Document:

Exhibit
10.7

 

Certain
confidential portions of this Exhibit were omitted by means of asterisks in
lieu of the text (the “Mark”). This Exhibit has been filed separately with the
Secretary of the Securities and Exchange Commission without the Mark pursuant to
the Company’s request for confidential treatment pursuant to Rule 406 under the
Securities Act of 1933, as amended.

 

MERCHANT
PROCESSING AGREEMENT

 

This Merchant
Processing Agreement, together with Schedules A and B attached hereto and
incorporated herein (“Agreement”) is made and entered into this 1st
day of, April, 2002 by and between KeyBank National Association, a national
bank with its principal office located in Cleveland, Ohio (“KeyBank” ), and
Heartland Payment Systems Inc. (“HPS”), a Delaware Corporation with its
principal office located in Princeton, New Jersey.

 

RECITALS

 

WHEREAS, KeyBank
has established a credit card merchant processing program (“Program”) whereby
KeyBank provides processing and related services for merchants which accept, as
a method of payment for goods and services, Visa, MasterCard and other
proprietary credit cards approved for acceptance by KeyBank; and

 

WHEREAS, the
Program is operated in conformity with applicable by-laws and regulations of
Visa U.S.A., Inc. (“Visa”) or its successor, and MasterCard International, Inc.
(“MasterCard”) or its successor and regulations of governmental agencies; and

 

WHEREAS, KeyBank
is a member of Visa and MasterCard; and

 

WHEREAS, Heartland
Payment Systems, Inc. will from time to time enter into contracts with
individual clients (“Clients”) to provide merchant processing services
consistent with the Program to said Clients (“Plan”); and

 

WHEREAS, Heartland
Payment Systems, Inc. has entered into an agreement with Vital to provide
various services related to the Plan, including but not limited to risk
management, front-end and back-end processing, and merchant chargebacks; and

 

WHEREAS, Heartland
Payment Systems, Inc. desires to have KeyBank perform certain other processing
and related services of the Program which are applicable to the Plan and which
are set forth on the attached Schedule A (Description of Services, Fees
and Charges) and on such additional schedules as the parties mutually agree
upon.

 

NOW, THEREFORE, in
consideration of the mutual promises of each, the parties agree as follows:

 

1

 

ARTICLE I

RIGHTS,
DUTIES, AND RESPONSIBILITIES

OF PARTIES RELATED TO THE PLAN

 

1.1.                           General

 

(a)                                  KeyBank will perform such processing and
related services as are applicable to HPS’s Plan as set forth in
Schedule A.

 

(b)                                 KeyBank will process HPS’s Plan in accordance
with accepted industry standards and in a manner that is consistent with the
existing care and attention used for its current portfolio.

 

(c)                                  HPS acknowledges and agrees that its
obligations hereunder and in connection with the Plan include compliance with:

 

(i)                                     all state and federal laws and regulations
which affect the Plan; and

 

(ii)                                  applicable by-laws and regulations of Visa
and/or MasterCard, including but not limited to, providing to KeyBank any
information regarding HPS or its Clients requested by KeyBank that is required
to be provided to Visa and/or MasterCard.

 

(d)                                 HPS will pay KeyBank charges as set forth on
attached Schedule A in the manner as set forth in Section 1.5.

 

(e)                                  HPS will, at its expense, administer the Plan
in accordance with established risk management practices and take or cause to
be taken any such additional action as may be appropriate or necessary to
protect KeyBank against any loss as a result of abuse, or fraud on the part of
any Client.

 

(f)                                    HPS has received, and understands and agrees
to comply fully with all by-laws and regulations of Visa and MasterCard,
including but not limited to, rules regarding independent sales organizations
and member service providers.

 

(g)                                 HPS shall be responsible for all actions or
failure to act by Vital in compliance with any of the requirements set forth in
this Agreement.

 

(h)                                 HPS represents that it maintains a sales
office at 343 West Bagley Road, Suite 400, Berea, Ohio 44017, and sales
representatives throughout the United States. HPS agrees that it will provide
KeyBank with written notice of any sales locations or any changes in the
location of its current sales office. In addition, HPS shall disclose the
following on all statements, marketing and other materials delivered to Clients
the following disclosure: “Visa and MasterCard services provided through
KeyBank National Association”.

 

(i)                                     In the event of any inconsistency between any
provision of this Agreement and the by-laws and regulations of Visa and/or
MasterCard, the by-laws and regulations of Visa or MasterCard in each instance
shall be afforded precedence and shall apply.

 

2

 

(j)                                     HPS acknowledges and agrees that Visa and
MasterCard are the owners of their trademarks and service marks, that HPS will
not contest the ownership of such marks, and that Visa and MasterCard each has
the right to immediately and without advance notice prohibit HPS from
performing any further service or activity relating to use of their respective
marks and the operation of their programs should HPS be deemed by Visa or
MasterCard to have violated any Visa or MasterCard by-law or regulation
relating to its performance as an independent sales organization or as a member
service provider.

 

(k)                                  KeyBank and HPS agree that in performing
their responsibilities pursuant to this Agreement, they are in the position of
independent contractor. This Agreement is not intended to create, nor does it
create and shall not be construed to create, a relationship or joint venture or
agency or any association for profit between KeyBank and HPS. HPS is not
authorized thereunder to hold itself out as an agent of KeyBank or to inform or
represent that HPS has authority to bind or obligate KeyBank or to otherwise
act on behalf of KeyBank.

 

1.2.                           Client Relationship Requirements

 

(a)                                  HPS must satisfy in full the requirements
attached in Schedule B before any Client may become a participant in the
Plan. Changes to the requirements must be documented by HPS and forwarded to
KeyBank for review. No changes in the requirements set forth in Schedule B
shall be effective as to KeyBank until approved by KeyBank in writing.

 

(b)                                 HPS shall solicit applications from eligible
merchants at HPS expense, and shall provide each applicant with application
materials. HPS shall collect completed, signed application materials from
applicants and shall forward such application materials to KeyBank or to such
other place as KeyBank may designate.

 

(c)                                  HPS shall underwrite each application to
determine whether each applicant is an eligible merchant, and if in compliance
with the attached underwriting requirements (attached hereto as
Schedule B) may then be added as an approved merchant to the program and
commence processing. HPS shall promptly terminate and remove from the program
any applicant that is rejected by KeyBank. KeyBank may obtain credit reports
and such other information, as it deems necessary or appropriate to review and
underwrite all completed application materials in accordance with the merchant
processing policy. HPS will monitor on-line, and other activity, reports on a
timely and regular basis for suspicious client deposit activity.

 

(d)                                 KeyBank reserves the right, in its sole and
absolute discretion to (i) change the merchant processing policy, (ii) reject
the application of any applicant who KeyBank determines, in the good faith
exercise of its underwriting judgment, fails to satisfy KeyBank’s merchant
processing policy, and (iii) terminate the merchant processing agreement with
respect to any merchant when KeyBank, in good faith, determines that
termination is appropriate under KeyBank’s merchant processing policy and the
terms of the merchant processing agreement.

 

3

 

(e)                                  Notwithstanding any agreement between HPS and
Vital to the contrary, HPS shall be responsible for any loss or damage to
KeyBank, its subsidiaries, affiliates, employees, officers, directors,
successors or assigns may sustain as a result of any chargebacks, returns,
merchant or customer fraud, or any other loss or damage with respect to HPS
Plan. HPS will monitor online and other activity reports on a timely and
regular basis for suspicious Client deposit activity.

 

1.3.                           Client Termination

 

KeyBank reserves
the right to terminate any Client from the Plan upon a determination that there
is reasonable cause to believe that the Client represents an unfavorable credit
risk including but not limited to items in Section 1.2(b) to KeyBank or
HPS. KeyBank agrees that as a condition to exercising such right, it will
notify HPS of its intent to terminate such Client and provide HPS with the
opportunity to consult with KeyBank regarding the intended termination. Nothing
in this Section 1.3 shall, however, operate as a limitation on KeyBank
discretion in terminating a Client and shall not limit KeyBank’s ability to
suspend deposits to a Client’s account if such action is deemed necessary or
appropriate by KeyBank.

 

1.4.                           Liability for Source Documentation

 

HPS shall bear any
liability for source documentation or data as specified in Section 1.8.
Failure to provide requested source documentation (including sales draft
copies, if available) on a timely basis will result in HPS’s assumption of
liability in settlement of cardholder disputes and KeyBank shall have the right
to charge the full amount of the transaction in question to the Settlement
Account (as defined in Section 1.5(a)). The data and information received
by KeyBank pursuant to this Section is the property of KeyBank.

 

1.5.                           Accounts

 

(a)                                  HPS will establish, or has established, a
settlement account with KeyBank which will be named “Heartland Payment Systems
Commercial Customer Trust Account,” pursuant to the terms of a deposit
agreement between HPS and KeyBank (the “Settlement Account”). This account will
be used for the settlement of Clients’ Visa and MasterCard transactions and to
settle fees, charges, interchange fees and reimbursements due to KeyBank
hereunder. KeyBank will furnish monthly billings for all Plan services rendered
and charges incurred by HPS hereunder. KeyBank’s fees, chargebacks, charges,
reimbursements, and interchange fees will be charged to the Settlement Account
once per month via a debit based on the detail provided by the account analysis
five (5) business days after providing HPS with such detail. HPS agrees to have
sufficient funds in the Settlement Account at all times so that any charges by
KeyBank against the Settlement Account provided for in this Agreement shall not
result in a negative balance. Charges from other processors, if applicable,
including Vital will be debited via ACH for settlement of charges monthly.
Detailed back-up invoices will be provided.

 

4

 

(b)                                 The parties hereby agree that unless and
until written notice changing the account is provided to KeyBank by an
authorized officer of HPS, the Settlement Account used for deposit settlement
and chargebacks will be KeyBank Account No. ***********

 

(c)                                  In addition to any other remedy provided by
law or this Agreement, if HPS fails to comply with Section 1.4 or this
Section 1.5, or fails to reimburse KeyBank or any of its affiliates for
any loss or damage as provided for in Section 1.2(b), except when such
failure results from inadvertent error which is immediately cured by HPS,
KeyBank may, after ten (10) days’ notice to HPS, charge the Settlement Account
in any amount for charges or reimbursements provided for in this Agreement.

 

1.6                              Interchange Fees and Assessments

 

Interchange/Intrachange
fees shall not exceed the amount as set forth in, and provided by, the
applicable regulations of Visa or MasterCard which are then in effect. These
fees will be settled monthly from the Settlement Account. Reports will be
provided by Vital for HPS reconcilement activities daily. Carrying cost on the
average daily balance in the Work In Process Account will be charged a rate
equivalent to the KeyBank prime rate published on the last bank business day of
the billing month.

 

1.7                              Data Input

 

(a)                                  HPS is responsible for the quality and
accuracy of all data input to KeyBank and Vital and will implement appropriate
procedures and take all necessary action to insure that such data is input in
the proper sequence and format as specified by KeyBank and Vital. HPS Plan
shall be administered in a manner compatible with KeyBank’s and Vital’s
program. Any data submitted by HPS for processing which is incorrect will be
corrected by HPS at its expense.

 

1.8.                           Record Retention

 

(a)                                  BPS will require Clients to retain drafts and
other evidences of cardholder transactions for a period of three years. In
addition, HPS shall communicate to Clients the importance of providing drafts
and other evidences of cardholder transactions. HPS will also assist the Client
in directing such documentation to the appropriate area within KeyBank.

 

(b)                                 HPS will retain evidence of merchant
statements and supporting items relating to the Plan for seven (7) years,
except where applicable Visa, MasterCard, or federal government agency
regulations require retention for a longer period. Reports will be stored for
seven (7) years.

 

*
[****] Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.

 

5

 

ARTICLE II

TERM

 

2.1.                           Term of Agreement

 

This Agreement
shall commence on the date shown above and, unless terminated as provided
herein, shall have an initial term of four years. The Agreement shall continue
for successive three year terms unless terminated by either party (a) upon
ninety (90) days prior written notice or (b) as otherwise provided in this
Agreement.

 

2.2.                           Agreement Termination

 

In addition to
terminating this Agreement pursuant to Section 2.1:

 

(a)                                  Either KeyBank or HPS may terminate this
Agreement upon material breach of any provision hereof by the other party hereto
upon giving such other party ten (10) days prior written notice of its
intention to terminate and its reason therefor.

 

(b)                                 EitherKeyBank or HPS may terminate this
Agreement immediately if such other party becomes insolvent, files a petition
in a United States Bankruptcy Court, or if a receiver, trustee or conservator
is appointed pursuant to a state or federal court proceeding or such other
party makes an assignment for the benefit of creditors.

 

(c)                                  Either KeyBank or HPS may terminate this
Agreement immediately upon giving written notice of termination in the event
either party is required to discontinue its participation in the Program based
upon a final order of state or federal court or regulatory body, unless such
order is stayed pending appeal.

 

(d)                                 KeyBank may terminate this Agreement
immediately in the event of a breach by HPS of the by-laws and regulations of
Visa or MasterCard applicable to the services to be rendered herein remains
unremedied for a period of more than ten (10) days, and is terminated
automatically in the event of termination of KeyBank’s applicable Visa or
MasterCard license or its membership in Visa or MasterCard or upon
“deregistration” of HPS as an independent sales organization or as a member
service provider by Visa or MasterCard.

 

(e)                                  In addition to other termination rights under
this Section, Sponsor Bank shall have the right, at its option, to terminate
this Agreement upon either of the following events:

 

(i)                                     If any federal or state regulatory agency
with regulatory authority over Sponsor Bank requires, or requests in writing,
termination of this Agreement or Sponsor Bank’s services, in whole or in part,
under this Agreement, Sponsor Bank may terminate this Agreement at any time.
Termination shall become effective ninety (90) days after written notice
unless, in the event of a “required” termination, the regulatory agency
requiring or requesting termination specifies a termination date less than
ninety (90) after written notice, in which event the termination shall become effective
as required or requested by the agency.

 

6

 

(ii)                                  If, as the result of any court decision,
change in any law or regulation, or interpretation or ruling by any regulatory
agency with jurisdiction over Sponsor Bank that arises after the date of this
Agreement (collectively called “Applicable Law”), or Sponsor Bank’s receipt of
a reasonable written opinion of its legal counsel, Sponsor Bank reasonably
believes that continued delivery of Sponsor Bank’s services under this
Agreement would violate any material Applicable Law, Sponsor Bank shall notify
Company in writing of the specific Applicable Law or legal opinion and shall
present to Company a plan to minimize or eliminate the adverse impact resulting
therefrom. Company agrees to consider the plan, including such changes in the
services as Sponsor Bank may propose, promptly and in good faith. The parties
agree to use commercially reasonable efforts to agree upon a plan and to
implement any appropriate corrective action within thirty (30) days after such
notice. If the parties hereto cannot agree upon such a plan within said time
period, either party may terminate this Agreement, effective immediately upon
written notice to the other party.

 

(f)                                    Upon termination for any reason, HPS will
have one hundred and eighty days to convert to another sponsor bank, moving the
applicable BIN/ICA numbers to that new sponsor bank.

 

(h)                                 This agreement may be terminated by either
party upon one hundred eighty (180) days written notice to the other party, if
there shall be a change in the majority ownership of the non -terminating
party.

 

2.3.                           Continuing Obligations

 

All obligations of
either party incurred or existing under this Agreement as of the time of any
termination hereof will survive such termination.

 

ARTICLE III

INDEMNIFICATION

 

3.1

 

(a)                                  Certificate of Deposit

 

HPS
hereby agrees to obtain and have in effect as long as this Agreement is in
effect, and for ninety (90) days after any expiration or earlier termination of
this Agreement, a Certificate of Deposit, (herein called the “CD”), to be
issued by Key Bank in an initial face amount of Five Hundred Thousand Dollars
($500,000.00).

 

(b)                                 The CD shall be delivered to Sponsor Bank
within five (5) business days after the date of this Agreement. Upon any
failure of Company to maintain the CD in effect, Sponsor Bank may immediately
terminate this Agreement upon delivery of written notice to Company.

 

7

 

ARTICLE IV

MISCELLANEOUS
PROVISIONS

 

4.1.                           Assignment

 

The rights, duties
and obligations of HPS pursuant to this Agreement shall not be assigned or
otherwise transferred in any way without the prior written consent of KeyBank.
KeyBank may assign or transfer its rights, duties, and obligations pursuant to
this Agreement to any party upon thirty (30) days written notice to HPS

 

4.2.                           Assurances

 

KeyBank and HPS
agree that the performance of services under this Agreement is hereby made subject, without notice, to the
regulation and examination of the Comptroller of the Currency, or such other
governmental agency as shall have jurisdiction, together with any resolutions,
agreements or assurances encompassing the foregoing matters, in such form as
may be required by the Comptroller or other governmental agency.

