested.

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  (k)   ISO understands that all Program Materials including Merchant Applications, Merchant Processing Agreements, Merchant statements, and Promotional Materials (i) must be approved by SERVICERS before use, such approval not to unreasonably withheld or delayed beyond [***] [***] days, and (ii) may not state or imply that ISO is participating in or conducting any activity precluded by the Rules.

  (l)   ISO recognizes that SERVICERS must approve (in advance) any fee associated with the Program which must be clearly and conspicuously disclosed in writing to the Merchant prior to any payment or Application.

8.5   Registration as ISO. ISO and each Other MSP shall at all times, at ISO's and/or each Other MSP's cost and expense, maintain in effect during the term of this Agreement, a valid and effective registration as an independent service organization with Visa and a member service provider with MasterCard and shall provide any information as Visa and MasterCard may reasonably request in connection therewith or in connection with the services of ISO hereunder, and shall provide SERVICERS the information as it may reasonably request concerning compliance with all applicable Rules, laws, regulations and the requirements set forth herein in connection with this Agreement. The parties hereto will work together expeditiously and in good faith to register and maintain the registration of ISO and each Other MSP with the appropriate Bank Card associations as required under the Rules.

8.6   Mark Restriction. ISO shall not make any use of SERVICERS' Marks or any other Intellectual Property without SERVICERS' prior written consent, which will not be unreasonably withheld or delayed beyond [***] [***] days.

8.7   Financial Statements/Audit Rights. ISO shall make available (whether through public filings or directly) SERVICERS with annual audited financial statements prepared by an independent auditing firm within 90 days of the end of each fiscal year (and shall make available to SERVICERS quarterly financial statements upon request of SERVICERS). In addition, ISO will provide any shareholder/owner personal financial information as required by the Rules. ISO will, at any and all reasonable times, permit SERVICERS' employees, agents and/or auditors to inspect ISO's books and records at SERVICERS' expense prior request and notice and if for a particular need.

SECTION 9 CONFIDENTIAL INFORMATION

9.1   Confidential Information. Confidential Information is non-public and proprietary information relating to the business of ISO or its Affiliates that SERVICERS and their Affiliates acquire during the term of this Agreement, and information relating to the business of SERVICERS and their Affiliates. It includes, but is not limited to, the following, whether used in, or to be used in, the business of ISO or SERVICERS: physical systems for the operation of the business; all present and planned strategies, business plans, and projections; all market and sales and marketing information; all



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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    financial, accounting, and credit information; and the terms and conditions of this Agreement. Neither party will disclose, furnish, sell, convey, or use for any purpose other than as contemplated under this Agreement any of the other parties' Confidential Information or materials without written authorization. For the avoidance of doubt, the parties acknowledge and agree that all Merchant information is the Confidential Information of ISO and (i) may not be used by SERVICERS for any purpose other than to provide the services contemplated hereunder during the term of this Agreement and thereafter, and (ii) will not be used by SERVICERS, directly or indirectly, to solicit any Merchants in the Merchant Portfolio.

9.2   Exclusions. Nothing in this Section 9 shall restrict either party with respect to Confidential Information which: (a) the receiving party can demonstrate was rightfully possessed by it before it received the information from the disclosing party; (b) was in the public domain prior to the date of this Agreement or subsequently becomes publicly available through no fault of the receiving party or any person acting on its behalf; (c) was previously received by the receiving party from a third party or is subsequently furnished rightfully to the receiving party by a third party not known to be under restrictions on use or disclosure; (d) is independently developed by such party; (e) is required to be disclosed by the Rules, law, regulation or court order, provided that the disclosing party will exercise reasonable efforts to notify the other party prior to disclosure; or (f) is required to be disclosed to comply with or to enforce the terms of this Agreement.

9.3   Ownership of Work Product. Each party shall have and retain all ownership rights (including ownership of any Marks) in the work product developed for the implementation of the Program, including the Application, Merchant Processing Agreement and Promotional Materials that it creates, prepares or produces in connection with this Agreement, and all the work products shall remain the exclusive property of that party. Upon termination of the Agreement, each party shall immediately cease using any materials using the other's Marks or Intellectual Property, and shall immediately destroy all such materials.

9.4   Remedy; Survival. If any party breaches this Section 9, the non-breaching party will suffer irreparable harm and the total amount of monetary damages for any injury to such party will be impossible to calculate and therefore an inadequate remedy. Accordingly, the non-breaching party may (i) seek temporary and permanent injunctive relief against the breaching party or (ii) exercise any other rights and seek any other remedies to which the non-breaching party may be entitled to at law, in equity and under this Agreement for any violation of this Section 9. The provisions of this Section 9 shall survive the termination or expiration of this Agreement.

SECTION 10 TERM AND TERMINATION

10.1  Initial Term. The initial term of this Agreement shall be four (4) Processing Years commencing on the Effective Date of this Agreement and ending on June 30, 2010 unless

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    terminated earlier as provided in this Section 10. Thereafter, this Agreement shall automatically continue in effect until either party gives the other at least six (6) months prior written notice of termination.

10.2  Termination by SERVICERS. SERVICERS may terminate this Agreement prior to its expiration for cause upon prior written notice to ISO as follows:

  (a)   Upon a Material breach of any representation, warranty or covenant in this Agreement by ISO which is not cured by ISO within sixty (60) days of receipt of written notice from SERVICERS; provided however, that if ISO is attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then ISO shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days;

  (b)   Upon a breach of any Material Rule by ISO, or repeated breach of any Rule by ISO which is not cured by ISO within sixty (60) days of receipt of written notice from SERVICERS; provided however, that if ISO is attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then ISO shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days;

  (c)   Upon any commission of any fraudulent activity by ISO, or the illegal activity of ISO's employees in the performance of their duties in connection with this Agreement;

  (d)   Upon any failure by ISO to pay (or make arrangements to pay that are acceptable to SERVICERS) any amount due under this Agreement to SERVICERS which does not give rise to the right to terminate under any other provision of this Agreement within ten (10) Business Days after written notice to ISO of its failure to pay the amount;

  (e)   Upon the insolvency or bankruptcy of ISO;

  (f)   Upon a Material adverse change in the business or financial condition of ISO;

  (g)   Upon an assignment of this Agreement by ISO without SERVICERS' prior written consent;

  (h)   Upon the failure by ISO to maintain good standing as an independent sales organization with Visa or a member services provider with MasterCard;

  (i)   If SERVICERS are required by a governmental or regulatory body or agency or by any Bank Card association to terminate the Services on behalf of ISO with as much prior notice as is practicable under the circumstances;

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  (j)   If ISO fails to fund the Offset Account or the Reserve Account as required under this Agreement within ten (10) Business Days after written notice to ISO of its failure to pay the amount;

  (k)   Upon the termination of the Service Agreement for any reason with one hundred eighty (180) days prior written notice to ISO; or

  (l)   Upon a Change of Control of ISO with one hundred eighty (180) days prior written notice to ISO, unless the SERVICERS had previously consented to such change in control.

