UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
Amendment No. 2
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of The
Securities Exchange Act of 1934
MYECHECK,
INC.
(Exact name of registrant as specified in
its charter)
| WYOMING |
|
20-1884354 |
| (State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
| 2600 E. BIDWELL STREET, STE 190 |
|
|
| FOLSOM, CA |
|
95630 |
| (Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code (844)
693-2432
Securities to be registered pursuant to Section 12(b) of the
Act:
| Title of each class |
|
Name of each exchange on which |
| to be so registered |
|
each class is to be registered |
| |
|
|
| NONE |
|
NONE |
| |
|
|
| |
|
|
Securities to be registered pursuant to Section 12(g) of the
Act:
| Common Stock, $0.00001 par value |
| |
| Preferred Stock, $0.00001 par value |
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated
filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ¨ |
Accelerated filer ¨ |
| Non-accelerated filer ¨ (Do not check if a smaller reporting company) |
Smaller reporting company x |
MyECheck, Inc.
FORM 10
Amendment No. 2
FORWARD LOOKING STATEMENTS
CERTAIN STATEMENTS IN THIS ANNUAL REPORT ON FORM 10, OR THE
"REPORT," ARE "FORWARD-LOOKING STATEMENTS." THESE FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO,
STATEMENTS ABOUT THE PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS OF MYECHECK, INC., A WYOMING CORPORATION AND OTHER STATEMENTS
CONTAINED IN THIS REPORT THAT ARE NOT HISTORICAL FACTS. FORWARD-LOOKING STATEMENTS IN THIS REPORT OR HEREAFTER INCLUDED IN OTHER
PUBLICLY AVAILABLE DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, OR THE "COMMISSION," REPORTS TO OUR SHAREHOLDERS
AND OTHER PUBLICLY AVAILABLE STATEMENTS ISSUED OR RELEASED BY US INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS
WHICH COULD CAUSE OUR ACTUAL RESULTS, PERFORMANCE (FINANCIAL OR OPERATING) OR ACHIEVEMENTS TO DIFFER FROM THE FUTURE RESULTS, PERFORMANCE
(FINANCIAL OR OPERATING) OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FUTURE RESULTS ARE BASED
UPON MANAGEMENT'S BEST ESTIMATES BASED UPON CURRENT CONDITIONS AND THE MOST RECENT RESULTS OF OPERATIONS. WHEN USED IN THIS REPORT,
THE WORDS "EXPECT," "ANTICIPATE," "INTEND," "PLAN," "BELIEVE," "SEEK,"
"ESTIMATE" AND SIMILAR EXPRESSIONS ARE GENERALLY INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, BECAUSE THESE FORWARD-LOOKING
STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. THERE ARE IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS, INCLUDING OUR PLANS, OBJECTIVES, EXPECTATIONS, INTENTIONS AND OTHER
FACTORS.
PART I
Item 1. Business
Business Summary
MyECheck is one of the pioneers and leaders of the electronic
check industry, and serves as a trusted advisor in the rapidly evolving landscape of consumerism in the payments industry. We
believe that MyECheck’s novel patented technology described in the Form 10 is evidence of MyECheck’s pioneering innovation
in the electronic check industry. Electronic checks are considered by many to be the fastest, safest and lowest cost payment method
in America, providing secure, low cost, same day payments from any checking account. MyECheck offers a variety of electronic check
services for almost any application including personal, business and government payments.
Focused on defining real time secure mobile payments, MyECheck
now offers a suite of mobile payment apps that can be downloaded onto any smart mobile device and used immediately with no special
hardware requirements. MyECheck’s merchant point-of-sale app can be downloaded and run from leading accounting software
enabling mobile commerce for anyone, anywhere, anytime.
MyECheck is a leading mobile payment system licensor and develops
custom mobile payment solutions for corporations and payment service providers.
Founded in 2004 the day Check 21 legislation became effective,
MyECheck has evolved the payments landscape by creating the platforms that enable real-time mobile and online payments for all
applications and users.
Summary History of MyECheck
MyECheck started processing transactions on version one of its
software platform in July of 2005 and continued through March of 2006, after which it ceased processing in order to further develop
and refine its service offerings.
During the period from March of 2006 through September 2007,
MyECheck redesigned and developed its software platform to better suit the demands of its prospective customers and to ensure the
accurate performance of the software.
MyECheck
had been sponsored by First Regional Bank, and successfully completed approval and check image file (ANSI X9.37) testing with the
Federal Reserve Bank in the second quarter of 2007. On January 29, 2010, the Company’s sponsoring bank, First Regional Bank,
was closed by the Federal Deposit Insurance Corporation (FDIC). The new bank acquiring the old bank from the FDIC obtained all
rights to accept or reject former contracts. The new bank elected to reject the Company’s agreement with the old bank. The
Company is in the process of moving its customers to one of its other processing banks, such as JP Morgan Chase and Bank of America.
While the Company does image cash letter deposits with JP Morgan Chase
and Bank of America, there is currently no direct contractual relationship between MyECheck and JP Morgan Chase or Bank of America.
The Company only makes deposits to their customer’s accounts.
MyECheck entered into a merger agreement in November 2007 with
Sekoya Holdings Ltd., a non-trading Nevada corporation in the process of developing an online payment system for use in the Chinese
online community. This agreement was amended on February 4, 2008, and became effective on March 14, 2008. Under the merger
agreement, shareholders of Sekoya at the time of the merger would own approximately 40% of the shares of the surviving company
and shareholders of MyECheck would own approximately 60% of the surviving company, with all parties being diluted by additional
financing to be completed following the Merger (excluding 2,000,000 shares held in escrow as remedies for breaches of the Merger
Agreement). Subsequent to the acquisition by MyECheck, Sekoya’s operations were phased out.
MyECheck filed a Registration Statement with the SEC in February,
2008, to have its securities traded on the OTC:BB exchange. The Company engaged Berman & Co., PA as their auditors and became
a fully reporting company in June, 2008. At that time, MyECheck commenced trading on the OTC:BB exchange. After the Company’s
sponsoring bank, First Regional Bank, shut down, MyECheck had very limited revenue and few prospects for capital. As a result,
the Company was unable to maintain the costs associated with being a fully reporting company. On October 5, 2012, the Company filed
Form 15 with the SEC to terminate its reporting obligations and has since been trading on the OTC:PK as a limited reporting company.
Revenue
Revenue is generated from transaction fees charged to companies
that contract with MyECheck to utilize the Company’s services. In addition, the Company also generates revenue from software
licensing and maintenance fees. The Company charges a flat fee per transaction that is relatively low in comparison to card interchange
rates plus fees. A transaction fee is charged per electronic check and per use of MyECheck’s fraud control tools. Fees for
fraud control vary according to the amount of fraud screening required per each merchant.
About Check 21
Check 21 was signed into law on October 28, 2003, and became
effective on October 28, 2004. Check 21 is designed to foster innovation in the payments system and to enhance its efficiency by
reducing some of the legal impediments to check truncation. The law facilitates check truncation and permits banks to truncate
original checks and to process check information electronically. As a result, the check clearing system has transformed from a
paper exchange system to an electronic exchange system, whereby financial institutions can now handle and process all checks electronically,
increasing efficiencies and reducing time and costs.
MyECheck leverages Check 21 by utilizing the national electronic
check clearing networks that were created as a result of the law. The Company uses the national electronic check clearing system
to process and clear the fully electronic checks that it creates.
The Company is aware of other companies that have emerged as
a result of the opportunities created by Check 21. To date these companies have not been direct competitors to MyECheck. Primarily
because most companies engaged in the Check 21 related industries have been focused on imaging, formatting and clearing checks
that originated as paper items while MyECheck has focused on the processing of the fully electronic checks..
MyECheck believes that competition in the fully electronic check
space will increase in the near future as changes to Reg CC, the law that defines payment instruments, further enables fully electronic
checks.
The Services of MyECheck
MyECheck offers comprehensive, easily implemented solutions
that include real-time check authorization, payment guarantee, check image creation and clearing and complete online reporting.
Set out below are services that MyECheck provides or intends to provide as part of its business plan.
Electronic Check Service
Internet merchants and other companies wishing to accept payments
online or over a telephone (“Merchants”) can directly integrate with MyECheck’s payment engine. Payer check data
is collected by the Merchant either at the Merchant’s website or over the telephone, and is transmitted in real-time to MyECheck
for processing.
MyECheck uses patented technology, US Patent 7389913 –
Method and apparatus for online check processing, to generate electronic checks in accordance with the Federal Reserve Check 21
specification. Electronic checks are formatted and are transmitted in near real-time to banks, or more commonly directly to the
Federal Reserve for clearing on behalf of MyECheck’s partner bank(s).
MyECheck believes that its electronic check service overcomes
many of the shortcomings of Automated Clearing House (“ACH”) based e-check systems and cost effectively provides higher
transaction success rates, faster funds clearing and fewer returned items.
MyECheck believes that it is positioned to capture a significant
market share of the payments industry with a viable alternative payment method for mobile and online payments.
Check Authorization Service
MyECheck offers Check Authorization Service that enables merchants
to verify consumer provided data, check the status of the customer’s bank account, provide evidence that the consumer has
authorized the check and predict the likelihood of a check being returned unpaid. Businesses that accept payments online through
MyECheck utilize this service to provide greater assurance that the check will clear. Transactions can be approved or declined
based upon the results of the Check Authorization Service.
Check Guarantee Service
MyECheck co-markets with Giact Systems, Inc., Check Guarantee
Provider, to offer Check Guarantee Services. On June 11, 2014, the Company entered into a Services Agreement with Giact Systems,
Inc. for a term of one (1) year with automatic renewal for like periods unless either Party gives a 30 day written notice of its
intent not to renew. See Exhibit 10.18.
The Check Guarantee Provider warranties all approved checks
and reimburses the Payee for financial losses incurred as a result of returned checks. The Check Guarantee Provider buys the returned
checks that have been warranted from merchants for the full face value of the returned checks. MyECheck merchants utilize Check
Guarantee Service so that they can ship products or provide services immediately without having to wait for the check to clear.
The Check Guarantee Service also eliminates the need for Merchants
to collect on returned checks from their customers. The Check Guarantee Providers are independent third parties whose services
are offered to Merchants separately from the MyECheck service. MyECheck is not compensated by, and does not compensate, Check Guarantee
Providers. MyECheck may in the future enter into compensated arrangements with Check Guarantee Providers.
Merchant Reporting
Through our Merchant interface, MyECheck provides the following
reports:
| · | Detailed
transaction history |
| · | MyECheck
fees and settlement statements |
In addition to the above reports, pertinent information is returned
at the end of each transaction to facilitate reporting on the Merchant side.
Mobile Payment Apps
On June 29, 2015, MyECheck uploaded its Mobile Commerce
Platform “e” to Google and Apple app stores for approval. Once approved for Apple and Android devices, the e
Mobile apps would be available to a limited group for live testing. On August 28th, 2015, after a period of beta testing,
the apps were made available to the general public for free download on Google Play and in the Apple App Store on iTunes. As
of the date of this filing we have had five hundred and sixty free Google Play downloads and five hundred and fifty free IOS downloads.
The e Mobile commerce platform is software only, and can be adopted by simply downloading the app and registering, with no special
hardware requirements or costs. It works with all Apple and Android devices. MyECheck’s innovative e Mobile Commerce
System enables businesses to accept real-time, guaranteed payments from their customers via mobile devices. Merchants pay only
$0.25 per transaction or less with no other fees, no interchange or discount rates, potentially saving businesses 2% to 5% of
sales in payment processing and related costs. The rewards program allows merchants to offer discounts to their customers
to adopt and use the system, and build customer loyalty.