 

4.3.                           Confidentiality

 

(a)                                  KeyBank will safeguard, and hold confidential
from disclosure to unauthorized persons, all data relating to the Plan
submitted to KeyBank pursuant to this Agreement to the same extent that KeyBank
safeguards data relating to its own business, unless such data is otherwise
available to the public or is already in KeyBank possession and was rightfully
obtained by it from others, or unless required by law or regulation, or by Visa
or MasterCard. In such case, KeyBank will bear no responsibility for
disclosures thereof or with respect thereto, whether inadvertent or otherwise.
Nothing contained herein will preclude KeyBank participation in Visa and/or
MasterCard fraud and/or counterfeit deterrent procedures.

 

(b)                                 HPS will safeguard, and hold confidential
from disclosure to unauthorized persons, all data relating to KeyBank business
received by HPS pursuant to this Agreement to the same extent that HPS
safeguards data relating to its own business, unless such data is otherwise
available to the public or is already in HPS possession and was rightfully
obtained by it from others, or unless required by law or regulation.

 

4.4.                           Due Care

 

(a)                                  KeyBank and HPS will exercise due care in
inputting and processing data and information and in performing their
respective obligations hereunder and each party will, in the event of an error
or omission attributable to the malfunction of equipment which it owns or
leases or to the acts, negligence or the failure of operators, programmers, or
other personnel or programs employed by them, use its best efforts to correct
such error or omission, and provide prompt notice of the error or omission to
the other party.

 

(b)                                 Each party shall not be liable to the other
for any nonperformance if it is prevented from performing any task hereunder in
whole or in part as a result of an act of God, war, civil

 

8

 

disturbance,
labor dispute, or other cause beyond its reasonable control, provided, however,
that the party will use its best efforts to restore performance.

 

4.5.                           Indemnity

 

(a)                                  HPS will at all times indemnify, protect and
hold harmless KeyBank, and its subsidiaries, affiliates, directors, officers,
employees, subcontractors, successors and assigns (the “Indemnified Parties”)
from and against any and all liability, claims, demands, or disputes, together
with all costs, charges and expenses, including counsel fees imposed upon or in
any manner accruing against the Indemnified Parties, arising out of or in any
way resulting from, or attributable to, (i) HPS failure to comply with any
provision of this Agreement and (ii) Vital’s failure to comply with any
provision of this Agreement which, pursuant to any written or oral agreement
between Vital and HPS, Vital has agreed to perform.

 

(b)                                 KeyBank will at all times indemnify, protect
and hold harmless HPS and its subsidiaries, affiliates, directors, officers,
employees, subcontractors, successors and assigns (the “Indemnified Parties”)
from and against any and all liability, claims, demands, or disputes, together
with all costs, charges and expenses, including counsel fees imposed upon or in
any manner accruing against the Indemnified Parties, arising out of or in any
way resulting from, or attributable to KeyBank failure to comply with any
provision of this Agreement.

 

(c)                                  HPS will, at its own expense and if KeyBank
so requests, defend any action or proceeding brought against the Indemnified
Parties in connection with any such liability, claim, demand, or dispute.

 

4.6.                           Inspection or Audit

 

KeyBank shall
permit HPS or HPS designee at any reasonable time, with prior notice and at HPS
expense, to conduct an inspection or audit of KeyBank records relative to HPS
Plan and of KeyBank accounting or auditing procedures regarding HPS Plan. HPS
shall permit KeyBank designee at any reasonable time, with prior notice and at
KeyBank expense, to conduct an inspection or audit of HPS records and materials
relative to its Plan and of HPS accounting or auditing procedures regarding its
Plan. In addition, HPS will furnish to KeyBank on an annual basis, a financial
statement of HPS which has been completed based upon generally accepted
accounting principles. If KeyBank, as a result of such inspection, audit, or
review, reasonably concludes that it is exposed to undue financial risk or
exposure based on the internal controls and security procedures of HPS, KeyBank
shall notify HPS in writing of such finding and HPS shall remedy such condition
within the appropriate time frame given the perceived risk or exposure. If
KeyBank and HPS cannot reach agreement on an appropriate remedy, either party
may terminate this Agreement in accordance with Section 2.2 hereof.

 

4.7.                           Limitation on Damages

 

In any action by
one of the parties against the other arising from performance, or the failure
of performance, of the provisions of this Agreement, damages will be limited to
general money damages in an amount not to exceed the actual damages of the
party. In no case will the

 

9

 

other party be
responsible for special, incidental, consequential or exemplary damages, except
for willful breach of this Agreement.

 

4.8.                           Notice Procedure

 

Notice, when
required hereunder, will be sent by Certified or Registered Mail, postage
prepaid, Federal Express, Airborne Express or a comparable overnight service,
or by facsimile to the respective parties as set out below:

 

	
  As
  to KeyBank:

  	
   

  	
  KeyBank
  National Association

  
	
   

  	
   

  	
  Mail
  Code: OH01510250

  
	
   

  	
   

  	
  4910
  Tiedeman

  
	
   

  	
   

  	
  Brooklyn,
  OH 44144

  
	
   

  	
   

  	
  Attn:

  	
  Daniel
  J. Neistadt

  
	
   

  	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
  Fax:  (216) 813-1514

  
	
   

  	
   

  	
   

  
	
  As
  to Heartland Payment Systems, Inc.

  	
   

  	
  Heartland
  Payment Systems, Inc.

  
	
   

  	
   

  	
  343
  W. Bagley Rd., Suite 400

  
	
   

  	
   

  	
  Berea,
  Ohio 44017

  
	
   

  	
   

  	
  Attn:

  	
  Martin
  J. Uhle

  
	
   

  	
   

  	
   

  	
  President
  & COO

  
	
   

  	
   

  	
  Fax:  (440) 239-0444

  

 

4.9.                           Right to Contract

 

Each of the
parties warrants that neither its execution and delivery of this Agreement nor
its performance of the provisions hereof is, or will constitute, a violation on
its part of any contract, indenture or other agreement or relationship to which
it is a party or by which it is bound, and hereby agrees that it will indemnify
and save harmless the other party from and against any loss, costs, liability,
damages or expense by reason of any claim which may be asserted to the contrary
by any third party.

 

4.10.                     Taxes

 

In the event that
the relationship created between KeyBank and HPS under this Agreement or any of
the services rendered hereunder or any other aspect of the relationship gives
rise to any tax responsibility, exclusive of income and similar taxes, payable
to the State of Ohio, any other state or political subdivision thereof or to
the Internal Revenue Services, or any other subdivision of the Federal
government, such obligation, regardless of whether or not assessed against,
will be the responsibility of HPS In the event that KeyBank should be required
to pay any such tax obligation, HPS will reimburse KeyBank upon demand
therefor.

 

4.11.                     Governing Law

 

This Agreement
shall be governed by the laws of the State of Ohio with giving effect to
conflict of law rules.

 

10

 

4.12.                     Counterparts

 

This Agreement may
be executed in counterparts, each of which shall be considered an original and
all of which shall constitute the same document.

 

4.13                        Sub- ISO’s / Sub-Contractors

 

HPS will not enter
into sales agreements or use the services of other Independent Sales
Organization (Sub-ISO) and/or Independent Sales Representatives without the
approval of KeyBank.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

 

	
   

  	
  Heartland
  Payment Systems, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Martin J. Uhle

  	
   

  
	
   

  	
  Name:

  	
  Martin
  J. Uhle

  
	
   

  	
  Title:

  	
  President
  and Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KeyBank
  National Association:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Daniel J. Niestadt

  	
   

  
	
   

  	
  Name:

  	
  Daniel
  J. Neistadt

  
	
   

  	
  Title:

  	
  Executive
  Vice President

  
				

 

11

 

SCHEDULE A

 

KeyBank
Merchant Services Fee Schedule

To

Heartland Payment Systems, Inc.

 

KeyBank will pass
all fees assessed to it by VISA, MasterCard, Vital Processing Services and any
other third-party entity, if applicable, in conjunction with the Merchant
Services business of HPS. Any additional services requested by HPS will be
negotiated at a future date.

 

Funding
Fees.

 

***********

 

Transaction
Processing Fees.

 

1.                                       From
April 1, 2002 through December 31, 2002 all transactions will be
billed at ********** per item.

 

2.                                       From
January 1, 2003 through April 1, 2006 all transactions will be billed
at ********** per item.

 

3.                                       Effective
January 1, 2003 HPS will pay KeyBank no less than ********** per month
through the term of this agreement. HPS will pay the greater sum of **********
monthly or the sum of the transaction fees and the funding fees noted above.

 

4.                                       HPS
will pay to KeyBank an Agent Bank registration fee of ********** for newly
sponsored Agent Banks with 250 or fewer merchants, and ********** for Agent
Banks with greater than 250 merchants.

 

*
[****] Represents material which has been redacted and filed separately wi

th the Commission
pursuant to a request for confidential treatment pursuant to Rule 406 under the
Securities Act of 1933, as amended.

 

12

 

FIRST
AMENDMENT AGREEMENT

 

This First
Amendment Agreement (herein called “Amendment
Agreement”) is entered into effective as of the date specified below
by and between KEYBANK NATIONAL ASSOCIATION, (“KeyBank”), with its main office
at 127 Public Square, Cleveland, Ohio 44114-1306, and its merchant services
administrative offices at 4900 Tiedeman Road, Brooklyn, Ohio 44144 and
HEARTLAND PAYMENTS SYSTEMS, INC., with its office at 47 Hulfish Street, Suite
400, Princeton, New Jersey 08542 (“HPS”) and modifies, and shall become a part
of, the Merchant Processing Agreement, dated as of April 1, 2002, between
HPS and KeyBank (as amended, herein called the “Agreement”).

 

WHEREAS, KeyBank and HPS
desire to amend the Agreement in the manner set forth below regarding the Card
Program described therein.

 

NOW THEREFORE, for
valuable consideration received, the parties hereto agree as follows:

 

A.                                   Definitions. For purposes of this Amendment Agreement,
all defined terms used herein shall have the meaning set forth in the Agreement
unless otherwise expressly defined herein.

 

B.                                     Amendments.

 

(1)                                  The initial term of the Agreement is hereby
extended for three years. Thus, Section 2.1 of the Agreement is hereby
amended to read as follows:

 

“2.1.
Term of Agreement. This Agreement shall commence on the date shown at
the beginning of the Agreement (April 1, 2002) and, unless terminated as
provided herein, shall have a term of seven (7) years to continue until
April 1, 2009. The Agreement shall continue for successive three (3) years
terms after said initial term, unless terminated by either party (a) upon
ninety (90) days prior written notice or (b) as otherwise provided in this
Agreement.”

 

(2)                                  For purposes of Schedule A attached to
the Agreement, and paragraph 2 in said Schedule A, the minimum monthly billing
of Transaction Processing Fees shall apply to transaction fees only and not to
Settlement Account Interest, effective as of December 1, 2004, and
continuing through the end of the term of the Agreement.

 

(3)                                  Schedule A to the Agreement is further
amended by adding the following terms:

 

“ACH Processing Fees.

HPS
shall pay to KeyBank an *********** fee per ACH debit for the end of
month settlement per Merchant Account, beginning November 1, 2003, and
continuing through the end of the term of the Agreement.”

 

*
[****] Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.

 

13

 

C.                                     Miscellaneous.

 

(1)                                  Modifications and Changes. This Amendment Agreement may only be amended
by a written document signed by each of the parties. Neither party shall be
deemed to have waived any of its rights, powers or remedies hereunder unless
the waiving party approves such waiver in writing.

 

(2)                                  Severability; Headings. If any provision herein is held to be
invalid or unenforceable for any reason, the remaining provisions will continue
in full force without being impaired or invalidated in any way. Headings are
for reference purposes only and in no way define, limit, construe or describe
the scope or extent of such section.

 

(3)                                  Mutual Representations. HPS and KeyBank each represents and warrants
that (i) it has the power to execute and perform this Amendment Agreement; (ii)
the execution and performance of this Amendment Agreement by it has been duly
authorized by all necessary corporate action; and (iii) this Amendment
Agreement constitutes a legal, valid, and enforceable obligation of such party.

 

(4)                                  Governing Law. This Amendment Agreement and the rights and
obligations of the parties hereunder shall be performed, construed, and
interpreted in accordance with the laws of the United States and the State of
Ohio, notwithstanding any conflict of laws doctrine.

 

(5)                                  Ratification. Except as otherwise amended hereby, the
Agreement is hereby confirmed in all respects and shall remain in full force
and effect.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment Agreement, effective
as of November 1, 2003.

 

	
  KEYBANK

  	
  HEARTLAND PAYMENTS
  SYSTEMS, INC.

  
	
  NATIONAL ASSOCIATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Daniel
  Neistadt

  	
   

  	
  By:

  	
   /s/ Martin J.
  Uhle

  	
   

  
	
   

  	
   Daniel Neistadt

  	
   

  	
   

  	
   Martin J. Uhle

  	
   

  
	
   

  	
   

  
	
  Title: Executive Vice
  President

  	
  Title: President and
  C.O.O.

  	
   

  
							

 

14Exhibit 10.8

 

WITHDRAWAL AND REDEMPTION AGREEMENT

 

AMONG

 

HEARTLAND PAYMENT SYSTEMS, LLC,

 

TRIAD, LLC,

 

HEARTLAND BANK,

 

AND

 

HEARTLAND CARD COMPANY

 

Dated as of May 8, 2000

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1
  - DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2
  - WITHDRAWAL AND REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Withdrawal

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3
  - ALLOCATION AND PAYMENT OF REVENUE FROM MARCH CONTRACTS

  	
   

  
	
   

  	
   

  
	
  3.1

  	
  Net
  Contract Revenue

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4
  - SERVICING OF THE HCC PORTFOLIO CONTRACTS

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Servicing
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Termination
  of Servicing; Commissions; Buy-Out Commission

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5
  - HCC PORTFOLIO CONTRACTS: SALE AND TRANSFER; OPTIONS; TAG-ALONG

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Restrictions
  on Sale

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Option to
  Purchase

  	
   

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Right of
  First Offer; Right of First Refusal

  	
   

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Tag-along
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6
  - USE OF NAME; NON-COMPETE

  	
   

  

 

i

 

	
  6.1

  	
  Use
  of Name; Non-Compete

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7
  - REPRESENTATIONS AND WARRANTIES OF HPS AND HCC

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Representations
  and Warranties of HPS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Representations and
  Warranties of HCC and HB

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 -
  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 -
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Covenants of Both HPS and
  HCC

  	
   

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Covenants of
  HPS

  	
   

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  Covenants
  of HCC; HB

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10
  - DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11
  - MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Precautionary
  UCC-1 Financing Statements

  	
   

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  Leasing

  	
   

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  Loan to Triad

  	
   

  
	
   

  	
   

  	
   

  
	
  11.4

  	
  Disclosure

  	
   

  
	
   

  	
   

  	
   

  
	
  11.5

  	
  Letter of
  Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  11.6

  	
  MasterCard Escrow; HB PBIN

  	
   

  
	
   

  	
   

  	
   

  
	
  11.7

  	
  ACH

  	
   

  
	
   

  	
   

  	
   

  
	
  11.8

  	
  Inspection
  and Audit

  	
   

  
	
   

  	
   

  	
   

  
	
  11.9

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  11.10

  	
  Assignment; Specific
  Performance

  	
   

  
	
   

  	
   

  	
   

  
	
  11.11

  	
  Entire
  Agreement

  	
   

  
				

 

ii

 

	
  11.12
  

  	
  Amendments
  and Waivers

  	
   

  
	
   

  	
   

  	
   

  
	
  11.13 

  	
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  11.14

  	
  Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  11.15

  	
  Captions,
  Counterparts; Execution

  	
   

  
	
   

  	
   

  	
   

  
	
  11.16

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  11.17

  	
  Waiver
  of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  
	
  11.18

  	
  Submission to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  11.19

  	
  Severability

  	
   

  

 

 

	
  Exhibits

  	
   

  	
   

  	
  Reference

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit

  	
  1

  	
  Allocation Formula

  	
  Definitions

  
	
   

  	
  2

  	
  Commission Report
  Format

  	
  Definitions

  
	
   

  	
  3

  	
  Servicing Agreement

  	
  Definitions; §4.1

  
	
   

  	
  4

  	
  Mutual Release

  	
  §2.1(e)

  
	
   

  	
  5

  	
  LLC Interest Transfer
  Agreement — HCC/Triad

  	
  §2.2(iii)

  
	
   

  	
  6

  	
  Monthly Debit Amount

  	
  §3.1(b) and (c)

  
	
   

  	
  7

  	
  Valuation Formula

  	
  Throughout

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  	
  Reference

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule

  	
  A

  	
  Relationship Schedule

  	
  Definitions; §2.1(c)

  
	
   

  	
  B

  	
  not used

  	
   

  
	
   

  	
  C

  	
  HCC Portfolio Contracts

  	
  §2.2(a)(ii)

  
	
   

  	
  D

  	
  Data Schedule

  	
  §9.2(a)

  
	
   

  	
  E

  	
  Settlement Report

  	
  §3.1(b)

  
	
   

  	
  F

  	
  Vesting Schedule

  	
  §9.2(e)

  
	
   

  	
  G

  	
  Seasonality Factors

  	
  §5.2

  
	
   

  	
  H

  	
  List of Merchant
  Contracts Securing Letter of Credit

  	
  §11.5

  
	
   

  	
  I

  	
  Ineligible Contracts

  	
  §9.2(g)

  

 

iii

 

WITHDRAWAL AND
REDEMPTION AGREEMENT

 

This Withdrawal and
Redemption Agreement (the “Agreement”) is made and entered into as of this 8th
day of May, 2000 by and among Heartland Payment Systems,
L.L.C., a Missouri
limited liability company (“HPS”), TRIAD, LLC, a New Jersey limited liability
company (“Triad”), HEARTLAND CARD COMPANY, a Missouri corporation (“HCC”), and HEARTLAND BANK, a
federal savings bank (“HB”).