10.3  Termination by ISO. ISO may terminate this Agreement prior to its expiration for cause upon prior written notice to SERVICERS as follows:

  (a)   Upon a Material breach of any representation, warranty or covenant in this Agreement by SERVICERS which is not cured by SERVICERS within sixty (60) days of receipt of written notice from ISO; provided however, that if SERVICES are attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then SERVICERS shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days;

  (b)   Upon any failure by SERVICERS to pay any amount due under this Agreement which does not give rise to the right to terminate under any other provision of this Agreement within five (5) Business Days after written notice to SERVICERS of its failure to pay the amount;

  (c)   Upon the insolvency or bankruptcy of either of the SERVICERS;

  (d)   Upon the termination of the Service Agreement for any reason;

  (e)   Upon a Material adverse change in the business or financial condition of either of SERVICERS;

  (f)   Upon an assignment of this Agreement by SERVICERS without ISO's prior written consent;

  (g)   Upon the failure by SERVICERS to maintain good standing with Visa or a MasterCard;

  (h)   If required by a governmental or regulatory body or agency or by any Bank Card association to terminate;

  (i)   Upon cessation of Bank Card operations by SERVICERS; or

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  (j)   At any time upon one hundred eighty (180) days prior written notice to the SERVICERS with no penalty.

10.4  Effect of Termination.

  (a)   Upon the expiration or termination of this Agreement for any reason, at the direction of ISO and pursuant to the plan of Deconversion, SERVICERS will transfer and assign all their interest in the Merchant Portfolio (including Merchant Processing Agreements and Merchant Accounts) and the dedicated BINs/ICAs to a Visa and MasterCard Member designated by ISO, provided first that: (a) all amounts due (or estimated to become due) in connection with each Merchant Processing Agreement and under this Agreement have been paid to SERVICERS; (b) the Termination Reserve Account has been adequately funded; (c) ISO provides full written indemnities to SERVICERS regarding actual and potential losses or other obligations arising out of operation of the Program or arising out of, or related to, this Agreement or any Merchant Processing Agreement; and (d) the Program Transfer complies with all applicable Rules, laws and regulations (the Program Transfer). [***]

  (b)   Until the completion of the Deconversion of the Merchant Portfolio, the parties shall continue to operate under the terms and conditions of this Agreement; provided, however, that upon the effective date of expiration or termination of this Agreement, ISO will promptly discontinue its promotion and recommendation of the Program and will cease to board new accounts on Bank's BINs and ICAs or for sponsorship by Bank. ISO will reimburse SERVICERS for any Deconversion pursuant to the plan for Deconversion, regardless of whether such Deconversion occurs before or after the expiration or termination of this Agreement. ISO shall continue to hold all risks associated with transactions processed by SERVICERS prior to the effective date of Deconversion of each respective Merchant in the Merchant Portfolio, including all risk relating to chargebacks and fraudulent transactions. ISO shall pay SERVICERS any amounts associated with such risks immediately upon demand.

10.5  Termination Reserve Account. Within ten (10) Business Days of the issuing of a notice of termination by any party, ISO shall fund a Termination Reserve Account. Except as specifically set forth otherwise in this Section 10.5, all provisions of Section 8.1 of this Agreement with regard to the Reserve Account shall also apply to the Termination Reserve Account. The amount of the Termination Reserve Account shall be the greater of (i) the most recent required amount for the Reserve Account prior to termination, or (ii) the amount calculated as follows:



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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  (a)   The amount of all chargebacks during the [***] [***] months preceding termination, plus

  (b)   The amount of all assessed Bank Card association fines or penalties and all fees and contingent fees which are or shall become due to SERVICERS from ISO, plus

  (c)   The estimated maximum amount of any known or likely significant loss events (defined as a credit or fraud loss that is likely to exceed $[***]).

    Upon termination, any balance in the Reserve Account shall be transferred to, and be applied toward, the Termination Reserve Account. The Termination Reserve Account will be held by SERVICERS until the completion of the Program Transfer or for such longer period of time as is consistent with SERVICERS' liability for Bank Card transactions in accordance with the Rules. SERVICERS will reduce the Termination Reserve Account balance to reflect any reductions in ISO's then-potential liability as the Program Transfer and Deconversion progress. [***]

SECTION 11 INDEMNIFICATION ; EXCLUSIONS ; LIMITATIONS

11.1  ISO's Indemnification. ISO shall indemnify, defend, protect, and hold SERVICERS, their Affiliates, and their respective officers, directors, employees, attorneys, and permitted assigns, harmless from and against any Losses and credit/fraud losses arising directly from:

  (a)   Any failure by ISO to comply with any Material term or condition of this Agreement applicable to ISO, or the failure of any warranty or representations made by ISO in this Agreement to be true and correct;

  (b)   Any claim for which ISO has otherwise agreed herein to pay or indemnify SERVICERS;

  (c)   Credit or fraud losses, regardless of whether SERVICERS performed any underwriting, credit review, periodic review or fraud monitoring reviews on their own behalf;

  (d)   Any negligence, misrepresentation or willful misconduct on the part of ISO or any of its employees, agents, Other MSP's or IC's related to this Agreement; and

  (e)   Any claim by any third party related to this Agreement of a Merchant in the Merchant Portfolio that ISO's Intellectual Property violates or infringes any proprietary right of such third party, without any limitation of liability whatsoever.



