Document:

exv10w3

EXHIBIT 10.3

MASTER AGREEMENT

FOR

STANDBY LETTERS OF CREDIT

TERMS AND CONDITIONS

General Electric Capital Corporation

201 Merritt Seven

Norwalk, CT 06856

          The undersigned (“Applicant”) will require, from time to time, Standby Letters of Credit.
General Electric Capital Corporation (“GE Capital”) will, upon Applicant’s application therefor,
and to the extent such application is approved by GE Capital in its sole discretion, issue Standby
Letters of Credit or arrange for the issuance thereof through an indirect wholly-owned subsidiary
of GE Capital. Each Credit will be governed by and interpreted in accordance with the following
terms and conditions. Capitalized terms shall have the meanings accorded them in Section 9,
Definitions, below.

1. Payment Terms.

          In addition to all commissions, charges, fees and expenses payable in connection with Credits
pursuant to the Credit Agreement (including, without limitation the Letter of Credit Fee, as
defined in the Credit Agreement), Applicant agrees to pay to GE Capital on demand, at GE Capital’s
office located at 201 Merritt Seven, Norwalk, CT 06856 or at such other address or account as may
be designated in writing by GE Capital, in Dollars, in immediately available funds: (i) each
amount drawn under any Credit (which payment is permitted or required under this Agreement, ISP 98
or applicable law) in Dollars or in the event that the Credit permits Drafts under such Credit to
be payable in a currency other than Dollars, the Dollar Equivalent of each amount so drawn; (ii)
interest on each amount (or the Dollar Equivalent thereof) so drawn for each day from the date of
payment of the relevant Draft to and including the date of payment in full of such amount by
Applicant to GE Capital, at the rate specified in the Credit Agreement; and (iii) any and all
commissions and charges of, and any and all costs and expenses incurred by, GE Capital and its
subcontractors or agents in relation to the Credits and all Drafts thereunder. If a Credit
provides for sight payment, reimbursement by Applicant is due on the day on which GE Capital pays
on the applicable Draft. All payments by Applicant hereunder shall be made without withholding,
deduction or set-off and shall be made free and clear of taxes.

2. Subrogation.

          If GE Capital honors any presentation, demand or Draft and Applicant fails to reimburse GE
Capital therefor in accordance with the terms of the Credit Agreement, GE Capital may assert its
rights of subrogation under applicable law, whether GE Capital’s honor satisfies all or only part
of the underlying obligation. The Applicant must, on reasonable notice, cooperate with GE Capital
in its assertion of the Applicant’s rights against the Beneficiary, the Beneficiary’s rights
against the Applicant, and any other rights that GE Capital may have by

 

 

subrogation or assignment. Such cooperation shall include without limitation the prompt
return of all Drafts, documents, instruments and statements in Applicant’s possession that were
presented by or on behalf of Beneficiary in connection with any draw under a Credit. Subject to
the terms of the Credit Agreement and the terms of Section 8(b) below, the Applicant agrees to make
upon demand such cash deposits with GE Capital as GE Capital may require to further secure
Applicant’s Letter of Credit Obligations.

3. Administration of Credit.

     (a) Applicant will promptly examine a copy of each Credit (and any proposed amendments
thereto) sent to Applicant, as well as all other instruments and documents delivered to Applicant
from time to time in connection with such Credit, and, in the event Applicant has any claim of
non-compliance with the instructions or of any discrepancy or other irregularity or any objection
to any action taken or proposed to be taken by GE Capital with respect to any Credit, Applicant
will notify GE Capital thereof in writing within two business days after its receipt of a copy of
such Credit, any amendments thereto, or such instruments or documents or notice of any such
proposed action, and Applicant will conclusively be deemed to have waived any such claim against GE
Capital and its subcontractors, servicers and agents, unless such notice is given as aforesaid.
This Section 3(a) is intended to substitute two business days for the “not unreasonable time
period” set forth in Rule 5.09 of ISP 98.

     (b) Neither GE Capital nor any of its agents, subcontractors or servicers shall be responsible
for, and neither GE Capital’s powers and rights hereunder nor Applicant’s obligations shall be
affected by: (i) any act or omission pursuant to Applicant’s instructions; (ii) any other act or
omission of GE Capital or its subcontractors, servicers, agents or employees other than any such
arising from its or their gross negligence or willful misconduct; (iii) the validity, accuracy or
genuineness of Drafts, documents or required statements, even if such Drafts, documents or
statements should in fact prove to be in any or all respects invalid, inaccurate, fraudulent or
forged (and notwithstanding that Applicant shall have notified GE Capital thereof); (iv) failure of
any Draft to bear any reference or adequate reference to the applicable Credit; (v) errors,
omissions, interruptions or delays in transmission of delivery of any messages however sent and
whether or not in code or otherwise; (vi) any act, default, omission, insolvency or failure in
business of any other person (including any agent, subcontractor or employee) or any consequences
arising from causes beyond GE Capital’s control; (vii) any acts or omissions of any Beneficiary of
any Credit or transferee of any Credit, if transferable; (viii) any act or omission of GE Capital
required or permitted under any (1) law or practice to which a Credit is subject (including ISP
98), (2) applicable order, ruling or decree of any court, arbitrator or governmental agency, (3) a
published statement or interpretation on a matter of law or practice (including ISP 98); (ix) honor
or other recognition of a presentation or demand that includes forged or fraudulent documents or
that is otherwise affected by the fraudulent, bad faith, or illegal conduct of the Beneficiary or
other person (excluding GE Capital’s employees), including payment to a person who forges the
signature of a Beneficiary or the signature of an assignee of a Credit’s proceeds, (x) honor of a
presentation without regard to any nondocumentary condition(s) in the Credit, regardless of whether
Rule 4.11 of ISP 98 applies, or (xi) dishonor of any presentation that does not strictly comply
with the terms of the applicable Credit or that is fraudulent, forged or otherwise not entitled to
be honored. Without limiting the generality of the foregoing, GE Capital may (1) act in reliance
on any oral, telephone,

2

 

telegraphic, electronic, facsimile or written request, notice, or instruction believed in good faith to be from or have
been authorized by the Applicant, (2) receive, accept or pay as complying with the terms of a
Credit any Drafts or other documents, otherwise in order, which are signed by or issued to any
person or entity acting as the representative of, or in the place of, the party in whose name such
Credit provides that any Drafts or other documents should be drawn or issued and (3) waive its
stipulation that the bank nominated in the applicable Credit shall accept or pay the Drafts, and GE
Capital may then accept presentations of Drafts and documents for payment directly.

     (c) Subject to GE Capital’s obtaining any necessary consent from the Beneficiary or other
third party, GE Capital may for Applicant’s account at any time (i) treat a Credit as governed by
the law of the place where GE Capital or the Beneficiary is located, notwithstanding a choice of
law provision in the Credit, and, in case of conflict, treat the law as prevailing over practice in
such place or vice versa; (ii) shorten or lengthen the examination period; (iii)
specify or amend a specified place or manner of receiving a presentation, effecting honor, or
giving notice of dishonor; or (iv) discount an accepted Draft or deferred obligation incurred under
the Credit.

     (d) Unless GE Capital is enjoined by a court of competent jurisdiction, GE Capital may assume
that any Beneficiary or other presenter acts in good faith and that any presentation or other
demand is nonfraudulent.

     (e) Unless the Credit specifically permits and GE Capital specifically agrees, GE Capital need
not check the authenticity or authority of any purported Beneficiary signature, even if in other
transactions the Beneficiary is a customer or its signature is otherwise known to GE Capital.

     (f) Unless specifically committed to do so in a writing signed by GE Capital, GE Capital need
not consent to any amendment of a Credit. GE Capital may, without authorization from or notice to
Applicant, send a notice of non-extension to the Beneficiary under a Credit if it provides for
automatic extension. Any notice of dishonor given by GE Capital within six business days after
presentation of documents to GE Capital shall not be deemed to be unreasonable. This Section 3(f)
is intended to substitute six business days for the three business days set forth in Rule 5.01a of
ISP 98.

     (g) Notwithstanding any waiver by Applicant of discrepancies in Drafts, documents or required
statements, GE Capital acting alone has the right in its sole judgment, to decline to approve any
discrepancies and to refuse payment on that basis under any Credit issued hereunder.

     (h) GE Capital may assign its rights and delegate its duties hereunder to any subsidiary of GE
Capital, in each case without prior notice to Applicant; provided that such assignment and
delegation does not diminish Applicant’s rights or increase Applicant’s duties hereunder.

     (i) No Credit shall be issued hereunder providing for the acceptance of time Drafts or the
incurrence of deferred payment undertakings.

3

 

     (j) Notwithstanding any provision herein contained to the contrary, if Applicant approves the
issuance of a Credit requiring payment of a Draft on the same day on which such Draft is presented,
GE Capital shall be entitled to honor such Draft without review or examination by Applicant and
Applicant waives all defenses to reimbursement thereof based on irregularities that may have been
revealed by Applicant’s review or examination.

4. Letter of Credit Text; Extensions, Increases and Modifications of Credit.

     (a) Applicant is responsible for preparing or approving the text of each Credit as issued by
GE Capital and as received by the Beneficiary. GE Capital’s recommendation or drafting of text or
GE Capital’s use or non-use or refusal to use text submitted by Applicant shall not affect
Applicant’s ultimate responsibility for the final text and its receipt by the Beneficiary.
Applicant is responsible for the effect, or lack of effect under ISP 98, Rule 4.11 or applicable
law, of a provision in any Credit that requires GE Capital to verify facts rather than examine
documents or that fails to identify the documents to which the provision applies.

          Applicant is responsible for including suitable provisions in the underlying agreement that
permit Applicant to review the text of the Credit as received by the Beneficiary and that describe
the circumstances under which: a drawing under the Credit may be made, Credit proceeds may be
applied to the underlying agreement, and part or all of those proceeds may be returned. Applicant
accepts the risk that the text of the Credit is consistent with the underlying obligation, suitable
for Applicant’s purposes, and received by the Beneficiary in time to permit the Beneficiary and
Applicant to review the Credit and to request any desired amendments.

