Document:

Exhibit 10.26

 

Amended and Restated
NetSpend Holdings, Inc. 2004 Stock Option Plan

Notice of Grant

 

	
  Name:  Christopher T. Brown

  	
   

  	
  Address:

  

 

You have been granted an option to purchase Common Stock of the
Company, subject to the terms and conditions of the Stock Option Agreement
attached hereto (the “Stock Option Agreement”) and the Amended and Restated
NetSpend Holdings, Inc. 2004 Stock Option Plan (the “Plan”), as follows:

 

	
  Date of Grant:

  	
   

  	
  March 11, 2008

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting Measurement Date:

  	
   

  	
  February 15, 2008

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Option Price per Share:

  	
   

  	
  $3.53

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Number of Shares Granted: 

  	
   

  	
  75,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Option Price:

  	
   

  	
  $264,750.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  x Incentive
  Stock Option o Nonqualified
  Stock Option

  
	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  March 10, 2018

  	
   

  

 

Capitalized terms not defined herein shall have the meanings ascribed
to such terms in the Plan or the Stock Option Agreement.

 

Vesting Schedule:

 

This Option shall become vested and may be exercised, in whole or in
part, as follows: (a) 25% on the Date of Grant, and (b) the remaining 75% shall
be vested and exercisable in 36 successive equal monthly installments,
beginning 13 months from the Vesting Measurement Date, subject to (1) your
continued employment with the Company or an Affiliate through the applicable
vesting date and (2) Section 9(b) of the Plan. Section 9(b) of the Plan
generally provides that in the event of a Change in Control twenty-five percent
(25%) of the Option will immediately vest, subject to your continued employment
with the Company or an Affiliate through the date of the Change in Control.
Notwithstanding the foregoing or any provision of the Plan or the Stock Option
Agreement to the contrary, in the event of a Change in Control, if in
connection therewith any unvested portion of the Option is not being assumed
by, or substituted for new options (“New Options”) covering the stock of, the
surviving, successor or purchasing corporation, or a parent or subsidiary
thereof, 100% of such unvested portion of the Option shall be vested upon the
consummation of such Change in Control. Further, in the event that (a) a Change
in Control occurs and (b) during the twelve-month period following such Change
in Control, (i) your employment is terminated by the Company or an Affiliate
for any reason other than for (A) Cause or (B) Disability, or (ii) your
employment is terminated by you for Good Reason (as defined in the Management
Employment Agreement, dated as of November 17, 2006, by and among you, the
Company and NetSpend Corporation, as amended and/or restated from time to
time), then 100% of the Option or New Options, as applicable, shall be vested
immediately. For purposes of clarification, in the event of a termination of
your employment by the Company or an Affiliate for Cause or Disability, by you
for any reason (other than for Good Reason) or in the event of your death, the
Option or New Options, as applicable, shall not be vested pursuant to the
preceding sentence.

 

 

Termination Period:

 

This Option (to the extent vested) may be exercised for the period set
forth in Section 4 of the Stock Option Agreement which generally provides the
following: (1) the Option may be exercised for 90 days after any termination of
employment, or for such longer period as may be applicable upon death or
Disability, but in no event later than the Expiration Date (as provided above)
and (2) the Option may not be exercised (A) after the termination of your
employment by the Company or an Affiliate for Cause (as defined in the Plan),
(B) after a breach by you of any confidentiality, non-solicitation or
non-competition agreement between you and the Company or any of its Affiliates,
or (C) after you engage in any Detrimental Activity.

 

2

 

Amended and Restated

NetSpend Holdings, Inc.

2004 Stock Option Plan

 

Stock Option Agreement

 

This Stock Option Agreement (this “Agreement”) is
made as of the 11th day of March, 2008, between NetSpend Holdings, Inc., a
Delaware corporation (the “Company”), and Chris Brown (the “Participant”, which
term as used herein shall be deemed to include any successor to the Participant
by will or by the laws of descent and distribution, unless the context shall
otherwise require).

 

Pursuant to the Company’s Amended and Restated 2004
Stock Option Plan (the “Plan”), the Company, acting through the Committee,
approved the issuance to the Participant, effective as of the date set forth
above, of a stock option to purchase the number of shares (the “Shares”) of
Common Stock, $0.001 par value per share, of the Company (the “Option Stock”),
at the price (the “Option Price”), each as set forth in the Notice of Grant
attached hereto (the “Notice of Grant”), upon the terms and conditions
hereinafter set forth. Capitalized terms not defined herein shall have the
meanings ascribed to such terms in the Plan or in the Notice of Grant.

 

NOW, THEREFORE, in
consideration of the mutual premises and undertakings hereinafter set forth,
the parties hereto agree as follows:

 

1.             Option;
Option Price.

 

On behalf of the Company, the Committee hereby
grants to the Participant an option (the “Option”) to purchase the number of
shares of Option Stock of the Company set forth in the Notice of Grant, at an
exercise price per share equal to the Option Price set forth in the Notice of
Grant, subject to the terms and conditions of this Agreement and the Plan
(which is incorporated by reference herein and which in all cases shall control
in the event of any conflict with the terms, definitions and provisions of this
Agreement). If designated in the Notice of Grant as an “incentive stock
option”, the Option is intended to qualify for Federal income tax purposes as
an “incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”). A copy of the Plan as in effect
on the date hereof has been supplied to the Participant, and the Participant
hereby acknowledges receipt thereof.

 

2.             Term.

 

The term (the “Option Term”) of the Option shall
commence on the Date of Grant and shall expire on the Expiration Date set forth
in the Notice of Grant, unless such Option shall theretofore have been
terminated in accordance with the terms hereof or of the Plan.

 

3.             Time
of Exercise.

 

(a)           The Option shall be vested and exercisable as set
forth in the Notice of Grant.

 

 

(b)           Anything contained in this Agreement to the contrary
notwithstanding, to the extent that this Option is intended to be an “incentive
stock option”, as set forth in the Notice of Grant, the Option shall not be
exercisable as an incentive stock option, and shall be treated as a
non-qualified stock option, to the extent that the aggregate Fair Market Value
(as determined in accordance with Section 6(b) of the Plan) on the date hereof
of all stock with respect to which incentive stock options are exercisable for
the first time by the Participant during any calendar year (under the Plan and
all other plans of the Company and its Subsidiaries, if any) exceeds $100,000.

 

4.             Termination of Option.

 

(a)           The unexercised portion of the Option shall automatically
terminate and shall become null and void and be of no further force or effect
upon the first to occur of the following:

 

(i)              the expiration of the Option
Term;

 

(ii)             the expiration of ninety
(90) days from the date of the Participant’s Termination of Service (other than
as a result of death, Disability or a Termination of Service by the Company or
an Affiliate for Cause); provided, however, that if the
Participant shall die during such ninety-day period, the time of termination of
the unexercised portion of the Option shall be one year from the date of the
Participant’s death;

 

(iii)            the expiration of one year
from the date of the Participant’s Termination of Service if such Termination
of Service is a result of the Participant’s death or Disability;

 

(iv)            immediately upon the
Participant’s Termination of Service if such Termination of Service is by the
Company or an Affiliate for Cause;

 

(v)             except to the extent
permitted by Section 7(c) of the Plan or Section 11, the date on which the
Option or any part thereof or right or privilege relating thereto is
transferred (otherwise than by will or by the laws of descent and
distribution), assigned, pledged, hypothecated, attached or otherwise disposed
of by the Participant; and

 

(vi)            except as otherwise permitted
by the Committee, the date on which the Participant breaches any
confidentiality, non-competition or non-solicitation agreement between the
Participant and the Company or the date on which the Participant engages in a
Detrimental Activity. For purposes of this Agreement, a “Detrimental Activity”
means (1) the rendering of services for any organization or engaging directly
or indirectly in any business which is or becomes competitive with the Company,
or which organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to or in conflict
with the interests of the Company; (2) the disclosure to anyone outside the
Company, or the use in other than the Company’s business without the prior
written authorization from the Company, of any confidential information or
material; (3) any attempt to directly or indirectly induce any employee of the
Company (or any person who was an Employee or Consultant during the six-month
period preceding the Participant’s Termination of Service) to be employed or
perform services elsewhere; (4) any attempt directly or indirectly to solicit
the trade or

 

2

 

business of any current or prospective customer (or entity that was a
customer during the six-month period preceding the Participant’s Termination of
Service); or (5) any other conduct or act determined to be injurious,
detrimental or prejudicial to any interest of the Company, in each case as
determined by the Committee in its sole discretion. For purposes of this clause
(vi), the term “Company” means the Company and its Affiliates.