The e Mobile business app generates QR (quick response)
code invoices that can be displayed on a screen or printed on a bill. To pay an invoice, the customer simply scans the QR
code with their device authorizing payment from their e Wallet. Customers load funds onto their e Wallet from their bank
account using MyECheck’s patented Electronic Check method.
Licensed Remote Payment Processing
MyECheck licenses its custom payment software solutions to payment
processors, banks and enterprise clients.
G-Pay
MyECheck’s G-Pay service is a fully electronic payment
service for government entities. Management is unaware of any other similar system on the market that has the same capabilities
as G-Pay. The G-Pay solution enables electronic check payments from any government account, allowing government entities to transfer
money fully electronically, eliminating paper checks and wire transfers from their processes. G-Pay is designed to save time and
money for any government entity.
Emerging Growth Company
We
are an "emerging growth company" as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as
such, have elected to comply with certain reduced public company reporting requirements for this registration statement and future
filings.
As a company with less than $1.0 billion
in revenue during our most recently completed fiscal year, we qualify as an "emerging growth company" as defined in Section 2(a)
of the Securities Act of 1933, as amended, which we refer to as the Securities Act, as modified by the Jumpstart Our Business Startups
Act of 2012, or the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements
that are otherwise applicable, in general, to public companies that are not emerging growth companies. These provisions include:
| · | Reduced disclosure about our executive
compensation arrangements; |
| · | No non-binding shareholder advisory votes
on executive compensation or golden parachute arrangements; |
| · | Exemption from the auditor attestation
requirement in the assessment of our internal control over financial reporting; and |
| · | Reduced disclosure of financial information
in this registration statement, including two years of audited financial information and two years of selected financial information. |
We may take advantage of these exemptions
for up to five years or such earlier time that we are no longer an emerging growth company.
We would cease to be an emerging growth
company if we have more than $1.0 billion in annual revenues as of the end of a fiscal year, if we are deemed to be a large-accelerated
filer under the rules of the Securities and Exchange Commission, or if we issue more than $1.0 billion of non-convertible
debt over a three-year-period.
The JOBS Act permits an emerging growth
company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public
companies. We are choosing to "opt out" of this provision.
Company Competition
MyECheck’s competition includes other payment methods
such as credit and debit card processing systems, Automated Clearing House (ACH) processing systems, paper checks and even cash,
along with other electronic check processing systems.
A stream of alternative payment brands have emerged, some of
which have experienced tremendous growth. However, virtually all of these payment services require consumers to pay using either
a payment card or ACH-based e-Checks, and offer nothing substantially new with respect to a payment method.
Although there are a very large number of companies selling
credit card services called Independent Sales Organizations (ISOs), virtually none of these sell electronic check services.
The Company has many competitive advantages over ACH based e-Checks.
Since MyECheck does not use the ACH network, transactions are not subject to National Automated Clearing House Association (“NACHA”)
regulation, including their rules, fees and fines. Electronic checks are governed by Uniform Commercial Code and federal Check
21 regulations which are more favorable to the Payee than NACHA rules. Electronic checks work with more bank accounts than ACH
payments, resulting in fewer items being returned unpaid. Electronic checks also clear at least a day faster than ACH items. However,
ACH processing systems are more well-established within the marketplace, and the industry has invested considerable resources in
ACH processing systems. ACH rules make it easier for a payer to reverse a transaction after it clears affording more convenient
fraud protection for consumers but a much weaker fraud protection for the recipient of the payment.
Other fully electronic check services providers have merged
and some are successful within the marketplace. These companies pose the most direct competitive threat to MyECheck. Some of these
companies include CheckAlt, Check21.com and The ECheck to name a few. MyECheck believes that its rights to US Patent 7389913 will
help stave off some direct competition. The Company recently filed a patent infringement lawsuit against a direct competitor, Zipmark.
(See Exhibit 10.12)
MyECheck provides access to more US consumers than any other
payment method because it can be used to clear checks from 100% of US checking accounts, including business accounts and accounts
where ACH does not work. MyECheck facilitates fast funds clearing for the Merchant, providing same day or next day availability
of funds to the merchant’s bank. MyECheck does not charge interchange fees therefore it has a much lower cost than card processing
systems.
E-commerce & The Mobile Payments Industry
The payments industry is going mobile, and the mobile payments
industry is exploding with growth. Companies such as Apple, Google, Microsoft, Amazon and Starbucks, all companies not known for
being payments companies, have entered the mobile payments arena. The industry could be the largest in the world, with trillions
of dollars in processing at stake.
The coming payment systems will allow people to spend at retail
locations without having to carry a traditional wallet with cash, cards and paper checks. The mobile device will replace the leather
wallet, and transactions will originate from mobile devices, including consumer to business payments, business-to-business (B2B)
and government payments.
MyECheck believes its product mix to be the optimum offering
to engage in the mobile payments industry. The Company’s fully electronic check service clears checks the same day from any
checking account, therefore MyECheck believes that the electronic check is the fastest and safest method of loading money onto
mobile wallets at a low cost. The Company’s mobile app systems can be adopted by anyone, anywhere, and at any time enabling
low cost, secure mobile commerce without any barriers to adoption such as swipe devices or NFC hardware.
Although many new payment schemes exist today with many more
on the horizon, the vast majority of these systems continue to be based upon the two fundamental payment methods, credit and debit.
Successful payment solutions such as PayPal offer a slight twist
to the traditional payment mechanism of credit cards. PayPal for example, offers consumer payment options consisting of either
credit cards or bank debit through the ACH network.
Other e-check (online electronic check) solutions are based
upon the ACH (automated clearing house) system. ACH transactions are bank electronic funds transfers whereby the consumer’s
bank account is debited and the recipients account is credited. ACH transactions work reasonably well in most instances, however
the system does suffer from some shortcomings which have impacted adoption.
The ACH system was designed in the 1970s and has experienced
multiple upgrades to add new capabilities. As a payment backbone, the ACH network is a robust and reliable system, and the NACHA
rules provide a regulatory framework that protects the parties involved in transactions on the system. The marketplace is familiar
and somewhat comfortable with ACH which causes a resistance to change the established process.
ACH transactions are governed by NACHA, (the National Automated
Clearing House Association), which imposes a substantial number of rules and regulations upon the transactions and their users.
Compliance with the many, and continuously updating, NACHA operating rules can be complicated for Merchants. The rules afford the
ability for payers to easily reverse a transaction, if they believe it wasn’t authorized, providing an easy charge back for
the payer but leaving the merchant vulnerable to fraud.
ACH transactions take several days to clear through the system.
During the clearing period the recipient has no way to determine if the transaction is even going to clear or if it will result
in an administrative return. ACH has more than 60 reasons why a transaction can fail. Many times it is because the consumer’s
bank has chosen not to participate in ACH, or the subject account is an ineligible account type for ACH according to NACHA rules.
Checks in 2012, continue to be the number one non-cash payment
method in the US. This ACH activity is the primary market focus of MyECheck.
Federal Reserve Proposed New Rule, February 4, 2014
On February 4, 2014, the Board of Governors of the Federal Reserve
System took the final step before creating a new law that will define a new payment instrument called the “electronic check”.
Request for comment was made on the proposed rule through May, 2014.
The Federal Reserve Board proposes to include two new
defined terms, ‘‘electronic check’’ and ‘‘electronic returned check,’’ in
Regulation CC, and would define ‘‘electronic check’’ and ‘‘electronic returned
check’’ as (1) an electronic image of a check, or returned check, or electronic information related to a check,
or returned check, that a bank sends to a receiving bank pursuant to an agreement with the receiving bank, and (2) that
conforms with ANS X9.100-187, unless the Board determines that a different standard applies or the parties otherwise agree.
The Federal Reserve Board’s proposal included the following description of an electronic check:
“Electronically-created items are electronic
images that resemble images of the fronts and backs of paper checks but that were created electronically and not from, for example,
scanning a paper check in order to create the electronic image. Electronically-created items are also sometimes referred to as
‘‘electronic payment orders’’ or ‘‘EPOs.’’ For example, a corporate customer sending
payments might, rather than printing and mailing a paper check, electronically create an image that looks exactly like an image
of the corporate customer’s paper checks, and email the image to the payee. Alternatively, a consumer might use a smart-phone
application through which the consumer is able to fill in the payee and amount, and provide a signature, on the phone’s screen.
The application then electronically sends the image to the payee.”
The new rule is valuable to MyECheck because it provides a regulatory
framework for electronic checks and would enable banks to more easily adopt the technology and understand what the risks and liabilities
are. The rule defines who is responsible for the item throughout the clearing process. As of the date of the filing, the new law
has not been adopted.
MyECheck believes that US Patent 7389913 describes a method
for creating a new payment instrument that the Federal Reserve is naming “electronic check”. MyECheck has the exclusive
master license to US Patent 7389913 as described below.
US Patent 7389913 Method and apparatus for online check processing
On June 24, 2008, the Company entered into a Patent License
Agreement with MyECheck’s CEO, Edward R. Starrs (as Licensor) for a term of nineteen (19) years to use the invention described
in US Patent Number 7389913, Method and apparatus for online check processing. This license is relevant to the Company as MyECheck
is in the business of providing electronic check services to businesses, payment services providers, financial institutions and
other government entities. (See Exhibit 10.17, Patent License Agreement). The following is an excerpt from the Patent summarizing
the invention:
SUMMARY OF THE INVENTION
In general, in one
aspect, this specification describes a computer-implemented method for processing an online payment for an item. The method includes
receiving information from a user corresponding to the online payment for the item. The information from the user is received through
a graphical user interface, and includes an authorization to pay for the item using an electronic check. The method further includes
creating an electronic image of an authorized demand draft based on the authorization received from the user. The electronic image
of the authorized demand draft is created directly from the information provided by the user through the graphical user interface.
Particular implementations can include one or more
of the following features. Creating an electronic image of an authorized demand draft can include creating an electronic image
of an authorized demand draft that is compliant with the Check Clearing for the 21st Century Act (Check 21). The electronic image
of the authorized demand draft can be unsigned by the user. The method can further include transmitting the electronic image of
the authorized demand draft to a financial institution, and receiving funds from the financial institution based on the electronic
image of the authorized demand draft to provide payment for the item.
Creating an electronic image of an authorized demand
draft, transmitting the electronic image of the authorized demand draft to a financial institution, and receiving funds from the
financial institution based on the electronic image of the authorized demand draft can be performed substantially in real-time.
The method can further include performing one or more real-time verifications on the user prior to creating the electronic image
of the authorized demand draft.
A check processing system for processing an online
payment from a user, the online payment being for an item that is purchasable through a website of a merchant. Particular implementations
can include one or more of the following features. The item can comprise one of a physical product, a service, digital media, or
digital content. The financial institution can be one of a bank, savings and loan (S&L), credit union, or Federal Reserve.
Implementations
may provide one or more of the following advantages. In one implementation, a fully integrated online check processing system is
provided that functions much like credit card authorization and settlement, but is much more universally available to consumers
or other users.
Implementations of the present invention relates
generally to data processing, and more particularly to methods and apparatus for processing a bank instrument. Various modifications
to implementations and the generic principles and features described herein will be readily apparent to those skilled in the art.
Thus, the present invention is not intended to be limited to the implementations shown but is to be accorded the widest scope consistent
with the principles and features described herein.
MyECheck’s Mobile Product Strategy
MyECheck’s strongest competitive advantage as an electronic
payment platform is its exclusive ability to enable transfers from any checking account. MyECheck believes that electronic checks
clear faster, have fewer returns and are lower in cost than ACH e-Checks and card transactions. The benefits are substantial making
the MyECheck platform clearly superior in many ways for mobile payments.