     (b) Each Applicant agrees that GE Capital may at any time and from time to time, in its
discretion, by agreement with one or more other Applicants (whether or not such Applicant shall
have been appointed as the “Agent Applicant” in the Joint Signature Agreement contained in the
Application): a) further finance or refinance any transaction under any Credit; b) renew, extend
or change the time of payment or the manner, place or terms of payment of any of the Obligations;
c) settle or compromise any of the Obligations or subordinate the payment thereof to the payment of
any other debts of or claims against any Applicant which may at the time be due or owing to GE
Capital; or d) release any Applicant or any Guarantor or any Collateral, or modify the terms under
which such Collateral is held, or forego any right of setoff, or modify or amend in any way this
Agreement or any Credit, or give any waiver or consent under this Agreement; all in such manner and
on such terms as GE Capital may deem proper and without notice or further assent from such
Applicant. In any such event, such Applicant shall remain bound by such event and this Agreement
after giving effect to such event, and the Obligations under this Agreement shall be continuing
obligations in respect of any transaction so financed or refinanced and, in either case, if the
Obligations are contingent, may be treated by GE Capital as due and payable for their maximum face
amount.

5. Reserve Requirements and Similar Costs.

          If GE Capital is now or hereafter becomes subject to any reserve, special deposit or similar
requirement against assets of, deposits with, or for the account of, or credit extended by, GE
Capital, or any other condition is imposed upon GE Capital which imposes a cost upon

4

 

GE Capital, and the result, in the determination of GE Capital is to increase the cost to GE
Capital of maintaining a Credit or paying or funding the payment of any Draft thereunder, or to
reduce the amount of any sum received or receivable, directly or indirectly, by GE Capital
hereunder, Applicant will pay to GE Capital upon demand such amounts required to compensate GE
Capital for such increased cost or reduction. In making the determinations contemplated hereunder,
GE Capital may make such estimates, assumptions, allocations and the like which GE Capital in good
faith determines to be appropriate, but GE Capital’s selection thereof, and GE Capital
determinations based thereon, shall be final and binding and conclusive upon Applicant.

6. Possession of Property by Applicant.

     If the Applicant accepts or retains possession of documents, goods or other property, if any,
covered by a Credit, prior to GE Capital’s review of such documents, then all discrepancies and
other irregularities of said documents shall be deemed waived by the Applicant, and GE Capital is
authorized and directed to pay any Drafts drawn or purporting to be drawn upon such Credit.

7. Partial Shipments.

     (a) Except as otherwise expressly stated in any Credit (i) partial shipments may be made under
such Credit, and GE Capital may honor the relative Drafts without inquiry regardless of any
apparent disproportion between the quantity shipped and the amount of the relative Draft and the
total amount of such Credit and the total quantity to be shipped under such Credit, and (ii) if
such Credit specifies shipments in installments within stated periods and the shipper fails to ship
in any designated period, shipments of subsequent installments may nevertheless be made in their
respective designated periods and GE Capital may honor the relative Drafts.

8. Events of Default, Remedies; Pre-funding.

     (a) If any Event of Default has occurred and is continuing, other than an Event of Default
specified in Sections 7.1(f) or 7.1(g) of the Credit Agreement, GE Capital as issuer hereunder and
in its capacity as Agent under the Credit Agreement may pursue any of the remedies provided for in
the Loan Documents, including without limitation declaring that all of the Obligations (including
any such Obligations hereunder that may be contingent and not matured) are immediately due and
payable. If an Event of Default under Sections 7.1(f) or 7.1(g) of the Credit Agreement has
occurred, the Obligations shall automatically be due and payable.

     (b) Without limiting the generality of the foregoing, Applicant agrees that if: i) any
Default or Event of Default shall have occurred and be continuing; or ii) in the event that a
Credit is denominated in a currency other than Dollars, GE Capital determines that such currency is
unavailable or that the transactions contemplated by this Agreement are unlawful or contrary to any
regulations to which GE Capital or any agent, servicer or subcontractor of GE Capital may be
subject or that due to currency fluctuations the Dollar Equivalent of the amount of a Credit
exceeds the amount of Dollars that GE Capital in its sole judgment expected to be its maximum
exposure under such Credit, then Applicant will upon demand pay to GE Capital an

5

 

amount equal to
the undisbursed portion, if any, of such Credit (or such greater amount as may
be specified in the Credit Agreement), and such amount shall be held as additional Collateral
for the payment of all Letter of Credit Obligations, and after the expiration hereof, to the extent
not applied to the Letter of Credit Obligations, shall be returned to Applicant (unless otherwise
provided in the Credit Agreement or any other Loan Document).

9. Definitions.

          As used herein, the following terms shall have the following meanings:

          “Agent” shall have the meaning given such term in the Credit Agreement.

          “Agreement” shall mean, collectively, this Agreement each Application for Standby Letter of
Credit entered into between GE Capital and Applicant, the Joint Signature Agreement and the
Authorization and Agreement of Account Party appended hereto, as the same may be amended, modified,
supplemented or restated from time to time.

          “Applicant” shall mean the person or entity executing this Agreement as Applicant; provided
that if two or more persons or entities shall have executed this Agreement as Applicant or as Joint
Applicant, the terms “Applicant” and “Applicants” shall mean each and all of such persons and
entities, individually and collectively, except that, if the term “Applicant” is preceded by the
word “any” or “each” or a word or words of similar import, such terms shall be deemed to refer to
each of such persons or entities, individually.

          “Beneficiary” shall mean, as to any Credit, the beneficiary of that Credit.

          “Collateral” shall have the meaning given such term in the Credit Agreement.

          “Credit” shall mean a Standby Letter of Credit issued by GE Capital upon Applicant’s request
of GE Capital, as the same may be amended and supplemented from time to time, and any and all
renewals, increases, extensions and replacements thereof and therefor.

          “Credit Agreement” shall mean the Credit Agreement, dated as of April 7, 2010 among the
Applicant, the other credit parties signatory thereto, the lenders signatory thereto from time to
time and GE Capital as agent and as lender, as such Credit Agreement may be amended, modified,
supplemented or restated from time to time.

          “Default” shall have the meaning given such term in the Credit Agreement.

          “Dollar Equivalent” shall mean: a) the number of Dollars that is equivalent to an amount of a
currency other than Dollars, determined by applying the selling rate of Wachovia Bank National
Association or another bank of comparable size selected by GE Capital; or b) in the event that GE
Capital shall not at the time be offering such a rate, the amount of Dollars that GE Capital, in
its sole judgment, specifies as sufficient to reimburse or provide funds to GE Capital in respect
of amounts drawn or drawable under a Credit; in either case as and when determined by GE Capital.

          “Dollars” shall mean lawful currency of the United States of America.

6

 

          “Draft” shall mean any draft (sight or time), receipt, acceptance, cable or other written
demand for payment.

          “Event of Default” shall have the meaning given such term in the Credit Agreement.

          “Guarantor” shall have the meaning given such term in the Credit Agreement.

          “Lenders” shall have the meaning given such term in the Credit Agreement.

          “Letter of Credit Obligations” shall have the meaning given such term in the Credit Agreement.

          “Loan Documents” shall have the meaning given such term in the Credit Agreement.

          “Loans” shall have the meaning given such term in the Credit Agreement.

          “Obligations” shall have the meaning given such term in the Credit Agreement.

          “Termination Date” shall mean the date on which (a) the Loans have been indefeasibly paid in
full; (b) all other Obligations under the Loan Documents have been discharged (other than
contingent indemnification Obligations to the extent no claim giving rise thereto has been
asserted), (c) all Letter of Credit Obligations have been cash collateralized in accordance with
the Credit Agreement, cancelled or, with the consent of Agent, backed by letters of credit
acceptable to Agent; (d) all Commitments have been terminated and (e) Agent and Lenders have been
released by the Credit Parties from all claims arising in connection with the Loan Documents.

10. Expenses; Indemnification.

          Applicant agrees to reimburse GE Capital and its subcontractors, servicers and agents upon
demand for and to indemnify and hold GE Capital and its subcontractors, servicers and agents
harmless from and against all claims, liabilities, losses, costs and expenses (“Indemnified
Liabilities”) including attorneys’ fees and disbursements, incurred or suffered by GE Capital and
its subcontractors, servicers and agents in connection with this Agreement or any Credit. Such
Indemnified Liabilities shall include, but not be limited to, all such Indemnified Liabilities
incurred or suffered by GE Capital and its subcontractors, servicers and agents in connection with
(a) GE Capital’s exercise of any right or remedy granted to it hereunder or under the Loan
Documents, (b) any claim and the prosecution or defense thereof arising out of or in any way
connected with this Agreement including, without limitation, as a result of any act or omission by
a Beneficiary, (c) the collection or enforcement of the Obligations, and (d) any of the events or
circumstances referred to in paragraph 3(b) hereof, including any defense by GE Capital in an
action in which Applicant obtains an injunction against presentation or honor of any Draft. None
of GE Capital or any subcontractor, servicer or agent of GE Capital shall be liable to Applicant
for any special, indirect, consequential or punitive damages arising with respect to any Credit.
Applicant must in all instances mitigate damages claimed against GE Capital or any subcontractor,
servicer or agent arising with respect to any Credit. If

7

 

GE Capital honors a Draft
or presentation under a Credit for which Applicant claims it is not obligated to reimburse GE
Capital, Applicant shall nonetheless pay to GE Capital the amount paid by GE Capital, without
prejudice to Applicant’s claims against GE Capital to recover fees and costs paid by Applicant with
respect to the honored presentation plus any direct damages resulting therefrom which Applicant is
unable to avoid or reduce. Applicant’s prevailing in an action based on forgery or fraud of the
Beneficiary or other presenter does not relieve Applicant from its obligation to pay GE Capital’s
costs and expenses in contesting the entry or maintenance of injunctive relief.