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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11.2  SERVICERS' Indemnification. SERVICERS, jointly and severally, shall indemnify, defend, protect, and hold ISO, its Affiliates and their respective officers, directors, employees, attorneys, permitted assigns, Other MSP's and IC's harmless from and against any Losses and credit/fraud losses arising directly from:

  (a)   Any failure by SERVICERS to comply with any Material term or condition of this Agreement applicable to SERVICERS, or the failure of any warranty or representations made by SERVICERS in this Agreement to be true and correct;

  (b)   Any claim for which SERVICERS have otherwise agreed herein to pay or indemnify ISO;

  (c)   Any Losses caused by SERVICERS' breach of a Merchant Processing Agreement;

  (d)   Any negligence, misrepresentation or willful misconduct on the part of SERVICERS or any of their employees or agents related to this Agreement; and

  (e)   Any claim by any third party related to this Agreement of a Merchant in the Merchant Portfolio that SERVICERS' Intellectual Property violates or infringes any proprietary right of such third party, without any limitation of liability whatsoever.

11.3  Exclusion of Warranties, Limitations of Liability.

  (a)   Except as expressly provided in this Agreement, SERVICERS specifically disclaim all warranties of any kind, express or implied, including any warranties regarding merchantability, fitness for a particular purpose, non-infringement or otherwise (regardless of any course of dealing, custom or usage of trade), arising out of or related to this Agreement, which are hereby excluded by agreement of the parties. The parties agree that this Agreement is a service agreement and is not subject to the provisions of the Uniform Commercial Code.

  (b)   Notwithstanding anything in this Agreement to the contrary, in no event shall any party hereto, their respective Affiliates or any of their respective directors, officers, employees, agents or subcontractors, be liable under any theory of tort, contract, strict liability or other legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect or consequential damages, each of which is hereby excluded by agreement of the parties, regardless of whether the damages were foreseeable or whether any party or any entity has been advised of the possibility of the damages.

  (c)   Notwithstanding anything in this Agreement to the contrary, the cumulative liability of each of SERVICERS and ISO for all Losses, claims, suits, controversies, breaches or damages arising out of or related to this Agreement

Page 28







      regardless of the form of action or legal theory relating to events in any one Processing Year shall not exceed [***] [***] times the amount of clearing/sponsorship fees paid to SERVICERS by ISO pursuant to this Agreement during the immediately preceding [***] [***] full months; provided, however, that this limitation shall not apply to either party's obligation to indemnify the other for credit/fraud losses or Losses arising from or related to the indemnifying party's (or its agents, representatives, Merchants, Other MSP's or IC's) failure to comply with Rules.

  (d)   The parties acknowledge and agree that no party will be obligated to indemnify the other party to the extent that the liability, lawsuit, penalty, claim, demand or Loss resulted from the negligence or intentional misconduct of the party to be indemnified.

  (e)   Notwithstanding anything in this Agreement to the contrary, neither ISO nor SERVICERS nor their Affiliates shall have any liability under this Agreement for breach of their respective duties and obligations under this Agreement to the extent such breach was caused by labor disputes, strikes, acts of God, floods, terrorist acts, lightning, severe weather, shortages of materials, rationing, utility or communication failures or interruptions, failure of MasterCard, Visa, and other networks or Bank Card associations, earthquakes, war, revolution, civil commotion, blockade, embargo, or any law, order, proclamation, regulation, ordinance, demand or requirement having legal effect of any government or any judicial authority or representative of any such government, or any other act, omission or cause whatsoever, whether similar or dissimilar to those referred to in this clause, which are beyond ISO's, SERVICERS' or their Affiliates reasonable control.

11.4  Survival. The provisions of this Section 11 shall survive the termination or expiration of this Agreement.

SECTION 12 MISCELLANEOUS

12.1  Books and Records. SERVICERS shall provide ISO promptly with monthly reports showing for the month the total number of active accounts and inactive accounts, the net sales processed for each Approved Merchant (provided ISO is either a party to the Merchant Processing Agreement (or assignee of a named party) or has obtained such Merchant's written authorization to obtain such information and SERVICERS' disclosure is not prohibited by any Rule, law, regulation or agreement with a governmental agency) and the net sales processed for all Approved Merchants.

12.2  Relationship of the Parties. SERVICERS and ISO agree that in performing their responsibilities pursuant to this Agreement they are in the position of independent contractors. This Agreement is not intended to create, nor does it create and shall not be construed to create, a relationship of partnership or joint venture or agency or any



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

Page 29







    association for profit between SERVICERS and ISO. ISO is not authorized hereunder to hold itself out as an agent of SERVICERS or to inform or represent to any person that ISO has authority to bind or obligate SERVICERS or to otherwise act on behalf of SERVICERS except as expressly set forth herein. ISO shall not make any representation or warranty, or create any liability or potential liability on behalf of SERVICERS except as expressly set forth herein.

12.3  No Third Party Beneficiaries. Nothing in this Agreement is intended to confer upon any person or entity other than the parties and their Affiliates any rights or remedies.

12.4  Assignment and Transfer. Except as expressly set forth herein, ISO shall not assign or otherwise transfer this Agreement or any of its rights or obligations hereunder, by operation of law or otherwise, or contract with any third party (other than the third parties named herein) to perform any of its responsibilities or obligations relating to this Agreement without the prior written consent of SERVICERS, which consent will not be unreasonably withheld. In addition, ISO shall provide written notice to SERVICERS within three (3) Business Days of any Change of Control of ISO.

12.5  Notices. Any notice, request, consent, waiver or other communication required or permitted to be given hereunder shall be effective only if in writing and shall be deemed sufficiently given only if delivered in person or sent by certified, registered, or overnight mail or overnight courier service, postage prepaid, return receipt requested, addressed as follows:

If to FDMS:

First Data Merchant Services Corporation 6902 Pine Street PS-11 Omaha, NE 68106 Attn: VP - Omaha Processing Facsimile Number: 402-222-6384

With a copy to:

First Data Merchant Services Corporation 12500 E. Belford Avenue, Suite M5-C Englewood, CO 80112 Attn: General Counsel Facsimile Number: 720-332-0033

If to Bank:

Wells Fargo Bank, N.A. 1200 Montego Way Walnut Creek, CA 94598

Page 30







Attn: EVP Merchant Card Services Facsimile Number:

If to ISO:

iPayment, Inc. 26707 West Agoura Hills Road, Suite 100 Calabasas, CA 91302 Attn: Operations Manager Facsimile Number:

With a copy to:

iPayment, Inc. 40 Burton Hills Boulevard, Suite 415 Nashville, TN 37215 Attn: General Counsel Facsimile: 615-665-8434

    or to such other person or address as either party may designate by notice given to the other party as provided herein. The notice or communication shall be deemed to have been given as of the date so delivered.