 

(b)              Anything contained herein to
the contrary notwithstanding, the Option shall not be affected by any change of
duties or position of the Participant (including a transfer to or from the
Company or any of its Affiliates), so long as the Participant continues to be
an Employee or a Consultant.

 

(c)               In the event of the
Participant’s Termination of Service, the Company shall have the right, but not
the obligation, to repurchase any and all Optioned Shares as set forth in the
Notice (defined in Section 5(a)) or in any stockholders, stock restriction or
similar agreement to which the Participant is a party, as applicable.

 

5.             Procedure
for Exercise.

 

(a)           The Option may be exercised, from time to time, in
whole or in part (but for the purchase of whole shares only), by delivery of a
written notice in the form attached as Exhibit A hereto (the “Notice”) from the
Participant to the Chief Financial Officer of the Company, which Notice shall:

 

(i)              state that the Participant
elects to exercise the Option;

 

(ii)             state the number of shares
with respect to which the Option is being exercised (the “Optioned Shares”);

 

(iii)            state the method of payment
for the Optioned Shares pursuant to Section 5(b);

 

(iv)            state the date upon which
the Participant desires to consummate the purchase of the Optioned Shares
(which date must be prior to the termination of such Option and no sooner that
5 business days from the delivery of such Notice and no later than 30 calendar
days from the delivery of such Notice, as may be appropriately adjusted by the
Committee in the event of a Change in Control);

 

(v)             if the Option shall be
exercised by any person other than the Participant, include evidence to the
satisfaction of the Committee of the right of such person to exercise the
Option pursuant to Section 11; and

 

(vi)            include such further
provisions consistent with the Plan (including, without limitation, the
execution of a joinder to a stockholders agreement and/or stock restriction
agreement or similar agreement) as the Committee may from time to time require.

 

(b)           Payment of the Option Price for the Optioned Shares
shall be made (i) in cash or by personal or certified check payable to the
Company, (ii) by delivery of stock certificates (in negotiable form)
representing shares of Option Stock that have been owned of

 

3

 

record by the Participant for more than six months on the date of
exercise and that have a Fair Market Value on the date of exercise (determined
in the manner set forth in Section 6(b) of the Plan as if the date of exercise
were the Date of Grant) equal to the aggregate Option Price of the Optioned
Shares, (iii) in compliance with any cashless exercise program authorized by
the Committee in its sole discretion; or (iv) a combination of the methods set
forth in the foregoing clauses (i), (ii) and (iii).

 

(c)               The Company shall issue (or
cause to be issued) a stock certificate in the name of the Participant (or such
other person exercising the Option in accordance with the provisions of Section
11) for the Optioned Shares as soon as reasonably practicable after receipt of
the Notice and payment of the aggregate Option Price for such shares. Such
stock certificate shall contain the legend set forth in Section 7 of the
Exercise Notice attached hereto as Exhibit A.

 

6.             Withholding.

 

The Committee shall be entitled to require as a
condition of delivery of shares of Option Stock in connection with the exercise
of an Option that the Participant remit or, in appropriate cases, agree to
remit when due, an amount sufficient to satisfy all current or estimated future
federal, state and local withholding tax and employment tax requirements
relating thereto. The Committee may in its discretion permit the minimum
statutorily required withholding obligations be satisfied by having the Company
withhold a portion of the shares that would otherwise be issued to the
Participant upon exercise of an Option, if any.

 

7.             No Rights as a Stockholder.

 

The Participant shall not have any privileges of a
stockholder of the Company with respect to any Optioned Shares until the date
of issuance of a stock certificate pursuant to Section 5(c).

 

8.             Adjustments.

 

(a)           Changes in Capital Structure. Subject to
Section 8(b), if the Option Stock is changed by reason of a change in corporate
capitalization, such as a stock split, reverse stock split, stock dividend or
recapitalization, or converted into or exchanged for other securities as a
result of a merger, consolidation or reorganization, the Committee shall make
such adjustments as shall be equitable and appropriate in order to make any
outstanding Option, as nearly as may be practicable, equivalent to the portion
of the Option outstanding as of the effective date of such transaction. Anything
contained in the Plan or in this Agreement to the contrary notwithstanding, in
the case of ISOs, no adjustment under this Section 8(a) shall be appropriate if
such adjustment (i) would constitute a modification, extension or renewal of
such ISOs within the meaning of Sections 422 and 424 of the Code, and the
regulations promulgated by the Treasury Department thereunder, or (ii) would,
under Section 422 of the Code and the regulations promulgated by the Treasury
Department thereunder, be considered the adoption of a new plan requiring
stockholder approval.

 

(b)         Change in Control. Notwithstanding any
provision of the Plan to the contrary, in the event of a Change in Control, the
Committee may make such adjustments and/or

 

4

 

settlements of the outstanding portion of the Option as it deems
appropriate and consistent with the Plan’s purposes, including, without
limitation, canceling the Option if the Option Price exceeds the price paid for
a share of Option Stock in connection with a Change in Control; provided,
however, that (1) in the event of any inconsistency between the
provisions of this subsection (b) and any provision in the Notice of Grant
regarding vesting upon a Change in Control, the provisions in the Notice of
Grant shall govern and (2) in the event of the assumption of the Option by, or
the substitution for such Option of a new option covering the stock of, the
surviving, successor or purchasing corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number, kind and option price
of shares subject to such option, the Committee shall, in the case of ISOs, to
the extent not inconsistent with the best interests of the Company or its
Affiliates (such best interests to be determined in good faith by the Committee
in its sole discretion), use its best efforts to ensure that any such
assumption or substitution will not constitute a modification, extension or
renewal of the ISOs within the meaning of Section 424(h) of the Code and the
regulations promulgated by the Treasury Department thereunder. Notwithstanding
the foregoing or any provision of the Plan or this Agreement to the contrary,
in the event of a Change in Control, if in connection therewith any unvested
portion of the Option is not being assumed by, or substituted for new options
(“New Options”) covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, 100% of such unvested portion
of the Option shall be vested upon the consummation of such Change in Control.
Further, in the event that (a) a Change in Control occurs and (b) during the
twelve-month period following such Change in Control, a Termination of Service
occurs and such Termination of Service is (i) by the Company or any Affiliate
for any reason other than for Cause or Disability or (ii) is by you for Good
Reason (as defined in the Management Employment Agreement, dated as of November
17, 2006, by and among you, the Company and NetSpend Corporation, as amended
and/or restated from time to time), 100% of the Option or New Options, as
applicable, shall be vested immediately.

 

(c)           Any adjustments referred to in Section 8(a) or (b) shall
be made by the Committee in its sole discretion and shall be conclusive and
binding on the Participant.

 

9.             Additional
Provisions Related to Exercise.

 

(a)           The Option shall be exercisable only on such date or
dates and during such period and for such number of shares of Option Stock as
are set forth in this Agreement.

 

(b)         To exercise the Option, the Participant shall follow
the procedures set forth in Section 5 hereof. Upon the exercise of the Option
at a time when there is not in effect a registration statement under the
Securities Act of 1933, as amended (the “Securities Act”), relating to the
shares of Option Stock issuable upon exercise of the Option, the Committee in
its discretion may, as a condition to the exercise of the Option, require the
Participant (i) to make the representations set forth in Exhibit B hereto and
(ii) to make such other representations and warranties as are deemed
appropriate by counsel to the Company. No shares of Option Stock shall be
issued and delivered upon the exercise of the Option unless and until the
Company and/or the Participant shall have complied with all applicable Federal
or state registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.