11. Licenses; Insurance.

          If any Credit assures payment for goods to be imported, the Applicant shall procure or cause
the Beneficiaries of each Credit to procure promptly any necessary import and export or other
licenses for import or export or shipping of any goods referred to in or pursuant to such Credit
and to comply and to cause the Beneficiaries to comply with all foreign and domestic governmental
regulations in regard to the shipment and warehousing of such goods or otherwise relating to or
affecting such Credit, including governmental regulations pertaining to transactions involving
designated foreign countries or their nationals, and to furnish such certificates in that respect
as GE Capital may at any time require, and to keep such goods adequately covered by insurance in
amounts, with carriers and for such risks as shall be satisfactory to GE Capital, and to cause GE
Capital’s interest to be endorsed thereon, and to furnish GE Capital on demand with evidence
thereof. Should the insurance upon said goods for any reason be unsatisfactory to GE Capital, GE
Capital may, at its expense, obtain insurance satisfactory to it.

12. No Waivers of Rights Hereunder; Rights Cumulative.

          No delay by GE Capital in exercising any right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right preclude other or further exercises thereof
or the exercise of any other right. No waiver or amendment of any provision of this Agreement
shall be enforceable against GE Capital unless in writing and signed by an officer of GE Capital,
and unless it expressly refers to the provision affected, any such waiver shall be limited solely
to the specific event waived. All rights granted GE Capital hereunder shall be cumulative and
shall be supplementary of and in addition to those granted or available to GE Capital under the
Loan Documents or applicable law and nothing herein shall be construed as limiting any such other
right.

13. Continuing Agreement; Termination.

          This Agreement shall continue in full force and effect until the Termination Date (subject to
reinstatement, as provided in the Loan Documents).

14. Performance Standards.

          Notwithstanding any provision to the contrary herein, GE Capital reserves the right to decline
(i) any request made by the Applicant for the issuance of a Credit or (ii) any instruction provided
by the Applicant if, in its discretion, GE Capital determines that the issuance

8

 

of such Credit or
the carrying out of such instruction contravenes GE Capital’s customary procedures or policy, ISP
98 or any applicable law, rule or regulation.

15. Governing Law; Jurisdiction; Certain Waivers.

     (a) This Agreement shall be governed by and interpreted and enforced in accordance with the
laws of the State of New York, and with respect to all security interests granted in connection
herewith, GE Capital shall have the rights and remedies of a secured party under applicable law,
including but not limited to the Uniform Commercial Code of New York. This Agreement supplements
the Loan Documents, including those provisions relating to Letter of Credit Obligations and, to the
extent of any inconsistency with the Loan Documents, this Agreement supersedes the Loan Documents.

     (b) APPLICANT AGREES THAT ALL ACTIONS AND PROCEEDINGS RELATING DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT SHALL BE LITIGATED ONLY IN COURTS LOCATED WITHIN THE STATE OF NEW YORK AND THAT SUCH
COURTS ARE CONVENIENT FORUMS THEREFOR, AND APPLICANT SUBMITS TO THE PERSONAL JURISDICTION OF SUCH
COURTS.

     (c) Applicant waives personal service of process upon it and consents that any such service of
process may be made by certified or registered mail, return receipt requested, directed to
Applicant at its address last specified for notices hereunder, and service so made shall be deemed
completed two (2) days after the same shall have been so mailed.

     (d) APPLICANT WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BETWEEN IT AND
GE CAPITAL WAIVES THE RIGHT TO ASSERT IN ANY ACTION OR PROCEEDING WITH REGARD TO THIS AGREEMENT OR
ANY OF THE OBLIGATIONS ANY OFFSETS OR COUNTERCLAIMS WHICH IT MAY HAVE.

     (e) Each Credit and this Agreement shall be subject to the International Standby Practices,
International Chamber of Commerce Publication No. 590 (“ISP 98”) and the same are incorporated
herein by reference. Applicant is responsible for knowing applicable letter of credit law and
practice, including ISP 98. Solely for purposes of interpreting the ISP 98’s application to this
Agreement and Credits issued hereunder, GE Capital shall be deemed to be a “bank” as such term is
used in ISP 98. To the extent permitted by applicable law, this Agreement shall prevail in case of
a conflict with applicable law or ISP 98, and ISP 98 shall prevail in case of a conflict with
applicable law.

16. Notices.

          Any notice to GE Capital shall be effective only if in writing or by authenticated
teletransmission acceptable to GE Capital, as applicable, directed to the attention of and received
by GE Capital. Any notice to or demand on Applicant, or, if more than one Applicant executes this
Agreement, the Agent Applicant, shall be binding on all Applicants and shall be effective when made
to Applicant, or if more than one Applicant executes this Agreement, the Agent Applicant, by mail,
telegraph, facsimile, telephone or otherwise, in the case of mailed, telegraphed or cabled notices,
to the address appearing below such Applicant’s signature or at

9

 

such other address as may hereafter
be specified in a notice designated as a notice of change of address under this paragraph, and in
the case of telephonic or facsimile notices, to the telephone
number of such Applicant appearing below Applicant’s signature. Any requirements under
applicable law of reasonable notice by GE Capital to Applicant of any event shall be met if notice
is given to Applicant or Agent Applicant, as the case may be, in the manner prescribed above at
least two days before (a) the date of such event or (b) the date after which such event will occur.

17. Applicant Status.

          The person identified in this Agreement as Applicant represents and warrants, except as
otherwise provided in this Agreement, that:

     (a) it acts for itself and for no other person in requesting issuance of each Credit for its
account;

     (b) it may be identified in each Credit as the “applicant,” “account party” or “customer” at
whose request and on whose instruction and for those account the Credit is issued;

     (c) it alone (acting through its officers) may authorize GE Capital to issue, amend, pay, or
otherwise act under any Credit; and

     (d) it alone has standing to enforce this Agreement or otherwise to assert the rights and
remedies of an applicant, including without limitation, to sue for any injunction against honor of
any Credit.

18. General.

     (a) If this Agreement is executed by two or more Applicants, they shall be jointly and
severally liable hereunder, and all provisions hereof regarding the Collateral shall apply to the
Obligations and Collateral of any or all of them.

     (b) This Agreement shall be binding upon the heirs, executors, administrators, assigns and
successors of each of the Applicant(s) and shall inure to the benefit of and be enforceable by GE
Capital and its respective successors, transferees and permitted assigns.

     (c) Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that jurisdiction or
affecting the validity or enforceability of such provision in any other jurisdiction.

     (d) This Agreement shall be deemed to be a “Loan Document” for all purposes under the Credit
Agreement.

     (e) This Agreement may be executed in any number of separate counterparts, each of which shall
collectively and separately constitute one agreement.

[Remainder of Page Left Intentionally Blank]

10

 

Date: August 31, 2010

Name of Applicant:

	 	 	 	 	 	 	 	 	 

	THE TALBOTS, INC.	 	 	 	GENERAL ELECTRIC CAPITAL CORPORATION
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Michael Scarpa
	 	 	 	By: 
	 	/s/ Mark Forti
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael Scarpa
	 	 	 	 	 	Name: Mark Forti
	 

	 	Title: Chief Operating Officer,

          Chief Financial Officer and Treasurer
	 	 	 	 	 	Title: Duly Authorized Signatory

Address of Applicant:

One Talbots Drive, Hingham, MA 02043

Attention: Chief Operating Officer and Chief Financial Officer

Facsimile Number: (781) 741-7771

 

 

Joint Signature Agreement

          In consideration of your establishment from time to time of a Credit substantially as applied
for herein, it is further agreed that this Agreement shall be the joint and several agreement of
the undersigned and all property referred to in this Agreement as belonging to Applicant shall be
understood to refer to the joint property of any or all of the several Applicants as well as to the
individual property of each of them. The happening of any Event of Default as specified in
paragraph 6 of this Agreement with respect to any Applicant shall mature the obligations of all
Applicants. A demand made on any Applicant pursuant to paragraph 1 of this Agreement shall fix the
exchange rate as to all Applicants.

          It is agreed that The Talbots, Inc. shall appear in each Credit as Account Party and that The
Talbots, Inc. (“Agent Applicant”) has the exclusive right to issue all instructions on any and all
matters relating to such Credit, including, without limitation, instructions as to disposition of
documents and any unutilized funds, and waivers of discrepancies, and to agree with you upon any
amendments, modifications, extensions, renewals, or increases in such Credit or any other matter.

	 	 	 	 	 	 	 	 	 

	THE TALBOTS GROUP, LIMITED PARTNERSHIP,

Joint Applicant	 	 	 	TALBOTS CLASSICS FINANCE COMPANY, INC.,

Joint Applicant
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Michael Scarpa
	 	 	 	By: 
	 	/s/ Michael Scarpa
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael Scarpa
	 	 	 	 	 	Name: Michael Scarpa
	 

	 	Title: Chief Operating Officer,
	 	 	 	 	 	Title: Vice President,
	 

	 	          Chief Financial Officer and Treasurer
	 	 	 	 	 	          Chief Financial Officer and Treasurer
	 

	 		 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	TALBOTS CLASSICS, INC.,

Joint Applicant	 	 	 	TALBOTS IMPORT, LLC,

Joint Applicant
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Michael Scarpa
	 	 	 	By: 
	 	/s/ Michael Scarpa
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael Scarpa
	 	 	 	 	 	Name: Michael Scarpa
	 

	 	Title: Vice President and Treasurer
	 	 	 	 	 	Title: Vice President and Treasurer
	 
	 	 	 	 	 	 	 	 
	BIRCH POND REALTY CORPORATION,

Joint Applicant	 	 	 	TALBOTS INTERNATIONAL RETAILING LIMITED,
INC.,

Joint Applicant
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Michael Scarpa
	 	 	 	By: 
	 	/s/ Michael Scarpa
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael Scarpa
	 	 	 	 	 	Name: Michael Scarpa
	 

	 	Title: Vice President and Treasurer
	 	 	 	 	 	Title: Vice President and Treasurer
	 
	 	 	 	 	 	 	 	 
	TALBOTS (U.K.) RETAILING LIMITED,

Joint Applicant	 	 	 	TALBOTS (CANADA), INC.,

Joint Applicant
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Michael Scarpa
	 	 	 	By: 
	 	/s/ Michael Scarpa
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael Scarpa
	 	 	 	 	 	Name: Michael Scarpa
	 

	 	Title: Vice President and Treasurer
	 	 	 	 	 	Title: Vice President and Treasurer
	 
	 	 	 	 	 	 	 	 
	Address of each Joint Applicants:	 	 	 	One Talbots Drive, Hingham, MA 02043
	 	 	 	 	 	 	Attention: COO and CFO
	 	 	 	 	 	 	Facsimile Number: (781) 741-7771

 

 

Authorization and Agreement of Account Party

Gentlemen:

     We hereby join the request of Applicant to issue from time to time the Credits, described on
page 1 with our name appearing as Account Party.

