Stored Value Product Agreement between Adaptive Marketing LLC and NBO Systems, Inc

Exhibit 10.22

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF THIS AGREEMENT. THE REDACTED PROVISIONS ARE INDICATED BY THREE ASTERISKS ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Stored Value Product Agreement between

Adaptive Marketing LLC

and

NBO Systems, Inc.

THIS AGREEMENT, dated as of November 19, 2004 (the "Effective Date"), is by and between Adaptive Marketing LLC , a Delaware limited liability company ("Adaptive"), with offices located at 680 Washington Boulevard, 11 ^th Floor, Stamford, Connecticut 06901, and NBO Systems, Inc. ("Vendor"), with offices located at 3676 W. California Avenue, Building D, Salt Lake City, Utah 84104. Adaptive and Vendor may be referred to hereinafter together as the "Parties" and individually as a "Party".

WHEREAS, Vendor is in the business of developing, marketing, owning and operating remote distribution, fulfillment and processing systems for stored value cards, reward/incentive/promotional programs, Gift Cards, gift certificates, gift rights, vouchers, and other instruments (collectively "Stored Value Products" or "SVPs") allowing the giving of a right to receive a credit toward the purchase of merchandise or services.

WHEREAS, Adaptive designs and markets various membership programs that offer rebates and/or other benefits ("Programs") to certain Program participants ("Members");

WHEREAS, Adaptive wishes to offer to certain of its Members the ability to purchase from Adaptive the SVPs and receive a commission for a portion of the purchase price of the SVPs (the "Benefit"); and

WHEREAS, Vendor wishes to provide Adaptive the ability to purchase Vendor SVPs under the financial terms identified herein, for use by Members pursuant to this Agreement;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. SVP Cards.

(a) During the Term (as hereinafter defined) and as provided herein, Vendor agrees to sell to Adaptive, and Adaptive agrees to purchase SVPs from Vendor in those denominations and under such terms as set forth in Exhibit A , annexed hereto, which is incorporated by reference herein and made a part hereof.

(b) Adaptive will submit SVP purchase orders to Vendor in the minimum amounts in accordance with Exhibit A, Item 1 . Inactive SVP Cards will be shipped from Vendor via trackable ground delivery method to Adaptive at Vendor's sole expense within three (3) business days of the date Adaptive submits such purchase order in accordance with Exhibit A attached to this Agreement. In the event that Adaptive requires a rush shipment of SVPs, such SVPs will be shipped via the common carrier of Adaptive's choice, and at Adaptive's expense. Adaptive accepts sole and full responsibility, financially and otherwise, for all inactive SVPs once received via a trackable method from Vendor. Adaptive shall use all reasonable efforts to secure inactive SVP inventory. For the purposes of this Agreement, an "inactive" SVP shall be a stored value card pre-denominated with a redemption number, but without a present ability to use or redeem the SVP until such time that Adaptive contacts Vendor and authorizes Vendor to activate a pre-determined range of SVP numbers. At such time, said range of then activated SVP Cards will be ready for immediate Member use, subject to receipt of good funds as specified in paragraph 1.d. below.

(c) Vendor will use its best efforts to supply Adaptive with such specific products, services and pricing, which will differ on case-by-case basis, as Adaptive may require from time to time. Vendor reserves the right to change or modify its products or services as needed or

mandated without prior approval from Adaptive, unless such change or modification affects the pricing particular to products or services provided to Adaptive, as defined by the applicable Exhibit to this Agreement. Such product or service changes or modifications requiring pricing changes shall be agreed upon by the Parties prior to implementation by Vendor, and shall be adopted by Amendment to the applicable Exhibit in this Agreement.

(d) Adaptive shall submit a written request for SVP activation, which may be transmitted to Vendor electronically by email or fax. Along with said request, Adaptive shall make payment to Vendor via ACH or wire transfer according to the terms and conditions identified in Exhibit A and 1(g) below.

(e) Adaptive agrees that the pricing contained in Exhibit A is based upon a minimum annual purchase of [* * *] SVPs, based on the Effective Date defined above. Minimum quantity per order for inactive SVPs shall be [* * *] SVPs. In the event that Adaptive does not meet the minimum annual purchase requirement upon the first anniversary of the Effective Date of this Agreement, Vendor's only recourse shall be: (a) to cancel this Agreement upon ninety (90) days' written notice and retain all earned but unpaid Adaptive revenue sharing; or (b) to reserve the right to renegotiate the financial terms in Exhibit A to reflect actual Adaptive SVP purchase volume on a going forward basis.