 

5

 

10.          No Evidence
of Employment or Consulting Relationship.

 

Nothing contained in the Plan or in this Agreement
shall confer upon the Participant any right with respect to the continuation of
his or her employment by, or service relationship with, the Company or any
Affiliate or interfere in any way with the right of the Company or any
Affiliate (subject to the terms of any separate agreement to the contrary), at
any time to terminate such employment or service relationship or to increase or
decrease the compensation of the Participant from the rate in existence at the
time of the grant of the Option. For the avoidance of doubt, this Option shall
not guarantee employment for the length of all, or any portion of, the vesting
schedule set forth in the Notice of Grant.

 

11.          Restriction
on Transfer.

 

The Option may not be transferred, pledged,
assigned, hypothecated or otherwise disposed of in any way by the Participant,
except by will or by the laws of descent and distribution, and may be exercised
during the lifetime of the Participant only by the Participant. If the
Participant dies, the Option shall thereafter be exercisable, during the period
specified in Section 4(a)(iii), by the Participant’s executors or
administrators to the full extent to which the Option was exercisable by the
Participant at the time of the Participant’s death. The Option shall not be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without effect.

 

12.          Lock-Up
Period.

 

In the event that the Company files a registration
statement under the Securities Act with respect to an underwritten public
offering of any Option Stock, the Participant shall be prohibited from
effecting any public sale or distribution of any Option Stock (other than as
part of such underwritten public offering), including, but not limited to,
pursuant to Rule 144 or Rule 144A under the Securities Act, during the
“lock-up” period established by the Committee, which lock-up period shall be no
shorter than that required by the underwriters of such public offering.

 

13.          Disqualifying
Dispositions.

 

If Optioned Shares acquired by exercise of an ISO
are disposed of within two years following the date of this Agreement or one
year following the issuance thereof to the Participant (a “Disqualifying
Disposition”), the Participant shall, immediately prior to such Disqualifying
Disposition, notify the Company in writing of the date and terms of such
Disqualifying Disposition and provide such other information regarding the
Disqualifying Disposition as the Company may reasonably require.

 

14.            Notices.

 

All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if (i) personally
delivered, (ii) sent by nationally-recognized overnight courier or (iii) sent
by registered or certified mail, postage prepaid, addressed as follows:

 

6

 

if to the Participant, to the address set forth on
the Notice of Grant; and 

 

if to the Company, to:

 

NetSpend Holdings, Inc.

c/o Netspend Corporation

Austin Centre

701 Brazos Street, 12th Floor

Austin, TX 78701

Attention: Chief Financial Officer

 

or to such other address as the party to whom notice is to be given may
have furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (x) when delivered, if
personally delivered, (y) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (z) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, “Business Day”
means a day that is not a Saturday, Sunday or a day on which banking
institutions in the city to which the notice or communication is to be sent are
not required to be open.

 

15.          Transfer
Restrictions; Mandatory Participation in Sale of the Company.

 

(a)           Prior to an Initial Public Offering, the Participant
agrees that he or she will not Transfer all or any portion of the Optioned
Shares, except in connection with, and strictly in compliance with applicable
securities laws and with this Section 15.

 

(b)           Sale of the Company and/or Its Subsidiaries.

 

(i)            Conditions. So long as Oak continues
to hold at least a majority of the Common Stock (on an as converted basis) held
by it on the effective date of the Plan, if Oak determines to pursue the sale
of the business of the Company and/or its Subsidiaries to a third party that is
not (i) an Affiliate of Oak or (ii) a Person in which Oak or an Affiliate of
Oak holds a direct or indirect equity interest (other than a ownership interest
of less than 5% of the outstanding capital stock of a public company) or any
other material interest (as a creditor or otherwise) (a “Third Party
Purchaser”) in a bona fide arms’ length transaction (whether by way of a
merger, consolidation, sale of all or substantially all of its assets, sale of
outstanding capital stock or otherwise) (an “Approved Sale”), then,
subject to the provisions of subsection (c) of this Section 15:

 

(A)          the Participant shall,
subject to the conditions set forth in subsection (c), consent to, vote for,
and raise no objections against, and waive dissenters and appraisal rights (if
any) with respect to, the Approved Sale, and

 

(B)           if the Approved Sale is
structured as a sale of stock, the Participant will agree to sell and will be
permitted to sell all of the Optioned Shares on the terms and conditions
approved by Oak.

 

7

 

(C)           if the Approved Sale
includes the sale, contribution, exchange, redemption, cancellation or other
disposition of options, the Participant will sell, contribute, exchange,
redeem, cancel or otherwise dispose of the Option on the terms and conditions
approved by the Oak.

 

The Participant will take all reasonably necessary
and desirable actions to consummate such Approved Sale, including, without
limitation, the execution of all agreements and other instruments and such
other actions reasonably necessary to effectuate the allocation and
distribution of the aggregate consideration upon the Approved Sale as set forth
in subsection (c) below.

 

(c)           Approved Sale Obligations. The
obligations of the Participant with respect to an Approved Sale are subject to
the satisfaction of the conditions that:

 

(i)            the proceeds of the Approved Sale are applied in
accordance with the Company’s Certificate of Incorporation as in effect
immediately prior to such Approved Sale;

 

(ii)           each holder of shares of capital stock of the Company
shall receive the same proportion of the aggregate consideration from such
Approved Sale that such holder would have received if such aggregate
consideration had been distributed by the Company in complete liquidation
pursuant to the rights and preferences set forth in the Company’s Certificate
of Incorporation as in effect immediately prior to such Approved Sale and no
holder of any shares of capital stock of the Company shall receive any
consideration of any kind from the purchaser or any of its Affiliates other
than such proportionate consideration (except in respect of such holder’s
employment with the Company and other matters personal to such holder);

 

(iii)          upon the consummation of the Approved Sale, all of
the holders of each class of Option Stock will receive the same form and amount
of consideration per share of each such class of Option Stock;

 

(iv)          if any holder of a particular class of Option Stock
is given an option as to the form and amount of consideration to be received,
all holders of the same class or series of stock will be given the same option;

 

(v)         the Participant shall not be required to make any
representations or warranties other than representations and warranties about
the Company and its business, operations, liabilities and the like that are
required by all Stockholders, in which case, the indemnification obligations of
the Participant with respect to any such representations and warranties
provided for in this clause (v) shall be limited to the Participant’s pro rata
portion thereof (based upon the share ownership of all Stockholders).

 

(d)           Prohibited Transfers. If any purported Transfer
is made or attempted contrary to the provisions of this Agreement, such
purported Transfer shall be void ab initio; the Company, and
the Stockholders shall have, in addition to any other legal or equitable
remedies which they may have, the right to enforce the provisions of this
Agreement by actions for specific performance (to the extent permitted by law);
and the Company shall have the right to refuse to recognize any Transferee as
one of its stockholders for any purpose. Without limitation

 

8

 

to the foregoing, the Participant (and any Permitted Transferees)
further agree that the provisions of Section 20 shall apply in the event of any
violation or threatened violation of this Agreement.

 

(e)           Definitions.

 

(i)            “Initial Public Offering” means the first
firm commitment underwritten public offering for shares of Option Stock
pursuant to an effective registration statement under the Securities Act with
aggregate gross proceeds of at least $25,000,000.

 

(ii)           “Oak” means Oak Investment Partners X,
Limited Partnership and/or Oak X Affiliates Fund, L.P.

 

(iii)          “Permitted Transfer” shall mean any Transfer
permitted under this Agreement or the Plan.

 

(iv)          “Permitted Transferree” shall mean any
Transferee of a Participant permitted under this Agreement or the Plan.

 

(v)           “Stockholder” and “Stockholders” shall
have the meaning set forth in the Preamble.