 

W  I  T  N  E
S  S  E  T  H:

 

WHEREAS,
Triad and HCC are the sole members of HPS, which is in the merchant services
business pursuant to which it provides authorization, processing, settlement,
servicing and other related activities with respect to credit cards and on-line
debit cards honored by merchants; and

 

WHEREAS, HB is the
sole shareholder of HCC, and HB and HCC desire that HCC withdraw completely as
a member of HPS, in consideration of the redemption of all of the member
interests of HCC; and

 

WHEREAS,
Triad is agreeable to the withdrawal of HCC as a member of HPS, in exchange for
the redemption of the HCC Interest by HPS, all in accordance with the terms and
conditions as hereinafter set forth.

 

NOW, THEREFORE, in
consideration of the mutual agreements, covenants and conditions contained in
this Agreement, the parties agree as follows:

 

 

ARTICLE 1 -
DEFINITIONS

 

1.1                                 Definitions. Except as otherwise specifically
indicated, the following terms shall have the meaning specified herein.

 

“Allocation
Formula” means the formula shown on Exhibit 1 attached.

 

“Closing Date”
means on or before May 8, 2000, or if an extension is required in order to
obtain the approval of the OTS to the transactions contemplated by this
Agreement, three (3) business days after obtaining the OTS approval, but in any
event no later than May 31, 2000.

 

“Commission Report
Format” means the format shown on Exhibit 2 attached.

 

“Contracts”
means the merchant card processing agreements between HPS and Merchants.

 

“End Date” means
December 31, 2000, or, if earlier, the date of a sale of all of the HCC
Portfolio Contracts in accordance with Section 5.2.

 

“Gross
Margin” means (A) all direct processing fees collected from merchants,
including but not limited to, discount fees, transaction fees, and monthly fees
(but excluding lease and rent payments, chargeback fees and supply revenue), less
(B) all direct processing costs (including but not limited to, authorization
costs, statement costs, help desk costs, draft capture costs but excluding
chargeback costs and supply expenses), interchange costs, dues and assessments
and chargeback losses and Automated Clearing House (“ACH”) reject losses.

 

“HCC
Interests” means all of the member interests of HCC in HPS, being fifty percent
(50%) of all of the member interests in HPS.

 

“HCC Portfolio
Contracts” means the Contracts that are identified in Schedule C.

 

“HCC Portfolio
Contracts Criteria” means the following criteria applicable to Contracts: (i)
the Contract is with a VisaNet Merchant, (ii) in the event a Contract is with a
Merchant

 

2

 

having
multiple-locations, all of the locations of that Merchant shall either be
included in the HCC Portfolio Contracts portfolio or shall be an HPS Retained
March Contract, (iii) the Contract does not have maintained by any
processing bank a merchant chargeback reserve or collateral deposit, and (iv)
the Contract is not a Contract previously sold by HPS to others (including
those Contracts sold to NPC, Inc., Web Investments, Inc. and Triad Discount Buying
Club, Inc.).

 

“HCC Revenue
Percentage” means, as of the Closing Date, 42.93% if the CellGate member
interests referred to below are transferred to HCC or its designee in
accordance with Section 2.2(iii), or 45.07% if such transfer does not
occur. The parties acknowledge that the foregoing percentages were derived from
the Allocation Formula. In the event after the Closing Date there is a change
in the HCC Revenue Percentage as a result of the sale or other transfer of HCC
Portfolio Contracts or HPS Retained March Contracts as permitted by this
Agreement (other than a sale and transfer for adjustment and true-up purposes
pursuant to Section 3.1(c) and (d) hereof), then the HCC Revenue
Percentage shall be adjusted to the percentage equal to the value of the HCC
Portfolio Contracts divided by the value of the March Contracts owned by
HPS and HCC immediately after said sale or transfer, with value in each
instance to be determined by the Valuation Formula applied to the HCC Portfolio
Contracts and the March Contracts immediately after said sale or other
transfer.

 

“HPS
Retained March Contracts” means all of the March Contracts excluding
the HCC Portfolio Contracts.

 

“Ineligible
Contracts” is defined at Section 9.2(g).

 

“March Contracts”
means all of the Contracts between HPS and Merchants processed by Key Bank and
in effect on March 31, 2000.

 

3

 

“Merchant” means a
person, firm, or other entity that has entered into a Contract with HPS.

 

“Net Contract
Revenue” means Gross Margin less (A) Residual Commissions, as shown on
the Commission Report Format from time to time, and (B) Value Added Resellers
(“VAR”), agent bank and association residual commissions, and (C) the lesser of
(i) 25% of Residual Commissions paid as Division Manager overrides (including
payroll-related expenses such as FICA, Medicare, state and federal unemployment
taxes and similar taxes) for Markets 1, 2 and 3 only, and (ii) the actual
amount of such Division Manager overrides (including the related costs
associated with such overrides, including applicable social security,
withholding and similar taxes and fees) identified in (i) paid by HPS.

 

“OTS” means the
Office of Thrift Supervision, an agency of the United States Government.

 

“PBIN”
means the bank processor or sponsor identification number utilized by HB for
its HPS processing relationship with Visa, MasterCard or other card or payment
transfer association or clearing house.

 

“Residual
Commissions” means the residual sales commissions due salespeople of HPS
arising out of the sale or servicing of a Contract on behalf of HPS, as
Residual Commissions are calculated and shown in the Commission Report Format,
and including payroll-related expenses such as FICA, Medicare, state and
federal unemployment taxes and similar taxes.

 

“Servicing
Agreement” means the processing servicing agreement in the form and containing
the terms as Exhibit 3 attached.

 

4

 

“Triad CellGate
Interest” means all of the member interests in CellGate Technologies, LLC (also
known as CellGate.com) owned by Triad on the date hereof, constituting 12,500
units of Class A member interests.

 

“Valuation
Formula” means the formula described in Exhibit 7.

 

“Vital” means
Vital Processing Services, LLC.

 

1.2                                 Construction. Unless the context otherwise clearly
indicates, words used in the singular include the plural and words used in the
plural include the singular.

 

ARTICLE 2 -
WITHDRAWAL AND REDEMPTION

 

2.1                                 Withdrawal.

 

(a)                                  On
the Closing Date, HCC will withdraw completely as a member of HPS. To evidence
such withdrawal, HCC will execute a withdrawal certification to HPS. HCC will
cause the current representatives of HCC to the Members’ Committee of HPS to
resign, and such resignation to be evidenced by delivering letters of
resignation to HPS effective as of the Closing Date.

 

(b)                                 All
of the contractual relationships between and among HPS, HCC, Triad, HB and
their respective affiliates will be listed in Schedule A –
Relationship Schedule. The Schedule shows the status of each relationship
and which relationships are to be terminated and released upon and effective as
of the Closing Date, and HCC and Triad will cause the obligations and rights of
the appropriate parties to each relationship to be terminated and released and
to have the appropriate parties execute the appropriate release and termination
agreement for such relationships.

 

5

 

 

May 15, 2000

 

 

VIA FAX 609-683-3815
& MAIL

 

Mr. Robert O. Carr

Heartland Payment Systems
LLC

130 Nassau Street

Princeton, NJ 08542

 

Dear Bob:

 

The
final Withdrawal and Redemption Agreement contains a typographical error that I
am bringing to your attention. At Section 2.2 (iii), the current figures
“42.39%” should be “42.93%.” Rather than worry about a formal amendment to the
Agreement, would you please simply respond to this letter indicating that HPS
is in agreement that the corrected figure controls.

 

Thank you.

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ David P. Minton

  	
   

  
	
   

  	
   

  	
  David P. Minton

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
  cc:

  	
  Mark B. Hillis

  	
   

  
	
   

  	
  Fred Nicoll

  	
   

  
	
   

  	
  Wesley Fredericks

  	
   

  

 

 

(c)                                  On
or before the Closing Date, the representatives of HCC and Triad to the
Members’ Committee of HPS will prepare, review, and approve the minutes of the
meetings of the Members’ Committee of HPS that have occurred up to and
including the Closing Date.

 

(d)                                 On
the Closing Date, Triad and HCC will execute the Mutual Release in the form and
containing the terms as Exhibit 4 attached.

 

2.2                                 Redemption. Concurrently with the withdrawal of HCC
as a member of HPS, HPS will transfer, convey, assign and pay to HCC on the
Closing Date the following:

 

(i)                                     In
cash or by wire transfer of good funds, the sum of One Million Five Hundred
Thousand Dollars ($1,500,000);

 

(ii)                                  The
HCC Portfolio Contracts; and

 

(iii)                               At
the option of HCC to be exercised, by notice to HPS, on or before 60 days after
the Closing Date, if the Triad CellGate Interests are desired to be acquired
pursuant to the separate agreement between HCC and Triad, the form of which is
attached as Exhibit 5, then upon the satisfaction of the condition
expressed below, and in exchange for the conveyance of the Triad CellGate
Interests to HCC or its designee, the value of the HCC Portfolio Contracts to
be conveyed to HCC pursuant to (ii) above will be reduced in the amount of
$625,000, pursuant to the calculation of value per the Allocation Formula. In
such event, and as condition precedents to such transaction, HCC will (A) cause
CellGate to provide, for the benefit of HPS and Triad, a general release of the
obligations of HPS and/or Triad to CellGate, and (B) pay to HPS the cash amount
necessary to reflect the adjustment of the HCC Revenue Percentage of the Net
Contract Revenue received by HCC from April 1, 2000 to the date of the
acquisition of the Triad CellGate Interests to 42.39%.

 

6

 

ARTICLE 3 -
ALLOCATION AND PAYMENT OF

REVENUE FROM MARCH CONTRACTS

 

3.1                                 Net Contract Revenue.

 

(a)                                  Upon
the consummation of the transactions on the Closing Date and thereafter, for as
long as it owns all or any portion of the HCC Portfolio Contracts, or until a
termination of the Servicing Agreement, HCC will own a percentage of the Net
Contract Revenue arising out of the March Contracts equal to its HCC
Revenue Percentage. From and after April 1, 2000, the HCC Revenue
Percentage of the Net Contract Revenue will be paid by HPS to HCC on a monthly
basis as provided in (b) below, commencing with Net Contract Revenue for the full
month of April and each succeeding month for as long as HCC owns all or
any portion of the HCC Portfolio Contracts or until a termination of the
Service Agreement.

 

(b)                                 All
net processing revenue from March Contracts will flow through and be
deposited into an account maintained by HPS, as trustee for HPS and HCC, at HB.
Such deposits of settlement proceeds will occur on or before the 4th business
day of the month succeeding the month of receipt (provided, however, that the
failure of such deposit to be made by such day of the month shall not be or be
deemed a default hereunder by HPS, unless such failure results solely from a
default by HPS in its contractual arrangements with Key Bank (or successor
processing bank) or from the unexcused refusal of HPS to permit or direct the
said deposit into the HPS account at HB), at which time HCC will be permitted
to make a single debit (in addition to any debit permitted under
Section 3.1(c) hereof), for the amount shown on Exhibit 6. HPS and
HCC agree that the monthly payment amounts shown on Exhibit 6 will
be reviewed on a monthly basis, and if the payment numbers on Exhibit 6
for any three (3) consecutive month period vary, either positively or
negatively, from the actual amounts paid to HCC for the same

 

7

 

three (3) consecutive
month period pursuant to this Section 3 after the adjustments provided in
sub-Sections 3.1(c) and (d) below, and such variance is more than 10% (positive
or negative), then going forward the monthly payment amounts shown on Exhibit 6
will be adjusted by the same positive or negative percentage variation. HPS
will on the Closing Date execute and deliver to HCC the appropriate bank
account debit authorization forms and codes to allow this debiting process,
which shall occur once per month. On or before the 20th day of each month, HCC
will receive a Settlement Report detailing the calculation and components of
Net Contract Revenue for the preceding month (to the extent of a delay in
receiving such information by HPS arising solely as a result of delay in
transmittal to HPS from Vital (or successor processing entity), the specified
date for receipt of the Settlement Report by HCC will be extended
commensurately). The format of the Settlement Report will be as shown on Schedule E
attached.

 

(c)                                  On
the 25th day of each month, there will be an adjustment, or “a true-up,” of the
Net Contract Revenue to assure the receipt by HCC of the HCC Revenue Percentage
of the Net Contract Revenue for the preceding month, after reflecting the fixed
amount of payment to HCC pursuant to sub-Section (b) of this
Section 3.1. This true-up will be accomplished by either a cash payment to
HCC to the extent HCC receives less than the HCC Revenue Percentage of the Net
Contract Revenue for the preceding month, or by a cash payment from HCC to HPS
to the extent HCC receives more than the HCC Revenue Percentage of the Net
Contract Revenue for the preceding month. HCC will be permitted, once each
month and after said adjustment and true-up occurs and provided HCC is due
money as a result, to debit from the said account at HB any amount due HCC. HPS
will on Closing Date execute and deliver to HCC the appropriate bank account
debit authorization forms and codes to allow this debiting process.

 

8

 

(d)                                 To
reflect the requirement that
HCC will receive the HCC Revenue Percentage of the Net Contract Revenue on a
constant and consistent basis from and after Closing Date as provided by this
Agreement, and also to implement the true-up provisions of sub-Section (c)
above going forward, it is agreed that to the extent the percentage value of
the HCC Portfolio Contracts to the percentage value of the March Contracts
existing at the end of the preceding month (value determined in each case as of
the end of the preceding month per the Valuation Formula) is greater than the
HCC Revenue Percentage, then HCC shall transfer to HPS, by quit-claim bill of
sale, such HCC Portfolio Contracts with a value to conform the said percentage
value as of the end of the preceding month to the HCC Revenue Percentage. In
the case where the said percentage value is less than the HCC Revenue
Percentage, HPS shall transfer to HCC, with the representations and warranties
specified in sub-Sections 7.1(d), (g) and (p) hereof to the benefit of HCC,
such HPS Retained March Contracts (conforming to HCC Portfolio Contracts
Criteria) as will conform the percentage value as of the end of the preceding
month to the HCC Revenue Percentage (provided, that if there are an
insufficient number of HPS Retained March Contracts available to achieve
such an adjustment, HPS may transfer Contracts acquired by HPS after
March 31, 2000, as long as the proffered Contracts conform to the HCC
Portfolio Contracts Criteria).

 

(e)                                  NPC
Contracts. HPS has certain contractual obligations to National Processing
Company (“NPC”) as a result of the sale of certain contracts to NPC in
December of 1999. If, pursuant to said contractual obligations, it becomes
necessary for HPS to transfer to NPC Contracts that are March Contracts
and HPS cannot meet the required transfer obligation out of the HPS Retained
March Contracts Portfolio, then HCC agrees that HPS may exchange with HCC
the required number of HCC Portfolio Contracts for other Contracts of at least
equal

 

9

 

value that were
originated by HPS after March 31, 2000, provided each of said exchange
contracts complies with the HCC Portfolio Contracts Criteria. HPS and HCC
acknowledge that the parties have reflected in the HCC Revenue Percentage and
in the Allocation Formula a reduction of $480,000 in the total amount of
March Contracts value to reflect potential Merchant attrition in the
Contracts portfolio purchased by NPC and the corresponding Contract replacement
obligation of HPS in that transaction.

 

ARTICLE 4 - SERVICING OF THE HCC PORTFOLIO
CONTRACTS

 

4.1                                 Servicing Agreement. On the Closing Date,
HPS and HCC will execute the Servicing Agreement. The servicing fees due HPS as
provided in the Servicing Agreement are to be paid out of the account and
pursuant to the procedures identified at Section 3.1 above. HPS agrees to
lend commercially reasonable cooperation and assistance (including the
provision of interim processing services for a reasonable period of time) in
the event of the transfer to another servicer of the servicing of the HCC
Portfolio Contracts, provided all payments are being made by HCC under the
Servicing Agreement. It is agreed that the Servicing Agreement will be
terminated on the earlier to occur of (i) the date HCC no longer owns any HCC
Portfolio Contracts, (ii) no fewer than twenty (20) business days after receipt
of notice of a default by HPS under this Agreement or under the Servicing Agreement,
and only if such a default has not been cured within said period, or (iii) the
specified termination date in the Servicing Agreement. HCC shall have the right
at any time to contract with Vital to procure back-up processing services for
the HCC Portfolio Contracts. HPS agrees to use its best efforts to secure for
HCC such back-up services. If such back-up services with Vital are not secured
for HCC within 60 days after Closing Date, HCC may secure such services with
other third-party payment processors.