12.6  Prior Agreements, Entire Agreement, and Modifications. This Agreement, along with the Service Agreement, supersedes all prior agreements, whether verbal or in writing, and contains the entire Agreement between the parties regarding all matters, issues and claims relating to the subject matter of this Agreement, and any other written documents exchanged, verbal agreements reached and representations made by or between the parties in the course of the negotiation of this Agreement. This Agreement may be changed only by a written instrument specifically stating that it modifies this Agreement and it must be signed by all parties.

12.7  Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to New York conflict laws.

12.8  Waivers. No failure or delay by any party to exercise, and no course of dealing regarding any right of the party concerning an obligation of any other party to this Agreement, shall operate as a waiver unless agreed to in writing by all parties. The parties hereto waive their right to a jury trial in the event of any legal proceedings between them.

12.9  Binding Effect, Remedies. This Agreement will not become legally binding and may not be enforced by any party until and unless executed by all parties hereto. This Agreement and the rights and obligations created hereunder shall be binding upon and inure solely to the benefit of the parties and their respective successors and permitted assigns, and no other person or legal entity shall acquire or have any rights under or by

Page 31







    virtue of this Agreement. The remedies provided for in this Agreement shall be cumulative in nature, not exclusive, and shall be in addition to any other remedy allowed in law or equity.

12.10  Severability. If any provision of this Agreement is held illegal, invalid, void, or unenforceable in any jurisdiction where this Agreement or any part thereof is to be performed by reason of any rule of law, administrative or judicial proceeding or public policy, the provision shall be deemed deleted and the remaining provisions of this Agreement shall remain valid and binding.

12.11  Headings. The Section headings of this Agreement are inserted as a matter of convenience only and shall in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions herein.

12.12  Counterparts. Provided that all parties execute a copy of this Agreement, this Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. The parties acknowledge that delivery of executed copies of this Agreement may be effected by facsimile or other comparable means, as well as by delivery of manually signed copies.

12.13  Construction. As used in this Agreement, any reference to the masculine, feminine or neuter gender shall include all genders, the plural shall include the singular, and the singular shall include the plural.

12.14  Exhibits. All exhibits to this Agreement are incorporated by reference with the same force and effect as if fully set forth herein. This Agreement shall be given full force and effect without the exhibits or as to those exhibits that are attached, in the event less than all of the exhibits referenced herein are in fact attached.

12.15  Termination of Other Agreements. The following agreements are herby terminated without penalty to any party and are of no further force and effect: (i) the TS ISO Agreement; and (ii) the PCS ISO Agreement; provided, however, that neither the termination of the TS ISO Agreement or the PCS ISO Agreement nor anything contained in this Agreement shall act as a waiver or otherwise preclude FDMS from reconciling and/or collecting any billing, residual or other fee-related issues under either the TS ISO Agreement or the PCS ISO Agreement except where otherwise agreed to by FDMS.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

iPAYMENT, INC.

By: \s\ Greg Daily

Name: Greg Daily

Page 32







Title: Chief Executive Officer

FIRST DATA MERCHANT SERVICES CORPORATION

By: \s\ Rick Learch

Name: Rick Learch

Title: Senior Vice President

WELLS FARGO BANK, N.A.

By: \s\ Deirdre P. Cohen

Name: Deirdre P. Cohen

Title: Vice President

Page 33







[***]



*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

Exhibit A, Page 1







EXHIBIT B UNACCEPTABLE BUSINESS

The following industries are considered unacceptable merchant processing candidates due to Association prohibition; illegal or likely to be deemed illegal activity; high fraud potential; high potential for excessive chargebacks; or excessive risk exposure.

  •   All sexually oriented or pornographic merchants:       — Adult telephone conversations or Internet   - Modeling agencies       — Massage parlors   - Adult book stores       — Misc. entertainment (not elsewhere classified)   - Topless bars/clubs

  •   Any illegal products/services

  •   Any service providing peripheral support of illegal activities (i.e., drugs)

  •   Chain letters

  •   Collection agencies or firms involved in recovering/collecting past due receivables

  •   Drug paraphernalia

  •   Free gift, prize, sweepstakes or contest as an inducement to purchase a product/service

  •   Get-rich-quick schemes

  •   Lotteries and/or illegal gambling, including Internet gambling

  •   Sports forecasting or odds-making

  •   Merchants offering rebates or special incentives

  •   Credit card protection (including identity theft protection)

  •   Extended warranty companies

  •   Non-face to face tobacco sales

  •   Non-face to face prescription drug sales

  •   Non-face to face sales of firearms

  •   Aggregators/Internet Payment Service Providers/Third Party Payment Processors

  •   Audio/Video Text

  •   Airlines

  •   Cruise lines

  •   Travel Agents/Tour Operators

  •   Money transfer services

  •   Check cashing

  •   Currency exchange

  •   Dating Services

  •   Pseudo-pharmaceuticals (anti-aging pills, sex nutrients, etc.)

  •   Outbound telemarketing

  •   Up-sell Merchants

Exhibit B, Page 1







EXHIBIT C APPLICATION MATERIALS

See Attached.

Exhibit C, Page 1







EXHIBIT D PROGRAM STANDARDS

See Attached.

Exhibit D, Page 1







EXHIBIT E LIST OF CURRENT BINs/ICAs and CURRENTLY ACTIVE OTHER MSP's and IC's

See attached.