 

(vi)          “Transfer” means any direct or indirect
transfer, donation, sale, assignment, pledge, hypothecation, grant of a
security interest in or other disposal of all or any portion of a Security or
of any rights thereunder. “Transferred” means the accomplishment of a
Transfer, and “Transferee” means the recipient of a Transfer.

 

16.          No Waiver.

 

No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.

 

17.          Participant Undertaking.

 

The Participant hereby agrees to take whatever
additional actions and execute whatever additional documents the Company may in
its reasonable judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on the
Participant pursuant to the express provisions of this Agreement.

 

18.          Successors and Assigns.

 

Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit of and be enforceable by the Participant
and the Company and their respective successors, assigns, heirs,
representatives and estates, as the case may be (including subsequent holders
of Optioned Shares); provided, however, that the rights and obligations of the
Participant under this Agreement shall not be assignable except in connection
with a Permitted Transfer of Optioned Shares hereunder (so long as the
transferee agrees in writing in advance to become bound by the terms and
conditions hereof).

 

9

 

19.          modification
of Rights.

 

The rights of the Participant are subject to
modification and termination in certain events as provided in this Agreement
and the Plan.

 

20.          Governing
Law.

 

(a)          This Agreement shall be deemed to be a contract made
under, and shall be construed in accordance with, the laws of the State of
Delaware, without giving effect to conflict of laws principles thereof.

 

(b)         Each of the parties hereto hereby irrevocably and
unconditionally submits, for himself or herself and his or her property, to the
nonexclusive jurisdiction of any Delaware State court or any federal court of
the United States of America sitting in the State of Delaware, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such Delaware State court or, to the extent permitted by law,
in any such federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

 

(c)          Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent that he or she may legally and
effectively do so, any objection that he or she may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or
relating to the Agreement in any Delaware state or federal court sitting in the
State of Delaware. Each of the parties hereto irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

 

21.          Counterparts.

 

This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

 

22.          Entire
Agreement.

 

This Agreement (including the Notice of Grant), the
Plan and, upon execution, the Exercise Notice and the Investment Representation
Statement, constitute the entire agreement between the parties with respect to
the subject matter hereof, and supersede all previously written or oral
negotiations, commitments, representations and agreements with respect thereto.

 

10

 

23.          WAIVER OF JURY TRIAL.  NO PARTY TO THIS 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 AGREEMENT. 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 hereto have executed
this Agreement as of the date first written above.

 

	
   

  	
   

  	
  NetSpend Holdings, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel R. Henry

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Daniel R. Henry

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Participant

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Christopher T. Brown

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Christopher T. Brown

  

 

Acknowledgment and Agreement of Spouse

 

The undersigned spouse of the Participant
acknowledges that he/she has read this agreement and agrees to be bound thereby
to the extent that the Participant has executed such document.

 

	
   

  	
   

  
	
  Name:

  	
   

  

 

Declaration of Unmarried Status

 

I, Christopher
T. Brown, the undersigned hereby declare that I am not married as of the
date hereof.

 

 

	
  /s/ Christopher T. Brown

  	
   

  	
   

  
	
  Name:  Christopher T. Brown

  	
   

  	
   

  

 

11

 

EXHIBIT A

 

Amended and
Restated NetSpend Holdings, Inc. 2004 Stock Option Plan

Exercise Notice

 

NetSpend Holdings, Inc.

c/o Netspend Corporation

Austin Centre

701 Brazos Street, 12th Floor

Austin, TX 78701

Attention: Chief Financial Officer

 

Date of Notice:

 

1.           Exercise of
Option. Effective as of                          ,        , [Please
insert date that is at least 5 days from the Date of Notice and no later than
30 days from the Date of Notice], the undersigned (the
“Participant”) hereby elects to exercise the Participant’s option to purchase                                    shares of
the Common Stock (the “Shares”) of NetSpend Holdings, Inc. (the “Company”)
under and pursuant to the 2004 Stock Option Plan (the “Plan”) and the Stock
Option Agreement, dated                                     , 200   (the
“Stock Option Agreement”).

 

2.           Representations of the Participant. The Participant
acknowledges that the Participant has received, read and understood the Plan
and the Stock Option Agreement and the Investment Representation Statement and
agrees to abide by and be bound by their terms and conditions.

 

3.           Rights as Stockholder. Until the stock certificate
evidencing such Shares is issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Shares, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate as soon
as practicable after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 10 of the Plan.

 

The Participant shall enjoy rights as a stockholder
until such time as the Participant disposes of the Shares. Upon such
disposition, the Participant shall have no further rights as a holder of the
Shares so purchased except the right to receive payment for the Shares so
purchased in accordance with the provisions of the Option Agreement, and the
Participant shall forthwith cause the certificate(s) evidencing the Shares so
purchased to be surrendered to the Company and/or its assignee(s) for transfer
or cancellation.

 

4.          Plan;
Transfer Restrictions; Drag-Along. Unless otherwise determined
by the Committee, any shares of Stock acquired pursuant to this Option
(including any Shares acquired by way of stock dividend or stock split or in
connection with a combination of shares,

 

A-1

 

recapitalization, merger, consolidation or other reorganization) shall
be subject to the Option Agreement and the Plan including, without limitation,
transfer restrictions and the Company’s right to require the Participant to
sell the Optioned Shares and otherwise cooperate in the event of an Approved
Sale as set forth in Section 15 of the Option Agreement.

 

5.             Repurchase Right for Participants.

 

(a)           In the event of the Participant’s Termination of
Service, the Company shall have the right, but not the obligation, to
repurchase any and all Optioned Shares acquired by the Participant (for cash or
cancellation of purchase money indebtedness for the Optioned Shares) within 185
days following the date of the Participant’s Termination of Service. In the
event of the Participant’s Termination of Service for any reason other than by
the Company for Cause, the per share purchase price for each Optioned Share
shall be the Fair Market Value of a share of Common Stock on the date of such
Termination of Service. In the event of a Participant’s Termination of Service
for Cause, the purchase price shall be the lower of the exercise price for such
Optioned Share and the Fair Market Value of such Optioned Share on the date of
such Termination of Service. The Company’s repurchase right set forth in this
Section 5(a) shall lapse upon an Initial Public Offering.

 

(b)         In the event of the Company’s exercise of its
repurchase right, the Participant and his, her or its successors or assigns
shall (i) take all steps necessary and desirable to obtain all required
third-party, governmental and regulatory consents and approvals with respect to
the surrender and cancellation of the Optioned Shares, (ii) deliver for cancellation
the certificate(s) representing the Option Shares for cancellation in person or
by first class mail, registered mail, certified first class mail or by
reputable overnight courier service to the address set forth in the Company’s
notice to the Participant within 10 days of receipt of such notice and (iii) take
all other actions necessary and desirable to facilitate consummation of the
repurchase and the cancellation of the Option Shares in a timely manner. If the
Participant fails or refuses to take any action required by this Section 5, the
Company may note in its stock ledger and books and records the cancellation of
the Participant’s Optioned Shares which are subject to cancellation after
application of this Section 5.

 

6.             Tax Consultation. The
Participant understands that the Participant may suffer adverse tax
consequences as a result of the Participant’s purchase or disposition of the
Shares. The Participant represents that the Participant has consulted with any
tax consultants the Participant deems advisable in connection with the purchase
or disposition of the Shares and that the Participant is not relying on the
Company for any tax advice.

 

7.             Restrictive Legends and Stop-Transfer Orders.

 

(a)           Legends.  The Participant understands and agrees that
the Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing ownership
of the Shares together with any other legends that may be required by state or
federal securities laws at the time of the issuance of the Shares:

 

THE SALE AND ISSUANCE OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE

 

A-2

 

SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
PLEDGED, OR TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT UNDER THE ACT IS IN
EFFECT AS TO THESE SECURITIES AND SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN
COMPLIANCE WITH APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION OR
(II) THERE IS AN OPINION OF COUNSEL OR OTHER EVIDENCE, IN EITHER CASE,
SATISFACTORY TO THE CORPORATION, THAT AN EXEMPTION THEREFROM IS AVAILABLE AND
THAT SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH APPLICABLE
SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.