 

10

 

4.2                                 Termination of Servicing;
Commissions; Buy-Out Commission. In the event of the termination of the
Servicing Agreement by HPS, or by HCC as the result of a default by HPS, at a
time when HCC remains the owner of HCC Portfolio Contracts, HPS and HCC agree
to the following procedures for the payment of Residual Commissions to the
salespeople of HPS for the remaining period of time that HCC owns HCC Portfolio
Contracts: (I) HCC’s new servicer will supply to HPS on a monthly basis an
accurate calculation of the Residual Commissions due to the salespeople of HPS
for HCC Portfolio Contracts for the preceding month, using instructions
provided by HPS to create the same format, revenue and cost calculations as the
Commissions Report Format in Exhibit 2; (ii) within two (2) business days of
receipt of such report, HCC will provide said report to HPS and pay HPS the
amount of the Residual Commissions plus the applicable payroll and unemployment
taxes; and (iii) within two (2) business days thereafter, HPS will pay the
salespeople the Residual Commissions due for the preceding month, and upon the
request of HCC will provide written verification of the payment of such
Residual Commissions.

 

In the event of
the voluntary termination of the Servicing Agreement by HCC, and in lieu of the
procedures specified above, HCC shall pay to HPS (and HPS will in turn pay to
the salespersons) the amounts necessary to liquidate fully the buy-out
commissions of the salespeople of HPS who have the commission interests in the
HCC Portfolio Contracts the servicing of which HPS is being terminated. The
amount of the buy-out commissions (for which there are no payroll taxes or
withholding obligations) will be shown in the most recent Commission Report
Format as described in Exhibit 2 multiplied by 30 times or the buy-out factor
(if less than 30) in the HPS contract with the salesperson. HPS will supply a
copy of a salesperson’s management agreement with HPS to HCC upon the request
of HCC.

 

11

 

ARTICLE 5 - HCC PORTFOLIO CONTRACTS: SALE AND
TRANSFER; OPTIONS; TAG-ALONG

 

5.1                                 Restrictions on Sale. From the Closing Date
to the End Date, HCC shall not sell any of its HCC Portfolio Contracts unless
(i) there is an uncured default by HPS under this Agreement or the Servicing
Agreement, in which event HCC shall be free to sell all or any of the HCC
Portfolio Contracts, or (ii) there is a sale to HPS in accordance with
Section 5.2 below.

 

5.2                                 Option to Purchase. HCC hereby grants to HPS
the option to purchase, during the period from Closing Date to the End Date,
all but not less than all of the HCC Portfolio Contracts. The option may be
exercised during said period by written notice to HCC, and if exercised the
sale and purchase must occur within twenty (20) business days of the date of
the notice of exercise, for a cash purchase price equal to the valuation of the
HCC Portfolio Contracts existing on the notice of exercise date, determined
pursuant to the Valuation Formula. Upon such a sale and purchase, the Servicing
Agreement will terminate. Upon receipt of the cash purchase price, HCC will
transfer by bill of sale to HPS the HCC Portfolio Contracts, without warranty
or representation except for the ownership of title by HCC, free of liens and
encumbrances created by or as a result of the actions or omissions of HCC. If
HPS exercises its option, HPS shall concurrently with its notice of exercise
post a non-refundable deposit of 20% of the calculated price with HCC. If the
closing does not occur due to the unexcused failure of HPS to pay the purchase
price on the closing date, the deposit will be kept by HCC, and if the
circumstance is such that a second unexcused failure of HPS to pay the purchase
price on the closing date has occurred, the option to purchase shall be forever
extinguished.

 

12

 

5.3                                 Right of First Offer; Right of First
Refusal.

 

(a)                                  On
and after the End Date, HCC shall be free to sell or dispose of all or any
portion of the HCC Portfolio Contracts, provided HCC shall first offer to sell
to HPS by notice in writing (whether or not a bona fide offer has been received
by HCC from a third party) the HCC Portfolio Contracts or portion thereof desired
to be sold by HCC, at a price determined by HCC (the “Offered Price”),
whereupon HPS will have the option to buy such HCC Portfolio Contracts for a
period of twenty (20) business days after receipt of such notice at the Offered
Price. If HPS declines to purchase such HCC Portfolio Contracts, then HCC shall
have 120 days, commencing at the end of said twenty (20) business day period,
in which to sell such Portfolio Contracts to any party free of such right of
first offer in favor of HPS at a price which is no lower than the Offered Price
less $1,000,000 (or, if less than all of the HCC Portfolio Contracts are
the subject of the option to buy because HCC desires to sell or dispose of less
than all of the HCC Portfolio Contracts, a proportionately lower amount than
$1,000,000 based upon the proportion the value (determined according to the
Valuation Formula) of the HCC Portfolio Contracts that are the subject of the
option to buy bears to the value of the entire HCC Portfolio Contracts
(determined according to the Valuation Formula)), value in each instance
determined as of the end of the month preceding the month in which HPS declines
to purchase.

 

(b)                                 If
the price offered to a third-party prospective buyer during such 120-day period
is lower than the amount specified in (a) above (the Offered Price, less
$1,000,000, or a proportionately reduced amount), HCC shall first offer to HPS
the right to purchase the HCC Portfolio Contracts at the price offered to the
third-party prospective buyer, whereupon HPS shall have the option to purchase
at said price by notice of exercise to be received by HCC within twenty (20)
business days after receipt of HCC’s notice of intent to sell to a third
party-buyer.

 

13

 

(c)                                  If
HPS exercises its right of first offer or its right of first refusal as
provided in (a) and (b) above, respectively, HPS shall concurrently with its
notice of exercise post a non-refundable deposit of 20% of the calculated price
with HCC, and the closing of the sale and purchase shall occur within ten (10)
business days of the notice of exercise. The consideration to be paid by HPS to
HCC upon the exercise of its right of first offer or right of first refusal
shall be cash, and HCC will transfer by bill of sale to HPS the HCC Portfolio
Contracts (or portion thereof to be purchased by HPS) without warranty or
representation except for the ownership of title by HCC, free of liens and
encumbrances created by or as a result of the actions of HCC. If the closing does
not occur due to a default by HPS, the deposit will be kept by HCC, and if the
circumstance is such that a second default in the obligation to purchase
pursuant to an exercised option by HPS has occurred, the right of first offer
and right of first refusal of HPS shall both be forever extinguished. In the
event of a sale of HCC Portfolio Contracts to HPS after the End Date, or to a
third-party buyer at any time, the residual commission payable to salespeople
of HPS arising as a result of the sale of an HCC Portfolio Contract shall be
paid and liquidated by HCC concurrently with the receipt of cash by HCC as a
result of such sale, provided that, as a condition to such payment, the
contractual provisions benefiting HPS relating to the non-solicitation by the
salesperson of Merchants whose Contracts are the subject of the residual
buy-out commission to be paid and liquidated are, at the request of HCC,
assigned to HCC or its designee. It is acknowledged that there are no payroll
taxes or withholding obligations arising out of the payment of such residual
buy-out commissions.

 

5.4                                 Tag-along Rights. In the event that, during the
period that HCC owns HCC Portfolio Contracts, HPS desires to sell or securitize
any of HPS Retained March Contracts, HPS shall first offer the opportunity
to HCC to participate, on the same terms and conditions as HPS

 

14

 

and proportionately in
accordance with the HCC Revenue Percentage as of the most recent end of a
calendar month, in such a sale or securitization. HPS will disclose to HCC the
terms and conditions of such a sale or securitization, whereupon HCC shall have
the option, in its discretion, to participate by sending written notice of
exercise of option to HPS within twenty (20) business days of receipt by HCC of
the terms and conditions (provided, however, that if HPS is in receipt of an
unsolicited offer to purchase HPS Retained March Contracts, the exercise
period for HCC will be five (5) business days). If such option is exercised by
HCC, HCC and the portion of the HCC Portfolio Contracts that will be subject to
the sale or securitization will be entitled to the proportionate benefits, and
shall bear the proportionate costs and expenses, of the consummation of the
sale or securitization.

 

ARTICLE 6 -
USE OF NAME; NON-COMPETE

 

6.1                                 Use of Name; Non-Compete. HB and HCC
acknowledge that HPS and Heartland Payroll Company will continue to use the
name “Heartland” in connection with their respective businesses. For a period
of two (2) years after the Closing Date, HCC and HB agree not to, and to cause
their affiliates not to, compete with HPS or Heartland Payroll Company in the
business of providing merchant payment services or payroll processing services
to merchants, which prohibition will extend to the continental United States,
provided, however, that nothing in this Section 6.1 will prohibit HB and
its affiliates (other than HCC) from engaging in their product lines of
financial services as conducted and offered on the Closing Date. HPS agrees
that it will not license or contractually permit any entity (other than HPS) to
use the name “Heartland” in connection with any financial services business in
the State of Missouri.

 

15

 

ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF HPS
AND HCC

 

7.1                                 Representations and Warranties of HPS.
HPS hereby represents and warrants to HCC as follows (effective as of the date
of this Agreement and the Closing Date):

 

(a)                                  Organization.
HPS is a limited liability company duly organized, validly existing and in good
standing under the laws of Missouri.

 

(b)                                 Capacity;
Authority; Validity. HPS has all necessary corporate power and authority to
enter into this Agreement and related agreements and to perform all the
obligations to be performed by it under this Agreement and the related
agreements. This Agreement, the related agreements and the consummation by HPS
of the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action of HPS, and this Agreement and the
related agreements have been duly executed and delivered by HPS and constitute
the valid and binding obligations of HPS, enforceable in accordance with their
terms (except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship, the rights and
obligations of receivers and conservators of insured depository institutions
under 12 U.S.C. § 1821(d) and (e) and other laws relating to or affecting
creditors’ rights generally and by general equity principles).

 

(c)                                  Conflicts;
Defaults. Neither the execution and delivery of this Agreement or the
related agreements by HPS nor the consummation of the transactions contemplated
hereby and thereby by HPS will (i) conflict with, result in the breach of,
constitute a default under, or accelerate the performance required by the terms
of any contract, instrument or commitment to which HPS is a party or by which
HPS is bound, (ii) violate the charter or operating agreement or any other
equivalent organizational document of HPS, (iii) require any consent or
approval under any judgment, order, writ, decree, permit or license to which
HPS is a party or by which HPS is

 

16

 

bound, (iv) result in the
creation of any lien, charge or encumbrance upon any of the
March Contracts, or (v) require the consent or approval of any other party
to any contract, instrument or commitment to which HPS is a party or by which
it is bound. HPS is not subject to any agreement with any regulatory authority
which would prevent the consummation by HPS of the transactions contemplated by
this Agreement or the related agreements.

 

(d)                                 Title
to March Contracts; Originated March Contracts; Seasonality Factors.
To the best knowledge of HPS and after reasonable inquiry, HPS has good title
to the March Contracts free and clear of any lien, pledge, claim, security
interest, encumbrance, charge or restriction of any kind, other than in favor
of Heartland Bank. The bill of sale to HCC will vest in HCC all right, title
and interest of HPS in and to the HCC Portfolio Contracts, free and” clear on
the Closing Date of any lien, pledge, claim, security interest, encumbrance,
charge or restriction of any kind. All of the Contracts originated by HPS at
any time that (i) are processed by Key Bank or First Data Resources and (ii)
were in effect with Merchants on March 31, 2000, other than those
Contracts sold by HPS to NPC, Inc., Web Investments, Inc., and Triad Discount
Buying Club, Inc. have been reflected and incorporated into the Allocation
Formula. The data and historical experience information utilized by HPS in
formulating the Seasonality Factors - Schedule G are accurate in
all material respects, and the Seasonality Factors - Schedule G are
consistent with those data and historical experience information.

 

(e)                                  Litigation.
There is no claim, or any litigation, proceeding, arbitration, investigation or
material controversy pending, to which HPS is a party, which is reasonably
likely to have a material adverse effect on the March Contracts or on the
ability of HPS to consummate the transactions contemplated hereby and, to the
best of HPS’s knowledge, no such

 

17

 

claim, litigation,
proceeding, arbitration, investigation or controversy has been threatened or is
contemplated.

 

(f)                                    Compliance
with Laws. HPS has complied in all material respects with all applicable
laws and regulations and with the operating regulations of Visa, MasterCard and
other card associations in connection with the ownership and servicing of the
March Contracts, and HPS has not received any written or verbal notice
alleging any such violation.

 

(g)                                 Contracts.
HPS has performed in all material respects, all obligations required to be
performed by it under the terms of the March Contracts and is not in
default under, and no event has occurred which, with the lapse of time or
action by a third party, could result in a default under, any such agreements
which would have a material adverse effect upon a March Contract. No
deposits or reserves for chargebacks are held for Merchant accounts with
respect to the HCC Portfolio Contracts. HPS has not been notified of the
bankruptcy of a Merchant under the HCC Portfolio Contracts. HPS entered into
each March Contract in accordance with its customary credit review and
acceptance criteria. Each March Contract accurately reflects the original
pricing and billing information with respect to the Merchant that is a party
thereto. HPS has not received any oral or written notice stating that any
Merchant will terminate any March Contract or discontinue or substantially
reduce its relationship with HPS with respect to any March Contract.

 

(h)                                 Operation
of Business. Since December 31, 1999, HPS has not effected any change
in its policies or procedures relating to its business that would have an
adverse effect on the March Contracts.

 

(i)                                     Finders
or Brokers. HPS has not agreed to pay any fee or commission to any agent,
broker, finder or other person for or on account of services rendered as a
broker or

 

18

 

finder in connection with
this Agreement or the transactions contemplated hereby which would give rise to
any valid claim against HCC or the HCC Portfolio Contracts for any brokerage
commission or finder’s fee or like payment.

 

(j)                                     Other
Agreements. HPS is not a party to or bound by any agreement, commitment or
understanding with any party that would have, in the aggregate, an adverse
effect on the HCC Portfolio Contracts. HPS has no unpaid obligation for any
period prior to the Closing Date to a Merchant under an HCC Portfolio Contract
or, with respect to any HCC Portfolio Contract, to Visa, MasterCard, Diner’s
Club or any regional debit network or any independent sales organization or
other third party.

 

(k)                                  No
Independent Sales Organizations. HPS does not have any agreements,
understandings or commitments to or with any person or entity, including any
independent sales organization, for the provision of merchant card processing
services, which would give rise to any valid claim against HCC or the HCC
Portfolio Contracts.

 

(1)                                  Books
and Records. The books and records of HPS reflecting or concerning the HCC
Portfolio Contracts are true and accurate in all material respects.

 

(m)                               Permits,
Licenses and Other Authorizations. HPS has and is in compliance with the
terms of permits, licenses and authorizations to the extent that the failure to
have and comply with such would have a material adverse effect on the HCC
Portfolio Contracts, and there are no pending or, to the best of HPS’s
knowledge, threatened terminations, expirations, or revocations thereof.

 

(n)                                 Options
to Purchase. Neither HPS nor Triad has any outstanding options, rights to
purchase, contracts or any other right entitling anyone to acquire any of the
March Contracts except as otherwise expressly contemplated by this
Agreement, including, but not

 

19

 

limited to, any such
agreements with any independent sales organizations and/or member service
providers or any other agents of HPS or Triad.

 

(o)                                 Insolvency
Proceedings. HPS is not the subject of any pending or, to the best of HPS’s
knowledge, threatened insolvency proceeding of any character, including
bankruptcy, receivership, reorganization, composition or arrangement with
creditors, voluntary or involuntary. HPS has not made an assignment for the
benefit of creditors or taken any action in contemplation of or which would
constitute a valid basis for the institution of any such insolvency
proceedings.

 

(p)                                 HCC
Portfolio Criteria. Each HCC Portfolio Contract is in full compliance with
each HCC Portfolio Criteria.

 

7.2                                 Representations and Warranties
of HCC and HB. HCC and HB hereby represent and warrant to HPS as follows:

 

(a)                                  Organization.
HCC is a corporation duly organized, validly existing and in good standing
under the laws of the State of Missouri.