Exhibit E, Page 1







EXHIBIT F HIGH RISK MERCHANT LIST (Not Elsewhere Classified As Unqualified / Unacceptable)           MCC   MERCHANT TYPE ALL   Internet Merchants          ALL   Mail Order/ Telephone Order Merchants          ALL   Merchants Engaged In Extended Delivery           2741    Printing and Publishing Services — (Wholesale)           2791    Typesetting, Plate Making & Related Services-(Wholesale)           2842    Sanitation, Polishing & Specialty Cleaning Preparations           4121    Limousines, Taxis, Cabs           4784    Bridge and Tolls Fees           4812    Telecommunication Equipment and Telephone Sales, Beepers, Pagers, Paging Equipment, Cell Phones           4814    Telephone Services (Billing), Local and Long Distance Telecommunication Services, Cellular Telephone Services           4815    VisaPhone / MasterPhone           4816    Computer Network/Information Services. Internet Service Providers, Electronic Bulletin Boards           4821    Cablegrams, Telegrams           4899    Cable and Other Pay Television Services           5013    Parts — Motor Vehicle Supplies, New Parts — (Wholesale)           5021    Office, Commercial Furniture — (Wholesale)           5039    Construction Material — not elsewhere classified -(Wholesale)           5044    Copy Services — Photographic, Photocopy, Microfilm Supplies- (Wholesale)           5045    Computer, Computer Peripheral Equipment and Software — (Wholesale)           5046    Commercial Equipment — not Elsewhere classified (Wholesale)           5047    Equipment — Medical, Dental, Ophthalmic, Orthopedic, Hospital Equipment, Supplies — (Wholesale)           5051    Metal Service Centers and Offices — non-precious (Wholesale)           5065    Parts — Electrical, Equipment — (Wholesale)           5072    Hardware Equipment and Supplies — (Wholesale)           5074    Equipment — Heating Equipment, Supplies, Water Conditioning, Purification, Softening — (Wholesale)           5085    Industrial Supplies -Not elsewhere classified (Wholesale)           5094    Gemstones, Precious Stones, Metals, Watches, Jewelry (Wholesale)           5099    Durable Goods Not Elsewhere Classified (Wholesale)

Exhibit F, Page 1







          MCC   MERCHANT TYPE  5111    Paper — Writing, Printing, Stationery, Office Supplies — (Wholesale)           5122    Pharmaceuticals — (Wholesale)           5131    Fabrics and Dry Goods — (Wholesale)           5137    Commercial Work Clothing and Uniform — (Wholesale)           5139    Footwear — Commercial (Wholesale)           5169    Chemicals & Allied products — (Wholesale)           5172    Petroleum and Petroleum Products — (Wholesale)           5192    Books, Periodicals & Newspapers — (Wholesale)           5193    Florist Supplies, Nursery Stock and Flowers — (Wholesale)           5198    Paints, Varnishes and Supplies — (Wholesale)           5199    Non-Durable Goods — Not Elsewhere Classified (Wholesale)           5521    Used Car & Truck Dealers           5712    Furniture, Home Furnishing, Bedding, Mattress Stores           5713    Carpet, Rugs, Floor Covering Stores           5719    Miscellaneous Home Furnishing Specialty Stores           5732    Computers, Electronics, Electronic Stores, Electronic Parts           5734    Computer Software           5932    Antiques, Collectible, Memorabilia Stores           5933    Pawnbrokers           5937    Antique Reproductions           5946    Camera & Photographic Supply Stores           5960    Direct Marketing — Insurance Services.           5963    Door-To-Door Sales           5968    Direct Marketing — Continuity/Subscription Merchant.           5969    Direct Marketing — Other Direct Marketers (Not Elsewhere Classified) Including Infomercials           5972    Stamp, Coin Stores, Stamp Collecting — Philatelic, Numismatic Supplies           6211    Securities Brokers, Mutual Funds, Stocks, Commodities, Bonds           6300    Insurance Sales, Underwriting, and Premiums           6513    Real Estate Agents, Brokers, Managers           7032    Camps — Sporting, Recreational           7033    Camping — Trailer Parks, Campgrounds           7273    Dating / Escort Services           7297    Massage Parlors           7298    Health & Beauty Spas           7372    Computer Programming, Data Processing, and Integrated Systems Design Services





          7375    Information Retrieval Services           7379    Computer Maintenance, Repair & Services — (Wholesale)           7829    Motion Picture and Video Tape Production and Distribution — (Wholesale)           7922    Theatrical Producers/Productions (except Motion Pictures) and Ticket Agencies

Exhibit F, Page 2







          MCC   MERCHANT TYPE  7929    Bands, Orchestras, and Miscellaneous Entertainers, Not Elsewhere Classified           7941    Commercial Sports, Professional Sports Clubs, Athletic Fields, and Sports Promoters           7997    Health Clubs, Country Clubs, Membership (Athletic, Recreation, Sports), Private Golf Courses           8241    Correspondence School           8244    Business & Secretarial Schools           8249    Trade & Vocational Schools           8299    Schools & Educational Services-Not Elsewhere Classified           8398    Organizations — Charitable, Social Service, Non-Political           8641    Associations — Civic, Social. Fraternal Associations           8651    Political Organizations           8661    Religious Organizations           8675    Automobile Associations, Automobile Clubs           8699    Membership Organizations — Not Elsewhere Classified           8734    Testing Laboratories (Non-Medical)           9211    Court Costs, Including Alimony, Child Support           9222    Fines           9223    Bail, Bond Payments           9311    Tax Payments           9399    Government Services — Not Elsewhere Classified           9401    Food Stamps           9402    Postal Services — U.S. Government           9700    Automated Referral Service

Exhibit F, Page 3







EXHIBIT G ADDITIONAL TERMS AND CONDITIONS FOR POS NETWORKS MERCHANT SPONSORSHIP

1.  General.

  1.1.   ISO desires to deploy and service (or cause to be deployed and serviced), at merchant locations, terminals (POS Terminals) that will be connected to the shared electronic funds transfer networks set forth on Schedule A to this Exhibit G, as it may be amended from time to time by FDMS in its sole discretion (the Debit Networks), to transmit point of sale transactions (POS Transactions) generated by these POS Terminals through the Debit Networks' telecommunications and processing systems which effectuate the switching, processing and settlement of transactions (Debit Network Systems). (The services described in this paragraph shall be referred to in this Exhibit G as the POS Services.).

  1.2.   ISO may offer qualified merchants the ability to provide, or have Customer provide on such merchant's behalf, merchants' ISOs with the option to pay their bills by initiating funds transfers through Debit Network Systems without PIN entry or verification, subject to additional terms and conditions agreed to by the ISO and FDMS (PIN-less Debit). (The services described in this paragraph shall be referred to in this Exhibit G as the PIN-less Debit Services. The POS Services and PIN-less Debit Services, collectively, will be referred to in this Exhibit G as the Debit Services).