 

TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN AN AWARD AGREEMENT
BETWEEN THE ISSUER AND A PARTICIPANT IN THE ISSUER’S 2004 STOCK OPTION PLAN. NO
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR
EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. SUCH AGREEMENTS MAY BE
INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.

 

(b)           Stop-Transfer Notices. The Participant agrees
that, in order to ensure compliance with the restrictions referred to herein,
the Company may issue appropriate “stop transfer” instructions to its transfer
agent, if any, and that, if the Company transfers its own securities, it may
make appropriate notations to the same effect in its own records.

 

(c)           Refusal to Transfer. The Company shall not be
required (i) to transfer on its books any Shares that have been sold or
otherwise transferred in violation of any of the provisions of this Agreement
or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have
been so transferred.

 

8.             Successors and Assigns. The Company
may assign any of its rights under this Agreement to single or multiple
assignees (who may be stockholders, officers, directors, employees or
consultants of the Company), and this Agreement shall inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this Agreement shall be binding upon the Participant
and his or her heirs, executors, administrators, successors and assigns.

 

9.             Interpretation. Any dispute
regarding the interpretations of this Agreement shall be submitted by the
Participant or by the Company forthwith to the Committee, which shall review
such dispute at its next regular meeting. The resolution of such a dispute by
the Committee shall be final and binding on the Company and on the Participant.

 

A-3

 

10.           Governing Laws; Severability.

 

(a)           This Agreement shall be deemed to be a contract made
under, and shall be construed in accordance with, the laws of the State of
Delaware, without giving effect to conflict of laws principles thereof.

 

(b)           Each of the parties hereto hereby irrevocably and
unconditionally submits, for himself or herself and his or her property, to the
nonexclusive jurisdiction of any Delaware State court or any federal court of
the United States of America sitting in the State of Delaware, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such Delaware State court or, to the extent permitted by law,
in any such federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

 

(c)           Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent that he or she may legally and
effectively do so, any objection that he or she may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or
relating to the Agreement in any Delaware state or federal court sitting in the
State of Delaware. Each of the parties hereto irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

 

11.           Specific
Performance. The right and remedy to
seek from any court of competent jurisdiction specific performance of the
transfer restrictions set forth or referenced herein or injunctive relief
against any act which would violate Section 4 hereof, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to the Company and that money damages will not provide an adequate remedy to
the Company.

 

12.           Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given if given in the manner specified in the Stock Option
Agreement.

 

13.           Further Instruments. The parties agree to execute such further instruments and to take such
further action as may be reasonably necessary to carry out the purposes and
intent of this Agreement.

 

14.           Delivery of Payment. The Participant herewith delivers to the Company the full Option Price
for the Shares.

 

15.           Definitions. Capitalized terms not defined herein shall have the meaning set forth
in the Plan.

 

16.           Entire Agreement. The Plan, the Notice of Grant, the Stock Option Agreement and the
Investment Representation Statement (if applicable) are incorporated herein by
reference. This Agreement, the Plan, the Notice of Grant, the Stock Option
Agreement and the Investment Representation Statement (if applicable)
constitute the entire agreement of the parties and

 

A-4

 

supersede in their entirety all prior undertakings and agreements of
the Company and the Participant with respect to the subject matter hereof.

 

17.           WAIVER OF JURY TRIAL.  NO PARTY TO THIS 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 AGREEMENT. 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.

 

[Signature Page Follows]

 

A-5

 

	
   

  	
   

  	
  Submitted by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Acknowledgment and Agreement of Spouse

 

The undersigned spouse of the Participant
acknowledges that he/she has read this agreement and agrees to be bound thereby
to the extent that the Participant has executed such document.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
				

 

Declaration of Unmarried Status

 

I,                                         , the
undersigned hereby declare that I am not married as of the date hereof.

 

	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NetSpend Holdings, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

A-6

 

EXHIBIT B

 

INVESTMENT REPRESENTATION
STATEMENT 

 

	
  PARTICIPANT

  	
  :

  
	
   

  	
   

  
	
  COMPANY

  	
  :                  NetSpend Holdings,
  Inc.

  
	
   

  	
   

  
	
  SECURITY

  	
  :

  
	
   

  	
   

  
	
  AMOUNT

  	
  :

  
	
   

  	
   

  
	
  DATE

  	
  :

  
			

 

In connection with the purchase of the above-listed
Securities, the undersigned Participant represents to the Company the
following:

 

The Participant is aware of the Company’s business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Securities. The Participant is acquiring these Securities for investment for
the Participant’s own account only and not with a view to, or for resale in
connection with, a “distribution” thereof within the meaning of the Securities
Act.

 

The Participant acknowledges and understands that
the Securities constitute “restricted securities” under the Securities Act and
have not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of the Participant’s investment intent as expressed herein. In this
connection, the Participant understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be unavailable
if the Participant’s representation was predicated solely upon a present
intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future. The Participant further understands that
the Securities must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. The Participant further acknowledges and understands that the
Company is under no obligation to register the Securities. The Participant
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company and other legends required under the applicable
state or federal securities laws.

 

The Participant is familiar with the provisions of
Rule 701 and Rule 144, each promulgated under the Securities Act, which, in
substance, permit limited public resale of “restricted securities” acquired,
directly or indirectly from the issuer thereof, in a non-public offering
subject to the satisfaction of certain conditions. Rule 701 provides that if
the issuer qualifies under Rule 701 at the time of the grant of the Option to
the Participant, the exercise will be exempt from registration under the
Securities Act.

 

B-1

 

In the event that the Company does not become
subject to the requirements of Section 13 or 15(d) of the Exchange Act, then
the Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires the resale to occur not less than one
year after the later of the date the Securities were sold by the Company or the
date the Securities were sold by an affiliate of the Company, within the
meaning of Rule 144; and, in the case of acquisition of the Securities by an
affiliate only, the satisfaction of the following conditions: (1) the resale
being made through a broker in an unsolicited “broker’s transaction,” in
transactions directly with a market maker (as said term is defined under the
Exchange Act) or in “riskless principal transactions” (as said term is defined
in the Note to Rule 144(f)(1)); (2) the amount of Securities being sold during
any three month period not exceeding the limitations specified in Rule 144(e);
(3) the availability of certain public information about the Company; and (4) the
timely filing of a Form 144, if applicable.

 

In the event the Company becomes subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, then ninety
(90) days thereafter (or such longer period as any market stand-off agreement
may require), Securities exempt under Rule 701 may be resold by non-affiliates
in reliance on Rule 144, without compliance with any of the conditions set
forth in Rule 144, and Securities exempt under Rule 701 may be resold by
affiliates in reliance on Rule 144, subject to the satisfaction of the conditions
set forth in the clauses (1) through (4) immediately above and without
compliance with any specified holding period requirement.

 

The Participant further understands that in the
event all of the applicable requirements of Rule 701 or Rule 144 are not
satisfied, registration under the Securities Act, compliance with Regulation A
under the Securities Act, or some other registration exemption will be
required; and that, notwithstanding the fact that Rules 144 and 701 are not
exclusive, the Staff of the Securities and Exchange Commission has expressed
its opinion that a person proposing to sell private placement securities other
than in a registered offering and otherwise than pursuant to Rules 144 or 701
will have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk. The Participant understand that no assurances can be given that any
such other registration exemption will be available in such event.

 

The Participant further represents and warrants that
it comes within the category or categories marked below, and that for any
category marked, it can truthfully set forth the factual basis or reason the
investor comes within that category. The undersigned agrees to furnish any
additional information which the Company deems necessary in order to verify the
answers set forth below.

 

o            (a)           The Participant is an individual (not a partnership,
corporation, etc.) whose individual net worth, or joint net worth with his or
her spouse, presently exceeds US$1,000,000.