 

(b)                                 Capacity;
Authority; Validity. HCC has all necessary corporate power and authority to
enter into this Agreement and the related agreements and to perform all of the
obligations to be performed by it under this Agreement and the related
agreements. This Agreement and the related agreements and the consummation by
HCC of the transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action of HCC, and this Agreement
and the related agreements have been duly executed and delivered by HCC and
constitute the valid and binding obligations of HCC, enforceable in accordance
with their terms (except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship, the
rights and

 

20

 

obligations of receivers
and conservators of insured depository institutions under 12 U.S.C. §1821(d)
and (e), and other laws relating to or affecting creditors’ rights generally,
and by general equity principles).

 

(c)                                  Conflicts;
Defaults; OTS. Neither the execution and delivery of this Agreement or the
related agreements by HCC nor the consummation of the transactions contemplated
hereby by HCC will (i) conflict with, result in the breach of, constitute a
default under, or accelerate the performance required by the terms of any
contract, instrument or commitment to which HCC is a party or by which HCC is
bound, (ii) violate the articles of incorporation or by-laws, or any other
equivalent organizational document of HCC, (iii) require any consent or approval
under any judgment, order, writ, decree, permit or license to which HCC is a
party or by which HCC is bound, or (iv) require the consent or approval of any
other party to any contract, instrument or commitment to which HCC is a party
or by which it is bound, which on or before the Closing Date has not or will
not have been unconditionally obtained. Further, all of the approvals and
non-objections required to be obtained from the OTS have been obtained on an
unconditional basis (or, to the extent any conditions have been imposed, such
conditions have been satisfied in full).

 

(d)                                 Litigation.
There is no claim, or any litigation, proceeding, arbitration, investigation or
material controversy pending, to which HCC is a party, which is reasonably
likely to have a material adverse effect on HCC’s ability to consummate the
transactions contemplated hereby and, to the best of HCC’s knowledge, no such
claim, litigation, proceeding, arbitration, investigation or controversy has
been threatened or is contemplated.

 

(e)                                  Finders
or Brokers. HCC has not agreed to pay any fee or commission to any agent,
broker, finder or other person for or on account of services rendered as which
would 

 

21

 

give rise to any valid claim
against HPS for any brokerage commission or finder’s fee or like payment.

 

(f)                                  Effect
of Law on Closing. There is no federal or state statute, rule or regulation
currently in effect which would prevent HCC from purchasing the HCC Portfolio
Contracts from HPS as contemplated by this Agreement.

 

ARTICLE 8 -
CONDITIONS PRECEDENT

 

(a)                                  The
obligations of HCC to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of each of the following conditions
prior to or on the Closing Date as follows:

 

(i)                                     All
of the terms, covenants and conditions of this Agreement to be complied with
and performed by HPS or Triad at or prior to the Closing Date shall have been
fully complied with and performed in all material respects;

 

(ii)                                  There
shall be no material inaccuracies in any of the representations and warranties
of HPS as of the date of this Agreement or as of the Closing Date;

 

(iii)                               The Board of Directors
of HCC shall have adopted resolutions for the execution and delivery of this Agreement
and the related agreements for the consummation of the transactions
contemplated hereby and thereby;

 

(iv)                              Since
the date of this Agreement, there shall have been no material adverse change in
the condition, financial or otherwise, of the business of HPS (other than the
normal fluctuations in the value of processing transactions for Merchants);

 

(v)                                 The
OTS shall have approved (or not objected to) the transactions contemplated by
this Agreement, on an unconditional basis; and

 

22

 

(vi)                              No
action, suit, proceeding, or investigation related to any of the transactions
contemplated hereby shall have been threatened or instituted which, in the
opinion of HCC is reasonably likely to materially restrict or prohibit or
otherwise have a material adverse effect on the consummation of the
transactions contemplated hereby.

 

(b)                                 The
obligations of HPS to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of each of the following conditions
prior to or on the Closing Date as follows:

 

(i)                                     All
of the terms, covenants and conditions of this Agreement to be complied with
and performed by HCC and HB at or prior to the Closing Date shall have been
fully complied with and performed in all material respects;

 

(ii)                                  There
shall be no material inaccuracies in any of the representations and warranties
of HCC as of the date of this Agreement or as of the Closing Date, and such
representations and warranties are made anew with the same force and effect at
and as of the Closing Date, and at and as of each date after the Closing Date
that a Settlement Report is (or should be) delivered to HCC by HPS;

 

(iii)                               The Members’ Committee
of Triad shall have adopted authorizing resolutions for the execution and
delivery of this Agreement and the related agreements for the consummation of
the transactions contemplated hereby and thereby

 

(iv)                              No
action, suit, proceeding, or investigation related to any of the transactions
contemplated hereby shall have been threatened or instituted which, in the
opinion of HPS, is reasonably likely to materially restrict or prohibit or
otherwise have a material adverse effect on the consummation of the
transactions contemplated hereby; and

 

23

 

(v)                                 The
OTS shall have approved (or not objected to) the transactions contemplated by
this Agreement, on an unconditional basis.

 

ARTICLE 9 -
AFFIRMATIVE COVENANTS

 

9.1                                 Covenants of Both HPS and HCC.

 

(a)                                  Both
parties will undertake to execute whatever further documentation is necessary
and appropriate to effectuate the transactions contemplated hereby.

 

(b)                                 The
HCC Portfolio Contracts will be in the custody and control of HCC pursuant to
the following arrangements. The HCC Portfolio Contracts and the documentation
and files relating thereto are to be segregated and so labeled, upon the
request and at the expense of HCC. If so requested by HCC, such custody and
control will be created by the use of filing cabinets containing the appropriate
documentation for the HCC Portfolio Contracts (at the expense of HCC), and
access to those filing cabinets will be controlled by HCC by Marty Uhle (or
other senior executive of HPS reasonably acceptable to HCC). Mr. Uhle (and
any such successor senior executive) will agree by separate letter agreement to
act as the agent for HCC and to comply with HCC’s reasonable instructions with
respect to the care of and access to such files and cabinets. Mr. Uhle (and any
such successor senior executive) will act with the same duties of care and
responsibility to HCC as he discharges to HPS in the care and custody of such
files and cabinets. 

 

(c)                                  Within
30 days after the Closing Date, the parties will review the appropriate books
and records of HPS, including information concerning the March Contracts,
to verify the accuracy of the Schedules attached hereto and the conformity of
those Schedules (including specifically the identity, number and value of the
HCC Portfolio Contracts) to the requirements and criteria therefor set forth in
this Agreement. Such steps shall be taken by a

 

24

 

representative of HPS
designated by its President and a representative of HCC, and appropriate
adjustments will be made to the HCC Portfolio Contracts, and the composition
and extent thereof, to assure conformity to the terms, criteria and provisions
of this Agreement and the transactions contemplated hereby.

 

9.2                                 Covenants of HPS.

 

(a)                                  HPS
will provide HCC with a monthly database file that discloses all pertinent
merchant information, including but not limited to that which was disclosed by
Salomon Smith Barney Company to potential portfolio purchasers by documentation
dated on or about December, 1999. On the Closing Date, HPS will provide HCC
with a database that contains the images of all documents presently stored in
HPS’ computer systems for the Merchants with HCC Portfolio Contracts. All of
the foregoing information will be in a format and media as shown and described
on Schedule D — Data Schedule.

 

(b)                                 In
the event of a breach of a representation and warranty by HPS with respect to
an HCC Portfolio Contract, HPS will substitute a Contract of equal value (per
the Allocation Formula) that complies with the HCC Portfolio Criteria and the other
requirements of this Agreement concerning the HCC Portfolio Contracts. If a
Merchant with an HCC Portfolio Contract terminates its contract with HPS, and
then subsequently re-signs a contract with HPS for card processing services,
that Merchant’s contract upon re-signing will be treated as a
March Contract for purposes of calculating the HCC Revenue Percentage of
the Net Contract Revenue.

 

(c) (i)                    HPS will
indemnify and hold harmless HCC, HB and their respective officers, directors,
employees, affiliates and agents (“the Indemnitees”) from and against any and
all claims, expenses (including attorneys’ fees incurred by an Indemnitee),
liabilities, and losses incurred by an Indemnitee (the “Indemnified Matters”)
by reason of (A) the operations of HPS 

 

25

 

from and after the
Closing Date, (B) the breach by HPS of any representation, warranty or covenant
hereunder, or (C) any action or failure to act by HPS with respect to the
March Contracts (including, without limitation, any such Indemnified
Matter arising out of any claims, actions or proceedings by Merchants or any
governmental body or agency relating to the administration, disposition or
servicing of the March Contracts and any reserves or charge-back amounts
or deposits or collateral relating thereto), whether arising prior to, on or
after the Closing Date. The liability of HPS under the foregoing indemnity in
this sub-Section (c)(i) shall not exceed in the aggregate the sum of
$3,500,000, and an Indemnitee may not present a claim for indemnification
pursuant to the foregoing indemnity unless and until the cumulative amount of
claims subject to the foregoing indemnity exceeds $200,000.

 

(ii)                                  In
addition to and in supplementation of the foregoing indemnity, but without the
applicability of the foregoing per claim retention and aggregate limitations,
HPS will at its cost and expense defend and protect the interests of the
Indemnitees, and hold them harmless against, Indemnified Matters arising out of
any litigation or proceeding initiated by a Merchant or former Merchant or
government entity and concerning the agreement or relationship of the Merchant
with HB as the processing bank for HPS, including without limitation fraud
committed by Merchants or losses from the business failure of such Merchants,
whether such litigation or proceeding arises out of facts and circumstances
occurring before or after the Closing Date. HPS will send to HB and HCC prompt
notice of the receipt of any summons, order or claim concerning any such
litigation or proceeding. The selection of counsel by HPS to represent the
interests of the Indemnitees that have been named in or may have exposure to
such litigation or proceeding, at the cost of HPS, shall be subject to the
prior approval of the Indemnitee, which approval will not be unreasonably
withheld or delayed.

 

26

 

(d)                                 HPS
will provide commercially reasonable cooperation and assistance to HCC
(including the provision of interim processing services for a reasonable period
of time) in the event of the transfer to another servicer of servicing of the
HCC Portfolio Contracts (provided all payments, including payroll-related
expenses such as FICA, Medicare, state and federal unemployment taxes and
similar taxes, are being made by HCC under the Servicing Agreement).

 

(e)                                  HPS
will forward to HCC a Vesting Schedule, periodically at the request of HCC,
showing the sales commission levels, to whom commissions are payable, and other
relevant information to enable HCC to determine the amount of commissions and
residuals payable under the HCC Portfolio Contracts at any particular date. The
Schedule shall conform to the form of Schedule F – Vesting
Schedule. 

 

(f)                                    HPS
and Triad and their respective principals, successors and affiliates will not
solicit the Merchants which have HCC Portfolio Contracts for merchant card
processing services, as such services are defined in the first recital clause
of this Agreement, for so long as HCC is the owner of such HCC Portfolio
Contracts and there is not an uncured default by HCC hereunder or under the
Servicing Agreement. 

 

(g)                                 There
are certain Contracts as of March 31, 2000 that are not
March Contracts, which Contracts are listed in Schedule I
attached (the “Ineligible Contracts”). For the full month of April, 2000 and
for each succeeding month thereafter for so long as HPS owns Ineligible
Contracts, fifty percent (50%) of the Net Contract Revenue arising from
Ineligible Contracts shall be paid by HPS to HCC. Such payments shall be made
by HPS to HCC by the tenth (10th) day of each month for the monthly Net
Contract Revenue of the Ineligible Contracts for the preceding month. 

 

27

 

9.3                                 Covenants of HCC; HB.

 

(a)                                  HCC
shall indemnify and hold HPS and its officers, member committee
representatives, employees and agents harmless from and against any and all
liability, costs (including attorneys’ fees incurred by HPS), losses and
expenses, incurred by HPS or any such person by reason of a breach by HCC of
any representation, warranty or covenant of HCC hereunder. 

 

(b)                                 HB
covenants that it will not permit or cause HCC to sell or transfer the HCC
Portfolio Contracts other than in accordance with the terms of this Agreement,
absent the prior written approval of HPS, which approval will not be
unreasonably withheld or delayed. 

 

ARTICLE 10 -
DEFAULTS

 

(a)                                  A
breach by any party under this Agreement will give the right to the aggrieved
party to pursue available legal and equitable remedies if (i) in the event of a
breach of a covenant for the payment of money, the breach is not cured within
five (5) days after receipt of notice of default by the breaching party from
the aggrieved party, and (ii) in the case of any other breach, the failure to
cure such breach within twenty (20) business days after receipt of notice of a
default by the breaching party from the aggrieved party. The filing of a
reorganization or a bankruptcy proceeding by or against one of the parties
hereto (and the continuance thereof for a period of more than 60 days) shall
also constitute a default under this Agreement, automatically terminating the
obligations of the other party hereto. Notwithstanding the foregoing cure
periods, it is agreed that no notice of default or opportunity to cure need be
given to a breaching party if a notice of default has been given to the same
breaching party more than twice in any consecutive twelve-month period
hereunder.

 

28

 

(b)                                 In
the event of a default in the payment of money to HCC which continues more than
five (5) days after notice of non-payment by HCC to HPS under this Agreement or
the Servicing Agreement, then in addition to available legal and equitable
remedies, HCC or its designee shall have the option to purchase from HPS all of
the Contracts then owned by HPS for a cash purchase price calculated per the
Valuation Formula as of the end of the five-day period. To exercise such
option, HCC shall give written notice to HPS within twenty (20) business days
after the expiration of the five-day cure period, and, if exercised, and HPS
has not cured the default prior to such date of exercise, the closing of the
purchase and sale shall occur within ten (10) business days after giving the
notice of exercise. HCC shall concurrently with its notice of exercise post a
non-refundable deposit of 20% of the calculated price with HPS. If closing does
not occur due to the unexcused failure of HCC to pay the purchase price on the
closing date, the deposit will be kept by HPS.

 

ARTICLE 11 - MISCELLANEOUS PROVISIONS

 

11.1                           Precautionary UCC-1 Financing
Statements. HPS agrees that HCC may, at its option, file precautionary
UCC-1 Financing Statements with respect to the interests of HCC in the HCC
Portfolio Contracts (as the same may be supplemented from time to time
hereunder), to accommodate the possibility a court or other entity or person
should claim or allege that the transactions contemplated by this Agreement is
a secured financing supplied by HCC to HPS or transaction other than the sale
and purchase of full title to the HCC Portfolio Contracts. Any such UCC-1
Financing Statement will be released upon a sale or transfer of HCC Portfolio
Contracts by HCC as permitted by this Agreement. HCC will prepare on a monthly
basis additional UCC-1 Financing Statements to reflect any changes in the
identity of the Contracts

 

29

 

that are HCC Portfolio
Contracts. The additional UCC-1 Financing Statements will be signed by HPS and
promptly returned to HCC.

 

11.2                           Leasing . Heartland Business Credit Corporation
(“HBCC”) and HPS currently have a program whereby a processing equipment lease
finance program is offered to certain merchants. After the Closing Date, it is
understood that HBCC may in its discretion terminate the offering of such a
program upon 60 days notice to HPS. The existing small equipment leases and the
HPS guaranty of same will remain in place, notwithstanding such a termination. 

 

11.3                           Loan to Triad. The existing loan from HB to Triad
will be modified to (A) provide for a repayment by Triad of the principal
balance by 10% on the earlier to occur of Closing Date or June 1, 2000,
and (B) change the maturity date to December 31, 2000.

 

11.4                           Disclosure. The parties hereto agree not to disclose
the fact or terms of the transactions contemplated by this Agreement, except
for (A) the fact that Triad and its principals are 100% owners of HPS, and (B)
disclosures or news releases that are mutually agreeable to HPS and HCC or that
are required or appropriate to their respective employees, counsel,
accountants, investment bankers and advisors, and regulatory authorities. Both
parties agree to refrain from any derogatory, libelous or slanderous communications
about the other, or their affiliates. Subject to the requirements of any
applicable law, regulation, order or decree, at all times following the date
hereof, except with the other party’s prior written consent or as may be
required in connection with the performance of a party’s obligations hereunder,
each party agrees that it shall, and shall cause its employees, agents,
partners, representatives and affiliates to, keep in confidence and not use or
disclose to any other party or entity any confidential or proprietary
information acquired in connection with this Agreement and concerning the
operations or business of the other party or any information marked or
identified as “confidential” including, 

 

30

 

without limitation,
information regarding the other party’s systems and data bases, information
about merchants, terms of contracts, methods of operation, marketing methods,
pricing and other policies; provided, however, the respective obligations of
the parties under this Section 11.4 shall not apply to information which
is supplied to prospective buyers of a party’s Contracts portfolio (which buyer
must execute a non-disclosure agreement reflecting the restrictions of this
sub-Section 11.4), or which is ascertainable from public or trade sources
or published information, or which is or becomes generally available to the
public and to such party other than as a result of a disclosure by a party or
its employees, agents, partners, representatives or affiliates in violation of
this Agreement or any other agreement by which it may be bound, or information
which is developed separately. Upon a termination of this Agreement, each party
shall return to the other, upon request, all documents and other written materials
that set forth or reflect confidential or proprietary information of the other
party or certify the destruction thereof. In the event of the breach or
threatened breach by a party of any of the agreements contained in this
Section 11.4, the other party shall have, in addition to any other
remedies provided by law or otherwise, the right to have such agreements
specifically enforced by any court having jurisdiction, it being specifically
acknowledged and agreed that any breach of the agreements set forth herein will
cause irreparable injury to the non-breaching party and that monetary damages
will not provide an adequate remedy to the non-breaching party, and injunctive
relief may be obtained in addition to any other remedies available at law or in
equity.