MyECheck provides three types of mobile payment solutions
for different applications:
1) As a backend or wholesale processor to Mobile
Payment Service Providers (MPSP). These include payment processors, e-wallets, stored value, and large merchant proprietary payment
systems. The MPSP integrates with MyECheck in the traditional manner.
2) As a MPSP with a comprehensive solution for POS
purchases on mobile devices.
3) As a licensor of customized mobile payment solutions
MyECheck has developed and expects to launch new products in the coming months including an end-to-end turn-key mobile payments
solution that any business can easily implement remotely. The retail Point Of Sale system will include user apps for Apple and
Android devices, and a download merchant POS app that runs on Quickbooks accounting software. There are two mobile payment systems,
one has higher security and has been developed for regulated industries. The other has been developed for retail sales, however
the set-up and process flow is almost identical. The Merchant only requires an internet connected computer with Quickbooks and
a bank account, the User only requires an internet connected mobile device or tablet and a checking account.
The process flow for remote registration apps the regulated
industries system:
Step 1: Merchant downloads, installs and registers MyECheck
Merchant App
Step 2: User downloads and installs MyECheck User App
Step 3: User selects Merchant in User App Merchant Menu
Step 4: User enters Registration Data and submits to Merchant
App
Step 5: Merchant App validates Bank Data and Pre-Approves/Declines
User Account
Step 6: User presents ID at Merchant Location, Merchant compares
to Registration Data
Step 7: Merchant App displays QR code to User App containing
User Account Token
Step 8: At POS Merchant App displays QR code to User App containing
Invoice
Step 9: User App displays Transaction Detail and prompts authorization
Step 10: User authorizes payment by sending Token to Merchant
App
Step 11: Merchant App verifies User Bank Account and Approves/Declines
Transaction
Step 12: Merchant App sends receipt to User App
Step 13: MyECheck backs up transaction data at an independent
data warehouse.
With this uniquely broad range of capabilities, MyECheck can
serve almost any customer in any market either directly or through one of MyECheck’s licensees or MPSP partners. This model
also enables growth through leveraging partners’ existing customer base and sales and marketing resources.
Employees and Contractors
As of June 30, 2015, we employed seven (7) full-time employees.
We also use outside contractors on an as needed basis.
Leases
On July 1, 2014, MyECheck, leased
approximately 3700 square feet of Class A Office Space from Maidu Investment, LLC (“Maidu Investment”) at the office
development known as College Point Business Center, located at 2600 E. Bidwell Street in the City of Folsom, State of California
as its corporate headquarters and primary product development center. This is a 42 month full service lease expiring on December
31, 2017 with an average rent per month of $4,866. The rent increases annually by $0.05 per square foot. Both physical and electronic
security features are employed at this location.
On October 28, 2014, MyECheck amended its original lease agreement
with Maidu Investment, LLC (Maidu Investment) at the office development known as College Point Business Center, located at 2600
E. Bidwell Street in the City of Folsom, State of California, to include an expansion space defined as Suite 190. The lease term
on the expansion space is 42 months expiring on June 30, 2018 with an average combined rent per month of $10,998. MyECheck paid
an additional security deposit in the amount of $20,000, for a combined deposit amount of $52,812.
In addition, MyECheck entered into a secured networking co-location
lease with QTS Data Center. The term of this lease agreement is thirty nine (39) months, and the monthly lease payment is at $500.
MyECheck uses the services of QTS Data Center, located about 90 miles from San Francisco in seismically-neutral Sacramento. The
data center and the Folsom office are connected via a secure VPN, allowing the development staff to interact with the MyECheck
development, test, and production equipment.
On January 27, 2015, MyECheck entered into a copier equipment
lease with Caltronics Business Systems. The term of this lease agreement is thirty nine (39) months and the monthly lease payments
are $155, with a fair market value buyout at the end of the thirty nine month lease. (See Exhibit 10-22)
On March 1, 2015, Seergate, Ltd. (a recently
acquired subsidiary of the Company) entered into a sublease with YK. Multimedia, Ltd. renting one room within the offices of an
Executive Suite located on level 1 at “Gamla Building in Park” in Ra’anana, Israel. This lease is open ended
and can be terminated with a thirty day written notice of intent to vacate the premises at any time. The monthly rent is $900 U.S.
and is prepaid in increments of three months in advance. There was no deposit or guarantee required.
Regulation
Since MyECheck processes but does not conduct transactions,
and does not directly hold or transfer cash, we are not subject to direct federal, state or local regulations regarding money transfer.
We are also not subject to any regulation or law that applies to accessing or conducting Internet commerce. We are only subject
to regulations applicable to general business conduct. However, there are no assurances that MyECheck will not be subject to financial
regulations in the future.
Cost of Compliance with Environmental Regulation
MyECheck currently has no costs associated with compliance with
environmental regulations. However, there can be no assurances that MyECheck will not incur such costs in the future.
Software Development
In April 2006, MyECheck entered into an open ended software
development agreement with R Systems International Ltd., a software product development company. At December 31, 2007, MyECheck
no longer utilized these services. MyECheck also develops some of its software in-house and utilizes independent contractors. Per
the contractual agreements with the independent contractors, the Company owns all intellectual property created by the independent
contractors. We have architected the MyECheck ‘Engine’ to run on the rock-solid RHEL
(Red Hat Enterprise Linux) platform. Security and scalability
has been our priority from the beginning, resulting in a multi-threaded check engine that is capable of automatically scaling to
any load.
By taking a modular approach to systems design, we will avoid
being orphaned as new technologies emerge. This approach has served us well for the past 10 years, allowing us to improve our system
without a complete redesign. An example of this is in our service APIs. Our original web services were created using SOAP (Simple
Object Access Protocol). SOAP is a way for a program running in one operating system to communicate with a program with the same
or different type of operating system. Current methods “consume” our web services based upon REST (REpresentational
State Transfer). REST is a simple stateless architecture that generally runs over HTTP. REST is often used in mobile applications.
SOAP and REST both allow us to roll-out new technologies without orphaning our existing customers.
With the acquisition of GreenPay LLC., in August of 2014, MyECheck
has assumed primary responsibility for significantly improving the mobile payments platform. We believe this platform will greatly
extend MyECheck’s ability to leverage the ubiquity of smartphones and capitalize on the growth of mobile payments. We currently
have both Android and iOS apps in our product pipeline. We have avoided some mobile technologies that have inherent security blind
spots and embraced others that are more robust. We are creating products that will offer both complete security and ease of use.
Our web site (www.MyECheck.com) is not only a community outreach
and marketing tool, but has been securely designed as a merchant/user gateway to the MyECheck services. This gives our customers
a comprehensive, single point of access to all their merchant needs and reporting.
During the past four years, research and development costs associated
with the development of the software have been approximately $603,816.
MyECheck owns proprietary software and intellectual property,
and licenses patented technology from the Company founder Edward R. Starrs.
Business Partners
In 2008, we entered into an agreement with Forever Living Products
and Simplifile, the leading provider of electronic recording services. The agreement with Simplifile facilitates the MyECheck Electronic
Check solution in the Simplifile e-recording service. The Forever Living Products and Simplifile agreement remains in effect as
of the date of this filing.
In the second half of 2013 we signed independent licensing agreements
with InterPay (a related party) and Sierra Global, which will allow them to develop and sell their own payment solutions using
our technology.
During 2014 we are continuing to nurture existing and develop
new partner relationships. During the first quarter GreenPay and Itonis licensed our software to develop their own Check21 payment
solutions. We also added VX Gateway in the first quarter to our Electronic Check Service.
On March 31, 2014, Itonis, Inc. signed a Licensing Agreement
with MyECheck, Inc. for Itonis to acquire a software license for MyECheck’s patented mobile payment app that will facilitate
point of purchase transactions. The license agreement calls for Itonis to pay a one-time licensing fee of $300,000 to MyECheck
as well as a portion of the per-transaction fees collected at the point of sale. There is no expiration date on that license.
On February 24, 2014, MyECheck was selected by GreenPay, LLC
to provide a comprehensive processing solution. MyECheck sold a continuous non-exclusive license and a mobile license to GreenPay
for $1,000,000 and will share in a percentage of transaction fee revenue. On June 13, 2014, the Company announced that it would
acquire GreenPay, LLC. The merger was completed on August 20, 2014. The net purchase price for the licenses sold to Sierra Global
was determined to be $412,000 after the acquisition of GreenPay, LLC. The license issued to GreenPay, LLC on February 24, 2014
will remain with Sierra Global per the terms and conditions of the merger.
The patent license issued to GreenPay, LLC on February 24th,
2014 will remain with Sierra Global per the terms and conditions of the merger.
In October, 2014, the Software License and Services Agreement between
the Company and Sierra Global, LLC, dated November 23, 2013, was amended to include a 2014 Software Module License Fee in
the amount of $500,000. (See Exhibit 10.20)
The Company entered into a License Agreement with GreenPay,
LLC on February 24, 2014. Subsequent to that Agreement, the Company and Sierra Global, LLC entered into business discussions,
the point of which was the purchase of GreenPay by the Company. In anticipation of that transaction, the Company’s CEO became
an unpaid business consultant to GreenPay and was authorized to establish a bank account for GreenPay.
After the acquisition of GreenPay by the Company, the bank account
was retained by Sierra Global (the Company executed a license under which Sierra Global was permitted to use the GreenPay trade
name for limited purposes). During this time, the Company’s CEO did not participate in any ownership of either Sierra Global
or GreenPay. (See Exhibit 10.19).
The Company was able to utilize cash flow generated from
operations to purchase 1,000,000,000 shares of MyECheck’s Common stock from its major shareholder, Edward Starrs, for $10,000.
In the second quarter of 2014, our longtime customer Simplifile
renewed their contract and expanded their use of our payment processing services.
During the fiscal year ended December 31,
2014, three (3) of the Company’s customers accounted for approximately 98% of the Company’s revenues. The loss of any
one of these customers or a sustained decrease in demand by any of such customers could result in a substantial loss of revenues
and could have a material adverse effect on MyECheck’s results of operations.
During the third and fourth quarters of 2014, MyECheck entered
into Service Agreements with ten (10) customers. The Services Agreement required MyECheck to complete the integration process
with MyECheck’s bank partner, Avidia Bank. Under the terms of the Reseller Agreement between MyECheck and Avidia Bank
executed on May 7, 2015, herein attached as Exhibit 10.31, MyECheck agreed to authorize Avidia Bank to sell MyECheck’s data
processing services and its mobile payment system to Avidia’s customers. The integration process with Avidia Bank has now
been completed and the services contemplated under the aforementioned Service Agreements will now become operational. In
the third quarter the Company signed Services Agreements with Monthly Filter Club, LLC, Cuallix Consumer Services, Inc. and SionicMobile.
(See Exhibits 10.32-10.34). During the fourth quarter of 2014 the Company executed Services Agreements with (i) Withum Smith
& Brown, (ii) Dad’s Roast Custom Coffee, (iii) New Age Telecom, Inc., (iv) Mesorah Heritage Foundation, (v) Artscroll
Mesorah Publications, Ltd., (vi) Sushi Groove, LLC, and (vii) eze System, Inc. (See Exhibits 10.35 – 10.41). Under
the terms of the Services Agreement, MyECheck will provide fully electronic check services to each customer.