 

Explanation: In calculating net worth you may
include equity in personal property and real estate, including your principal residence,
cash, short-term investments, stock and securities. Equity in personal property
and real estate

 

B-2

 

should be based on the appraised fair market value
of such property less debt secured by such property.

 

o            (b)           The Participant is an individual (not a partnership,
corporation, etc.) who had an income in excess of US$200,000 in each of the two
most recent years, or joint income with his or her spouse in excess of
US$300,000 in each of those years (in each case including foreign income, tax
exempt income and full amount of capital gains and losses but excluding any
income of other family members and any unrealized capital appreciation) and has
a reasonable expectation of reaching the same income level in the current year.

o            (c)           The Participant is a director or executive officer
of the Company.

o            (d)           The Participant is a non-profit organization within
the meaning of Section 501(c)(3) of the Internal Revenue Code, corporation,
business trust, partnership or limited liability company, in each case not
formed for the specific purpose of acquiring the Securities and with total
assets in excess of US$5,000,000. If so, please describe entity:

o            (e)           The Participant is a trust with total assets in
excess of US$5,000,000, not formed for the specific purpose of acquiring the
Securities, where the purchase is directed by a “sophisticated person” as
defined in Rule 506(b)(2)(ii) of Regulation D under the Securities Act.

o            (f)            The Participant is a revocable grantor trust in
which each of the grantors is an individual who (i) has a net worth, either
alone or with his or her spouse, of more than $1,000,000 or (ii) had income in
excess of $200,000 during each of the previous two years and reasonably expects
to have income in excess of $200,000 during the current year, or joint income
with his or her spouse in excess of $300,000 during each of the previous two
years and reasonably expects to have joint income in excess of $300,000 during
the current year.

o            (g)           The Participant is an entity
(other than a trust) all the equity owners of which are “accredited investors”
within one or more of the above categories. If so, please describe entity: (If relying upon this category alone, each equity
owner must complete a separate copy of this questionnaire.)

o            (h)           The Participant is not within any of the categories
above and is therefore a non-accredited investor.

 

 

	
   

  	
  Signature of Participant:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
  ,

  	
   

  

 

B-3Exhibit 10.27

 

RESTRICTED STOCK AGREEMENT

PURSUANT TO THE

AMENDED AND RESTATED

NETSPEND HOLDINGS, INC.

2004 STOCK OPTION AND RESTRICTED STOCK PLAN

 

1.             General.  Pursuant to the Amended and Restated NetSpend
Holdings, Inc. 2004 Stock Option and Restricted Stock Plan (the “Plan”),
Restricted Stock shall be issued to [                      ]
(the “Participant”), effective as of April 20, 2010 (the “Grant
Date”) as hereinafter provided subject to certain restrictions
thereon.  The Restricted Stock shall be
issued to the Participant upon acceptance hereof by the Participant of the
conditions of this Restricted Stock Agreement. 
Capitalized terms used in this Restricted Stock Agreement and not
defined herein shall have the meanings ascribed to them in the Plan.  This Restricted Stock Agreement and the
Restricted Stock to which it relates are subject to the terms and conditions of
the Plan, a copy of which is attached hereto. 
If there is any conflict between the terms and conditions of the Plan
and this Restricted Stock Agreement, the terms and conditions of Plan, as
interpreted by the Committee, shall govern.

 

2.             Number of Shares of
Restricted Stock.  This
Restricted Stock Agreement shall represent the grant of [              ]
shares of Common Stock (the “Restricted Stock”).

 

3.             Vesting of Restricted Stock.  The Restricted Stock shall become vested as
follows:  The Restricted Stock shall
become vested upon the earliest to occur of: (i) February 24, 2013; (ii) the
Participant’s Termination of Service by the Company without Cause (but
excluding a termination due to Disability), provided that vesting will be
pro-rated based on the number of days from February 24, 2010 through the
date of the Termination of Service and the total 1,095-day vesting schedule
(e.g., if the Termination of Services occurs on the first anniversary of the
Grant Date, one-third (1/3 of the shares of Restricted Stock will be vested); (iii) the
date that is six months following an Initial Public Offering; and (iv) a
Change in Control; subject, in each case, to the Participant’s continued
service with the Company or an Affiliate through the applicable vesting date or
event.

 

4.             Participants’
Representations and Warranties.  The Participant shall complete the Investment
Representation Statement attached hereto as Exhibit A, which is a
condition to the Participant’s receipt of this Award of Restricted Stock.

 

5.             Transferability;
Certificates.

 

(a)           Prior to an Initial Public Offering, no Restricted Stock, may be
transferred or disposed of in any way by the Participant, except by will or by
the laws of descent and distribution or pursuant to this Restricted Stock
Agreement.  References to “Participant”
shall include persons who acquire any interest in Restricted Stock under Section 7
of this Restricted Stock Agreement.

 

 

(b)           A certificate evidencing the Restricted Stock shall be issued by the
Company in Participant’s name pursuant to which the Participant shall have
voting and dividend  rights unless
and until the shares of Restricted Stock are canceled or forfeited pursuant to
the provisions of this Restricted Stock Agreement.  Notwithstanding the foregoing, dividends
issued with respect to unvested shares of Restricted Stock shall be held in a
suspense account until the underlying shares vest, and shall be forfeited upon
the earliest of a Change in Control, the date that is six months from an
Initial Public Offering or the date the Participant’s Termination of Service if
the underlying shares of Restricted Stock have not vested as of such date.  The certificate shall bear a legend,
substantially in the following form, evidencing the nature of the Restricted
Stock, and the Company may cause the certificate to be delivered upon issuance
to the Board  or such other
depository as may be designated by the Company as a depository for safekeeping
until the cancellation or forfeiture occurs or the vesting period ends pursuant
to the terms of the Plan and this Restricted Stock Agreement.

 

THE
SALE AND ISSUANCE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.  THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE DISTRIBUTION THEREOF.  THESE SECURITIES MAY NOT BE OFFERED,
SOLD, PLEDGED, OR TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT UNDER
THE ACT IS IN EFFECT AS TO THESE SECURITIES AND SUCH OFFER, SALE, PLEDGE, OR
TRANSFER IS IN COMPLIANCE WITH APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION OR (II) THERE IS AN OPINION OF COUNSEL OR OTHER EVIDENCE, IN
EITHER CASE, SATISFACTORY TO THE CORPORATION, THAT AN EXEMPTION THEREFROM IS
AVAILABLE AND THAT SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH
THE ACT AND APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.

 

TRANSFER
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS
SPECIFIED IN AN AGREEMENT BETWEEN THE ISSUER AND CERTAIN OF ITS STOCKHOLDERS
AND AN AWARD AGREEMENT BETWEEN THE ISSUER AND A PARTICIPANT IN THE ISSUER’S
AMENDED AND RESTATED 2004 STOCK OPTION AND RESTRICTED STOCK PLAN.  NO TRANSFER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN

 

2

 

FULFILLED.  SUCH AGREEMENTS MAY BE INSPECTED AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.

 

(c)           Upon request of the Committee or its delegate, the Participant shall
deliver to the Company a stock power, endorsed in blank, relating to the
Restricted Stock with respect to which the vesting period has not expired.  Notwithstanding any other provisions of this
Restricted Stock Agreement, the issuance or delivery of any Restricted Stock
(whether subject to restrictions or unrestricted) may be postponed for such
period as may be required to comply with applicable requirements of any
national securities exchange or any requirements under any law or regulation
applicable to the issuance or delivery of such Restricted Stock.  The Company shall not be obligated to issue
or deliver any Stock if the issuance or delivery thereof shall constitute a
violation of any provision of any law or of any regulation of any governmental
authority or any national securities exchange.

 

(d)           IPO Lock-Up and Company Repurchase Rights.  For the avoidance of doubt,
Sections 9(e) of the Plan (Company Repurchase Right) and Section 12
of the Plan (IPO Lock-Up) apply to the shares of Restricted Stock.