     In consideration of your issuing each Credit in this form it is agreed that Applicant has the
exclusive right to issue all instructions on any and all matters relating to such Credits
including, without limitation, instructions as to disposition of documents and any unutilized
funds, and waivers of discrepancies, and to agree with you upon any amendments, modifications,
extensions, renewals, or increases in each Credit or any other matters irrespective of whether the
same may now or hereafter affect our rights or those of our successors or assigns.

	 	 	 	 	 	 	 	 	 

	THE TALBOTS GROUP, LIMITED PARTNERSHIP, 

Account Party	 	 	 	TALBOTS CLASSICS FINANCE COMPANY, INC.,

Account Party
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Michael Scarpa
	 	 	 	By: 
	 	/s/ Michael Scarpa
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael Scarpa
	 	 	 	 	 	Name: Michael Scarpa
	 

	 	Title: Chief Operating Officer,
	 	 	 	 	 	Title: Vice President,
	 

	 	          Chief Financial Officer and Treasurer
	 	 	 	 	 	          Chief Financial Officer and Treasurer
	 
	 	 	 	 	 	 	 	 
	TALBOTS CLASSICS, INC.,

Account Party	 	 	 	TALBOTS IMPORT, LLC,

Account Party
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Michael Scarpa
	 	 	 	By: 
	 	/s/ Michael Scarpa
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael Scarpa
	 	 	 	 	 	Name: Michael Scarpa
	 
	 	Title: Vice President and Treasurer
	 	 	 	 	 	Title: Vice President and Treasurer

	 	 	 						
	BIRCH POND REALTY CORPORATION,

Account Party	 	 	 	TALBOTS INTERNATIONAL RETAILING LIMITED,
INC.,

 Account Party
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Michael Scarpa
	 	 	 	By: 
	 	/s/ Michael Scarpa
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael Scarpa
	 	 	 	 	 	Name: Michael Scarpa
	 

	 	Title: Vice President and Treasurer
	 	 	 	 	 	Title: Vice President and Treasurer
	 
	 	 	 	 	 	 	 	 
	TALBOTS (U.K.) RETAILING LIMITED,

Joint Applicant	 	 	 	TALBOTS (CANADA), INC.,

Joint Applicant
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/ Michael Scarpa
	 	 	 	By: 
	 	/s/ Michael Scarpa
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael Scarpa
	 	 	 	 	 	Name: Michael Scarpa
	 

	 	Title: Vice President and Treasurer
	 	 	 	 	 	Title: Vice President and Treasurer
	 
	 	 	 	 	 	 	 	 
	Address of each Account Party:	 	 	 	One Talbots Drive, Hingham, MA 02043
	 	 	 	 	 	 	Attention: COO and CFO
	 	 	 	 	 	 	Facsimile Number: (781) 741-7771Exhibit
10.5

 

MANAGEMENT
EMPLOYMENT AGREEMENT

 

THIS MANAGEMENT EMPLOYMENT AGREEMENT (this “Employment
Agreement”) is dated as of April 21, 2010, by and between NETSPEND
CORPORATION, a Delaware corporation (the “Company”) and George W.
Gresham, an individual residing at the address set forth on the signature page hereto
(the “Executive”). Certain terms used herein are defined in Section 8(k) hereof.

 

WITNESSETH:

 

WHEREAS, the Company wishes to secure the services
of the Executive as Chief Financial Officer of the Company upon the terms and
conditions hereinafter set forth, and the Executive wishes to render such
services to the Company upon the terms and conditions hereinafter set forth;
and

 

WHEREAS, in consideration of the employment to be
provided hereby and the amounts to be paid as provided herein, the Executive
desires to be employed by the Company and to agree with the Company as further
provided herein.

 

NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

 

1.                                       Employment by
the Company.

 

(a)                                  The Company
agrees to employ the Executive in the position of Chief Financial Officer, and
the Executive accepts such employment and agrees to perform such duties as the
Company’s Chief Financial Officer. During the Term (as hereinafter defined),
the Executive shall report to the Company’s Chief Executive Officer, the Chief
Executive Officer having been duly appointed his or her responsibilities by the
Company’s Board of Directors. It is understood and agreed to by both parties
that the Executive agrees to be employed by the Company and report to the Chief
Executive Officer who reports to the Company’s Board of Directors and the
Executive is agreeing to undertake such responsibilities generally understood
to result from being the senior executive in the Company responsible for
matters of a financial nature.

 

(b)                                 The Executive
agrees to devote his business time and energies to the business of the Company
and to perform his duties hereunder faithfully, diligently and to the best of
his ability. The Executive, if so requested by the Company, also shall serve,
without additional compensation, as an officer, director or manager of any of
NetSpend Holdings, Inc. (“Holdings”) and/or any other subsidiary of
Holdings or other Affiliate. During the Term, the Executive shall not engage in
any business activity which, in the reasonable judgment of the Board of
Directors of the Company (the “Board”), conflicts with the duties of the
Executive hereunder, whether or not such activity is pursued for gain, profit
or other pecuniary advantage.

 

2.                                       Term of
Employment. Unless otherwise mutually agreed upon by the
parties hereto, the term of the Executive’s employment pursuant to this
Employment Agreement (the “Term”) shall be for the period commencing on
May 7, 2010 (the “Effective Date”) and ending

 

 

on the second anniversary of the Effective Date. This Employment
Agreement shall automatically renew for additional one (1) year terms
beginning on the first (1st) anniversary of the Effective Date and on each subsequent anniversary
thereof (each, an “Expiration Date”) unless (i) the Executive
notifies the Company in writing of his intention to terminate his employment
pursuant to this Employment Agreement at least thirty (30) calendar days prior
to the applicable Expiration Date or (ii) the Company notifies the
Executive in writing of its intention to terminate his employment pursuant to
this Employment Agreement at least thirty (30) calendar days prior to the
applicable Expiration Date. Notwithstanding the foregoing, the Executive’s
employment may be earlier terminated as provided in Section 4
hereof.

 

3.                                       Compensation,
Benefits and Expenses. As full compensation for all services to be
rendered by the Executive to the Company and its Affiliates in all capacities,
the Executive shall receive the following compensation, benefits, and reimbursement
of expenses during the Term:

 

(a)                                  Salary. During the
Term, the Executive shall be entitled to receive an annual salary of
$350,000.00 (the “Base Salary”), payable not less frequently than
semimonthly in accordance with the then-customary payroll practices of the
Company. Executive’s Base Salary shall be reviewed for adjustment by the
Compensation Committee of the Board (the “Compensation Committee”) at
least once annually during the Term, and the determination of whether to
increase the Base Salary shall be in the sole discretion of the Company. For
the avoidance of doubt, the Company shall not be obligated to increase the Base
Salary during the Term. For the purposes of this Agreement, “Base Salary” shall
refer to the Executive’s Base Salary on an annualized basis and as adjusted
pursuant to the terms of this Agreement.

 

(b)                                 Bonus. The Executive
shall be eligible to participate in the bonus program of the Company now or
hereafter maintained by the Company (the “Bonus Program”), subject to the terms
and conditions of such Bonus Program; provided that the Executive shall be
eligible to earn a bonus of up to 70% of the Base Salary at 100% target, with a
maximum bonus of 105% of the Base Salary. For purposes of clarification, the
Board may elect to eliminate or modify any Bonus Program at any time during the
Term. With respect to the 2010 fiscal year, such bonus, if any, shall be paid
on a pro rata basis (based upon the number of months elapsed in the 2010 fiscal
year following the month of the Effective Date, and calculated by the Board in
its sole discretion).

 

(c)                                  Sign-On Bonus. In addition,
within fifteen days following the Effective Date, the Company will pay the
Executive a sign-on bonus in the amount of $100,000 (subject to applicable
withholding taxes and deductions); provided that the Executive commences
employment on the Effective Date.

 

(d)                                 Participation
in Executive Benefit Plans. The Executive additionally
shall be permitted during the Term, if and to the extent eligible, to
participate in employee benefit plans now or hereafter maintained by the
Company and/or Holdings and generally provided to the Company’s executives,
subject to the terms and conditions of such plans. Nothing in this Employment
Agreement shall preclude the Company from terminating or amending any such
plans or coverage so as to eliminate, reduce or otherwise change any benefit
payable thereunder.

 

2

 

(e)                                  Expenses. Subject to
the limitations set forth in Section 9(b), the Company shall pay or
reimburse the Executive for all reasonable and necessary expenses actually
incurred or paid by the Executive during the Term in the performance of the
Executive’s duties under this Employment Agreement, upon submission and
approval of expense statements, vouchers or other supporting information in
accordance with the then-customary practices of the Company.

 

(f)                                    Vacation. The Executive
shall be entitled to up to four (4) weeks of personal time off (“PTO”),
which shall include, without limitation, vacation and sick leave.

 

(g)                                 Relocation. The Executive
and the Company agree that the Executive will relocate his principal residence
from Henderson, Nevada to the Austin Texas area within nine (9) months
following the Effective Date. The Executive shall be entitled to receive
benefits pursuant to the terms of the Company’s Executive Homeowner Relocation
Policy (“Relocation Policy”), subject to the Executive’s execution of the
Employee Repayment Agreement provided by the Company (which shall be substantially
in the form set forth in Exhibit B hereto). For purposes of the Relocation
Policy, the pre-determined cap shall be $100,000. Notwithstanding the terms of
the Relocation Policy to the contrary, the Executive shall be eligible to
receive reimbursements for reasonable temporary housing costs for the
nine-month period following the Effective Date and the Executive shall also be
eligible to receive reasonable travel costs to and from Las Vegas, Nevada or
Phoenix, Arizona to Austin, Texas (e.g., advance purchase coach class airline
tickets).