  1.3.   Debit Networks require that in order for ISO to provide the POS Services to merchants, merchants must be sponsored into the Debit Network by a member of such Debit Network (Network Member). Certain Networks (Standard Networks) require that in order for ISO to provide the PIN-less Debit Services to merchants, merchants must be sponsored into the Debit Network by a Network Member.

2.  Duties of FDMS. Subject to the provisions of this Agreement, FDMS agrees to cause FFB, a Network Member, to: (a) sponsor Merchants into Debit Networks for provision of POS Services; (b) sponsor Merchants into Standard Networks for provision of PIN-less Debit Services through Standard Networks, subject to additional terms agreed upon by FDMS and ISO; provided, that FFB, in its absolute discretion, may refuse to sponsor any Merchant and may terminate its sponsorship of a Merchant or direct ISO to refuse to provide or terminate its provision of Debit Services to a Merchant.

  2.1.   Neither SERVICERS nor FFB will be responsible for the acts or omissions of any Debit Network or its agents or representatives.

3.  Conflict with Agreement. In the event of a conflict between this Exhibit G and the remainder of the Agreement as it relates to the subject matter hereof, the terms of this Exhibit G shall control. Otherwise, all terms and conditions of the remainder of the Agreement shall likewise apply to this Exhibit.

Exhibit G, Page 1







Schedule A

DEBIT NETWORKS

1.  All EDS networks, including; ACCEL, The Exchange, Instant Teller, Mpact, and TX.

2.  Alaska Option

3.  All Pulse networks, including; TYME, Money Station, and Gulfnet

4.  All Star networks, including; MAC, Cash Station, Alert, Avail, Bankmate, Cactus, Explore, Honor, Lynx, Most, and Relay

5.  NYCE

6.  Interlink

7.  Maestro

8.  Any other network added by FFB after the Effective Date.

Schedule A to Exhibit G, Page 1 
Question: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?

Answer: 51363


Question: Exhibit 10.36 [Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit have been omitted by means of marking such portions with asterisks as the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.] MANUFACTURING AND SUPPLY AGREEMENT (DA-9801 Licensed Products) Between DONG-A ST CO., LTD. And NEUROBO PHARMACEUTICALS, INC. Dated: September 28, 2018

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019





MANUFACTURING AND SUPPLY AGREEMENT (DA-9801 Licensed Products) This MANUFACTURING AND SUPPLY AGREEMENT (this Agreement) is made and entered into as of September 28, 2018 (Effective Date) by and between: Dong-A ST Co., Ltd., a corporation duly incorporated under the laws of the Republic of Korea, having its principal place of business at 64 Cheonho-daero, Dongdaemun-gu, Seoul 02587, Republic of Korea (Dong-A) and NeuroBo Pharmaceuticals, Inc., a corporation duly incorporated under the laws of the State of Delaware, having its principal place of business at 177 Huntington Avenue, Suite 1700, Boston, MA 02115, U.S.A. (NeuroBo). RECITALS WHEREAS, Dong-A and NeuroBo entered into the License Agreement (DA-9801) dated January 18, 2018, as amended by the Amendment to License Agreement (DA-9801) dated April 18, 2018 (the License Agreement) whereby Dong-A granted to NeuroBo an exclusive license under the Licensed Technology in the Field and in the Territory, to make, use, offer to sell, sell and import the Licensed Products (as defined by the License Agreement); WHEREAS, NeuroBo wishes that Dong-A manufacture and supply to NeuroBo the entire requirement of the Licensed Products and their matching placebo for the purpose of research and development of the Licensed Products, including the use in phase III clinical trials to be conducted by NeuroBo for the purpose of obtaining the NDA in the Territory, pursuant to the License Agreement; WHEREAS, NeuroBo wishes that Dong-A supply to NeuroBo the Licensed Products and their matching placebo already manufactured by Dong-A as of the Effective Date in compliance with the Korea Good Manufacturing Practices promulgated by the Governmental Authority in the Republic of Korea (the KGMP) and the Licensed Products and/or their matching placebo to be manufactured by Dong-A after the Effective Date in compliance with the KGMP; and WHEREAS, Dong-A agrees (i) to supply to NeuroBo the Licensed Products and their matching placebo already manufactured by Dong-A as of the Effective Date in compliance with the KGMP, and (ii) to manufacture and supply to NeuroBo the Licensed Products and their matching placebo in compliance with the KGMP, and NeuroBo agrees to purchase from Dong-A, the Licensed Products and/or their matching placebo for research and development, on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Dong-A and NeuroBo mutually agree as follows: 1. DEFINITIONS Unless otherwise defined in this Agreement, the capitalized terms utilized herein shall have 1