 

(e)           Prohibited Transfers.  Notwithstanding any provisions in this
Restricted Stock Agreement to the contrary, all shares of Restricted Stock
shall be subject to the transfer restrictions set forth in Section 9(f) of
the Plan.  If any purported Transfer is
made or attempted contrary to the provisions of this Restricted Stock
Agreement, such purported Transfer shall be void ab initio; the Company, and its stockholders shall have,
in addition to any other legal or equitable remedies which they may have, the
right to enforce the provisions of this Restricted Stock Agreement by actions
for specific performance (to the extent permitted by law); and the Company
shall have the right to refuse to recognize any Transferee as one of its
stockholders for any purpose.  For the
avoidance of doubt, the Participant shall not Transfer any shares of Restricted
Stock that have not vested pursuant to Section 3 hereof.

 

6.             Mandatory Participation in
Sale of the Company.

 

(a)           Sale of the Company and/or Its Subsidiaries.

 

(i)            Conditions.  So long as Oak continues to hold at least a
majority of the Common Stock held by it on the effective date of the Plan, if
Oak determines to pursue the sale of the business of the Company and/or its
Subsidiaries to a third party that is not (i) an Affiliate of Oak or (ii) a
Person in which Oak or an Affiliate of Oak holds a direct or indirect equity
interest (other than a ownership interest of less than 5% of the outstanding
capital stock of a public company) or any other material interest (as a
creditor or otherwise) (a “Third Party Purchaser”) in a bona fide arms’
length transaction (whether by way of a merger, consolidation, sale of all or
substantially all of its assets, sale of outstanding capital stock or
otherwise) (an “Approved Sale”), then, subject to the provisions of
subsection (b) of this Section 6:

 

(A)          the Participant shall, subject to the conditions set forth in subsection
(c), consent to, vote for, and raise no objections against, and waive
dissenters and appraisal rights (if any) with respect to, the Approved Sale,

 

3

 

(B)           if the Approved Sale is structured as a sale of stock, the Participant
will agree to sell and will be permitted to sell all of the shares of
Restricted Stock (other than those unvested shares of Restricted Stock that are
forfeited in connection with the Approved Sale) upon on the terms and
conditions approved by Oak, and

 

(C)           if the Approved Sale includes the sale, contribution, exchange,
redemption, cancellation or other disposition of Common Stock, the Participant
will sell, contribute, exchange, redeem, cancel or otherwise dispose of the
Restricted Stock on the terms and conditions approved by the Oak.

 

The
Participant will take all reasonably necessary and desirable actions to
consummate such Approved Sale, including, without limitation, the execution of
all agreements and other instruments and such other actions reasonably
necessary to effectuate the allocation and distribution of the aggregate
consideration upon the Approved Sale as set forth in subsection (b) below.

 

(b)           Approved Sale Obligations.  The obligations of the Participant with
respect to an Approved Sale are subject to the satisfaction of the conditions
that:

 

(i)            the
proceeds of the Approved Sale are applied in accordance with the Company’s
Certificate of Incorporation as in effect immediately prior to such Approved
Sale;

 

(ii)           each
holder of shares of capital stock of the Company shall receive the same
proportion of the aggregate consideration from such Approved Sale that such
holder would have received if such aggregate consideration had been distributed
by the Company in complete liquidation pursuant to the rights and preferences
set forth in the Company’s Certificate of Incorporation as in effect
immediately prior to such Approved Sale and no holder of any shares of capital
stock of the Company shall receive any consideration of any kind from the
purchaser or any of its Affiliates other than such proportionate consideration
(except in respect of such holder’s employment with the Company and other
matters personal to such holder);

 

(iii)          upon
the consummation of the Approved Sale, all of the holders of Common Stock will
receive the same form and amount of consideration per share of each such class
of Common Stock;

 

(iv)          if
any holder of Common Stock is given an option as to the form and amount of
consideration to be received, all holders of the same class or series of stock
will be given the same option;

 

(v)           the Participant shall not be required to make any representations or
warranties other than representations and warranties about the Company and its
business, operations, liabilities and the like that are required by all
Stockholders, in which case, the indemnification obligations of the Participant
with respect to any such representations and warranties provided for in this
clause (v) shall be limited to the Participant’s pro rata portion thereof
(based upon the share ownership of all Stockholders).

 

4

 

(c)           Definitions.

 

(i)            “Initial
Public Offering” means the first firm commitment underwritten public
offering for shares of Common Stock pursuant to an effective registration
statement under the Securities Act with aggregate gross proceeds of at least
$25,000,000.

 

(ii)           “Oak”
means Oak Investment Partners X, Limited Partnership and/or Oak X Affiliates
Fund, L.P.

 

(iii)          “Permitted
Transfer” shall mean any Transfer permitted under this Agreement or the
Plan.

 

(iv)          “Permitted
Transferee” shall mean any Transferee of a Participant permitted under this
Agreement or the Plan.

 

(v)           “Stockholder”
and “Stockholders” shall have the meaning set forth in the Preamble.

 

(vi)          “Transfer” means any direct or indirect transfer, donation, sale,
assignment, pledge, hypothecation, grant of a security interest in or other
disposal of all or any portion of a Security or of any rights thereunder.  “Transferred” means the accomplishment
of a Transfer, and “Transferee” means the recipient of a Transfer.

 

7.             Notices.  All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if (i) personally
delivered, (ii) sent by nationally-recognized overnight courier or (iii) sent
by registered or certified mail, postage prepaid, addressed as follows:

 

if
to the Participant, to the address set forth on the signature page hereto;
and

 

if
to the Company, to:

 

NetSpend
Holdings, Inc.

c/o
NetSpend Corporation

Austin
Centre

701
Brazos Street, 12th Floor

Austin,
TX  78701

Attention:  Chief Financial Officer

 

or
to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith.  Any such communication shall be deemed to
have been given (x) when delivered, if personally delivered, (y) on
the first Business Day (as hereinafter defined) after dispatch, if sent by
nationally-recognized overnight courier and (z) on the third Business Day
following the date on which the piece of mail containing such communication is
posted, if sent by mail.  As used herein,
“Business Day” means a day that is not a Saturday, Sunday or a day on which
banking institutions in the city to which the notice or communication is to be
sent are not required to be open.

 

5

 

8.             No Waiver.  No
waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other or subsequent breach or condition, whether of like or
different nature.

 

9.             Participant Undertaking.  The
Participant hereby agrees to take whatever additional actions and execute
whatever additional documents the Company may in its reasonable judgment deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on the Participant pursuant to the express
provisions of this Agreement.

 

10.           Successors and Assigns.  Except
as otherwise provided herein, this Agreement shall bind and inure to the
benefit of and be enforceable by the Participant and the Company and their
respective successors, assigns, heirs, representatives and estates, as the case
may be (including subsequent holders of shares of Restricted Stock); provided,
however, that the rights and obligations of the Participant under this
Agreement shall not be assignable except in connection with a Permitted
Transfer of shares of Restricted Stock hereunder (so long as the transferee
agrees in writing in advance to become bound by the terms and conditions
hereof).

 

11.           Modification of Rights.  The
rights of the Participant are subject to modification and termination in
certain events as provided in this Agreement and the Plan.

 

12.           Governing Law.

 

(a)           This
Agreement shall be deemed to be a contract made under, and shall be construed
in accordance with, the laws of the State of Delaware, without giving effect to
conflict of laws principles thereof.

 

(b)           Each
of the parties hereto hereby irrevocably and unconditionally submits, for
himself or herself and his or her property, to the nonexclusive jurisdiction of
any Delaware State court or any federal court of the United States of America
sitting in the State of Delaware, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such Delaware
State court or, to the extent permitted by law, in any such federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

 

(c)           Each
of the parties hereto irrevocably and unconditionally waives, to the fullest
extent that he or she may legally and effectively do so, any objection that he
or she may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to the Agreement in any Delaware state or
federal court sitting in the State of Delaware. 
Each of the parties hereto irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

 

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

 

6

 

14.           Entire Agreement.  This Agreement, the Plan and the
Investment Representation Statement, constitute the entire agreement between
the parties with respect to the subject matter hereof, and supersede all
previously written or oral negotiations, commitments, representations and
agreements with respect thereto.