 

(h)                                 Option Grant. As soon as
practicable following the Effective Date, subject to the approval of the Board,
the Executive shall be awarded two options (collectively, the “Options”)
pursuant to the Second Amended and Restated NetSpend Holdings, Inc. 2004
Stock Option and Restricted Stock Plan (the “Plan”) as follows: (1) a time
vesting option to acquire 330,000 shares of Class A Common Stock, par
value $0.001 per share (“Common Stock”), of Holdings pursuant to an option
agreement substantially in the form attached hereto as Exhibit C,
and (2) a performance vesting option to acquire 170,000 shares of Common
Stock (“Performance Option”). In addition to recommending that the Board
approve the Options, management has also recommended that Board approve the
form of performance option agreement attached hereto as Exhibit D
(the “Proposed Agreement”). Subject to approval by the Board, the
Performance Option will be granted pursuant to the Proposed Agreement.

 

(i)                                     Withholding of Taxes. The Company
may withhold from any compensation or benefits payable under this Employment
Agreement or otherwise all federal, state, city and other taxes as shall be
required pursuant to any law or governmental regulation or ruling and, where
applicable, in accordance with any lawful election made by the Executive.

 

4.                                       Termination.

 

(a)                                  Termination upon Death. If the
Executive dies during the Term, the Term shall terminate as of the date of his
death.

 

(b)                                 Termination upon Disability. If during the
Term the Executive becomes physically or mentally disabled, whether totally or
partially, so that the Executive is unable to

 

3

 

perform his essential job functions hereunder, with or without
reasonable accommodation in accordance with the Americans With Disabilities
Act, as determined by the Board in its good faith judgment, for: (i) a
period of one hundred twenty (120) consecutive days; or (ii) for shorter
periods aggregating one hundred fifty (150) days during any twelve-month period
(a “Disability”), the Company, by written notice to the Executive, may
terminate the Executive’s employment, in which event the Term shall terminate
ten (10) calendar days after the date upon which the Company shall have
given notice to the Executive of its intention to terminate the Executive’s
employment because of the Disability. Nothing in this Section 4(b) shall
be deemed to extend the Term.

 

(c)                                  Termination by Company for
Cause. If the Company determines, in its sole discretion, that (i) the
Executive has committed any felony or other offense involving moral turpitude
or any crime relating to his employment, (ii) the Executive has violated
this Employment Agreement or any other written agreement with the Company or
any Affiliate, in any material respect, and fails to cure such violation within
fourteen (14) calendar days after notice of such conduct, (iii) the
Executive has committed any act of fraud, theft or personal dishonesty with
respect to the Company or any Subsidiary or otherwise detrimental to the
Company or any Subsidiary, (iv) the Executive has, in the good faith
opinion of the Board, failed to perform his duties hereunder or has performed
such duties in a grossly negligent manner or with willful malfeasance, (v) the
Executive has failed to observe material Company policies applicable to
executives of the Company, or (vi) the Executive has violated any state or
federal law relating to sexual harassment or age, sex or other prohibited
discrimination, (the foregoing clauses (i) through (vi) being
referred to herein collectively as “Cause”), then the Company, at any
time by written notice to the Executive, may terminate the employment of the
Executive for Cause, which notice shall set forth the reasons for the Company’s
terminating the Executive’s employment for Cause, and terminate the Term and
Executive’s employment pursuant to this Employment Agreement effective as of
the date of such notice and, except as provided in Section  5(b) hereof,
the Executive shall have no right to receive any compensation or benefit
hereunder on and after the date of such notice.

 

(d)                                 Termination by Company
Without Cause. The Company may terminate the Term at any time,
without Cause, upon thirty (30) calendar days’ written notice by the Company to
the Executive and, except as provided in Section 5(a) hereof,
the Executive shall have no right to receive any compensation or benefit
hereunder after such termination. The Executive’s termination of employment on
any Expiration Date following notice by the Company to the Executive of the
Company’s intention to terminate this Employment Agreement on such Expiration
Date, as provided in Section 2 hereof, shall constitute a
termination without Cause hereunder.

 

(e)                                  Termination by Executive for
Good Reason. The Executive may terminate the Term at any time
with Good Reason (as hereinafter defined), upon thirty (30) calendar days’
written notice by the Executive to the Company (which notice shall be received
by the Company no later than thirty (30) calendar days following the
Executive’s knowledge of the occurrence of any of the events set forth in
clauses (i), (ii) or (iii) below) and, except as provided in Section 5(a) hereof,
the Executive shall have no right to receive any compensation or benefit hereunder
after such termination. For purposes of this Employment Agreement, “Good Reason”
shall mean, without the Executive’s written consent: (i) the Company
violates this

 

4

 

Employment Agreement in any material respect, including, without
limitation, the failure of the Company to pay or provide to the Executive the
Base Salary or any reduction in the Base Salary or any downward change in the
target bonus percentage (it being understood by the Executive that the Board
may elect not to maintain a Bonus Program at any time during the Term and that
the Company is not obligated to pay the Executive any bonus hereunder); (ii) the
Company makes a material reduction in the Executive’s duties as Chief Financial
Officer, as provided in Section 1(a) hereof, other than by
reason of the expiration of the Term or a termination of the Term pursuant to Sections
4(a), 4(b), 4(c) or 4(d) hereof; (iii), a
requirement that the Executive relocate to a facility or a location outside of
the Austin, Texas area without the Executive’s consent, or (iv) the sale
or other transfer of all or substantially all of the assets of the Company to a
corporation or other entity in a transaction in which such corporation or other
entity does not assume all of the obligations of the Company hereunder. Good
Reason shall not be deemed to exist unless the Company fails to cure the event
giving rise to Good Reason within thirty (30) calendar days after receipt of
written notice thereof given by the Executive to the Company, which notice
shall specifically set forth the nature of such event and the corrective action
reasonably sought by the Executive.

 

(f)                                    Termination by Executive
Without Good Reason. The Executive may terminate the Term at any time,
without Good Reason, upon thirty (30) calendar days’ written notice by the
Executive to the Company and, except as provided in Section 5(b) hereof,
the Executive shall have no right to receive any compensation or benefit after
such termination.

 

5.                                       Severance Payments.

 

(a)                                  Severance Payments for
Termination by the Company Without Cause or Termination by Executive With Good
Reason. If during the Term the Company terminates the Term pursuant to Section 4(d) hereof
or the Executive terminates the Term pursuant to Section 4(e) hereof,
all compensation payable to the Executive under Section 3 hereof
shall cease as of the date of termination of the Term specified in the
Company’s or Executive’s notice, as the case may be (the “Termination Date”),
and:

 

(i)                                     the Company shall pay to the
Executive the following sums: (A): all accrued and unpaid Base Salary through
the Termination Date, (B) any unpaid or unreimbursed expenses incurred by
the Executive through the Termination Date in accordance with Sections
3(e) and 3(g) hereof, and (C) to the extent permitted under
the applicable plans, programs or policies, if any, all previously earned,
accrued, and unpaid benefits from the Company, Holdings and their respective
employee benefit plans, including any such benefits which have become vested
prior to the Termination Date under the retirement plans, and any other such
benefits under disability, and life insurance plans, policies, and programs
applicable to the Company which benefits, if any, shall be payable as provided
therein (collectively, the “Accrued Obligations”); and

 

(ii)                                  the Company shall pay to the
Executive the following sums, subject to the final sentence of this Section 5(a)(ii) and
Sections 5(c), 6 and 9 hereof, an amount equal to the Base Salary, as in effect
on the Termination Date, payable over the twelve (12) month period following
the Termination Date (the “Severance Period”), (B) any accrued but unpaid
bonus in respect of any fiscal year ending prior to the fiscal year in which
the

 

5

 

Termination Date falls (which shall be paid notwithstanding any
requirement that the Executive otherwise be employed by the Company on the date
of the payment of such bonus), payable when bonuses generally are paid to
executives of the Company pursuant to the terms of the Bonus Program, (C) the
bonus at target that would have been received by the Executive for the
then-current fiscal year had the Executive been employed by the Company for the
entire fiscal year in which he was terminated, and (D) if the Executive
elects to continue his participation and/or that of his eligible dependents in
the Company’s group health and/or dental plans for a period of time under the
Consolidated Omnibus Reconciliation Act of 1985 “COBRA”) then, through the
earliest of (1) the expiration of the Severance Period, (2) the
period during which the Executive is entitled to continuation coverage under
COBRA and (3) the date the Executive becomes eligible to receive
comparable medical coverage under a group health plan (within the meaning of
Section 5001(b)(1) of the Internal Revenue Code of 1986, as amended
(the “Code”), under new employment (the earliest of such periods, the “COBRA
Continuation Period”), the Company will contribute to the premium cost of the
Executive’s coverage and that of his eligible dependents under those plans at
the rate it contributed to the Executive’s premium cost of coverage on the
Termination Date. To be eligible for these Company premium contributions,
however, the Executive must pay the same portion of the premium cost during the
COBRA Continuation Period as is paid by the Company’s active employees. The
Executive is required to notify the Company immediately if he begins new
employment during the COBRA Continuation Period and to repay promptly the cost
of any benefit contributions made by the Company for coverage after Executive
becomes eligible to participate in the group policy of such new employer. After
the Company’s contributions end, the Executive may continue benefits coverage
for the remainder of the COBRA period, if any, by paying the full premium cost
of such benefits. lf, prior to the end of the Severance Period, the Executive
violates Section 6 hereof, then the Company shall have no obligation to
make any of the payments that remain payable by the Company under this Section 5(a)(ii) on
or after the date of such violation.

 

(b)                                 Payments upon Termination by
Company for Cause, Termination by 
Executive Without Good Reason, Death or Disability. If the Term
is terminated by the Company pursuant to Sections 4(a), 4(b) or
4(c) hereof or if the Executive terminates the Term pursuant to Section 4(f) hereof,
the Executive shall receive only the Accrued Obligations.

 

(c)                                  Eligibility. For the
Executive (or his estate) to be eligible to receive the severance payments and
benefits provided for in Section 5(a)(ii) and, if applicable,
(iii), the Executive (or his estate or, in the event of the Executive’s
legal incapacity, his legal representative) will be obligated to execute and
deliver to the Company (and not revoke) a release (to be provided by the
Company) substantially in the form attached hereto as Exhibit A (the
“Form of Release”); provided, however, that the
Company shall have the right to modify the form of Release as necessary to comply
with applicable law and/or the particular circumstances of termination. The
Company shall deliver the Release to the Executive within five (5) Business
Days following the Termination Date.