(f) Vendor agrees to allow Adaptive to create and implement one (1) private labeled SVP design, at no cost to Adaptive, pursuant to the terms set forth in the attached Exhibit A . Additional private-label SVPs will be created and implemented by Vendor at a minimum cost to Adaptive of [* * *] . Complex custom design costs may exceed [* * *] . Said costs will be approved by both Parties in writing before a production order is placed by Vendor for said custom SVP design.

(g) Vendor acknowledges and agrees that Adaptive may: (i) resell the SVPs to Members at a discounted rate off the face value of each SVP, which discounted rate shall be determined by Adaptive in its sole discretion; (ii) resell the SVPs to Members at face value of each SVP and then, at the end of the month, credit/rebate a portion (to be determined by Adaptive in its sole discretion) of the SVPs face value back to the Members' account used to purchase the SVP; (iii) limit the number of SVPs each Member may purchase from Adaptive during a membership year; (iv) give the SVPs to Members free of charge. In all cases listed herein, Adaptive shall ensure Vendor receives full payment in good funds via ACH or wire transfer for the full face value of all SVPs sold or distributed to Members by Adaptive on the same day SVPs are sold or distributed to Members. If full payment is not received within 24 hours of distribution or sale, Vender reserves the sole right to de-activate any/all SVPs sold or distributed for which full payment has not been received.

(h) SVPs shall be in the form and of materials specified by Vendor and Vendor's associated processing partners as described in Exhibit A . All SVPs issued will include the Terms and Conditions document that apply to use of that specific SVP. SVPs may be used in whole or in part for purchasing merchandise and/or services up to the amount of the initial value loaded, or the amount of available balance remaining on the SVP at that time, provided a Merchant follows the redemption procedures set forth by Vendor and/or the issuing bank/association. Vendor guarantees payment to such participating Merchant in accordance with the terms of this Agreement. Such redemption procedures shall be governed by processor, issuer and association regulations. Expiration terms and balance inquiry fees are defined in Exhibit A .

(i) SVPs issued per the terms of this Agreement can be used to purchase merchandise or services from any participating merchant applicable to the related SVP issuing bank/association. Neither Adaptive, nor any third party represented by Adaptive, shall have

a financial obligation under the SVP Program to make any payments to merchants. Vendor, issuing bank/association and Vendor's SVP Program financial partner shall each retain the obligation to pay to appropriate participating merchants all or a portion of the purchase price of merchandise or services, depending upon the amount of the purchase made and the balance of available funds to be deducted from the SVP balance remaining at time of purchase. All SVPs issued or distributed by Adaptive, or a third party represented by Adaptive, shall include the Terms and Conditions document containing some or all of the following language, or language similar thereto, which is incorporated into this contract by reference:

"The Terms and Conditions are a contract between the holder, Vendor, the processing network and Adaptive. When presented to a participating merchant for the purchase of merchandise and/or services, Vendor has the obligation to pay the merchant all or part of the purchase price, to the extent of the remaining value of the SVP. The remaining value is equal to the initial value loaded on the SVP, less any previously used amounts, less any fees or charges deducted from the SVP balance by Vendor as detailed in the Terms and Conditions accompanying the SVP at time of issuance".

The following disclosures shall be prominently printed/displayed on the SVP and/or the Terms and Conditions provided with each SVP issued:

·          SVP is not redeemable for cash.

·          Subject to Expiration except where prohibited by law.

·          For use at all participating stores that display the applicable association/ processing network logo.

(k) in addition to SVPs, Vendor may provide to Members such special offers or value-added offers as the Parties may agree in writing from time to time.

(I) Vendor shall use best efforts to provide Members with high quality, courteous service.

2. Creative Materials. Adaptive shall, at its sole expense, design and print marketing materials used to communicate the availability of the Benefit to Members. Adaptive shall be responsible for its own sales, marketing, and promotional activities. Adaptive agrees to obtain Vendor' prior written approval, subject to issuing bank/association network approval, on the creatives for Adaptive materials (including, without limitation, printed brochures, letters, inserts, scripts, e-mail communications, coupons and Program web sites) containing Vendor or issuing bank/association network trademarks, service marks, trade names and logos. Notwithstanding Vendor's approval, Adaptive shall remain solely responsible for such items and shall be solely responsible for sales, promotion, and marketing activities.