 

31

 

11.5                           Letter of Credit. The existing $500,000 letter
of credit issued by HB for the account of HPS shall be secured by HPS Retained
March Contracts at a collateral coverage ratio of at least 1.5:1, with the
value of the collateral to be established per the Allocation Formula. The
letter of credit may be cancelled at any time by HPS, with the consent of the
beneficiary of the letter of credit. The Merchant Contracts which support the
letter or credit are listed in Schedule H. At the option of HPS at
any time, such collateral for said letter of credit may be substituted by a
certificate of deposit in the principal amount of $500,000 to be maintained at
HB. 

 

11.6                           MasterCard Escrow; HB PBIN. (a) HB
currently has placed in escrow with MasterCard the amount of $2,000,000 in cash
and mortgage-backed securities. If an amount is withdrawn from the escrow by
Mastercard, HPS will immediately pay to HB the amount of such withdrawal. The
ownership of the escrow of HB with MasterCard, to the extent of the escrowed
amounts not returned to HB on or before March 1, 2001, shall be
transferred to and assumed by HPS (upon the payment of an amount equal to the
value of the escrow with MasterCard by HPS to HB, which HPS hereby agrees to
do). (b) HPS will use its best efforts to move each HB PBIN to another bank
promptly after the Closing Date. In any event, if there are excessive losses or
merchant chargebacks in the processing of accounts to the detriment of HB,
measured as of the end of each calendar month, or if HPS owes HB processing
settlement amounts or processing fees and other reimbursements which are more
than ten (10) days in arrears as of the tenth day of any month, or if the HB
PBIN is not transferred to another sponsor bank by October 1, 2000, HB may
cancel its PBIN with MasterCard, Visa or other card association without any
penalty to or recourse by HPS or others. From the Closing Date until the
termination of each HB PBIN, HCC has the right to reject or approve all new
Merchants to be put in an HB PBIN within 15 days after 

 

32

 

HPS’ acceptance of the
Merchant. If rejected (and if the Merchant has a projected annual processing
volume of less than $1,000,000, the rejection must be based upon good cause as
expressed in the existing HPS underwriting policy for new Merchants), HPS will
move the Merchant immediately to another processing bank. An exception to this
arrangement is for Merchants over $1,000,000 in anticipated annual volume,
which must be approved by HB in advance of HPS acceptance. After
October 1, 2000, no new Merchants are to be put in an HB PBIN. In the
event another bank has accepted the transfer of an HB PBIN before
October 1, 2000, then HPS shall have until December 31, 2000 to
transfer the HB PBIN to the new processing bank, new Merchants can be added to
the HB PBIN (per the approval requirements above), and HB will continue to be
the processing bank until the earlier of (A) December 31, 2000 or (B) the
transfer of the HB PBIN to the new Bank.

 

11.7                           ACH. HB currently is providing the ACH sponsorship for the
payroll processing services of Heartland Payroll Company LLC. It is agreed that
HPS shall use its best efforts to move the HB PBIN (or similar bank payment
processor identifying number) for the ACH processing to another bank promptly
after Closing Date, and in any event if there are excessive losses in the
processing accounts to the detriment of HB, measured as of the end of each
succeeding business day, or if the HB PBIN (or similar bank payment processor
identifying number) is not transferred to another bank by October 1, 2000,
HB may cancel its PBIN (or similar bank payment processor identifying number)
for ACH processing without any penalty to or recourse by HPS, Heartland Payroll
Company LLC, or others, provided, however, that if a new ACH payment processing
bank has agreed to undertake the ACH processing by October 1, 2000, then
HB will continue to be the ACH processing bank for Heartland Payroll Company

 

33

 

LLC until the earlier of
(A) December 31, 2000 and (B) the transfer of the ACH payment processing
to the new bank.

 

11.8                           Inspection and Audit. HPS shall grant to HCC
and its agents and representatives, after reasonable written notice and during
normal business hours, access to its books and records for purposes of
confirming the allocation of the March Contracts and the revenue arising
from the March Contracts, and any other information directly related to
the HCC Portfolio Contracts. 

 

11.9                           Notices. All notices and other communications required
of or permitted by HPS and HCC hereunder shall be in writing to the other party
and shall be deemed to have been duly given when delivered in person or the business
day following delivery to an overnight courier service, receipt requested, or
when sent via telecopy and/or facsimile transmission, with confirmation of
receipt given, or five (5) business days following the posting with the United
States postal service registered or certified mail, with postage prepaid,
addressed as follows: 

 

	
  If to HPS or to Triad:

  	
   

  	
  Heartland Payment
  Systems

  
	
   

  	
   

  	
  130 Nassau Street

  
	
   

  	
   

  	
  Princeton, NJ 08542

  
	
   

  	
   

  	
  Attention:

  	
  Robert O. Carr,

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
  Facsimile No:

  	
  609-683-3815

  
	
   

  	
   

  	
   

  
	
  If to HCC:

  	
   

  	
  Heartland Card Company

  
	
   

  	
   

  	
  212 S. Central Avenue

  
	
   

  	
   

  	
  St. Louis, MO 63105

  
	
   

  	
   

  	
  Attention:

  	
  John J. Wuest

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
  Facsimile No.:

  	
  314-512-8501

  

 

or to such other
addresses as a party may from time to time designate by notice as provided
herein, except that notices of change of address shall be effective only upon
actual receipt.

 

11.10                   Assignment; Specific Performance.
This Agreement shall not be assigned or transferred by any party without the
approval of the other party, and any assignment in violation

 

34

 

of this Agreement shall
be null and void, provided, however, that notwithstanding the foregoing, HPS
may (i) assign this Agreement to any entity with the prior written consent of
HCC, which consent will not be unreasonably withheld or delayed, or (ii) assign
this Agreement to an entity ninety-five percent (95%) of the voting and
non-voting equity interests of which on the date of such assignment is owned
directly or indirectly by, and the control of which on the date of such
assignment is vested in, directly or indirectly, the members of Triad as of the
date hereof or the executive management of HPS as of the date hereof, provided
HPS shall give notice of such transfer to HCC. Any such permitted transfer will
not relieve HPS from its obligations or liability under this Agreement. Each
party agrees that it may be impossible to measure in money the damages that
would result to a party hereto as a result of a breach hereof by the other
party. Accordingly, each party agrees that the other shall have the right to
obtain an injunction requiring specific performance of this Agreement and
waives (and agrees not to assert) any defense that a party seeking such
injunction has an adequate remedy at law.

 

11.11                     Entire
Agreement. This Agreement, together with the exhibits and schedules to
this Agreement, constitutes the entire agreement by the parties and supersedes
any other agreement, whether written or oral, that may have been made or
entered into by HPS and HCC (or by any officer or officers of such parties)
relating to the matters contemplated hereby. This Agreement supersedes in its
entirety the agreement between Triad and HCC dated April 18, 2000. 

 

11.12                     Amendments
and Waivers. This Agreement may be amended, modified, superseded, or
canceled, and any of the terms, representations, warranties or covenants hereof
may be waived, only by written instrument executed by each of the parties or,
in the case of a waiver, by the party waiving compliance. In the course of the
planning and coordination of this 

 

35

 

Agreement, written
documents have been exchanged between the parties. Such written documents shall
not be deemed to amend or supplement this Agreement. The failure of any party
at any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by any
party of any condition or of any breach of any term, representation, warranty
or covenant under this Agreement, whether by conduct or otherwise, in any one
or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach or waiver of any such
condition or breach or waiver of any other condition or of any breach or waiver
of any other term, representation, warranty or covenant under this Agreement.

 

11.13                     Termination.

 

(a)                                  In
the event that the conditions of Article VIII are not met, the party which
is the beneficiary of the failed condition may terminate this Agreement without
any further obligation or liability to the other party, effective upon giving
notice of such termination to such other party except for any obligation
contained in this Agreement that specifically survives any termination hereof.
If all the respective conditions precedent to such party’s obligations
hereunder have been fulfilled prior to the Closing Date, such party shall have
no right to terminate this Agreement, and a party shall not have the right to
terminate this Agreement as the result of any deliberate act or inaction on its
part which results in a condition precedent to its obligations hereunder being
unfulfilled. 

 

(b)                                 Anything
contained in this Agreement to the contrary notwithstanding, this Agreement may
be terminated prior to the Closing Date: (i) by the mutual consent of HCC and
HPS; (ii) by either party if the Closing Date has not occurred by May 31, 2000;
or (iii) if the 

 

36

 

consummation of the
transactions contemplated by this Agreement would violate any order, decree or
judgment of any court or governmental body having competent jurisdiction.

 

(c)                                  In
the event that this Agreement shall be terminated pursuant to this
Article 11, all further obligations of the parties under this Agreement
(other than Sections 11.4 and 11.14) shall be terminated without further
liability of any party to the other, provided that nothing herein shall relieve
any party from liability for its breach of this Agreement.

 

11.14                     Expenses.
Each party will each bear its own legal, accounting and other costs in
connection with the transactions herein, including taxes, if any, which are
imposed upon that party based on its activities hereunder. 

 

11.15                     Captions, Counterparts; Execution.
The captions in this Agreement are for convenience only and shall not be
considered a part of or affect the construction or interpretation of any
provision of this Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument. This Agreement and the signatures
hereto may be executed and delivered by facsimile transmission. 

 

11.16                     Governing
Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

 

11.17                     Waiver
of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE RELATED AGREEMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. 

 

37

 

11.18                     Submission
to Jurisdiction. Any judicial proceeding brought with respect to this
Agreement must be brought in a court of competent jurisdiction in the State of
Missouri located in the County of St. Louis or in the State of New York in the
County of New York, or in the United States District Court for the Eastern
District of Missouri or for the Southern District of New York, and, by
execution and delivery of this Agreement, each party (i) accepts, generally and
unconditionally, the exclusive jurisdiction of such courts and any related
appellate court, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement, (ii) irrevocably waives any
objection it may now or hereafter have as to the venue of any such suit, action
or proceeding brought in such a court or that such court is an inconvenient
forum, and (iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to its
address set forth in Section 11.9 hereof or in any other manner permitted
by law. 

 

11.19                     Severability.
If any provision of this Agreement or portion thereof is held invalid, illegal,
void or unenforceable by reason of any rule of law, administrative or judicial
provision or public policy, such provision shall be ineffective only to the
extent invalid, illegal, void or unenforceable, and the remainder of such
provision and all other provisions of this Agreement shall nevertheless remain
in full force and effect. 

 

38

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

	
   

  	
  HEARTLAND PAYMENT
  SYSTEMS, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert O. Carr

  	
   

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HEARTLAND CARD COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  [ILLEGIBLE] President

  
	
   

  	
   

  	
   

  
	
   

  	
  TRIAD, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert O. Carr

  	
   

  
	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  	
   

  
	
  Approved and Agreed for
  the purpose

  only of Sections 6.1, 7.2, 8(b), 9.2(c),

  9.3(b), 11.3, 11.4, 11.5, 11.6 and 11.7:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HEARTLAND BANK

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  	
   

  
	
   

  	
  [ILLEGIBLE] President
  & CEO

  	
   

  	
   

  	
   

  

 

39

 

Exhibit 1 - CellGate Not [ILLEGIBLE] Consideration

 

05/05/2000

 

VALUATION
AND ALLOCATION FORMULA

 

	
   

  	
   

  	
   

  	
   

  	
  Merchants to be “Valued”

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Actual

  Vital/Key Bank

  	
   

  	
  Actual

  FDR/Heartland

  	
   

  	
  Actual

  Harris Bank

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March, 2000 Gross Margin

  	
   

  	
   

  	
   

  	
  1,370,863

  	
   

  	
  36,668

  	
   

  	
  5,796

  	
   

  	
  1,413,327

  	
   

  
	
  Seasonality
  Factor to Est

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Gross
  Margin

  	
   

  	
   

  	
   

  	
  8.13

  	
  %

  	
  8.13

  	
  %

  	
  8.13

  	
  %

  	
  8.13

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estimated Annual GM

  	
   

  	
   

  	
   

  	
  16,861,781

  	
   

  	
  451,021

  	
   

  	
  71,292

  	
   

  	
  17,384,094

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estimated
  Residual Commission and Override - Vital

  	
   

  	
  28.93

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  - FDR

  	
   

  	
  33.27

  	
  %

  	
  (4,878,140

  	
  )

  	
  (150,074

  	
  )

  	
  0

  	
   

  	
  (5,028,214

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Amt Avail to Split & Value

  	
   

  	
   

  	
   

  	
  11,983,641

  	
   

  	
  300,947

  	
   

  	
  71,292

  	
   

  	
  12,355,880

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Divide by 12 to get Monthly Amt

  	
   

  	
   

  	
   

  	
  / 12

  	
   

  	
  /
  12

  	
   

  	
  / 12

  	
   

  	
  /
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monthly Amt subject to Multiple

  	
   

  	
   

  	
   

  	
  998,637

  	
   

  	
  25,079

  	
   

  	
  5,941

  	
   

  	
  1,029,657

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Valuation Multiple

  	
   

  	
   

  	
   

  	
  29.2

  	
   

  	
  19.5

  	
   

  	
  19.5

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Remaining Portfolio Value

  	
   

  	
   

  	
   

  	
  29,160,193

  	
   

  	
  488,203

  	
   

  	
  115,651

  	
   

  	
  29,764,047

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HCC Gross Share
  (@50%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  14,882,024

  	
   

  
	
  less HCC share
  of NPC Obligation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (240,000

  	
  )

  
	
  less Cash
  Payment at Closing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (1,500,000

  	
  )

  
	
  less CellGate
  Trans Val @ Closing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  13,142,024

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Portfolio Value to HCC

  	
   

  	
   

  	
   

  	
  13,142,024

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Key/HB/Harris
  Portfolio Value

  	
   

  	
   

  	
   

  	
  29,160,193

  	
   

  	
  488,203

  	
   

  	
  115,651

  	
   

  	
   

  	
   

  
	
  % of Portfolio
  to HCC

  	
   

  	
   

  	
   

  	
  45.07

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
   

  	
   

  

 

	
  KeyBank
  Commissions

  	
   

  	
   

  	
   

  
	
  RP Total

  	
   

  	
  337,094.17

  	
   

  
	
  Mkt 1 Ov

  	
   

  	
  17,950.79

  	
   

  
	
  Mkt 2 Ov

  	
   

  	
  13,406.76

  	
   

  
	
  Mkt 3 Ov

  	
   

  	
  13,769.84

  	
   

  
	
  VARs

  	
   

  	
  14,371.25

  	
   

  
	
  Total - March

  	
   

  	
  396,592.81

  	
   

  

 

NOTE:
HCC will own specified merchants representing 45.07% of the Remaining Portfolio
currently processed through Key
Bank and will receive 45.07% of the Net Contract Revenue associated with same. HPS will retain 100% of the revenue from
the HB FDR and Harris
Portfolios, which will not be part of the monthly “True-up.”