 

(d)                                 No Mitigation. The Executive
shall not be required to mitigate the amount of any severance payments or
benefits provided for in Section 5(a)(ii) and (iii) by
seeking other employment or otherwise and the amount of any such severance
payments and benefits shall not be reduced by any compensation earned as a result
of the Executive’s other employment or otherwise.

 

6

 

6.                                       Certain
Covenants of the Executive. To induce the Company to
enter into this Employment Agreement, the Executive covenants and agrees that:

 

(a)                                  Confidential
Information. During the Restricted Period (as hereinafter
defined) and thereafter, the Executive shall not, directly or indirectly,
disclose to any Person who is not authorized by the Company to receive such
information, or use or appropriate for his own benefit or for the benefit of
any Person other than the Company, (i) any documents or other papers
relating to the Company, including, without limitation, any such information,
documents or papers relating to the Company’s Current Lines of Business (as
hereinafter defined) or the customers of the Company (whether such customers
were customers of the Company prior to or after the date hereof) including,
without limitation, files, business relationships and accounts, royalty
relationships, licensing relationships, pricing policies, customer lists,
computer software and hardware or (ii) any other materials relating to the
Company or any trade secrets or confidential information, including, without
limitation, any business or operational methods, know-how, marketing plans or
strategies, product development techniques or plans, product concepts and
designs, business acquisition plans, financial or other performance data,
personnel and other policies of the Company, whether generated by the Executive
or by any other Person and/or whether developed prior to the date hereof
(collectively, “Confidential Information”); provided, however,
that Confidential Information shall not include any information readily
ascertainable from public or published information, or trade sources (other
than as a direct or indirect result of unauthorized disclosure by the
Executive).

 

(b)                                 Receipt of
Confidential Information. The Executive acknowledges that: (i) the
Company is presently engaged in the marketing, processing and distributing of
prepaid debit cards, stored value cards and other similar products from which
the Company derives substantial revenues (collectively, the “Company’s
Current Lines of Business”); (ii) contemporaneously with the
Executive’s execution of this Employment Agreement, the Company is providing
the Executive with Confidential Information, including, without limitation,
information relating to the Company’s information technology systems, and
related technologies, and information previously or hereafter provided relating
to the Company’s legal affairs and business relationships, and the Company will
continue to provide the Executive with Confidential Information in the future
while the Executive is employed with the Company; (iii) the Executive has
received the Confidential Information; (iv) in the Executive’s position as
Chief Financial Officer, the Executive will need the Confidential Information
to properly carry out the Executive’s duties hereunder; (v) the Company’s
provision of Confidential Information to the Executive, in exchange for the
Executive’s agreement and covenant to maintain the confidentiality of the
Confidential Information, as set forth in Section 6(a) hereof
gives rise to the Company’s interest in restraining the Executive from
competing against the Company as set forth in Sections 6(c), 6(e),
6(f) and 6(g) hereof; (vi) the Executive’s
agreement and covenant not to compete with the Company as set forth in Sections
6(c), 6(e), 6(f), and 6(g) hereof is designed to
enforce the Executive’s agreement and covenant to maintain the confidentiality
of the Confidential Information as set forth in Section 6(a) hereof;
(vii) the agreements and covenants contained in Sections 6(a) through
6(g) hereof (the “Restrictive Covenants”) are essential to
protect the goodwill and profitability of the Company’s Current Lines of
Business; and (viii) the agreements and covenants contained in Sections
6(a) through 6(g) hereof will not involve a substantial
hardship upon the Executive’s future livelihood. Accordingly, the Executive

 

7

 

covenants and agrees for the benefit of the Company, with respect to
himself, to comply with the Restrictive Covenants.

 

(c)                                  Non-Compete. At all times
during the Term and for a period of one (1) year thereafter (the entirety
of such period being the “Restricted Period”), the Executive shall not,
in the United States of America or any other country in which the Company then
engages in business, directly or indirectly, accept employment with, provide
services to or have any interest (as an owner, sole proprietor, shareholder,
partner, director, officer, employee, consultant, agent or otherwise) in any
financial institution, third party processor, member service provider, card
association or independent sales organization or other similar business that
directly competes with the Company’s Current Lines of Business; provided,
however, that the Executive may hold, directly or indirectly, solely as an
investment, not more than one percent (1%) of the outstanding securities of any
Person which is listed on any national securities exchange or regularly traded
in the over-the-counter market.

 

(d)                                 Property of the
Company. At no time shall the Executive remove or cause to be removed from the
premises of the Company any memorandum, note, list, record, file, document or
other paper, equipment or any like item relating to the Company, or its
customers, distribution partners or issuing banks (including copies, extracts
and summaries thereof) except as specifically permitted hereunder or in
furtherance of the performance of his duties on behalf of the Company. Upon
termination of employment the Executive must return Confidential Information to
the Company in accordance with the provisions of Section 8(b) hereof.
All memoranda, notes, lists, records, files, documents and other papers and
other like items (and all copies, extracts and summaries thereof) made or
compiled by the Executive or made available to the Executive concerning the
Company (whether or not prior to the date hereof), are and shall be the
property of the Company (or its customers, distribution partners, or issuing
banks) and shall be delivered by the Executive to the Company, and all
electronic copies thereof shall be deleted by the Executive from any personal
computer or other similar device belonging to the Executive promptly upon the
termination of the Executive’s employment with the Company.

 

(e)                                  Employees of
the Company. During the Restricted Period, the Executive shall
not hire or, directly or indirectly, initiate communications with, solicit,
persuade, entice, induce or encourage any individual who is then or who has
been within the preceding 12-month period, an employee or consultant of the
Company to terminate employment with the Company or to become employed by, or
enter into a contract or any other arrangement with, any other Person, and the
Executive shall not approach any such employee or provider for any such purpose
or authorize or knowingly approve the taking of any such actions by any other
Person.

 

(f)                                    Solicitation of
Customers and/or Suppliers. During the Restricted
Period, the Executive shall not, directly or indirectly, initiate
communications with, solicit, persuade, entice, induce, or encourage (or assist
any other Person to do any of the foregoing), for the Executive’s benefit or
for the benefit of any Person other than the Company, any Person who is then or
has been within the preceding 12-month period a customer, supplier or account
of the Company, or any potential customer, supplier or account whose identity
the Executive learned during the course of his relationship with the Company
(whether or not prior to the date hereof), to terminate its contractual or
other relationship with the Company.

 

8

 

(g)                                 Servicing of
Customers. During the Restricted Period, the Executive shall not
furnish any services similar to those furnished while he was employed by the
Company (whether prior to or after the date hereof) to any customer or account
of the Company.

 

(h)                                 Future Employer. The Executive
shall inform any future employer of the Restrictive Covenants and provide such
employer with a copy thereof, prior to the commencement of that employment.

 

(i)                                     Corporate Opportunities. During the
Term, the Executive promptly shall disclose to the Company any business idea or
opportunity which falls within the scope of the Company’s Current Lines of
Business, which business idea or opportunity shall become the sole property of
the Company if the Company elects to pursue such idea or opportunity as part of
the Company’s Current Lines of Business or as a business project. All programs,
product concepts, materials, results or ideas (“Inventions”) conceived,
made, developed, reduced to practice, or worked on, in whole or in part, solely
by the Executive or jointly with others prior to the date of this Employment
Agreement, during the Term, relating to the business of the Company are and
shall be deemed to be “work for hire” and, at the election of the Company, shall
be the sole property of the Company, without any further consideration paid to
the Executive. The Executive shall disclose promptly in writing to any duly
appointed officer of the Company, any Invention, whether or not patentable or
copyrightable or entitled to legal protection as a trade secret or otherwise.
Upon the request of the Company, the Executive agrees to disclaim promptly in
writing all such rights and give all reasonable assistance and execute such
documents to enable the Company to prepare and prosecute any application for
patent or copyright registration. The Company shall have the sole right as it
may deem appropriate to determine the treatment of information related to any
Inventions, including but not limited to the right to keep the same as a trade
secret, to use, disclose, and publish same without prior patent application or
copyright registration and to file the same in its own name or to follow any
other procedure which the Company may deem appropriate.

 

(j)                                     Rights and
Remedies Upon Breach. If the Executive breaches, or threatens to commit
a breach of, any of the Restrictive Covenants, the Company shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the other and severally enforceable, and all of which rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity:

 

(i)                                     Specific Performance. The right and
remedy to seek from any court of competent jurisdiction in Travis County, Texas
specific performance of the Restrictive Covenants or injunctive relief against
any act which would violate any of the Restrictive Covenants, it being
acknowledged and agreed that any such breach or threatened breach will cause irreparable
injury to the Company and its Affiliates and that money damages will not
provide an adequate remedy. Any action or proceeding arising out of this
Employment Agreement shall be maintained in Travis County, Texas. In the event
an action is filed for specific performance or injunctive relief under this Section 6(j)(i),
the parties further agree to submit to jurisdiction and venue in Travis County,
Texas.

 

(ii)                                  Accounting. The right and
remedy to require the Executive to account for and pay over to the Company and
its Affiliates all compensation, profits, monies,

 

9

 

accruals, increments or other benefits derived or received by the
Executive as the result of any transactions constituting a breach of any of the
Restrictive Covenants.

 

(k)                                  Severability of Covenants. If any of the
Restrictive Covenants, or any part thereof, is held by a court of competent
jurisdiction or any Governmental Authority to be invalid, void, unenforceable
or against public policy for any reason, the remainder of the Restrictive
Covenants shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and such court, government, agency or
authority shall be empowered to substitute, to the extent enforceable,
provisions similar to the provisions governing the term, breadth or geographic
scope of the Restrictive Covenants so as to provide to the Company and
Affiliates thereof, to the fullest extent permitted by applicable law, the
benefits intended by such provisions.