3. Term; Termination; Effect of Termination. Unless earlier terminated as provided in Section 1(e), this Agreement shall be for an initial term of one (1) year commencing on the Effective Date (the "initial Term"). Thereafter, this Agreement shall automatically renew for successive terms of one (1) year each (a "Renewal Term"; each Renewal Term, if any, together with the Initial Term, the "Term") from the end of the Initial Term and any subsequent Renewal Term. This Agreement may be terminated by either Party (a) immediately, upon notice, in the event of fraud, bankruptcy, insolvency, liquidation or willful misconduct by the other Party, or (b) upon thirty (30) days' notice to the other Party in the event of a material breach by the other party that is not cured within such ten (10) day period (unless such breach is not susceptible to cure, in which case there shall be no cure period). Vendor agrees to fulfill all Adaptive orders for the SVPs prior to the effective date of termination of this Agreement, unless Vendor has notified Adaptive of a breach on the part of Adaptive and such breach remains uncured at the time.

4. Obligations of Vendor:

(a) Vendor shall obtain and maintain all necessary licenses and insurance to provide the SVPs and Vendor Products.

(b) Certain depository and other bank accounts shall be established and managed by Vendor as described in Exhibit B annexed hereto, which is incorporated by reference herein and made a part hereof.

(c) Vendor shall provide the following support in order for Members to check account balances:

·          Through the web site http://www.myprepaidcard.info, which shall be maintained by Vendor, at no charge to Adaptive;

·          Through an automated voice response system, available 24 hours per day, 7 days per week and maintained by Vendor, at no charge to Adaptive, at a charge as specified in Exhibit A to the SVP holders account balance;

·          Through a live Adaptive service representative, to be available during normal business hours, at a charge as specified in Exhibit A to the SVP holders account balance.

(d) Vendor shall fulfill all Adaptive orders for SVPs as stated herein, provided Adaptive is not in breach of this Agreement.

(e) Vendor shall provide Adaptive with prompt, written notice of any and all substantial changes to the SVP, including, but not limited to the addition or termination of Participating Merchants.

5. Obligations of Adaptive.

(a) Adaptive shall obtain and maintain during the continuance of this Agreement, reasonable general liability insurance adequate for its business activities in connection with this Agreement.

(b) During the Term, Adaptive shall conduct its business in accordance with all applicable Federal, state and local laws and regulations. Adaptive shall obtain and keep in force all permits and licenses required for Adaptive to conduct its business activities in connection with this Agreement.

6. Press Release. Neither Party shall issue a press release revealing or discussing the existence or contents of this Agreement, or make any other public statement revealing or discussing the existence or contents of this Agreement, without first obtaining the prior written consent of the other Party.

7. Standard Terms and Conditions. The Parties hereto shall comply with and be bound by the terms and conditions set forth in Exhibit C annexed hereto, which is incorporated by reference herein and made a part hereof. In the event of any inconsistency between the terms of this agreement and the terms of the attached Exhibit C, the terms of the attached Exhibit C shall govern.

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed by its duly-authorized officer on the date first written above.

Exhibit A

1. SVPs, SVP Design. Vendor will provide Adaptive a privately branded SVP Program under the following conditions:

a. SVPs shall be of standard credit card size and thickness, shall include no more than four (4) colors on the face of the SVP and one (1) color on the back of the SVP; a magnetic strips and signature panel on the back, and must conform to applicable issuing bank/association network specifications.

b. An SVP carrier ("Carrier" or "Packaging") shall be supplied with each SVP and shall include the SVP Terms and Conditions document.

c. Adaptive has full responsibility, financial or otherwise, for all losses associated with lost, stolen, or fraudulent activity of SVPs and Carriers entrusted to Adaptive.

d. Additional privately branded SVPs will be created for Adaptive by Vendor at a minimum charge of [* * *] .

e. Customer acknowledges there is a production lead-time of approximately 90 days once SVPs are ordered.

f. Minimum SVP order or re-order is [* * *] .

2. Denominations. SVPs will be sold to Adaptive by Vendor in [* * *] denominations. No additional denominations are contemplated by the Agreement or this Exhibit A .

3. Service Fee. [* * *] .

4. Adaptive Commission. Adaptive will be entitled to a commission to be paid to Adaptive by Vendor, based upon [* * *] .

5. Payment of Commission by Vendor to Adaptive. Adaptive, [* * *] , as defined in Section 6(b) of this Exhibit A .

6. Expiration Terns and Balance Inquiry Fees

a. The SW expiration date is defined during the SVP production and encoding process and is indicated on the face of each SVP Card as a "Valid Thru" date. The SVP Card will expire on such "Valid Thru" date.

b. SVP Cards shall expire no more than six (6) months from the date of Account creation and shall not be extended. For the purposes of this Agreement, "Account creation" shall be defined as that time when Adaptive actually activates the SVPs. All costs associated with unused, expired and obsolete SVP Cards are the sole responsibility of Adaptive, based

upon orders placed by Adaptive. All unused, expired and/or obsolete SVP inventory in possession of Adaptive shall be returned to Vendor at Adaptive sole expense.