During the third quarter of 2014, the Company’s wholly
owned subsidiary, GreenPay, LLC, also entered into a Software License and Services Agreement with MJ SafePay, LLC pursuant to
which GreenPay agreed to provide software and payment data processing services to MJ SafePay, (Exhibit 10.42) In addition, in
the fourth quarter of 2014, GreenPay, LLC, executed an Authorized Reseller Agreement with Maverick Bankcard, LLC to sell GreenPay’s
Check 21 Electronic Check Services, Mobile Payment Applications and Consulting Services, (Exhibit 10.43).
In 2013, Seergate entered into a Memorandum of Understanding
with Centric Gateway authorizing them to be a sales agent for their software license platform and services. Subsequently,
in February of 2015, Centric Gateway entered into a Memorandum of Understanding with a major bank in Africa to license the Seergate
Software Platform and Services, herein attached as Exhibit 10.58, and was awarded the contract with the Bank in Africa to license
the Seergate Software Platform and Services, herein attached as Exhibit 10.59. The identity of the Bank in the attached
Exhibits 10.58 and 10.59 are redacted due to the confidentiality agreement between Centric Gateway and the Bank.
The first quarter of 2015 produced seven (7) executed Services
Agreements, one (1) executed Reseller Agreement and one (1) executed Partnership Agreement. The customers executing Services
Agreements with MyECheck during the first quarter were (i) truCrowd Texas, Inc., (ii) Lucid Integrated Systems, (iii) Boss Tech
Support, LLC, (iv) Vergence Entertainment, LLC, (v) The Mother of All Kits, (vi) Credit Shop, Incorporated and (vii) Nutronix
Revolution, Inc. a leading distributor of health and wellness products, pursuant to which MyECheck agreed to process payments
from NXR Global’s customers. MyECheck provides fully electronic check services to its customers under the Services Agreement,
herein attached as Exhibits 10.44 through 10.50. On January 25, 2015, MyECheck entered into a Partnership Agreement with
Hercules Credit Union pursuant to which MyECheck agreed to integrate its electronic check processing technology into Hercules
Credit Union’s existing payment processing system, herein attached as Exhibit 10.51. Subsequently, on March 5, 2015
the Company entered into an Authorized Reseller Agreement with Access Payment Systems, Inc. authorizing Access Payment Systems
to sell MyECheck’s Check 21 data processing services to its customers, herein attached as Exhibit 10.52.
In addition to the new customers MyECheck acquired during
the previous three quarters, during the second quarter of 2015 the Company continued the expansion of its customer base through
the execution of four (4) Services Agreements and one (1) Reseller Agreement. The four Services Agreements were executed
between MyECheck, Inc. and Fantasy Grudge, LLC, Elite Tech Help, LLC, Kokopay, Inc., and PacNet Services, Ltd, see Exhibits 10.53
through 10.56. On April 17, 2015, the Company executed an Authorized Reseller Agreement with Peter Farinas DBA PK and Maverick,
Inc. pursuant to which PK and Maverick was authorized to sell MyECheck’s Check 21 data processing services to its customers,
herein attached as Exhibit 10.57.
The Company believes that the additional customers acquired
during the previous four quarters will result in increased revenue for MyECheck during the fourth quarter of 2015.
We continue to explore additional banking relationships to support
future growth and strategic flexibility.
Mergers and Acquisitions
Sekoya Holdings, Limited Transaction
MyECheck, Inc., a Wyoming corporation (“MEC”) and
Sekoya Holdings, Limited (a Nevada corporation) entered into a Merger Agreement in November 2007, which was amended and restated
as of February 4, 2008, and was filed as an exhibit to the Report on Form 8-K filed on February 7, 2008 (the Report on Form 8-K
and Merger Agreement are incorporated herein by reference). The merger was effective March 14, 2008.
A total of 2,000,000 shares otherwise issuable to MEC’s
shareholders were held back (the “Escrow Shares”) for purposes of compensating MEC and its officers, directors, employees,
agents and affiliates should they sustain any loss due to a breach of Company’s representations, warranties, covenants or
agreements contained in the Merger Agreement or any related document (a “Loss”). Subsequent to the acquisition by MyECheck,
Sekoya’s operations were phased out.
GreenPay, LLC Transaction
On August 20, 2014, MyECheck completed the acquisition of its
licensee, GreenPay, LLC. GreenPay, LLC is now a wholly owned subsidiary of MyECheck, Inc. GreenPay assets are owned by MyECheck,
however Greenpay will be operated as a separate entity and will move forward with an independent board of directors and management
in 2015. (See Exhibit 10.24 - Membership Purchase Agreement).
Seergate, Ltd. Transaction
On January 30, 2015, MyECheck signed an agreement to acquire
100% of the stock of Seergate, Ltd, developer of a comprehensive electronic payment platform for banks. The Seergate system will
be integrated with the MyECheck payment systems adding multiple new capabilities to MyECheck’s payment platform. The acquisition
closed on May 6, 2015. The December 31, 2014 and 2013 Seergate, Ltd Audited Annual Report (Financial Statements) and the Unaudited
Pro Forma Condensed Combined Financial Information for the Twelve Months Ended December 31, 2014 and the Six Months Ended June
30, 2015, are herein attached as Exhibits 10.26 and 10.27.
Item 1A. Risk Factors
MYECHECK IS A HIGH RISK, START-UP COMPANY AND, AS SUCH, THERE
IS UNCERTAINTY REGARDING WHETHER IT WILL SUCCESSFULLY EXECUTE ITS BUSINESS PLAN, GENERATE ENOUGH REVENUE TO SUPPORT OPERATIONS,
RECEIVE ANY INVESTMENT, OR ENGAGE ANY NEW CUSTOMERS.
The ability of the Company to continue as a going concern is
dependent on Management's plans, which include the raising of capital through debt and/or equity markets. The Company will require
additional funding during the next twelve months to finance the growth of its current and expected operations and achieve strategic
objectives. Additionally, the Company will need to continually generate revenues through its current business operations in order
to generate enough cash flow to fund operations through 2015. The Company is also dependent on bank partnerships when processing
transactions. If the Company were to lose bank partnerships, their ability to provide services would be affected negatively.
Changes in laws or interpretation of existing laws may
impose significant risks and may prevent the Company from providing its services.
There are no assurances that MyECheck will continue to be able
to provide its services. Changes in laws or interpretation of existing laws may pose significant risk and may prevent MyECheck
from providing its serviceS. MyECheck is dependent on a bank relationship and there are no assurances that MyECheck will be able
to maintain its current bank relationships, or develop new bank relationships.
With the Internet and high technology industries rapidly
evolving there are no guarantees that the market demand for the Company’s services exist.
There are no assurances that the market demand for MyECheck’s
services exist, or will continue to exist in the future. The Internet and high technology industries are rapidly evolving and changing,
and new products or services may be introduced that may make MyECheck’s services less viable or obsolete.
The Company business depends to a large extent on retaining
the services of its founder and executive officers.
The Company's business depends to a large extent on retaining
the services of its founder, Mr. Edward R Starrs (Chairman of the Board of Directors and Chief Executive Officer), as well as MyECheck’s
Chief Technical Officer Mr. Robert S. Blandford and MyECheck’s Chief Operations Officer Mr. James T. Fancher. The Company's
operations could be materially adversely affected if, for any reason, one or more of the above officers ceases to be active in
MyECheck’s management.
We have limited operating history and may not have sufficient
resources to continue operations.
There are no assurances that MyECheck will always have sufficient
resources to continue operations. Management estimates that the Company will require Six Hundred Six Thousand and Six Hundred and
Sixty Six dollars ($606,666) to operate for the next six (6) months.
There are no assurances that MyECheck will be able to
effectively compete against larger, better funded competitors.
There are no assurances that MyECheck will be able to effectively
compete against larger, better funded competitors. Although MyECheck is apparently first to market with its RCC service, competing
services may be developed that may offer more advantages, cost less or may have higher sales and marketing success. With the ever-growing
popularity of the Internet and as computer hardware (i.e., servers) and creating/maintaining virtual private networks becomes more
affordable, other on-line services may appear or are already established which will try to create an electronic link to provide
similar products and services that MyECheck offers. Some of those businesses may have far greater financial and marketing resources,
operating experience and name recognition than MyECheck. Potential competitors include PayPal, Google Checkout, BillMeLater and
others.
All these companies take different approaches to processing
electronic transactions and to the best of MyECheck’s knowledge, none of them currently offer services of the same type as
MyECheck. Nonetheless, these potential competitors, as well as the entry of more competitors offering similar services, could have
a material adverse effect upon MyECheck’s business, operating results and financial condition.
Customer Retention
While the Company believes that the market for its products
and services will continue to grow, at present MyECheck depends on several significant customers for a significant portion of its
revenue, and a loss of one or more of these significant customers could have a material adverse effect on MyECheck’s results
of operations.
Our officers and directors are not obligated to commit
their time and attention exclusively to our business and therefore they may encounter conflicts of interest with respect to the
allocation of time between our operations and those of other businesses.
Our directors are not obligated to commit their
time and attention exclusively to our business and, accordingly, they may encounter conflicts of interest in allocating their
own time between our operations and those of other businesses.
Interim Chief Financial Officer
Currently, Bruce M. Smith, our Interim Chief Financial
Officer, commits 50% of his time to our Company in his capacity as an officer. On February 28, 2015, the Company and Mr. Smith
agreed it would be in the best interest of the Company that Mr. Smith continue as acting Interim CFO through the filing process
of the Form 10 Registration Statement and thereafter until such time as a new CFO is duly appointed.
The future success of the Company depends largely in part
on whether the Internet continues to be a viable commercial marketplace as the Company’s products and services are provided
directly over the internet.
Because MyECheck’s products and services are provided
directly over the Internet, the future success of MyECheck will depend in large part on whether the Internet continues to be a
viable commercial marketplace. Whether because of inadequate development of the necessary infrastructure or as a result of fraud,
or any other cause, if customers lack confidence in sourcing products over the Internet, MyECheck’s business, operating results
and financial condition will be materially adversely affected.
Rapid and significant technological developments, new
product introductions and enhancements may render the Company’s products and services obsolete if we are unable to adapt
accordingly.
The Internet market in which MyECheck intends to compete is
characterized by rapid and significant technological developments, frequent new product introductions and enhancements, continually
evolving business expectations and swift changes.
To compete effectively in such markets, MyECheck must continually
improve and enhance its products and services and develop new technologies and services that incorporate technological advances,
satisfy increasing customer expectations and compete effectively on the basis of performance and price. MyECheck’s success
will also depend substantially upon its ability to anticipate, and to adapt its products and services to its collaborative partner’s
preferences. There can be no assurance that technological developments will not render some of MyECheck’s products and services
obsolete, or that MyECheck will be able to respond with improved or new products, services, and technology that satisfy evolving
customers’ expectations. Failure by MyECheck to acquire, develop or introduce new products, services, and enhancements in
a timely manner could have a material adverse effect on MyECheck’s business, financial condition and operations. Also, to
the extent one or more of MyECheck’s competitors introduces products and services that better address a customer’s
needs, MyECheck’s business would be materially adversely affected.
Delays in new product and service development and introduction
could adversely affect the Company’s business, operating results and financial conditions.
The process of developing products and services such as those
offered by MyECheck may prove to be extremely complex and it is highly likely that MyECheck will experience delays in developing
and introducing new products and services in the future. If MyECheck is unable to develop and introduce new products, services
or enhancements to existing products and services in a timely manner in response to changing market conditions or customer requirements,
MyECheck’s business, operating results and financial conditions could be materially adversely affected. Also, announcements
of currently planned or other new products and services may cause customers to delay their subscription decisions in anticipation
of such products and services, which could have a material adverse effect on MyECheck’s business, operating results and financial
condition, especially if the introduction of such products and services is delayed.