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019





the same meanings as defined in the License Agreement. 2. MANUFACTURE AND SUPPLY 2.1 Subject to the provisions hereof, Dong-A shall (i) supply to NeuroBo the Licensed Products and their matching placebo already manufactured by Dong-A as of the Effective Date in compliance with the KGMP, and (ii) manufacture in compliance with the KGMP and in conformity with the specifications separately agreed upon between the Parties and attached hereto as Exhibit A (the Product Specifications) and supply to NeuroBo the Licensed Products and/or their matching placebo, and NeuroBo shall purchase from Dong-A the entire requirement of the Licensed Products and/or their matching placebo for research and development of the Licensed Products under the License Agreement. 2.2 NeuroBo shall manufacture, or have manufactured, and supply to Dong-A the active pharmaceutical ingredients (API), which are necessary to manufacture the Licensed Products, in the quantity and in conformity with the specifications separately agreed upon between the Parties and attached hereto as Exhibit C (the API Specifications) as may be amended by the Parties's agreement in writing from time to time. 2.3 NeuroBo shall, at its costs and expenses, deliver the API to the place designated by Dong-A no later than [***] days prior to the requested delivery date for the Licensed Products and/or their matching placebo in accordance with the Firm Order. 2.4 Within [***] days after receipt of the API from NeuroBo, Dong-A shall perform quality control test (the API Test) in accordance with the methods of the API Test on such API for acceptance (the API Test Methods), which shall be separately agreed in writing by and between the Parties and attached hereto as Exhibit D) as may be amended by the Parties's agreement in writing from time to time. NeuroBo shall provide Dong-A with all available information and technical assistance necessary for Dong-A to perform the API Test expeditiously. If the API Test indicates that the API is deficient in quantity or does not meet the API Specifications, Dong-A shall notify NeuroBo thereof in writing within the [***]-day period together with results of the API Test. If the quantity is deficient, NeuroBo shall, as soon as commercially reasonable, ship, or have shipped, the sufficient amount of additional API to cover the deficiency. If the API does not meet the API Specifications, NeuroBo shall retrieve the API at its own expense and replace the API at no additional cost to Dong-A. 2.5 Upon [***] days' notice and at time mutually agreed upon by the Parties during Dong-A's normal business hours, but no more frequently than [***] every year during the term of this Agreement, NeuroBo may, at its cost and expense, inspect Dong-A's manufacturing facilities where the Licensed Products are manufactured. Within [***] days after the completion of the inspection, NeuroBo shall provide a written report detailing the results of such audit to Dong-A. In case of any inspection by any Governmental Authority of Dong-A's manufacturing facilities where the Licensed Products are manufactured, NeuroBo shall promptly provide Dong-A with a notice of the inspection and all notices, correspondence and related documents received from or sent to the applicable Governmental Authority. Dong-A shall permit such Governmental Authority to inspect the facilities to the fullest extent permitted by Laws and shall make its [***] and cooperate with the Governmental Authority in conducting the inspection. NeuroBo shall provide 2

such assistance as reasonably requested by Dong-A for the preparation of and during such inspection and furnish Dong-A with copies of all reports and notices received as a result of any such inspection. NeuroBo agrees that Dong-A shall not be obligated to correct any deficiencies documented by the Governmental Authority as a result of any such inspection. NeuroBo further agrees that it shall not hold Dong-A responsible nor shall bring any claims or actions against Dong-A for any such deficiencies and/or costs or damages NeuroBo may incur resulting therefrom. Upon request of Dong-A, the Parties may discuss in good faith a plan for NeuroBo to assist in correcting such deficiencies and the terms and conditions for implementing the corrective actions under such plan. 2.6 The Parties acknowledge and agree that prior to commercialization of the Licensed Products by NeuroBo, its Affiliates and/or sublicensees, the Parties shall, in good faith, negotiate the terms and conditions for, including, without limitation, the supply price, and enter into a definitive non-exclusive supply agreement pursuant to which Dong-A shall supply to NeuroBo the Licensed Products for the commercialization by NeuroBo, its Affiliates and/or sublicensees of the Licensed Products in the Field in the Territory pursuant to the License Agreement. 2.7 In case NeuroBo requests Dong-A to conduct any additional activities, including testing (e.g. AMV, PV), documentation (e.g. CMC packaging), which NeuroBo requires for obtaining the NDA for the Licensed Product in the Territory, the Parties shall, in good faith, negotiate the terms and conditions, including, without limitation, the costs and expenses for conducting such additional testing activities of the Licensed Products and/or their matching placebo. For any such activities, NeuroBo shall pay to Dong-A [***] ([***]%) of the fees as agreed by the Parties within [***] days prior to conducting such activities by Dong-A, and shall pay the balance due within [***] days after delivery by Dong-A to NeuroBo of the deliverables as agreed by the Parties. 3. ORDERING AND DELIVERY 3.1 NeuroBo shall submit to Dong-A an order for the Licensed Products and/or their matching placebo no later than [***] days prior to the requested delivery date thereof. For each order, NeuroBo shall be obligated to order the Licensed Products and/or their matching placebo in [***] tablets. NeuroBo acknowledges and agrees that certain quantity of the Licensed Products and/or their matching placebo from each batch ordered shall be retained by Dong-A for use in the stability tests and as retention samples, and NeuroBo shall order the Licensed Products and/or their matching placebo in consideration of such quantity to be retained by Dong-A. Each order shall specify at least (i) the quantity of the Licensed Products and/or their matching placebo, (ii) the specifications of the Licensed Products and/or their matching placebo, including the specifics of packaging, (iii) the expected delivery date for the API, (iv) the requested delivery date for the Licensed Products and/or their matching placebo, (v) the shipment terms for the Licensed Products and/or their matching placebo and (vi) the supply price for the Licensed Products and/or their matching placebo. Upon receipt of the order from NeuroBo, Dong-A shall promptly acknowledge the receipt of such order. No order shall be binding upon the Parties until agreed in writing by Dong-A and NeuroBo; provided, however, that such agreement shall not be unreasonably withheld or delayed. Upon such agreement, the order shall be deemed to be the Firm Order which shall be binding and may only be revised by agreement of the Parties in writing. Dong-A shall deliver the Licensed Products and/or their matching placebo to NeuroBo in accordance with the Firm 3