 

15.           Withholding.  The Participant shall pay to the Company, or
make arrangements satisfactory to the Company, regarding the payment of any
Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to the Restricted Stock upon vesting. Certificates shall
not be delivered to the Participant, and the Restricted Stock shall be
forfeited, unless the Participant has made arrangements satisfactory to the
Committee to satisfy tax-withholding obligations.  The Participant may, subject to the Committee’s
prior approval, authorize the Company to withhold a portion of the shares of
Restricted Stock that would otherwise be issued to the Participant upon the
lapse of the applicable vesting restrictions to satisfy such withholding
obligations (up to the minimum statutorily required withholding obligations).

 

16.           83(b) Election.  The Participant shall deliver to the Company
a copy of any election filed by the Participant with the Internal Revenue
Service under Section 83(b) of the Code within 30 days of the Grant
Date.

 

17.           WAIVER OF JURY TRIAL.  NO PARTY TO THIS 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 AGREEMENT. 
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.

 

7

 

IN
WITNESS WHEREOF, the parties have executed this Restricted Stock Agreement as
of the Grant Date.

 

	
   

  	
  NETSPEND
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  State
  of Residence:

  	
   

  
				

 

One of the following two must be
fully executed.

 

Acknowledgment
and Agreement of Spouse

 

The
undersigned spouse of the Participant acknowledges that he or she has read this
agreement and agrees to be bound thereby to the extent that the Participant has
executed such document.

 

 

	
   

  	
   

  
	
  Name:

  	
   

  

 

 

Declaration
of Unmarried Status

 

I,
                                  ,
hereby declare that I am not married as of the date hereof.

 

	
   

  	
   

  
	
  Name:

  	
   

  

 

8

 

EXHIBIT A

 

INVESTMENT REPRESENTATION STATEMENT

 

	
  PARTICIPANT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY

  	
  :

  	
  NetSpend
  Holdings, Inc.

  
	
   

  	
   

  	
   

  
	
  SECURITY

  	
  :

  	
  Class A
  Common Stock

  
	
   

  	
   

  	
   

  
	
  AMOUNT

  	
  :

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE

  	
  :

  	
   

  
				

 

In
connection with the acquisition of the above-listed Securities, the undersigned
Participant represents to the Company the following:

 

The Participant is aware
of the Company’s business affairs and financial condition and has acquired
sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the Securities.  The
Participant is acquiring these Securities for investment for the Participant’s
own account only and not with a view to, or for resale in connection with, a “distribution”
thereof within the meaning of the Securities Act.

 

The Participant
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Participant’s
investment intent as expressed herein. 
In this connection, the Participant understands that, in the view of the
Securities and Exchange Commission, the statutory basis for such exemption may
be unavailable if the Participant’s representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future. 
The Participant further understands that the Securities must be held
indefinitely unless they are subsequently registered under the Securities Act
or an exemption from such registration is available.  The Participant further acknowledges and
understands that the Company is under no obligation to register the
Securities.  The Participant understands
that the certificate evidencing the Securities will be imprinted with a legend
which prohibits the transfer of the Securities unless they are registered or
such registration is not required in the opinion of counsel satisfactory to the
Company and other legends required under the applicable state or federal
securities laws.

 

The Participant is
familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited
public resale of “restricted securities” acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions.

 

In
the event that the Company does not become subject to the requirements of Section 13
or 15(d) of the Exchange Act, then the Securities may be resold in certain
limited circumstances

 

 

subject
to the provisions of Rule 144, which requires the resale to occur not less
than one year after the later of the date the Securities were sold by the
Company or the date the Securities were sold by an affiliate of the Company,
within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate only, the satisfaction of the following conditions: (1) the
resale being made through a broker in an unsolicited “broker’s transaction,” in
transactions directly with a market maker (as said term is defined under the
Exchange Act) or in “riskless principal transactions” (as said term is defined
in the Note to Rule 144(f)(1)); (2) the amount of Securities being
sold during any three month period not exceeding the limitations specified in Rule 144(e);
(3) the availability of certain public information about the Company; and (4) the
timely filing of a Form 144, if applicable.

 

In the event the Company
becomes subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, then ninety (90) days thereafter (or such longer period as
any market stand-off agreement may require), Securities exempt under Rule 701
may be resold by non-affiliates in reliance on Rule 144, without
compliance with any of the conditions set forth in Rule 144, and
Securities exempt under Rule 701 may be resold by affiliates in reliance
on Rule 144, subject to the satisfaction of the conditions set forth in
the clauses (1) through (4) immediately above and without compliance
with any specified holding period requirement.

 

The Participant further
understands that in the event all of the applicable requirements of Rule 701
or Rule 144 are not satisfied, registration under the Securities Act,
compliance with Regulation A under the Securities Act, or some other
registration exemption will be required; and that, notwithstanding the fact
that Rules 144 and 701 are not exclusive, the Staff of the Securities and
Exchange Commission has expressed its opinion that a person proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rules 144 or 701 will have a substantial burden of proof
in establishing that an exemption from registration is available for such
offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.  The Participant understands that no
assurances can be given that any such other registration exemption will be
available in such event.

 

The Participant further
represents and warrants that it comes within the category or categories marked
below, and that for any category marked, it can truthfully set forth the
factual basis or reason the investor comes within that category.  The undersigned agrees to furnish any
additional information which the Company deems necessary in order to verify the
answers set forth below.

 

o            (a)           The Participant is an
individual (not a partnership, corporation, etc.) whose individual net
worth, or joint net worth with his or her spouse, presently exceeds
US$1,000,000.

 

Explanation:  In calculating net worth you may include
equity in personal property and real estate, including your principal
residence, cash, short-term investments, stock and securities.  Equity in personal property and real estate
should be based on the appraised fair market value of such property less debt
secured by such property.

 

2

 

o            (b)           The Participant is an
individual (not a partnership, corporation, etc.) who had an income in excess
of US$200,000 in each of the two most recent years, or joint income with his or
her spouse in excess of US$300,000 in each of those years (in each case
including foreign income, tax exempt income and full amount of capital gains
and losses but excluding any income of other family members and any unrealized
capital appreciation) and has a reasonable expectation of reaching the same
income level in the current year.

 

o            (c)           The Participant is a
director or executive officer of the Company.

 

o            (d)           The Participant is a
non-profit organization within the meaning of Section 501(c)(3) of
the Internal Revenue Code, corporation, business trust, partnership or limited
liability company, in each case not formed for the specific purpose of
acquiring the Securities and with total assets in excess of US$5,000,000.  If so, please describe entity:

 

o            (e)           The Participant is a trust
with total assets in excess of US$5,000,000, not formed for the specific
purpose of acquiring the Securities, where the purchase is directed by a “sophisticated
person” as defined in Rule 506(b)(2)(ii) of Regulation D under the
Securities Act.

 

o            (f)            The Participant is a
revocable grantor trust in which each of the grantors is an individual who (i) has
a net worth, either alone or with his or her spouse, of more than $1,000,000 or
(ii) had income in excess of $200,000 during each of the previous two
years and reasonably expects to have income in excess of $200,000 during the
current year, or joint income with his or her spouse in excess of $300,000
during each of the previous two years and reasonably expects to have joint
income in excess of $300,000 during the current year.

 

o            (g)           The Participant is an entity
(other than a trust) all the equity owners of which are “accredited investors”
within one or more of the above categories. 
If so, please describe entity:  (If relying upon this category alone, each equity owner must complete a
separate copy of this questionnaire.)

 

o            (h)           The Participant is not
within any of the categories above and is therefore a non-accredited investor.

 

	
   

  	
  Signature
  of Participant:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:                                     ,

  

 

3

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