Products and services offered by the Company are complex
and may contain flaws or defects.
Products and services as complex as those offered by MyECheck
may contain undetected flaws or defects when first introduced or as new versions are released. Any inaccuracy or defects may result
in adverse products and service reviews and a loss or delay in market acceptance. There can be no assurance that flaws or defects
will not be found in MyECheck’s products and services. If found, flaws and defects could have a material adverse effect upon
MyECheck’s business operations and financial condition.
There has not been a regular trading public market or
that a regular trading market will develop in the near term for the Company’s shares.
There has not been a regular trading public market for MyECheck’s
shares. There are no assurances that a regular trading market will develop in the near term or that, if developed, it will be sustained.
In the event a regular public trading market does not develop, any investment in MyECheck’s Common Stock would be highly
illiquid. Accordingly, investors in MyECheck may not be able to readily sell their shares.
There are risks in investing in shares of “microcap”
companies which would include the Company.
The Securities and Exchange Commission has advised investors
to use caution in investing in shares of “microcap” companies, which would include the Company, (http://www.sec.gov/investor/pubs/microcapstock.htm).
The Company encourages investors to consider the information provided by the SEC prior to making an investment in the Company’s
stock.
The Company is heavily reliant upon a license with it
founder and CEO. If future terms of the license are not agreed upon this could have a material adverse impact on the Company.
On June 28, 2004, the Company entered into a Patent License
Agreement with Ed Starrs, its founder and CEO, under which the Company will become the sole licensee of a newly granted patent
for check processing technology. The Company believes that it will obtain a competitive advantage from the ability to access the
patent. Failure to agree on future terms of the license could have a material adverse impact on the Company. The current terms
of the license are defined in Article II of the Patent License Agreement herein attached as Exhibit 10-17.
The Company is a plaintiff in ongoing litigation which
could have a material adverse impact on the Company.
The Company is the plaintiff in the United States District Court,
Eastern District of California action styled MyECheck vs.Zipmark, Inc. et al. The Company is seeking damages in this action
for breach of its license agreement in the amount of $35,000, plus interest, in addition to damages of not less than $500,000 for
infringement of the patent that the Company has licensed from its founder, Ed Starrs. There is a risk, common to most litigation
seeking damages for patent infringement that the defendant in this case will seek to invalidate the patent on which the Company
is suing. An invalidation of the Company’s patent may have a material adverse impact on the Company. As of the date of this
filing there have been no new developments.
The Company is also the plaintiff in the United States District
Court, Eastern District of California action styled MyEcheck, Inc., vs Sweetsun Intertrade, Inc., Seven Mile Securities, Titan
International Securities, Inc. and Scottsdale Capital Advisors Corporation. The Company is seeking Declaratory Relief in this case
from the Court to cancel 530,005,000 shares of common stock in the Company that were fraudulently issued due to the actions of
the defendants. The Company is also seeking damages of not less than $16,000,000 which is the current market value of the fraudulently
issued shares. There is risk, common to all litigation, that the defendants may assert counter-claims for damages that they may
allege to have suffered. If the defendants assert counter-claims in this action upon which they ultimately prevail, an award of
damages against the Company in connection with any such counter-claims may have may have a material adverse effect on the Company’s
financial condition. However, the defendants have not asserted any counter-claims in this case and the Company does not believe
there is any merit in any counter-claim that could be conceivably asserted by these defendants. As of the date of this filing there
have been no further communication or new developments.
MyECheck is a defendant in a civil action initiated on July
13, 2015 by TCA Global Credit Master Fund, L.P. (as Plaintiff) in the Circuit Court of the 17th Judicial Circuit in
and for Broward County, Florida. The action is styled TCA Global Credit Master Fund, L.P. v. MyECheck, Inc., et al.
TCA is a holder of the Company’s convertible notes and is seeking damages in the aforementioned action for alleged breaches
by MyECheck of the provisions of the convertible notes issued to TCA. Although MyECheck disputes many of the allegations
set forth in TCA’s complaint, there is a risk that TCA may ultimately prevail in its action against MyECheck and an award
of damages to TCA in this case may have a material adverse effect on the Company’s financial condition.
Item 2. Financial Information
The following discussion contains certain forward-looking statements
that are subject to business and economic risks and uncertainties, and MyECheck’s actual results could differ materially
from those forward-looking statements. The following discussion regarding the financial statements of MyECheck should be read in
conjunction with the financial statements and notes thereto.
MyECheck’s prior full fiscal year ending December
31, 2014 is not indicative of MyECheck’s current business plan and operations. Incorporated in October 2004, MyECheck
currently has limited revenues and is deemed an early stage Company. This plan of operation will focus on MyECheck’s
business plan and operations current. There can be no assurance that MyECheck will generate positive cash flow and there can
be no assurances as to the level of revenues, if any, MyECheck may actually achieve from its operations.
Implementation Plan
Following is an outline of MyECheck’s plan to build a
widely used payment system. The success of MyECheck depends on a number of factors including the careful selection and active participation
of qualified Value Added Resellers (“VARs”) and Payment Service Providers (“PSPs”). The VARs / PSPs commitment
to MyECheck will depend on the commercial viability of MyECheck’s solutions and web-based services.
MyECheck targets internet payment gateways and payments software
and service providers for partnership and reseller opportunities.
Early emphasis has been on building sales channels through partnerships.
MyECheck has experienced early success in partnerships with PSP Cardinal Commerce and is in discussions and other major PSPs.
In addition to its in-house direct sales department, MyECheck
has engaged a number of specialized independent sales agents such as Sheffield Resource Network and others, who leverage their
existing contacts for direct sales.
MyECheck has an active PR program and issues press releases
on a regular basis which generate in-bound leads and interest from industry press. Company management conducts interviews with
national press. MyECheck attends and exhibits at industry trade shows, conferences and other networking events.
MyECheck’s in-house sales force and independent sales
agents also use email and cold calling marketing techniques, focusing on the industry’s largest target companies. MyECheck
is currently in discussion with a large Independent Sales Organizations (ISOs) regarding partnership and representation opportunities.
In addition to the effective marketing and distribution of MyECheck’s
services, MyECheck’s infrastructure must be able to support a significant increase in transaction volume. MyECheck plans
to enhance its infrastructure by adding a new data center and new hardware in anticipation of increased transaction volume. MyECheck
plans to continue to scale it’s infrastructure in advance of the need.
Overview
Results of Operations
We incurred a net loss of $992,923 for the year ended December
31, 2014 and a net loss for the three and six-month periods ended June 30, 2015 of $1,675,376 and $1,777,783, respectively. At
June 30, 2015 we had cash and cash equivalents of $22,850 and a working capital deficit of $1,966,936.
Years ended December 31, 2014 and 2013
We had revenue from continuing operations in December 31, 2014
of $952,156, compared to $89,496 in 2013. Cost of revenue from continuing operations in December 31, 2014 was $99,976, compared
to $0 in 2013, for an increase of $99.976 or 100%. Selling, general and administrative expenses (“S,G &A”) was
$1,458,374 in 2014 compared to $79,943 in 2013, an increase of $1,378,431 or 1724.2%. S,G & A was mostly contributable to the
following:
| Twelve months ending: | |
12/31/2014 | | |
12/31/2013 | | |
$
VAR | | |
%
VAR | |
| Salaries & Related Expense | |
$ | 411,080 | | |
$ | 0.00 | | |
$ | 411,080 | | |
| 100 | % |
| Stock Compensation | |
| 299,695 | | |
| 0.00 | | |
| 299,695 | | |
| 100 | % |
| Research & Development | |
| 254,580 | | |
| 7,000 | | |
| 247,580 | | |
| 3536.8 | % |
| Legal & Professional Fees | |
| 169,164 | | |
| (70 | ) | |
| 169,234 | | |
| 241762.8 | % |
| Advertising & Marketing expense | |
| 74,461 | | |
| 4,231 | | |
| 70,230 | | |
| 1625.3 | % |
| Amortization of Loan Fees | |
| 43,106 | | |
| 0.00 | | |
| 43,106 | | |
| 100 | % |
| Rent | |
| 29,797 | | |
| 0.00 | | |
| 29,797 | | |
| 100 | % |
| Miscellaneous | |
| 176,491 | | |
| 68,782 | | |
| 107,709 | | |
| 156.6 | % |
| Total Expenses | |
$ | 1,458,374 | | |
$ | 79,943 | | |
$ | 1,378,431 | | |
| 1724.2 | % |
In 2014, the Company built out its management team,
operational staff and sales force which increased salaries and related expenses, i.e. health care and payroll liabilities. The
Company had an effective rent expense of $29,797. As a result of the build out, the Company incurred legal and professional fees
due to the focus of becoming SEC compliant. Professional fees included Audit and Review expenses while legal fees also played
a role in becoming SEC compliant. Stock compensation was a result of the issuance of stock to two former employees and two issuances
to unrelated parties for their participation in the early development of the Company in 2007. In addition, we obtained legal counsel
on various legal issues as further described in Item 8. Legal Proceedings. Research and Development expense increased due to the
integration of the software platform and the mobile application.
Other Income (Expense)
Interest income (expense) for the years ended December 31, 2014
and 2013 was ($24,347) and ($26,613), respectively for a decrease of $2,266 or 8.5% from the same period in 2013.
Other income for the years ended December 31, 2014 and 2013
was $147,164 and $130,167 respectively for an increase of $16,997 or 13.0% over the same period in 2013.
Three –month periods ended June 30, 2015 and 2014
We had revenue from continuing operations in the three-month
periods ended June 30, 2015 of $181,801 and $362,281 for 2014. A decrease of $180,480, or 50%. S, G & A was $576,672 in 2015
compared to $155,970 in 2014, an increase of $420,702 or 269%. S, G & A was mostly contributable to the following:
| Three months ending: | |
6/30/2015 | | |
6/30/2014 | | |
$ VAR | | |
% VAR | |
| Salaries & Related Expenses | |
$ | 147,951 | | |
$ | 65,391 | | |
$ | 82,560 | | |
| 126 | % |
| Contract Labor & Consulting | |
| 7,999 | | |
| - | | |
| 7,999 | | |
| 100 | % |
| Legal & Professional Fees | |
| 63,171 | | |
| 26,210 | | |
| 36,961 | | |
| 141 | % |
| Amortization of Loan Fees | |
| 64,659 | | |
| - | | |
| 64,659 | | |
| 100 | % |
| Advertising & Marketing Development | |
| 14,257 | | |
| 6,771 | | |
| 7,486 | | |
| 11 | % |
| Research & Development | |
| 166,133 | | |
| 35,359 | | |
| 130,774 | | |
| 369 | % |
| Rent | |
| 38,751 | | |
| 600 | | |
| 38,151 | | |
| 6359 | % |
| Miscellaneous | |
| 73,751 | | |
| 21,639 | | |
| 52,112 | | |
| 240 | % |
| Total Expenses | |
$ | 576,672 | | |
$ | 155,970 | | |
$ | 420,702 | | |
| 269 | % |
Three –month periods ended June 30, 2015 and
2014 (Cont.)
For the three-month period ended June 30, 2015 the Company continued to refine its management team
while Research and Development remained a primary focus in its execution and completion of the software platform and mobile application.
Amortization of loan fees were and will continue to be a result of the $5,000,000 Line of Credit received through TCA Global Credit
Master Fund, LP on October 29, 2014.