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019





Order on the shipment terms of [***] manufacturing facility of Dong-A (ICC Incoterms 2010), including the delivery date and place set forth therein, within the later of (i) [***] days after the date of the Firm Order and (ii) [***] days after the date of acceptance by Dong-A of the API. 3.2 Dong-A shall supply NeuroBo with the Licensed Products and/or their matching placebo together with a certificate of analysis, as described in the Product Specifications, for each batch of the Licensed Products and/or their matching placebo shipped hereunder certifying that such batch of the Licensed Products and/or their matching placebo meets the Product Specifications. 3.3 Within [***] days after receipt of the Licensed Products and/or their matching placebo hereunder, NeuroBo may, in its discretion, perform a quality control test (the Product Test) in accordance with the methods of the test on such Licensed Products and/or their matching placebo for acceptance (the Product Test Methods), which shall be separately agreed in writing by and between Dong-A and NeuroBo and attached hereto as Exhibit B, as may be amended by the Parties' agreement in writing from time to time. Dong-A shall provide NeuroBo with all available information and technical assistance necessary for NeuroBo to perform the Product Test expeditiously. If the Product Test indicates that the Licensed Products and/or their matching placebo is deficient in quantity or does not meet the Product Specifications, NeuroBo shall notify Dong-A thereof in writing within the [***]-day period together with results of the Product Test. If the quantity is deficient, Dong-A shall immediately ship the sufficient amount of additional Licensed Products and/or their matching placebo to cover the deficiency. If Dong-A does not agree that the Licensed Products and/or their matching placebo does not meet the Product Specifications, the Parties shall refer their disagreement for decision by an independent testing laboratory agreed by the Parties. The decision by the independent testing laboratory shall be conclusive and binding on both Parties, and the losing Party shall bear the costs of the independent testing laboratory. If Dong-A agrees that the Licensed Products and/or their matching placebo does not meet the Product Specifications, or if the decision by the testing laboratory confirms that the Licensed Products and/or their matching placebo does not meet the Product Specifications, (i) Dong-A shall arrange for the return from NeuroBo of the Licensed Products and/or their matching placebo at Dong-A's expense, and (ii) without waiting for the return, Dong-A shall promptly replace the Licensed Products and/or their matching placebo at no additional cost to NeuroBo. 4. TERMS AND CONDITIONS OF SALE 4.1 The terms and conditions of sale and purchase of the Licensed Products and/or their matching placebo between Dong-A and NeuroBo shall be set forth in each Firm Order. 4.2 The supply prices for the Licensed Products and their matching placebo shall be specified in Schedule 4.2. 4.3 Upon agreement by the Parties of the Firm Order, Dong-A shall issue to NeuroBo an invoice in Korean Won for each shipment of the Licensed Products and/or their matching placebo based on the Firm Order. Unless otherwise agreed in writing by Dong-A, NeuroBo shall pay the invoiced supply price (i) in Korean Won (KRW) or (ii) in United States Dollars (USD) which amount shall correspond the invoiced amount converted from KRW to USD at the exchange rate of the payment date, no later than [***] days prior to the shipment date by way of wire transfer 4

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019





to Dong-A. NeuroBo shall be responsible for and pay all wire transfer fees incurred in the Territory. If Dong-A does not receive payment of any sum due to it on or before the due date, [***] interest shall thereafter accrue on the sum due to until the date of payment at the [***] rate of [***] percent ([***]%) over the then-current prime rate quoted by Citibank in New York, New York or the maximum rate allowable by New York law, whichever is lower. 4.4 Dong-A shall not be responsible for any taxes levied on account of the payments under this Agreement. In the event that any taxes are required to be paid on account of any payment hereunder, NeuroBo shall pay all such taxes. 4.5 In performing its obligations under this Agreement, NeuroBo shall, and shall cause its Affiliates and sublicensees to, comply with all applicable laws, including any applicable anti-corruption or anti-bribery laws or regulation, of any governmental authority with jurisdiction over the activities performed by NeuroBo or its Affiliates or sublicensees in furtherance of such obligations. 5. TERM AND TERMINATION 5.1 This Agreement shall commence on the Effective Date and, unless earlier terminated, shall continue in full force and effect for a period of [***] years thereafter. 5.2 This Agreement shall automatically terminate in case the License Agreement is terminated for any reason specified therein. 5.3 A Party may terminate this Agreement by notice to the other Party if the other Party is in material breach of any provision of this Agreement, and (a) the breaching Party has not cured the breach within [***] days after receiving notice from the terminating Party; or (b) if the breach cannot reasonably be cured within the [***]-day period, the breaching Party has not started to remedy the breach within the [***]-day period and diligently endeavored to cure the breach within a reasonable time thereafter. 5.4 Either Party may terminate this Agreement immediately upon notice to the other Party in the event that (a) the other Party is the subject of a petition for bankruptcy, reorganization, or arrangement, whether voluntary or involuntary, and the same is not dismissed within thirty (30) days thereof, (b) a receiver or trustee is appointed for all or a substantial portion of the assets of the other Party, or (c) the other Party makes an assignment for the benefit of its creditors. 5.6 The termination or expiration of this Agreement, in whole or in part, shall be without prejudice to the right of either Dong-A and NeuroBo to receive all payments accrued and unpaid at the effective date of such termination or expiration, without prejudice to the remedy of either Dong-A and NeuroBo in respect to any previous breach of any of the representations, warranties, covenants or obligations herein contained and without prejudice to any other provisions hereof which expressly or necessarily call for performance after such termination or expiration. 5

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019





6. GOVERNING LAW The laws of the State of New York (without giving effect to its conflicts of law principles) govern all matters arising out of or relating to this Agreement and all of the transactions it contemplates, including without limitation, its validity, interpretation, construction, performance, and enforcement. 7. NOTICES All notices, consents, and approvals under this Agreement must be delivered in writing by courier, electronic facsimile (fax), or certified or registered mail, (postage prepaid and return receipt requested) to the other Party; and shall be effective upon receipt or three (3) business days after being deposited in the mail, whichever occurs sooner. Notices to the Parties shall be sent to the addresses set forth at the beginning of this Agreement. Notice of change of address shall be given in the same manner as other communications. 8. INCORPORATION BY REFERENCE Articles or Sections 8.2 (Limitation of Liability), 9 (Indemnification), 12.2 (Force Majeure), 12.3 (Assignment), 12.4 (Severability), 12.6 (Remedies), 12.8 (Submission to Jurisdiction/Waiver of Jury Trial), 12.9 (Independent Contractor/No Agency), 12.10 (Entire Agreement) of the License Agreement shall be deemed to be incorporated herein by reference as it is set forth in this Agreement <Signature page follows.> 6

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019





IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the Effective Date. DONG-A ST CO., LTD. By: /s/ Daesik Eom Daesik Eom, Chairman and CEO NEUROBO PHARMACEUTICALS, INC. By: /s/ John L. Brooks, III John L. Brooks III, President & CEO 7

Exhibit A Product Specifications

Test Analytical Method Specification Requirements [***] [***] [***]

[***] [***] [***][***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Schedule 1-1

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019





Exhibit B Product Test Methods [***] Schedule 1-2

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019





Exhibit C API Specifications

Test Analytical Method Specification Requirements [***] [***] [***]

[***] [***] [***][***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Schedule 1-3

Exhibit D API Test Methods [***] Schedule 1-4

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019





Schedule 4.2 Supply Price [***] Schedule 1-5

Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 
Question: Highlight the parts (if any) of this contract related to Warranty Duration that should be reviewed by a lawyer. Details: What is the duration of any  warranty against defects or errors in technology, products, or services  provided under the contract?

Answer:
11420