 

(l)                                     Enforceability in
Jurisdictions. The Company and the Executive intend to and hereby
confer jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Restrictive Covenants. If
the courts of any one or more of such jurisdictions hold the Restrictive
Covenants wholly invalid or unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the Company and the Executive that
such determination not bar or in any way affect the right of the Company, or
any of their Affiliates, to the relief provided above in the courts of any
other jurisdiction within the geographical scope of such Restrictive Covenants,
as to breaches of such Restrictive Covenants in such other respective
jurisdictions, such Restrictive Covenants as they relate to each jurisdiction
being, for this purpose, severable into diverse and independent covenants.

 

(m)                               Reasonableness of
Restrictions. The Executive has carefully read and considered the
provisions of this Section 6, and having done so, agrees that the
restrictions set forth herein, including, but not limited to, the time period
of restriction, the geographic areas of restriction, and the scope of the
restriction are fair and reasonable, are supported by sufficient and valid
consideration, and these restrictions do not impose any greater restraint than
is necessary to protect the goodwill and other legitimate business interests of
the Company and its Affiliates, officers, directors, stockholders and other
employees.

 

7.                                       Arbitration. Any and all
claims or controversies between the Company and the Executive relating to the
Executive’s employment with the Company, or the termination thereof, including
claims for breach of contract, personal injury, tort, employment discrimination
(including unlawful harassment), and any violation of any state or federal, law
shall be resolved by final binding arbitration in accordance with the rules of
the American Arbitration Association. Judgment upon the award rendered by the
arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. The Executive understands that this agreement to arbitrate covers any
and all claims that the Executive might bring under Title VII, the Americans With
Disabilities Act or the Age Discrimination in Employment Act. The arbitrators
shall be selected from a panel provided by the American Arbitration
Association. Any such arbitration shall be conducted in Austin, Texas or such
other place as may be mutually agreed upon by the parties. Each party shall
select one (1) individual to act as arbitrator, and the two (2) arbitrators
so selected shall select a third arbitrator. Each party shall bear its own
costs, expenses and attorneys’ fees. The Executive shall pay a portion of the
arbitrators’ expenses and administrative fees of arbitration equal to the
standard filing fee in the U.S. Federal District Court, Western

 

10

 

District in Austin, Texas. The Company shall pay the remainder of the
arbitrators’ expenses and administrative fees of arbitration. If any party
prevails on a statutory claim that affords the prevailing party attorneys’
fees, then the arbitrator may award reasonable attorneys’ fees and costs to the
prevailing party. Notwithstanding anything to the contrary contained in this Section 7,
if the Executive breaches, or threatens to commit a breach of, any of the
Restrictive Covenants, the Company shall have the right and remedy to seek from
any court of competent jurisdiction specific performance of the Restrictive
Covenants or injunctive relief against any act which would violate any of the
Restrictive Covenants, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and its
Affiliates.

 

8.                                       Other
Provisions.

 

(a)                                  Notices. Except as may
be otherwise provided herein, all notices, requests, waivers and other
communications under this Employment Agreement shall be in writing and shall be
conclusively deemed delivered and effective (i) when hand delivered to the
other party, (ii) five (5) Business Days after being sent by
registered or certified mail, return receipt requested, postage prepaid, (iii) one
(1) business day after being sent via a reputable nationwide overnight
courier service guaranteeing next business day delivery, or (iv) in the
case of a facsimile transmission, upon transmission thereof by the sender and
the issuance by the transmitting machine of a confirmation slip confirming that
the number of pages constituting the notice have been transmitted without
error; provided, however, that the sender shall contemporaneously mail a copy
of the notice to the addressee by the method provided for in (i) or (ii) above,
but such mailing shall in no way alter the time at which the notice sent by
facsimile transmission is deemed received, in each case to the intended
recipient as set forth below:

 

(i)                                     if to the Company, to:

 

	
   

  	
  NetSpend Corporation

  
	
   

  	
  Austin Centre

  
	
   

  	
  701 Brazos Street, 12th Floor

  
	
   

  	
  Austin, TX 78701

  
	
   

  	
  Telephone:

  	
  (512) 532-8280

  
	
   

  	
  Fax:

  	
  (512) 469-9951

  
	
   

  	
  Attn: General Counsel

  

 

and

 

(ii)                                  if to the Executive, to him
at the address set forth on the signature page hereto.

 

Any party may change the address to which notices,
requests, consents or other communications hereunder are to be delivered by
giving the other parties notice in the manner set forth in this Section 8.

 

(b)                                 Return of Confidential
Information and the Company’s Property. The Executive agrees that
all documents, records, electronic data, and tangible items and materials containing
or embodying any Confidential Information (whether prepared by the Executive or
by

 

11

 

others), including all copies thereof, that are in the Executive’s
possession, custody, or control are the property of the Company and shall as
soon as is practicable be returned to the Company and that any electronic
copies thereof shall be deleted by the Executive from any personal computer or
other similar device belonging to the Executive upon termination of the
Executive’s employment with the Company, whether voluntary or otherwise, or at
any time upon the Company’s request. In addition, upon termination of employment
for any reason, the Executive shall return all property of the Company for
which the Executive is responsible including but not limited to pagers,
security access keys, and laptop computers, or that is in the Executive’s
possession, custody, or control.

 

(c)                                  Entire Agreement. This
Employment Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior contracts and
other agreements, written or oral, with respect thereto, including, without limitation,
the offer letter from the Company to the Executive, dated April 8, 2010
and all email correspondence and conversations relating thereto. Neither the
termination of the Executive’s employment hereunder nor the expiration or
termination of the Term or of this Employment Agreement shall affect the
enforceability of Section 6 hereof.

 

(d)                                 Waivers and Amendments. This
Employment Agreement may be amended, modified, superseded, canceled, renewed or
extended, and the terms and conditions hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party of any right, power or privilege hereunder, nor any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder.

 

(e)                                  Governing Law. This
Employment Agreement shall be governed by, and construed in accordance with and
subject to, the laws of the State of Texas applicable to agreements made and to
be performed entirely within such State. Venue for enforcement of this
Employment Agreement shall be in Travis County, Texas.

 

(f)                                    Payment of Severance. In addition
to the provisions of Section 6(c) hereof, and not in any way
in limitation thereof, or in limitation of any right or remedy otherwise available to the Company, if the
Executive violates any provision of Section 6 hereof, any severance
payments and/or benefit then or thereafter due from the Company to the
Executive shall be terminated forthwith and the Company’s obligation to pay and
the Executive’s right to receive such severance payments and/or benefit shall
terminate and be of no further force or effect, in each case without limiting
or affecting the Executive’s obligations under Section 6 hereof or
the Company’s other rights and remedies available at law or equity.

 

(g)                                 Binding Effect:
Benefit. This Employment Agreement shall inure to the benefit of and be
binding upon the parties hereto and any successors and assigns. Nothing in this
Employment Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto or such successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Employment
Agreement other than the right to the Executive’s estate under Section 5(c) hereof.

 

12

 

(h)                                 Assignment. This
Employment Agreement, and the Executive’s rights and obligations hereunder, may
not be assigned by the Executive; provided, however, that it shall be
enforceable by the Executive’s legal representatives and other successors in
interest. The Company may assign this Employment Agreement and its rights,
together with its obligations, hereunder in connection with any sale, transfer
or other disposition of all or substantially all of its assets or business,
whether by merger, consolidation or otherwise.

 

(i)                                     Counterparts. This
Employment Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

 

(j)                                     Construction. The headings
in this Employment Agreement are for reference purposes only and shall not in
any way affect the meaning or interpretation of this Employment Agreement.
Whenever required by the context any gender shall include any other gender, the
singular shall include the plural, and the plural shall include the singular.

 

(k)                                  Certain Definitions.

 

“Affiliate” means any entity from time to
time owned or controlled by the Company.

 

“Business Day” means a day other than
Saturday, Sunday or a day on which banks in Austin, Texas are not required to
be open or are authorized to remain closed.

 

“Governmental Authority” means any United
States federal, state or local or foreign government or governmental,
regulatory or administrative authority, department, agency, commission, entity
or other political subdivision thereof or any court, tribunal, or judicial or
arbitral body.

 

“Person” means any natural person,
partnership, corporation, limited liability company, association, joint stock
company, trust, joint venture, unincorporated organization or Governmental
Authority.

 

“Subsidiary” means any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the Company.

 

9.                                       Compliance With
Code Section 409A. Notwithstanding anything herein to the contrary,
this Employment Agreement is intended to be interpreted and operated so that
the payments and benefits set forth herein either shall either be exempt from
the requirements of Code Section 409A or shall comply with the
requirements of such provision; provided, however, that in no
event shall the Company be liable to the Executive for or with respect to any
taxes, penalties or interest which may be imposed upon the Executive pursuant
to Section 409A. The Executive hereby acknowledges and agrees that no
representations have been made to the Executive relating to the tax treatment
of any payment pursuant to this Agreement under Code Section 409A and the
corresponding provisions of any applicable state income tax laws. Specifically,
the parties agree as follows:

 

13

 

(a)                                  Each severance payment shall
be treated as a right to a series of separate payments as set forth in Treasury
Regulation 1.409A-2(b)(2)(iii) and no severance payment shall be paid
later than the last day of the second taxable year of the Executive following
the taxable year of the Executive’s “separation from service” as defined in
Treasury Regulation 1.409A-1(h) (“Separation From Service”). To the extent
that any severance payment constitutes a “deferral of compensation” subject to
Code Section 409A (a “409A Payment”), then, (A) in the event that a
termination of Executive’s employment does not constitute a Separation From
Service, such 409A Payment shall begin at such time as the Executive has
otherwise experienced such a Separation from Service, and the date of such
Separation from Service shall be deemed to be his Termination Date for purposes
of Section 5 hereof, and (B) if on the date of the Executive’s
Separation from Service, the Executive is a “specified employee,” as such term
is defined in Treas. Reg. Section 1.409A-1(i), as determined from time to
time by the Company, then such 409A Payment shall not be made to the Executive
earlier than the earlier of (i) six (6) months after the Executive’s
Separation from Service; or (ii) the date of his death. The 409A Payments
under this Agreement that would otherwise be made during such period shall be
aggregated and paid in one lump sum, without interest, on the first business
day following the end of the six (6) month period or following the date of
the Executive’s death, whichever is earlier, and the balance of the 409A
Payments, if any, shall be paid in accordance with the applicable payment
schedule provided in Section 5.