 

 

Exhibit 1 - With CellGate as Consideration

 

05/05/2000

 

VALUATION
AND ALLOCATION FORMULA

 

	
   

  	
   

  	
   

  	
   

  	
  Merchants to be “Valued”

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Actual

  Vital/Key Bank

  	
   

  	
  Actual

  FDR/Heartland

  	
   

  	
  Actual

  Harris Bank

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March, 2000 Gross Margin

  	
   

  	
   

  	
   

  	
  1,370,863

  	
   

  	
  36,668

  	
   

  	
  5,796

  	
   

  	
  1,413,327

  	
   

  
	
  Seasonality
  Factor to Est

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Gross
  Margin

  	
   

  	
   

  	
   

  	
  8.13

  	
  %

  	
  8.13

  	
  %

  	
  8.13

  	
  %

  	
  8.13

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estimated Annual GM

  	
   

  	
   

  	
   

  	
  16,861,781

  	
   

  	
  451,021

  	
   

  	
  71,292

  	
   

  	
  17,384,094

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estimated
  Residual Commission and Override - Vital

  	
   

  	
  28.93

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  - FDR

  	
   

  	
  33.27

  	
  %

  	
  (4,878,140

  	
  )

  	
  (150,074

  	
  )

  	
  0

  	
   

  	
  (5,028,214

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Amt Avail to Split & Value

  	
   

  	
   

  	
   

  	
  11,983,641

  	
   

  	
  300,947

  	
   

  	
  71,292

  	
   

  	
  12,355,880

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Divide by 12 to get Monthly Amt

  	
   

  	
   

  	
   

  	
  / 12

  	
   

  	
  /
  12

  	
   

  	
  / 12

  	
   

  	
  /
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monthly Amt subject to Multiple

  	
   

  	
   

  	
   

  	
  998,637

  	
   

  	
  25,079

  	
   

  	
  5,941

  	
   

  	
  1,029,657

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Valuation Multiple

  	
   

  	
   

  	
   

  	
  29.2

  	
   

  	
  19.5

  	
   

  	
  19.5

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Remaining Portfolio Value

  	
   

  	
   

  	
   

  	
  29,160,193

  	
   

  	
  488,203

  	
   

  	
  115,651

  	
   

  	
  29,764,047

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HCC Gross Share
  (@50%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  14,882,024

  	
   

  
	
  less HCC share
  of NPC Obligation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (240,000

  	
  )

  
	
  less Cash Payment
  at Closing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (1,500,000

  	
  )

  
	
  less CellGate
  Trans Val @ Closing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (625,000

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  12,517,024

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Portfolio Value to HCC

  	
   

  	
   

  	
   

  	
  12,517,024

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Key/HB/Harris
  Portfolio Value

  	
   

  	
   

  	
   

  	
  29,160,193

  	
   

  	
  488,203

  	
   

  	
  115,651

  	
   

  	
   

  	
   

  
	
  % of Portfolio
  to HCC

  	
   

  	
   

  	
   

  	
  42.93

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
   

  	
   

  

 

	
  KeyBank
  Commissions

  	
   

  	
   

  	
   

  
	
  RP Total

  	
   

  	
  337,094.17

  	
   

  
	
  Mkt 1 Ov

  	
   

  	
  17,950.79

  	
   

  
	
  Mkt 2 Ov

  	
   

  	
  13,406.76

  	
   

  
	
  Mkt 3 Ov

  	
   

  	
  13,769.84

  	
   

  
	
  VARs

  	
   

  	
  14,371.25

  	
   

  
	
  Total - March

  	
   

  	
  396,592.81

  	
   

  

 

NOTE:
HCC will own specified merchants representing 42.93% of the Remaining Portfolio
currently processed through Key
Bank and will receive 42.93% of the Net Contract Revenue associated with same. HPS will retain 100% of the revenue from
the HB FDR and Harris
Portfolios, which will not be part of the monthly “True-up.”

 

 

	
  HCSRCommSum -
  1.1      HCC

  	
   

  	
  Heartland
  Payment Systems

  	
   

  	
   

  	
   

  	
  4/25/00

  
	
  Profit Date:  3/31/00

  	
   

  	
  Summary
  of Monthly Residual Commission Report

  	
   

  	
   

  	
   

  	
   

  
	
  ReportLevel:All

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  RepID

  	
   

  	
  Rep Name

  	
   

  	
   

  	
   

  	
  Nbr of

  Merchants

  	
   

  	
  Estimated

  Volume

  	
   

  	
  Estimated

  Revenue

  	
   

  	
  Items

  	
   

  	
  Volume

  	
   

  	
  Avg

  Ticket

  	
   

  	
  Revenue

  	
   

  	
  Residual

  Commission

  	
   

  	
  Res Comm/

  Revenue

  	
   

  	
  BP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Market:

  	
   

  	
  Market 01

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *LBA

  	
   

  	
  *Lesa Bailes

  	
   

  	
  20

  	
  %

  	
  3

  	
   

  	
  974,400

  	
   

  	
  0

  	
   

  	
  285

  	
   

  	
  80,471

  	
   

  	
  282

  	
   

  	
  314.12

  	
   

  	
  62.82

  	
   

  	
  20.0

  	
  %

  	
  39

  	
   

  
	
  *SMU

  	
   

  	
  *Sean Murtaugh

  	
   

  	
  20

  	
  %

  	
  1

  	
   

  	
  2,046,870

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  -32.50

  	
   

  	
  -32.50

  	
   

  	
  100.0

  	
  %

  	
  0

  	
   

  
	
  -ARO

  	
   

  	
  -Andrea Roman

  	
   

  	
  20

  	
  %

  	
  2

  	
   

  	
  360,000

  	
   

  	
  0

  	
   

  	
  1,861

  	
   

  	
  42,400

  	
   

  	
  23

  	
   

  	
  137.81

  	
   

  	
  27.56

  	
   

  	
  20.0

  	
  %

  	
  33

  	
   

  
	
  ATA0408

  	
   

  	
  Arthur Tay

  	
   

  	
  20

  	
  %

  	
  21

  	
   

  	
  8,050,000

  	
   

  	
  0

  	
   

  	
  11,657

  	
   

  	
  520,975

  	
   

  	
  45

  	
   

  	
  1,582.31

  	
   

  	
  233.57

  	
   

  	
  14.8

  	
  %

  	
  30

  	
   

  
	
  CPI

  	
   

  	
  Christopher Pillette

  	
   

  	
  20

  	
  %

  	
  12

  	
   

  	
  2,535,000

  	
   

  	
  0

  	
   

  	
  3,048

  	
   

  	
  125,029

  	
   

  	
  41

  	
   

  	
  312.48

  	
   

  	
  -121.35

  	
   

  	
  -38.8

  	
  %

  	
  25

  	
   

  
	
  DEN

  	
   

  	
  Doug Erieberg

  	
   

  	
  20

  	
  %

  	
  1

  	
   

  	
  658,000

  	
   

  	
  0

  	
   

  	
  69

  	
   

  	
  2,891

  	
   

  	
  42

  	
   

  	
  0.48

  	
   

  	
  0.10

  	
   

  	
  20.0

  	
  %

  	
  2

  	
   

  
	
  DYO

  	
   

  	
  Dwayne Young

  	
   

  	
  20

  	
  %

  	
  30

  	
   

  	
  9,606,573

  	
   

  	
  0

  	
   

  	
  18,668

  	
   

  	
  823,449

  	
   

  	
  44

  	
   

  	
  2,758.50

  	
   

  	
  550.42

  	
   

  	
  20.0

  	
  %

  	
  33

  	
   

  
	
  JHA0408

  	
   

  	
  Jane Hartle

  	
   

  	
  20

  	
  %

  	
  4

  	
   

  	
  1,600,000

  	
   

  	
  0

  	
   

  	
  1,500

  	
   

  	
  85,040

  	
   

  	
  57

  	
   

  	
  146.73

  	
   

  	
  23.35

  	
   

  	
  15.9

  	
  %

  	
  17

  	
   

  
	
  JKL

  	
   

  	
  Jon Klump

  	
   

  	
  20

  	
  %

  	
  2

  	
   

  	
  150,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  55.00

  	
   

  	
  11.00

  	
   

  	
  20.0

  	
  %

  	
  0

  	
   

  
	
  KGI

  	
   

  	
  Kenneth Gilbert

  	
   

  	
  20

  	
  %

  	
  5

  	
   

  	
  846,000

  	
   

  	
  0

  	
   

  	
  288

  	
   

  	
  29,443

  	
   

  	
  102

  	
   

  	
  213.24

  	
   

  	
  41.30

  	
   

  	
  19.4

  	
  %

  	
  72

  	
   

  
	
  KHA0408

  	
   

  	
  Kathy Haynes

  	
   

  	
  20

  	
  %

  	
  60

  	
   

  	
  24,976,000

  	
   

  	
  0

  	
   

  	
  45,003

  	
   

  	
  1,974,743

  	
   

  	
  44

  	
   

  	
  5,630.91

  	
   

  	
  1,125.33

  	
   

  	
  20.0

  	
  %

  	
  29

  	
   

  
	
  OSA0406

  	
   

  	
  Osama Salti

  	
   

  	
  20

  	
  %

  	
  1

  	
   

  	
  32,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  Cannot

  	
   

  	
  0

  	
   

  
	
  RLU0406

  	
   

  	
  Roger Luke

  	
   

  	
  20

  	
  %

  	
  2

  	
   

  	
  37,000

  	
   

  	
  0

  	
   

  	
  251

  	
   

  	
  4,385

  	
   

  	
  17

  	
   

  	
  25.41

  	
   

  	
  5.08

  	
   

  	
  20.0

  	
  %

  	
  58

  	
   

  
	
  SHE

  	
   

  	
  Steve Hershberger

  	
   

  	
  20

  	
  %

  	
  51

  	
   

  	
  5,145,000

  	
   

  	
  0

  	
   

  	
  4,120

  	
   

  	
  347,827

  	
   

  	
  84

  	
   

  	
  2,194.30

  	
   

  	
  438.86

  	
   

  	
  20.0

  	
  %

  	
  63

  	
   

  
	
  SMU

  	
   

  	
  Sean Murtaugh

  	
   

  	
  20

  	
  %

  	
  23

  	
   

  	
  5,495,200

  	
   

  	
  0

  	
   

  	
  16,271

  	
   

  	
  484,172

  	
   

  	
  30

  	
   

  	
  2,332.40

  	
   

  	
  466.48

  	
   

  	
  20.0

  	
  %

  	
  48

  	
   

  
	
  WMA

  	
   

  	
  William Ma

  	
   

  	
  20

  	
  %

  	
  73

  	
   

  	
  21,476,000

  	
   

  	
  0

  	
   

  	
  57,126

  	
   

  	
  1,740,829

  	
   

  	
  30

  	
   

  	
  4,410.65

  	
   

  	
  879.11

  	
   

  	
  19.9

  	
  %

  	
  25

  	
   

  
	
  DivisionTotals   101

  	
   

  	
  Portland

  	
   

  	
   

  	
   

  	
  291

  	
   

  	
  83,988,043

  	
   

  	
  0

  	
   

  	
  160,147

  	
   

  	
  6,261,654

  	
   

  	
  39

  	
   

  	
  20,081.84

  	
   

  	
  3,711.14

  	
   

  	
  18.5

  	
  %

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  &ASEF

  	
   

  	
  &Aleta Sefic

  	
   

  	
  20

  	
  %

  	
  1

  	
   

  	
  70,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  15.00

  	
   

  	
  3.00

  	
   

  	
  20.0

  	
  %

  	
  0

  	
   

  
	
  &RNO

  	
   

  	
  &Rita Novak

  	
   

  	
  20

  	
  %

  	
  4

  	
   

  	
  555,000

  	
   

  	
  0

  	
   

  	
  875

  	
   

  	
  105,495

  	
   

  	
  121

  	
   

  	
  470.98

  	
   

  	
  94.20

  	
   

  	
  20.0

  	
  %

  	
  45

  	
   

  
	
  *BMA

  	
   

  	
  *Bob Martin

  	
   

  	
  20

  	
  %

  	
  13

  	
   

  	
  5,571,000

  	
   

  	
  0

  	
   

  	
  16,829

  	
   

  	
  561,982

  	
   

  	
  33

  	
   

  	
  1,303.68

  	
   

  	
  260.74

  	
   

  	
  20.0

  	
  %

  	
  23

  	
   

  
	
  *JRG

  	
   

  	
  *JR Gonzales

  	
   

  	
  20

  	
  %

  	
  1

  	
   

  	
  430,185

  	
   

  	
  0

  	
   

  	
  2,783

  	
   

  	
  81,549

  	
   

  	
  29

  	
   

  	
  305.69

  	
   

  	
  61.14

  	
   

  	
  20.0

  	
  %

  	
  37

  	
   

  
	
  *RNO

  	
   

  	
  *Rita Novak

  	
   

  	
  20

  	
  %

  	
  11

  	
   

  	
  4,609,000

  	
   

  	
  0

  	
   

  	
  5,720

  	
   

  	
  632,261

  	
   

  	
  111

  	
   

  	
  3,018.79

  	
   

  	
  603.76

  	
   

  	
  20.0

  	
  %

  	
  48

  	
   

  
	
  ANA

  	
   

  	
  Andre Nataf

  	
   

  	
  20

  	
  %

  	
  26

  	
   

  	
  21,853,356

  	
   

  	
  0

  	
   

  	
  29,590

  	
   

  	
  1,959,861

  	
   

  	
  66

  	
   

  	
  3,764.48

  	
   

  	
  752.90

  	
   

  	
  20.0

  	
  %

  	
  19

  	
   

  
	
  ASEF

  	
   

  	
  Aleta Sefic

  	
   

  	
  20

  	
  %

  	
  1

  	
   

  	
  230,300

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  20.00

  	
   

  	
  4.00

  	
   

  	
  20.0

  	
  %

  	
  0

  	
   

  
	
  AST

  	
   

  	
  Anne Marie Standley

  	
   

  	
  20

  	
  %

  	
  21

  	
   

  	
  19,425,944

  	
   

  	
  0

  	
   

  	
  19,966

  	
   

  	
  1,289,712

  	
   

  	
  65

  	
   

  	
  1,663.39

  	
   

  	
  331.13

  	
   

  	
  19.9

  	
  %

  	
  .13

  	
   

  
	
  BJO0405

  	
   

  	
  Brian Jones

  	
   

  	
  20

  	
  %

  	
  40

  	
   

  	
  10,949,833

  	
   

  	
  0

  	
   

  	
  11,381

  	
   

  	
  762,784

  	
   

  	
  67

  	
   

  	
  3,258.70

  	
   

  	
  649.49

  	
   

  	
  19.9

  	
  %

  	
  43

  	
   

  
	
  BMA

  	
   

  	
  Bob Martin

  	
   

  	
  20

  	
  %

  	
  22

  	
   

  	
  14,567,500

  	
   

  	
  0

  	
   

  	
  30,608

  	
   

  	
  1,452,302

  	
   

  	
  47

  	
   

  	
  3,594.77

  	
   

  	
  718.95

  	
   

  	
  20.0

  	
  %

  	
  25

  	
   

  
	
  CPO

  	
   

  	
  Cheryl Powell

  	
   

  	
  20

  	
  %

  	
  1

  	
   

  	
  36,000

  	
   

  	
  0

  	
   

  	
  96

  	
   

  	
  5,160

  	
   

  	
  54

  	
   

  	
  28.05

  	
   

  	
  5.61

  	
   

  	
  20.0

  	
  %

  	
  54

  	
   

  
	
  DSH0320

  	
   

  	
  David Shaw

  	
   

  	
  20

  	
  %

  	
  6

  	
   

  	
  1,628,248

  	
   

  	
  0

  	
   

  	
  560

  	
   

  	
  49,381

  	
   

  	
  88

  	
   

  	
  177.79

  	
   

  	
  33.40

  	
   

  	
  18.8

  	
  %

  	
  36

  	
   

  
	
  JAD

  	
   

  	
  Jeff Adams

  	
   

  	
  20

  	
  %

  	
  6

  	
   

  	
  2,902,000

  	
   

  	
  0

  	
   

  	
  2,519

  	
   

  	
  231,976

  	
   

  	
  92

  	
   

  	
  585.15

  	
   

  	
  117.03

  	
   

  	
  20.0

  	
  %

  	
  25

  	
   

  
	
  JDES

  	
   

  	
  John DeSanto

  	
   

  	
  20

  	
  %

  	
  2

  	
   

  	
  140,000

  	
   

  	
  0

  	
   

  	
  6

  	
   

  	
  557

  	
   

  	
  93

  	
   

  	
  9.32

  	
   

  	
  1.86

  	
   

  	
  20.0

  	
  %

  	
  167

  	
   

  
	
  JKIN

  	
   

  	
  John G Kinnear

  	
   

  	
  20

  	
  %

  	
  37

  	
   

  	
  15,413,860

  	
   

  	
  0

  	
   

  	
  29,337

  	
   

  	
  1,885,584

  	
   

  	
  64

  	
   

  	
  11,217.99

  	
   

  	
  2,243.60

  	
   

  	
  20.0

  	
  %

  	
  59

  	
   

  
	
  JRG

  	
   

  	
  JR Gonzales

  	
   

  	
  20

  	
  %

  	
  42

  	
   

  	
  15,092,434

  	
   

  	
  0

  	
   

  	
  40,039

  	
   

  	
  1,580,362

  	
   

  	
  39

  	
   

  	
  4,747.20

  	
   

  	
  949.44

  	
   

  	
  20.0

  	
  %

  	
  30

  	
   

  
	
  JTUR

  	
   

  	
  Justin Turri

  	
   

  	
  20

  	
  %

  	
  87

  	
   

  	
  22,466,528

  	
   

  	
  0

  	
   

  	
  62,279

  	
   

  	
  3,735,517

  	
   

  	
  60

  	
   

  	
  8,656.84

  	
   

  	
  1,731.37

  	
   

  	
  20.0

  	
  %

  	
  23

  	
   

  
	
  KDR

  	
   

  	
  Karla Driggs

  	
   

  	
  20

  	
  %

  	
  6

  	
   

  	
  1,144,000

  	
   

  	
  0

  	
   

  	
  2,491

  	
   

  	
  94,016

  	
   

  	
  38

  	
   

  	
  573.22

  	
   