Six –month periods ended June 30, 2015 and 2014
We had revenue from continuing operations in the six-month periods
ended June 30, 2015 of $558,109 and $724,063 for 2014. A decrease of $165,954, or 23%. S, G & A was $1,209,727 in 2015 compared
to $189,457 in 2014, an increase of $1,020,270 or 539%. S, G & A was mostly contributable to the following:
| Six months ending: | |
6/30/2015 | | |
6/30/2014 | | |
$ VAR | | |
% VAR | |
| Salaries & Related Expenses | |
$ | 401,950 | | |
$ | 65,713 | | |
$ | 336,237 | | |
| 512 | % |
| Contract Labor & Consulting | |
| 20,849 | | |
| - | | |
| 20,849 | | |
| 100 | % |
| Legal & Professional Fees | |
| 179,443 | | |
| 40,738 | | |
| 138,705 | | |
| 340 | % |
| Amortization of Loan Fees | |
| 129,318 | | |
| - | | |
| 129,318 | | |
| 100 | % |
| Advertising & Marketing Development | |
| 28,767 | | |
| 10,443 | | |
| 18,324 | | |
| 175 | % |
| Research & Development | |
| 230,960 | | |
| 41,359 | | |
| 189,601 | | |
| 458 | % |
| Rent | |
| 74,174 | | |
| 600 | | |
| 73,574 | | |
| 12262 | % |
| Miscellaneous | |
| 144,266 | | |
| 30,604 | | |
| 113,662 | | |
| 371 | % |
| Total Expenses | |
$ | 1,209,727 | | |
$ | 189,457 | | |
$ | 1,020,270 | | |
| 539 | % |
For the six-month period ended June 30, 2015, the Company
continued its build out of the management team and infrastructure. By acquiring Seergate, Ltd, salaries and related expenses increased
due to the new addition of staff that came with the acquisition of Seergate. Rent increased due to a new corporate facility to
house its expansion. Research and Development increased due to the additional services Seergate provided that enhanced MyECheck’s
software platform. Legal and Professional fees increased as a result of the additional accounting and audit needs to close the
Seergate acquisition and to comply with the filing of the Form 10 Registration Statement.
Other Income (Expense)
Interest income (expense) net for the six-month periods ended
June 30, 2015 and 2014 was ($36,593) and ($2,934), respectively for an increase of $34,019 or 1159%. Interest income (expense)
for the three-month periods ended June 30, 2015 and 2014 was ($18,717) and ($1), respectively for an increase (decrease) of $18,716
or 99.99%
Other income (expense) for the six-month periods ended June
30, 2015 and 2014 was $1,114 and ($9,952) respectively for an increase of $11,066 or 111%. In addition, other income for the three-month
periods ended June 30, 2015 and 2014 was $1,114 and $53,438, respectively for a decrease of $52,324 or (1114%).
Liquidity and Capital Resources
Year Ended December 31, 2014
Net cash used by operating activities for the year ended December
31, 2014 amounted to $398,966, which mainly consisted of the following: an increase in accounts receivable of $140,740, an increase
in deferred revenue of $25,000, an increase in prepaid expenses of $135,444, an increase of accounts payable and accrued expenses
of $125,730, an increase in depreciation and amortization of $51,061 which comprised depreciation expense of $4,205 and amortization
of loan fees and website fees of $43,106 and $3,750, an increase of loss on debt conversion of $62,980 offset by income from forgiveness
of debt of $147,164, an increase of stock compensation of $299,965 and an increase of fair value of derivative liabilities of $439,368.
On December 31, 2014 the Company had total assets of $639,296.
The Company had total stockholders’ deficit of $1,193,035 on December 31, 2014. As of December 31, 2014 the Company’s
working capital deficit was $1,345,517.
Six –Month Period Ended June 30, 2015
Net cash used by operating activities for the six-month period
ended June 30, 2015 amounted to $388,169, which mainly consisted of the following: a decrease in accounts receivable of $66,540,
a decrease in prepaid expenses of $108,592, a net increase of accounts payable and accrued expenses of $35,634, an increase in
depreciation and amortization of $142,065 which comprised depreciation expense of $8,745, amortization of capitalized loan fees
of $129,318, amortization of IP of $96,980 and website fees of $4,002, a net decrease in payroll and accrued payroll of $3,790,
an increase of stock compensation of $9,833, a decrease of fair value of derivative liabilities of $163,104 and a loss on the conversion
of debt of $1,229,550.
On June 30, 2015 the Company had total assets of $3,445,352.
The Company h ad total stockholders’ equity of $1,345,559 on June 30, 2015. As of June 30, 2015 the Company’s working
capital deficit was $1,945,840.
Capital Resources
Management estimates that the Company will require Six Hundred
Six Thousand and Six Hundred Sixty Six Dollars ($606,666) to operate for the next six (6) months.
Critical Accounting Policies
The Company uses the accrual basis of accounting and accounting
principles generally accepted in the United States of America (“GAAP” accounting) are the financial statements are
presented in US dollars. The Company has adopted a December 31 fiscal year end. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amounts and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and the expenses during the reporting period. Actual results could differ from
those estimates.
Revenue recognition
The Company records revenue when all of the following have occurred;
(1) persuasive evidence of an arrangement exists, (2) product delivery has occurred, (3) the sales price to the customer is fixed
or determinable, and (4) collectability is reasonably assured.
The Company earns revenue from services, which has included
the following: electronic check processing, financial verification, identity verification and check guarantee services. The services
are performed under the terms of a contract with a customer, which states the services to be utilized and the terms and fixed price
for all services under contract.
The price of these services may be a fixed fee per transaction
and/or a percentage of the transaction processed depending on the service. Revenue from electronic check processing is derived
from fees collected from merchants to convert merchant customer check data into an electronic image of a paper draft, which allows
the Company to deposit the funds to the merchant’s bank through image clearing with the Federal Reserve on behalf of the
bank. The Company recognizes the revenue related to electronic check processing fees when the services are performed.
Revenue from financial verification is derived from fees collected
from merchants to process requests to validate financial verifications to an outside service provider under contract with the Company.
This revenue is recognized when the transaction is processed, since the Company has no further obligations.
Revenue from check guarantee services is derived from fees collected
from merchants to process transaction to an outside service provider under contract with the Company. This revenue is recognized
when the transaction is processed, since the Company has no further obligations.
Stock-based compensation
Stock-based compensation is accounted for at fair value in accordance
with ASC 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures
to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase
warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative
financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value
and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.
For option-based simple derivative financial instruments, the
Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity,
is re-assessed at the end of each reporting period.
Income Taxes
Income taxes are accounted for under the assets and liability
method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for one
year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for
income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs.
Earnings per Share
In accordance with accounting guidance now codified as FASB
ASC Topic 260, “Earnings per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted
average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing
net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities
outstanding during the period.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, financings,
or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).
Item 3: Properties
MyECheck’s primary business operations have been established
in greater Sacramento, CA area. The Company does not hold title to any real estate properties. Accordingly, the Company does not
have any mortgages, liens or encumbrances against such properties.
On July 1, 2014, MyECheck leased
approximately 3700 square feet of Class A Office Space from Maidu Investment, LLC (“Maidu Investment”) at the office
development known as College Point Business Center, located at 2600 E. Bidwell Street in the City of Folsom, State of California
as its corporate headquarters and primary product development center. This is a 42 month full service lease expiring on December
31, 2017 with an average rent per month of $4,866. The rent increases annually by $0.05 per square foot. Both physical and electronic
security features are employed at this location.
On October 28, 2014, MyECheck amended its original lease agreement
with Maidu Investment, LLC (Maidu Investment) at the office development known as College Point Business Center, located at 2600
E. Bidwell Street in the City of Folsom, State of California, to include an expansion space defined as Suite 190. The lease term
on the expansion space is 42 months expiring on June 30, 2018 with an average combined rent per month of $10,998. MyECheck paid
an additional security deposit in the amount of $20,000, for a combined deposit amount of $52,812.
In addition, MyECheck entered into a secured networking co-location
lease with QTS Data Center. The term of this lease agreement is three (3) years and the monthly lease payment is $500. MyECheck
uses the services of QTS Data Center, located about 90 miles from San Francisco in seismically-neutral Sacramento. The data center
and the Folsom office are connected via a secure VPN, allowing the development staff to interact with the MyECheck development,
test, and production equipment.
Item 4: Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
The following tabulates holdings of shares of the Company
by each person who, subject to the above, at the date of this registration statement, holders of record or is known by Management
to own beneficially more than 5.0% of the Common Shares and, in addition, by all directors and officers of the Company individually
and as a group. Each named beneficial owner has sole voting and investment power with respect to the shares set forth opposite
his name.
Shareholdings at Date of Filing
| Name and Address
of Beneficial Owner | |
Common
Stock | | |
Percentage | |
| Edward R. Starrs, CEO | |
| 1,953,456,970 | | |
| 47.44 | % |
| PO Box 10712 | |
| | | |
| | |
| Zephyr Cove, NV 89448 | |
| | | |
| | |
| | |
| | | |
| | |
| James T. Fancher, COO | |
| 22,198,850
| | |
| 0.55
| % |
| 104 Marvin Court | |
| | | |
| | |
| Folsom, CA 95630 | |
| | | |
| | |
| | |
| | | |
| | |
| a) William B. Delgado – Director | |
| - | | |
| 0.00 | % |
| 9477 Greenback Lane | |
| | | |
| | |
| Folsom, CA 95630 | |
| | | |
| | |
| | |
| | | |
| | |
| Robert S. Blandford, CTO | |
| 100,092,314 | | |
| 2.46 | % |
| 2624 Alana Court | |
| | | |
| | |
| Cameron Park, CA 95682 | |
| | | |
| | |
| | |
| | | |
| | |
| b) Bruce M. Smith, CFO | |
| - | | |
| 0.00 | % |
| 401 Listowe Drive | |
| | | |
| | |
| Folsom, CA 95630 | |
| | | |
| | |
| | |
| | | |
| | |
| c) Seven Mile Securities | |
| - | | |
| 0.00 | % |
| 724 Britannia Drive | |
| | | |
| | |
| Seven Mile Beach Grand Cayman | |
| | | |
| | |
| KY1 1203 Cayman Islands | |
| | | |
| | |
| | |
| | | |
| | |
| d) Titan International Securities, Inc. | |
| 280,000,000 | | |
| 6.80 | % |
| The Matalon Bldg Coney Drive | |
| | | |
| | |
| Ste 403 4th Floor | |
| | | |
| | |
| Belize City, Belize | |
| | | |
| | |
a) On February 23, 2015, the Company relieved
Mr. Delgado of his duties as Director for cause. His duties have been assumed by other members of the management team.
b) On January 15, 2015, the Company decided
to release Mr. Bruce M. Smith of his CFO duties. However, the separation agreement stated he would continue to act as CFO through
February 28, 2015. On February 28, 2015, the Company and Mr. Smith agreed it would be in the best interest of the Company that
he continue on as acting CFO through the filing process of the Form 10 Registration Statement and thereafter until such time as
a new CFO is duly appointed.
c) Seven Mile Securities is one
of four parties to litigation initiated against them by the Company. Seven Miles shares were returned and cancelled pursuant to
the litigation settlement (see Item 8, page 25, in this Registration Statement for more detailed information concerning this development).
d) Titan International Securities, Inc.
is one of four defendants in litigation against them by the Company. The details of this litigation are set forth in Item 8, page
24 herein. On September 8, 2014, the Brooklyn New York’s U.S. Attorney’s Office filed a criminal indictment against
Titan International Securities, Inc. and other defendants charging them with a fraudulent scheme to conceal the true ownership
of stocks and funds and engage in market manipulation of U.S. public companies. On September 15, 2014, the International Financial
Services Commission of Belize suspended Titan International Securities, Inc., a Belize international business company, from “trading
in financial and commodity-based derivative instruments and other securities” until further notice. To date, these shares
of the Company have not been transferred and remain in their entirety. As of the date of this filing there have been no new developments.