 

(b)                                 With respect to
reimbursements (whether such reimbursements are for business expenses or, to
the extent permitted under the Company’s policies, other expenses) and/or
in-kind benefits, in each case, that constitute deferred compensation subject
to Code Section 409A (as determined by the Company in its sole
discretion), each of the following shall apply: (1) no reimbursement of
expenses incurred by Executive during any taxable year shall be made after the
last day of the following taxable year of Executive, (2) the amount of
expenses eligible for reimbursement, or in-kind benefits provided, during a
taxable year of Executive shall not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, to Executive in any other
taxable year, and (3) the right to reimbursement of such expenses or
in-kind benefits shall not be subject to liquidation or exchange for another
benefit.

 

[Remainder
of page intentionally left blank]

 

14

 

10.                                 WAIVER OF JURY TRIAL. NO PARTY TO
THIS EMPLOYMENT AGREEMENT OR ANY ASSIGNEE, SUCCESSOR, HEIR OR PERSONAL
REPRESENTATIVE OF A PARTY SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF
THIS EMPLOYMENT AGREEMENT OR ANY OF THE OTHER AGREEMENTS OR THE DEALINGS OR THE
RELATIONSHIP BETWEEN THE PARTIES. NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS
SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER PARTY HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO THE OTHER PARTY THAT THE PROVISIONS OF THIS
SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

 

 

IN WITNESS WHEREOF, the parties have executed this
Employment Agreement as of the date first above written.

 

 

	
   

  	
   

  	
  NETSPEND CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel R. Henry

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ George W. Gresham

  
	
   

  	
   

  	
  George W. Gresham

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
					

 

15

 

Exhibit A

Form of
Release

 

This Release Agreement is by and between NetSpend Corporation, a
Delaware corporation (the “Company”), and George W. Gresham (“Gresham”).

 

1.                                       The parties
hereby acknowledge and agree to the severance terms set forth in Section 5(a)(ii) and,
if applicable, (iii) of the Employment Agreement, dated as of April 21,
2010 (the “Employment Agreement”), between the Company and Gresham. Gresham
further acknowledges and agrees that he is not entitled to any severance
payment or benefits, pursuant to the Employment Agreement or otherwise, unless
he signs this Release and returns it to the Company, as required by
Section 5(c) of the Employment Agreement.

 

2.                                       For and in
consideration of the severance payments and benefits the Company will pay to
Gresham pursuant to clauses (ii) and, if applicable, (iii) of
Section 5(a) of the Employment Agreement, Gresham, on his own behalf
and on behalf of his successors and assigns (collectively referred to as
“Releasor”), hereby releases and forever discharges the Company and NetSpend
Holdings, Inc., and their respective predecessors, successors, corporate
affiliates, stockholders, officers, directors, agents, representatives,
employees, consultants and advisors (collectively referred to as “Releasee”),
from any and all  claims, counterclaims, demands,
debts, actions, causes of action, suits, expenses, costs, attorneys’ fees,
damages, indemnities, obligations and/or liabilities of any nature whatsoever,
whether known or unknown, which Releasor ever had, now has or hereafter can,
shall or may have against Releasee, for, upon or by reason of any matter, cause
or thing whatsoever from the beginning of the world to the day of the date of
this Release, including, but not limited to, the following: (i) all such
claims and demands directly or indirectly arising out of or in any way
connected with Gresham’s employment with the Company or the termination of that
employment; (ii) all such claims and demands related to salary, bonuses,
commissions, stock, stock options, or any other ownership interests in the
Company, vacation pay, fringe benefits, expense reimbursements, severance pay
and/or any other form of compensation; (iii) any claims arising under any
federal, state or local law, statute or ordinance, including, without
limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, the Older Workers Benefit Protection Act, the Americans With
Disabilities Act, the Civil Rights Act of 1991, the Fair Labor Standards Act,
the Equal Pay Act, the Employee Retirement Income Security Act of 1974, the
Family and Medical Leave Act of 1993, the Consolidated Omnibus Budget
Reconciliation Act of 1985, the Texas Commission on Human Rights Act and
section 8307c of the Texas Workers Compensation Act; and (iv) any claims
for breach of contract, express or implied, including any claim for breach of
any implied covenant of good faith and fair dealing, wrongful discharge,
discrimination, harassment, fraud, defamation, intentional tort, emotional distress
and negligence.

 

3.                                       Notwithstanding
anything to the contrary contained in this Release, Releasor does not release
Releasee from any (i) claims against Releasee that may arise after this
Release has become effective; (ii) rights to indemnification conferred upon
Releasor as an officer, director or employee of the Company or any Affiliates
pursuant to the certificate or articles of incorporation or bylaws of such
entity, in accordance with applicable law; (iii) rights under [list stock option agreements], or (iv) rights
of Releasor under Section 5(a) of the Employment Agreement.

 

 

4.                                       Gresham
acknowledges that he has been advised to consult independent legal counsel
before signing this Release, and hereby represents that he has executed this
Release after having the opportunity to consult independent counsel and after
considering the terms of this Release for at least twenty one (21) days
(although Gresham may choose to voluntarily execute this Release earlier).
Gresham further represents and warrants that he has read this Release
carefully, that he has discussed it or has had reasonable opportunity to
discuss it with his counsel, that he fully understands its terms, and that he
is signing it voluntarily and of his own free will.

 

5.                                       Gresham
acknowledges that the consideration for this Release is consideration to which
he would not otherwise be entitled and is in lieu of any rights or claims that
he may have with respect to any severance benefits or other remuneration from
the Company.

 

6.                                       This Release
shall not become effective until the eighth day following the date on which
Gresham has executed it, provided that he has not revoked it. At any time prior
to that effective date, Gresham may revoke this Release by providing notice of
revocation to the Board of Directors of the Company. If Gresham exercises his
right to revoke this Release, any obligation of the Company to pay him
severance under the Employment Agreement shall terminate.

 

7.                                       Gresham agrees
that he will not, either directly or indirectly through any agent or surrogate,
and whether orally or in writing, “Disparage” (as defined herein) the Company
or its affiliates, or the members, directors, managers, officers, or employees
of the Company or its affiliates. In addition, the Company agrees that no Board
member or executive officer of the Company shall Disparage Gresham. As used in
this Agreement, to “Disparage” includes, but is not limited to, impugning the
character, honesty, integrity, morality, business acumen, abilities, qualities,
or reliability of any person or entity.

 

8.                                       This Release
may not be amended or modified except by a writing signed by the Company and
Gresham. This Release shall be governed by and construed in accordance with the
laws of the State of Texas without regard to principles of conflicts of laws
thereunder.

 

[Signature Page Follows]

 

2

 

	
   

  	
   

  	
   

  
	
  George W. Gresham

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:              This
               day
  of                                            ,
  20   .

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESSES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  

 

ACKNOWLEDGEMENT

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS:

  
	
  COUNTY OF

  	
  )

  	
   

  

 

On this
            day of
                              
, 20     , before me, the undersigned officer, personally
appeared George W. Gresham, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument and acknowledged that
he has executed the same for the purposes therein contained and acknowledged
the same to be his free act and deed.

 

In witness whereof, I
have hereunto set my hand.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  My Commission Expires:

  	
   

  

 

3

 

Exhibit B

Employee
Repayment Agreement

 

	
  Employee Name

  	
  George W. Gresham

  	
   

  
	
  (Please Print)

  

 

In exchange for receiving relocation benefits as described in the
NETSPEND Relocation Policy, I acknowledge and agree to the following
conditions:

 

I understand and agree that the relocation benefits that have been
and/or are extended by NETSPEND (NetSpend) to me are conditional upon my
continued employment with NetSpend for a minimum of twenty-four (24) months
from the effective date authorized on the relocation authorization form.

 

I understand and agree that if I voluntarily terminate my employment
without Good Reason, or if I am terminated by NetSpend for Cause, within
twenty-four (24) months from the effective date authorized on the relocation
authorization form, I hereby promise to repay to NetSpend, within 30 days,
the expenses incurred by NetSpend and any tax assistance payments provided by
NetSpend for my relocation. If termination occurs within the first twelve (12)
months, I hereby agree to
repay all relocation costs
(including any tax assistance payments); if termination occurs after the
twelfth (12th) month but
before the twenty-fourth (24th) month, my repayment will be based on a prorated share; the obligation
will be reduced by one/twelfth
of the costs for each month. “Good Reason” and “Cause” are defined in my
Employment Agreement between the Company and me, dated as of April 21, 2010.

 

I hereby authorize NetSpend to deduct from any salary or other monies
due me as of my last day of NetSpend employment, all  or part of any
relocation costs owed to NetSpend because of my voluntary termination of
employment without Good Reason or involuntary termination for Cause.

 

I understand and agree to reimburse NetSpend for any and all costs
incurred in enforcing this Relocation Agreement, including attorney’s fees and
court costs.

 

I understand and agree that if I  voluntarily terminate my employment
without Good Reason or if I  am terminated by NetSpend for Cause
within twenty-four (24) months from my relocation date, relocation expenses
paid or reimbursed during the calendar year of my termination will not be tax
assisted. Any relocation reimbursements will be reflected as income on my W-2
with no tax assistance provided to offset the additional tax liability.

 

I understand and agree that this Relocation Agreement does not
constitute a contract of employment or a guarantee of employment for one year
or otherwise. My employment is at-will at all times, including the first year
after relocation. NetSpend may terminate the employment relationship at any
time with or without cause and with or without notice.

 

 

	
   

  	
   

  	
   

  
	
  Employee signature

  	
   

  	
  Date

  

 

 

Exhibit C

 

[Time
Vesting Option Agreement]

 

*Form of agreement filed separately as
Exhibit 10.28 to the Registration Statement on Form S-1 (File No. 333-168127)
filed on August 31, 2010.

 

 

Exhibit D

[Performance
Vesting Option Agreement]

 

*Form of agreement filed separately as
Exhibit 10.31 to the Registration Statement on Form S-1 (File No. 333-168127)
filed on August 31, 2010.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]