  	
  114.64

  	
   

  	
  20.0

  	
  %

  	
  61

  	
   

  
	
  KKE

  	
   

  	
  Kelly Keesee

  	
   

  	
  20

  	
  %

  	
  19

  	
   

  	
  12,672,725

  	
   

  	
  0

  	
   

  	
  23,749

  	
   

  	
  997,694

  	
   

  	
  42

  	
   

  	
  2,203.93

  	
   

  	
  440.79

  	
   

  	
  20.0

  	
  %

  	
  22

  	
   

  
	
  KSTU

  	
   

  	
  Kathryn Stubler

  	
   

  	
  20

  	
  %

  	
  1

  	
   

  	
  50,000

  	
   

  	
  0

  	
   

  	
  2

  	
   

  	
  206

  	
   

  	
  103

  	
   

  	
  3.56

  	
   

  	
  0.71

  	
   

  	
  20.0

  	
  %

  	
  173

  	
   

  
	
  MSU

  	
   

  	
  Matt Sullivan

  	
   

  	
  20

  	
  %

  	
  59

  	
   

  	
  23,259,000

  	
   

  	
  0

  	
   

  	
  9,348

  	
   

  	
  1,263,381

  	
   

  	
  135

  	
   

  	
  4,512.98

  	
   

  	
  899.20

  	
   

  	
  19.9

  	
  %

  	
  36

  	
   

  
	
  MWE0402

  	
   

  	
  Martha Weeks

  	
   

  	
  20

  	
  %

  	
  2

  	
   

  	
  650,000

  	
   

  	
  0

  	
   

  	
  179

  	
   

  	
  41,809

  	
   

  	
  234

  	
   

  	
  119.58

  	
   

  	
  23.92

  	
   

  	
  20.0

  	
  %

  	
  29

  	
   

  
	
  PLFE

  	
   

  	
  Prince Lee

  	
   

  	
  20

  	
  %

  	
  2

  	
   

  	
  85,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  2

  	
   

  	
  0

  	
   

  	
  46.50

  	
   

  	
  9.30

  	
   

  	
  20.0

  	
  %

  	
  0

  	
   

  
	
  RNO

  	
   

  	
  Rita Noval

  	
   

  	
  20

  	
  %

  	
  54

  	
   

  	
  11,736,011

  	
   

  	
  0

  	
   

  	
  27,281

  	
   

  	
  1,488,807

  	
   

  	
  55

  	
   

  	
  5,835.27

  	
   

  	
  1,163.40

  	
   

  	
  19.9

  	
  %

  	
  39

  	
   

  

 

 

Exhibit 6

Monthly
Debit Amount

 

	
  Estimated
  Annual GM

  	
   

  	
  16,882,547

  	
   

  
	
  Divided
  by 12 mos

  	
   

  	
  / 12

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Estimated
  Monthly GM

  	
   

  	
  1,406,879

  	
   

  
	
  Multiplied
  by HCC’s Share

  	
   

  	
  45.07

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Gross
  Amt Avail to HCC

  	
   

  	
  634,080

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Estimated
  Attrition/Mo

  	
   

  	
  0.00

  	
  %

  
	
  Comm
  & Override %

  	
   

  	
  28.93

  	
  %

  
	
  Service
  Fee %

  	
   

  	
  13.73

  	
  %

  

 

	
  Month

  	
   

  	
  Attrited Amt

  	
   

  	
  Adj Seasonal

  Factor

  	
   

  	
  100%/12 mo

  	
   

  	
  Adjustment

  Factor

  	
   

  	
  Seasonal

  Amount

  	
   

  	
  Commission

  & Override

  	
   

  	
  Payroll Taxes

  Est @ 8&

  	
   

  	
  Service

  Fee

  	
   

  	
  Expected

  Pmt to HCC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr-00

  	
   

  	
  634,080

  	
   

  	
  8.37

  	
  %

  	
  8.33

  	
  %

  	
  100.44

  	
  %

  	
  636,870

  	
   

  	
  (184,247

  	
  )

  	
  (14,740

  	
  )

  	
  (87,442

  	
  )

  	
  350,442

  	
   

  
	
  May-00

  	
   

  	
  634,080

  	
   

  	
  8.32

  	
  %

  	
  8.33

  	
  %

  	
  99.84

  	
  %

  	
  633,066

  	
   

  	
  (183,146

  	
  )

  	
  (14,652

  	
  )

  	
  (86,920

  	
  )

  	
  348,348

  	
   

  
	
  Jun-00

  	
   

  	
  634,080

  	
   

  	
  8.77

  	
  %

  	
  8.33

  	
  %

  	
  105.24

  	
  %

  	
  667,306

  	
   

  	
  (193,052

  	
  )

  	
  (15,444

  	
  )

  	
  (91,621

  	
  )

  	
  367,189

  	
   

  
	
  Jul-00

  	
   

  	
  634.080

  	
   

  	
  9.02

  	
  %

  	
  8.33

  	
  %

  	
  108.24

  	
  %

  	
  686,329

  	
   

  	
  (198,555

  	
  )

  	
  (15,884

  	
  )

  	
  (94,233

  	
  )

  	
  377,656

  	
   

  
	
  Aug-00

  	
   

  	
  634,080

  	
   

  	
  8.78

  	
  %

  	
  8.33

  	
  %

  	
  105.36

  	
  %

  	
  668,067

  	
   

  	
  (193,272

  	
  )

  	
  (15,462

  	
  )

  	
  (91,726

  	
  )

  	
  367,608

  	
   

  
	
  Sep-00

  	
   

  	
  634,080

  	
   

  	
  8.40

  	
  %

  	
  8.33

  	
  %

  	
  100.80

  	
  %

  	
  639,153

  	
   

  	
  (184,907

  	
  )

  	
  (14,793

  	
  )

  	
  (87,756

  	
  )

  	
  351,698

  	
   

  
	
  Oct-00

  	
   

  	
  634,080

  	
   

  	
  8.56

  	
  %

  	
  8.33

  	
  %

  	
  102.72

  	
  %

  	
  651,327

  	
   

  	
  (188,429

  	
  )

  	
  (15,074

  	
  )

  	
  (89,427

  	
  )

  	
  358,397

  	
   

  
	
  Nov-00

  	
   

  	
  634,080

  	
   

  	
  7.99

  	
  %

  	
  8.33

  	
  %

  	
  95.88

  	
  %

  	
  607,956

  	
   

  	
  (175,882

  	
  )

  	
  (14,071

  	
  )

  	
  (83,472

  	
  )

  	
  334,532

  	
   

  
	
  Dec-00

  	
   

  	
  634,080

  	
   

  	
  8.44

  	
  %

  	
  8.33

  	
  %

  	
  101.28

  	
  %

  	
  642,197

  	
   

  	
  (185,787

  	
  )

  	
  (14,863

  	
  )

  	
  (88,174

  	
  )

  	
  353,373

  	
   

  
	
  Jan-01

  	
   

  	
  634,080

  	
   

  	
  7.12

  	
  %

  	
  8.33

  	
  %

  	
  85.44

  	
  %

  	
  541,758

  	
   

  	
  (156,731

  	
  )

  	
  (12,538

  	
  )

  	
  (74,383

  	
  )

  	
  298,106

  	
   

  
	
  Feb-01

  	
   

  	
  634,080

  	
   

  	
  8.10

  	
  %

  	
  8.33

  	
  %

  	
  97.20

  	
  %

  	
  616,326

  	
   

  	
  (178,303

  	
  )

  	
  (14,264

  	
  )

  	
  (84,622

  	
  )

  	
  339,137

  	
   

  
	
  Mar-01

  	
   

  	
  634,080

  	
   

  	
  8.13

  	
  %

  	
  8.33

  	
  %

  	
  97.56

  	
  %

  	
  618,609

  	
   

  	
  (178,964

  	
  )

  	
  (14,317

  	
  )

  	
  (84,935

  	
  )

  	
  340,393

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  7,608,964

  	
   

  	
  100.00

  	
  %

  	
  100.00

  	
  %

  	
  1200.00

  	
  %

  	
  7,608,964

  	
   

  	
  (2,201,273

  	
  )

  	
  (176,102

  	
  )

  	
  (1,044,711

  	
  )

  	
  4,186,878

  	
   

  

 

 

Exhibit 7

Valuation Formula

 

The Valuation Formula for
any group of Contracts (for example the March Contracts or the HCC
Portfolio Contracts) shall be the average of the seasonally adjusted Gross
Margin less the Residual Commissions paid for each of the prior three full
months multiplied by 29.2. For the purposes of this Valuation Formula, the
seasonally adjusted Gross Margin less the Residual Commission for each of the
three subject full months shall be determined by dividing each such amount by
(i) the average of the Adjusted Seasonality Factor for (A) the rolling twelve
month period ending one month prior to the subject month and (B) the rolling
twelve month period ending on the subject month and then further dividing by
(ii) 12. The result for each subject full month from the immediately preceding
sentence will be summed and divided by 3 to get the average seasonally adjusted
Gross Margin less the Residual Commissions paid and that amount shall be
multiplied by 29.2 to get the value of the subject Contracts.

 

An example of the
foregoing Valuation Formula is attached for clarity.

 

 

HCC
Proposed Valuation Formula Exam

 

Assumptions:

 

•                  HPS
elects to exercise its option to purchase the HCC Portfolio in 8/00

•                  HCC
Revenue Percentage = 45.07% (no CellGate “swap”)

 

	
   

  	
   

  	
  Gross

  	
   

  	
  Commission

  	
   

  	
  Payroll

  	
   

  	
  CF to

  	
   

  	
  Rolling 12 Month Seasonality Factor

  	
   

  
	
   

  	
   

  	
  Margin

  	
   

  	
  & Override

  	
   

  	
  Taxes

  	
   

  	
  Valued

  	
   

  	
  Jul-00

  	
   

  	
  Jun-00

  	
   

  	
  May-00

  	
   

  	
  Apr-00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  July, 2000

  	
   

  	
  $

  	
  1,500,000

  	
   

  	
  $

  	
  (433,950

  	
  )

  	
  $

  	
  0

  	
   

  	
  $

  	
  1,066,050

  	
   

  	
  9.50

  	
  %

  	
  8.55

  	
  %

  	
  8.33

  	
  %

  	
  8.95

  	
  %

  
	
  June, 2000

  	
   

  	
  $

  	
  1,460,000

  	
   

  	
  $

  	
  (422,378

  	
  )

  	
  $

  	
  0

  	
   

  	
  $

  	
  1,037,622

  	
   

  	
  8.90

  	
  %

  	
  9.00

  	
  %

  	
  8.00 

  	
  %

  	
  8.25

  	
  %

  
	
  May, 2000

  	
   

  	
  $

  	
  1,390,000

  	
   

  	
  $

  	
  (402,127

  	
  )

  	
  $

  	
  0

  	
   

  	
  $

  	
  987,873

  	
   

  	
  8.25

  	
  %

  	
  8.45

  	
  %

  	
  8.35

  	
  %

  	
  8.00

  	
  %

  

 

Calculation:

 

Step 1 -        Get Seasonally adjusted figures for relavent
months by using average of (x) rolling twelve month ending on the subject month
(y) rolling 12 months ending the month prior to the subject month.

 

	
  July
  -

  	
   

  	
  (9.50% + 8.55%)
  / 2 =

  	
   

  	
  9.03

  	
  %

  	
  $1,066,050 /
  9.03% / 12 =

  	
   

  	
  $

  	
  983,804

  	
   

  
	
  June
  -

  	
   

  	
  (9.00% + 8.00%)
  / 2 =

  	
   

  	
  8.50

  	
  %

  	
  $1,037,622 /
  8.50% / 12 =

  	
   

  	
  $

  	
  1,017,276

  	
   

  
	
  May
  -

  	
   

  	
  (8.35% + 8.00%)
  / 2 =

  	
   

  	
  8.18

  	
  %

  	
  $987,873 / 8.18%
  / 12 =

  	
   

  	
  $

  	
  1,006,391

  	
   

  

 

Step 2 -        Sum the results of Step 1 and divide by 3 to
determine the average monthly cash flow to be “valued”

 

	
  July -

  	
   

  	
  $

  	
  983,804

  	
   

  	
   

  	
   

  	
   

  
	
  June
  -

  	
   

  	
  $

  	
  1,017,276

  	
   

  	
   

  	
   

  	
   

  
	
  May
  -

  	
   

  	
  $

  	
  1.006,391

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  3,007,471

  	
   

  	
  / 3 =

  	
  $

  	
  1,002,490

  	
   

  
									

 

Step 3 -        Multiply the HCC Revenue Percentage by the
seasonally adjusted three month average cash flow determined in Steps 1 & 2
and further multiply by the NPC valuation factor of 29.2

 

	
  45.07% * $1,002,490 *
  29.2 =

  	
   

  	
   

  	
  $

  	
  13,193,214

  	
   

  

 

 

Schedule A

Relationship Schedule

 

	
  Relationship

  	
   

  	
  Status

  
	
   

  	
   

  	
   

  
	
  HPS line of credit - 

  	
   

  	
  Any HB requirement to
  fund will terminate at Closing, except for the $500,000 Letter of Credit
  describe below.

  
	
   

  	
   

  	
   

  
	
  $500,000 Letter of
  Credit for the benefit of Key Bank -

  	
   

  	
  Addressed in the Withdrawal
  and Redemption Agreement (“Agreement”).

  
	
   

  	
   

  	
   

  
	
  Corporate credit cards
  -

  	
   

  	
  Terminated at Closing
  and any balances remaining unpaid 30 days following Closing to be paid
  immediately by HPS.

  
	
   

  	
   

  	
   

  
	
  MasterCard Escrow -

  	
   

  	
  Addressed in Agreement.

  
	
   

  	
   

  	
   

  
	
  FTC Escrow funds - 

  	
   

  	
  Continue to be held by
  HP pending release instruction from the Receiver. Any amounts not sent to
  Receiver to be paid to HPS upon full release.

  
	
   

  	
   

  	
   

  
	
  FDR BIN & ICA -

  	
   

  	
  Addressed in Agreement.

  
	
   

  	
   

  	
   

  
	
  Vital BIN & ICA,
  currently unused -

  	
   

  	
  To remain idle, with no
  activity, but, to be transferred to HPS designee.

  
	
   

  	
   

  	
   

  
	
  ISO sponsorship of HPS
  -

  	
   

  	
  To be transferred or
  canceled simultaneously with FDR BIN & ICA. 

  
	
   

  	
   

  	
   

  
	
  Agent Bank sponsorship
  -

  	
   

  	
  Same as ISO
  sponsorship.

  
	
   

  	
   

  	
   

  
	
  ACH sponsorship -

  	
   

  	
  Addressed in the
  Agreement.

  
	
   

  	
   

  	
   

  
	
  HB CD’s held for HPS
  merchants -

  	
   

  	
  Continue to hold until
  released by HPS.

  
	
   

  	
   

  	
   

  
	
  HPS checking accounts
  at HB -

  	
   

  	
  Account receiving Key
  settlement addressed in the Agreement, any others kept at HB at HPS’
  election.

  
	
   

  	
   

  	
   

  
	
  HPS/HBC POS lease purchase
  program -

  	
   

  	
  Addressed in the
  Agreement.

  
	
   

  	
   

  	
   

  
	
  Triad LLC loan -

  	
   

  	
  Addressed in the
  Agreement.

  

 

 

	
  Triad checking
  account(s) -

  	
   

  	
  To be moved to another
  bank at Triad’s sole election.

  
	
   

  	
   

  	
   

  
	
  True-up from 12/31/99
  sale of Heartland Bank owned merchant processing contracts to HPS -

  	
   

  	
  To be completed by
  December 1, 2000, with the Heartland Bank owned merchant processing
  contracts sold to NPC being valued at the NPC valuation less a proportionate
  share of any costs associated with the NPC sale and the balance being valued
  using an $800,000 valuation for the entire portfolio sold by Heartland Bank
  to HPS.

  
	
   

  	
   

  	
   

  
	
  Heartland Bank – HPS
  Agent Bank relationship - 

  	
   

  	
  During non-compete term
  specified in the Agreement, Heartland Bank will enter into an Agent Bank
  Agreement with HPS.

  

 

 

Schedule I

Ineligible Contracts

 

	
  Merchant
  Number

  	
   

  	
  Merchant Name

  
	
   

  	
   

  	
   

  
	
  650000000441975

  	
   

  	
  AMERICAS

  
	
   

  	
   

  	
   

  
	
  650000000345721

  	
   

  	
  Best Price USA

  
	
   

  	
   

  	
   

  
	
  650000000441967

  	
   

  	
  FUNDAMENTALS MSA

  
	
   

  	
   

  	
   

  
	
  650000000441942

  	
   

  	
  FUNDAMENTALS TBEC

  
	
   

  	
   

  	
   

  
	
  650000000345739

  	
   

  	
  Prime Discount

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]