Except as described above, there are currently no options,
warrants, rights or other securities conversion privileges granted to our officers, directors or beneficial owners.
Securities Authorized for Issuance Under Equity Compensation
Plans. We have no equity compensation plan.
Item 5: Directors and Executive Officers
The following persons listed below have been retained
to provide services as directors and executive officers until the qualification and election their respective successors. All holders
of Common Stock will have the right to vote for Directors of the Company. The Board of Directors has primary responsibility for
adopting and reviewing implementation of the business plan of the Company, supervising the development business plan, review of
the officers' performance of specific business functions. The Board is also responsible for monitoring management, and from time
to time, to revise the strategic and operational plans of the Company. Directors receive no cash compensation or fees for their
services rendered in such capacity.
| Name |
|
Age |
|
Position |
|
Date Appointed |
| Edward R. Starrs |
|
54 |
|
President |
|
October 29, 2004 |
| |
|
|
|
Chief Executive Officer |
|
|
| |
|
|
|
Chairman of the Board |
|
|
| |
|
|
|
Director |
|
|
| |
|
|
|
|
|
|
| James T. Fancher |
|
51 |
|
Executive Vice President |
|
December 1, 2014 |
| |
|
|
|
Chief Operating Officer |
|
|
| |
|
|
|
|
|
|
| Robert S. Blandford |
|
54 |
|
Vice President Product Development |
|
October 29, 2004 |
| |
|
|
|
Chief Technology Officer |
|
|
| |
|
|
|
Secretary |
|
|
| |
|
|
|
Board Member |
|
|
| |
|
|
|
|
|
|
| *Bruce M. Smith |
|
56 |
|
Vice President Administration & Finance |
|
March 1, 2014 |
| |
|
|
|
Chief Financial Officer |
|
|
| |
|
|
|
Controller |
|
|
| |
|
|
|
|
|
|
| **W.J. “Bill” Delgado |
|
55 |
|
Investor Relations |
|
March 1, 2014 |
| |
|
|
|
Board Member |
|
|
| |
|
|
|
Director |
|
|
* As stated in the previous Item, on January
15, 2015, the Company decided to release Mr. Bruce M. Smith from his CFO duties. However, the separation agreement stated he would
continue through February 28, 2015. On February 28, 2015, the Company and Mr. Smith agreed it would be in the best interest of
the Company that he continue on as the Interim CFO through the filing process of the Form 10 Registration Statement and thereafter
until such time as a new CFO is duly appointed.
** On February 23, 2015, the Company
relieved Mr. Delgado of his duties as Director for cause. His duties have been assumed by other members of the management team.
Biographic Sketches
Ed Starrs, Founder, President and CEO
Ed Starrs has more than 24 years of experience as an international
business executive with management experience in multiple industries. He has been an officer and director of MyECheck since its
formation in 2004. From January, 2002 through October, 2004, Mr. Starrs was President of Digency, Inc., an online payment company
engaged in credit card and eCheck transaction processing for Internet Merchants. Starrs was previously President of Starnet Systems
International, Inc., a public company that processed more than $2 billion annually in Internet transactions through the year 2000
using its StarMX transaction processing engine. Starrs created comprehensive solutions for Internet payment processing including
developing and implementing systems to control fraud, secure transactions, and increase global distribution for e-commerce merchants.
James T. Fancher, Executive Vice President, Chief Operating
Officer
Jim Fancher joined MyECheck
in December 2014. Mr. Fancher brings over 20 years of financial services and payments technology experience. Fancher’s prior
roles include COO of Seergate, Inc., a real time payment processing company from 2010 to the present and General Manager for Endpoint
Exchange from 2007 through 2009, an FIS company, where he had full P&L responsibility for the company’s real time, check
image exchange. Mr. Fancher went from Senior Business Development Manager in 2004 to Senior Accounts Executive in 2005 through
2006 for VECTORsgi, an FIS company. From 1995 to 2003 Fancher was CEO of G&A, Inc. where he created CheckMine, a Check Image
Mining application.
Robert “Steve” Blandford, Vice President, Product
Development, CTO and Board Member
Steve Blandford joined MyECheck in July 2004. He brings more
than 25 years of experience as a senior information technology professional including serving as CTO for companies in the online
entertainment and gaming industries. He is skilled at both business and technology adoption. His professional background includes
i2 Corp., MXM Media, Maxim Entertainment Group, Perspective Technologies, Win Streak and others. From January, 2002 through October,
2004, Mr. Blandford was Chief Technology Officer for Digency, Inc., an online payment processing company engaged in credit card
and eCheck transaction processing for Internet Merchants.
Bruce M. Smith, CPA, Vice President, Administration/Finance,
Controller, and CFO
Bruce Smith is a Certified Public Accountant. He joined
MyECheck in March 2014 where he brings a significant amount of executive and financial experience. He is a forensic auditor, business
advisor and a seasoned financial professional with over 30 years of progressive accounting responsibility.
In 2004, Smith became a Principal of BBRS, LLP, one of the most
prestigious accounting firms in the Sacramento region. In 2005, Smith became a Capital Partner in the firm. Mr. Smith remains a
Partner in the firm and devotes approximately 10% of his time to this position. He oversees the Outsourced CFO and Controller Services,
Small Business Consulting, and traditional CPA services for financial statements (Compiled, Reviewed, and Audited), and tax work.
Prior to joining BBRS, LLP, Smith worked as a CPA consultant for hire, offering contract CFO, Controller, and Consulting services
for small businesses. From 1999 through 2001, Smith was the Corporate Controller for eCongo.com, Inc., an ASP internet software
developer specializing in creating on-line enterprises.
Audit Committee Financial Expert
We do not have an audit committee financial expert as we believe
the cost related to retaining a financial expert at this time is prohibitive. Further, because we are only beginning our commercial
operations, at the present time, we believe the services of a financial expert are not warranted.
Conflicts of Interest
The only conflict that we foresee is that one of our officers
and one director devotes time to projects that do not involve us. Our director devotes a portion of his working time to one other
publicly traded company and our officer in one other private business activity. However, management believes this does not constitute
a risk to the shareholders given the time allocated to these outside projects.
SECTION 16(A) BENEFICIAL OWNER REPORTING COMPLIANCE.
Section 16(a) of the Securities and Exchange Act of 1934 requires
that the Company's directors, executive officers, and persons who own more than 10% of registered class of the Company's equity
securities, or file with the Securities and Exchange Commission (SEC), initial reports of ownership and report of changes in ownership
of common stock and other equity securities of the Company. Officers, directors, and greater than 10% beneficial owners are required
by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file.
Code of Ethics
Our board of directors has approved, and we have adopted, a
Code of Ethics that applies to all of our directors, officers, employees, consultants and agents. We will provide a copy of the
Code of Ethics free of charge upon request to any person submitting a written request to our chief executive officer.
Item 6: Executive Compensation
MyECheck pays Mr. Edward R. Starrs, MyECheck’s
President and Chief Executive Officer, an annual salary of $55,000 and provides health insurance coverage for Mr. Starrs and his
children.
MyECheck pays Mr. Robert S. Blandford, MyECheck’s
Vice President of Technology and Chief Technology Officer, an annual salary of $100,000 and provides health insurance coverage
for Mr. Blandford.
MyECheck pays Mr. Bruce M. Smith, MyECheck’s Vice
President of Finance and Chief Financial Officer, an annual salary of $100,000 and provides complete health insurance coverage
for Mr. Smith.
MyECheck pays Mr. James T. Fancher, MyECheck’s
Executive Vice President and Chief Operating Officer, an annual salary of $170,000 and provides complete health insurance coverage
for Mr. Fancher and his family.
MyECheck paid Mr. Rod Zalunardo, as MyECheck’s
Senior Vice President and Chief Operating Officer through October 14, 2014, then removed to President and CEO of the Company’s
subsidiary company, GreenPay, LLC, an annual salary of $100,000 and provided complete health insurance coverage for Mr. Zalunardo.
The following table sets forth the total compensation
by MyECheck pays it Officers:
| | |
Annual
Compensation | |
Long-Term
Compensation | |
| | |
| |
| | |
| | |
| | |
Awards | | |
Pay-outs | |
| Name
and Principal Position | |
Year | |
Salary
($) | | |
Bonus
($) | | |
Other
Annual
Compensation
($) | | |
Restricted
Stock
Award(s) ($) | | |
Securities
Underlying
Options/SARs
(#) | | |
LTIP
Payouts | |
| | |
| |
| | |
| | |
| | |
| | |
| | |
| |
| Edward R. Starrs | |
2014 | |
| 55,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| (President & CEO) | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| James T. Fancher | |
2014 | |
| 170,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| (Executive Vice President) | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Robert S. Blandford | |
2014 | |
| 100,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| (Chief Technology Officer) | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Bruce M. Smith | |
2014 | |
| 100,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| (Chief Financial Officer) | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| * Rod Zalunardo | |
2014 | |
| 100,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| (Chief Operating Officer) | |
| |
| | | |
| | | |
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* As of October 14, 2014, Mr. Zalunardo was removed from his
position as Chief Operating Officer and Senior Vice President of MyECheck and appointed to the position of President and CEO of
the Company’s subsidiary company GreenPay, LLC. Since the preparation of this Registration Statement Mr. Zalunardo has ended
his association with the subsidiary company and his duties have been assumed by other members of the management team.
On April 7, 2009 the Company adopted the 2009 Equity Incentive
Plan (the “Plan”) covering 10,000,000 stock rights including options, restricted stock and stock appreciation rights.
Under the Plan, employees, and consultants receive initial grants of options, which vest immediately, and the remaining unvested
portion of a grant vests ratably over a three-year period.
On May 11, 2009, the Company granted 7,300,000 non-qualified
stock options to employees and non-employee consultants for services to be rendered over a three-year period. The options are exercisable
over a 5 - 10 year term at $0.13 per share and vest 25% immediately while the remaining 75% vests monthly in equal increments over
a three-year period. These options had a fair value of $871,828 using the Black-Scholes option-pricing model.
On December 31, 2011 by order of a Board Resolution all equity
incentive plans, non-qualified stock options and warrants were cancelled.
There are no retirement, pension, or profit sharing plans for
the benefit of our officers and directors.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans.
Compensation of Directors
We do not have any plans to pay our directors any compensation
for Board participation.
Item 7: Certain Relationships and Related Transactions
MyECheck is not required as a Bulletin Board listed company
to have independent directors and at the present time does not have any directors who are not also members of management.
The Company’s major shareholder, Edward R. Starrs, has
agreed to advance short term funding until revenue or other funding has been obtained. The advances and repayments will fluctuate
depending on cash flow. As of June 30, 2015, the amount owed the shareholder was $523.
On June 28, 2008, the Company entered into a Patent License
Agreement with Ed Starrs, its founder and CEO, under which the Company became the sole licensee of a newly granted patent for check
processing technology. No royalties were due for the patent for the first year of the license term, and future royalties for the
remaining nineteen (19) years of the license term are defined in Article III – License Payments of the Patent License Agreement
herein attached as Exhibit 10-17, pursuant to Item 404 of Regulation S-K. The initial term of one year under which no royalty payments
were to be paid expired on June 2009. As of the date of this filing there have been no royalty payments made or are currently due
as the Company has not met the threshold described in the Patent License Agreement, Article III.1.b., which states: “..
providing that the Gross Sales exceed One Hundred Thousand US Dollars (US $100,000) in any single calendar month, or exceed One
Million and Two Hundred Thousand US Dollars (US $1,200,000) in any single calendar year.”
Mr. James T. Fancher, MyEcheck’s current COO, was formerly
the COO of Seergate, Inc. (a subsidiary of Seergate, Ltd). On January 30, 2015, MyECheck signed an agreement to acquire 100% of
the stock of Seergate, Ltd, developer of a comprehensive electronic payment platform for banks. As of the date of this filing MyECheck’s
acquisition of Seergate, Ltd, closed on May 7, 2015. Mr. Fancher is also a stockholder of Seergate, Ltd. and as such received 2,198,580
shares of MyECheck common stock in connection with MyECheck’s acquisition of Seergate, Ltd. Pursuant to the terms of the
acquisition agreement with Seergate, Ltd., the purchase price for 100% of the common stock of Seergate, Ltd. was $3,000,000, which
was paid with 150,000,000 shares of MyECheck’s $.02 per share common stock. Based on the purchase price for Seergate’s
shares, the value of the MyECheck shares issued to Mr. Fancher in connection with the Seergate transaction is approximately $43,971.60.
Item 8: Legal Proceedings
MyECheck may from time to time be involved in various claims,
lawsuits, and disputes with third parties, actions involving allegations of discrimination, intellectual property infringement,
or breach of contract actions incidental to the operation of its business. However, litigation is subject to inherent uncertainties,
and an adverse result in these or other matters may arise from time to time that may harm its business. MyECheck is currently not
aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse
effect on its business, financial condition or operating results.
Meegan, Hanschu & Kassenbrock
On August, 21, 2012, a judgment was filed against the Company
in the State of California, awarding the plaintiff $38,183 for unpaid legal fees, damages and interest. As of December 31, 2014,
the judgment is still in force and the amount remains unpaid. The Company’s management will open discussions with the law
firm to attempt to negotiate a settlement in the third quarter of 2015.
MyECheck, Inc. vs Zipmark Inc., Jay Bhattacharya
On October 10, 2014, the Company filed a complaint with the
United States District Court, Sacramento Division, against Zipmark, Inc. and Jay Bhattacharya, Inc. for damages for breach of contract
in the amount of $35,000 plus interest from June 1, 2012, patent infringement damages in an amount no less than $500,000 and that
such amounts be tripled, and for a temporary and permanent injunction prohibiting defendants from using the patented MyECheck technology
for online check processing. MyECheck has been informed that the defendants Zipmark and Jay Bhattacharya continue to operate Zipmark’s
business using technology that infringes on MyECheck’s patented technology. In addition, defendant Zipmark breached the Services
Agreement by failing to pay the second part of the required license fee. Zipmark and/or Jay Bhattacharya have filed a motion to
dismiss and challenge the venue. The Company has filed a response to these motions and continues to vigorously pursue all claims
against Zipmark and Jay Bhattacharya.
As of the date of the filing the Company has received the Scheduling
Order from the Court that sets out the dates for completing discovery, disclosing expert witnesses, filing dispositive motions
and pre-trial dates. These dates commence November 6, 2015 and continue through June 20, 2016.
MyECheck, Inc. vs Sweetsun Intertrade, Inc., Seven
Miles Securities, Titan International Securities, Inc. and Scottsdale Capital Advisors Corporation
On December 11, 2014, the Company filed a complaint with the
United States District Court, Sacramento Division, against Sweetsun Intertrade, Inc., Seven Mile Securities, Titan International
Securities, Inc. and Scottsdale Capital Advisors Corporation for declaratory relief for cancellation of share certificates, damages
for fraud, including punitive damages from Sweetsun, and preliminary and permanent injunctions restraining them from transferring
any shares of the Company’s common stock. In 2010, the Company entered into a settlement agreement with Tangiers Investors,
LP on a note due Tangiers in the amount of $32,200 plus attorney fees. Sweetsun was to have purchased the note from Tangiers satisfying
the liability. Sweetsun failed to purchase the note and induced the Company to issue shares to Titan International Securities,
Inc. as if the note had been paid. The Company first learned of the false claim of defendant Sweetsun’s representations,
and the additional issuance of fraudulent shares to Seven Mile Securities in October, 2013. Defendant Scottsdale Capital Advisors
Corporation currently holds an unknown amount of the shares of stock in the Company that were originally issued to defendant Sweetsun
as they are a brokerage company. At December 20, 2014, there was a stop transfer enforced on the shares issued to Titan International
Securities. To date, these shares have not been transferred and remain in their entirety until this matter is resolved. MyECheck
paid the note thereby eliminating the liability and on October 9, 2014, Tangiers acknowledged that it had been paid in full.
On September 8, 2014, the Brooklyn New York’s U.S. Attorney’s
Office filed a criminal indictment against Titan International Securities, Inc. and other defendants charging them with a fraudulent
scheme to conceal the true ownership of stocks and funds and engage in market manipulation of U.S. public companies. On September
15, 2014, the International Financial Services Commission of Belize suspended Titan International Securities, Inc., a Belize international
business company, from “trading in financial and commodity-based derivative instruments and other securities” until
further notice. To date, these shares of the Company have not been transferred and remain in their entirety. As of the date of
this filing there have been no new developments.
On March
12, 2015, Seven Mile Securities submitted all the required documentation to the Company’s transfer agent which permitted
the return of 275,000,000 shares of common stock that was part of the subject matter of this litigation. The cancellation of the
275,000,000 shares for Seven Mile Securities was completed on April 14, 2015 and returned to common stock. The
litigation continues against the other defendants in this action. Seven Mile Securities has been removed as a defendant in this
litigation.
Cecil Edwin Boozer
In late 2014, an individual, Cecil E. Boozer, contacted the
Company, contending that he had been promised a twenty percent (20%) equity interest in the Company as well as retaining a fifty
percent (50%) membership interest as the “co-founder” of the Company’s wholly owned subsidiary, GreenPay, LLC,
a Wyoming limited liability company. The Company also received a letter from Mr. Boozer dated March 25, 2015 which contained
similar claims. As of the date of this filing, no legal proceeding has been initiated by this individual. However,
as a cautionary measure, on February 5, 2015, the Company referred this matter to outside counsel and, following an active investigation,
the Company believes that the claims asserted by this individual lack legal merit. As of the date of this filing there have been
no new developments.
TCA Global Credit Master Fund, L.P. v. MyECheck, Inc.,
et al.
On July 13, 2015, TCA Global Credit Master Fund, L.P. initiated
a breach of contract action against MyECheck and several other defendants in the Circuit Court of the 17th Judicial
Circuit in and for Broward County, Florida. TCA is a holder of the Company’s convertible notes and has filed its action
against MyECheck seeking damages for alleged breaches by MyECheck of the provisions of the convertible notes. Although MyECheck
intends to file an answer to TCA’s complaint within the time allotted under Florida law, as of the date of this filing the
Company is engaged in settlement discussions with TCA in an effort to resolve the dispute.
MyECheck has negotiated a restructuring of its debt to TCA.
In connection with the restructuring of the TCA debt, on July 15, 2015 MyECheck, TCA and Redwood Management, LLC entered
into a Debt Purchase Agreement pursuant to which Redwood Management purchased from TCA all of MyECheck’s monetary obligations
to TCA pursuant to the Senior Secured Convertible Redeemable Debenture previously executed by MyECheck in favor of TCA on August
31, 2014, herein attached as Exhibit 10.60. In accordance with the terms of the Debt Purchase Agreement, on July 15,
2015 the Company and Redwood Management entered into an Exchange Agreement with Redwood pursuant to which MyECheck agreed to issue
its 10% Convertible Notes to Redwood in exchange for the indebtedness Redwood purchased from TCA, herein attached as Exhibit 10.61.
Under the terms of the Exchange Agreement, the Company will issue its 10% Convertible Notes to Redwood in accordance with the
closing schedule set forth on Schedule 1 of the Exchange Agreement. The Exchange Agreement contemplates the eventual
issuance of convertible notes with a combined principal amount of $700,000. The first convertible note in the original principal
amount of $50,000 was issued to Redwood on July 15, 2015, herein attached as Exhibit 10.62.
As part of the restructuring of its TCA debt, MyECheck also
agreed to make three (3) payments of $30,000 with the first payment being due on July 31, 2015 and the remaining two (2) payments
due on August 30, 2015 and September 31, 2015 (collectively referred to herein as the “TCA Payments”). The Company
is currently in default of its obligation to make the TCA Payments but is working with TCA to resolve the issue.
PART II
Item 9: Market for Common Equity, Related Stockholder Matters
and Small Business Issuer Purchases of Equity Securities
Our common stock is quoted on the OTCQB Marketplace
(“Pink OTC”) or pink sheets under the symbol “MYEC”. As of June 30, 2015, there were approximately 108
stockholders of record of our common stock. The transfer agent for our common stock is Signature Stock Transfer.
The following table sets forth the high and low bid
prices for our common stock for the periods indicated, as reported by the Pink OTC. The quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission, and may not represent actual transactions.
| Period | |
High | | |
Low | |
| March 10, 2008 through March 31, 2008 | |
$ | 4.9 | | |
$ | 4.9 | |
| April 1, 2008 through June 30, 2008 | |
| 5.5 | | |
| 1.55 | |
| July 1, 2008 through September 30, 2008 | |
| 3.4 | | |
| 1.25 | |
| October 1, 2008 through December 31, 2008 | |
| 3.05 | | |
| 0.92 | |
| January 1, 2009 through March 31, 2009 | |
| 1.9 | | |
| 0.34 | |
| April 1, 2009 through June 30, 2009 | |
| 0.49 | | |
| 0.11 | |
| July 1, 2009 through September 30, 2009 | |
| 0.3 | | |
| 0.09 | |
| October 1, 2009 through December 31, 2009 | |
| 0.2 | | |
| 0.08 | |
| January 1, 2010 through March 31, 2010 | |
| 0.18 | | |
| 0.02 | |
| April 1, 2010 through June 30, 2010 | |
| 0.02 | | |
| 0.02 | |
| July 1, 2010 through September 30, 2010 | |
| 0.07 | | |
| 0.01 | |
| October 1, 2010 through December 31, 2010 | |
| 0.01 | | |
| 0.01 | |
| January 1, 2011 through March 31, 2011 | |
| - | | |
| - | |
| April 1, 2011 through June 30, 2011 | |
| - | | |
| - | |
| July 1, 2011 through September 30, 2011 | |
| 0.15 | | |
| 0.15 | |
| October 1, 2011 through December 31, 2011 | |
| 1.00 | | |
| 1.00 | |
| January 1, 2012 through March 31, 2012 | |
| 0.51 | | |
| 0.01 | |
| April 1, 2012 through June 30, 2012 | |
| 0.51 | | |
| 0.06 | |
| July 1, 2012 through September 30, 2012 | |
| 1.00 | | |
| 0.1 | |
| October 1, 2012 through December 31, 2012 | |
| 1.00 | | |
| 0.05 | |
| January 1, 2013 through March 31, 2013 | |
| 0.09 | | |
| - | |
| April 1, 2013 through June 30, 2013 | |
| 0.01 | | |
| - | |
| July 1, 2013 through September 30, 2013 | |
| 0.04 | | |
| - | |
| October 1, 2013 through December 31, 2013 | |
| - | | |
| - | |
| January 1, 2014 through March 31, 2014 | |
| 0.08 | | |
| - | |
| April 1, 2014 through June 30, 2014 | |
| 0.07 | | |
| 0.02 | |
| July 1, 2014 through September 30, 2014 | |
| 0.04 | | |
| 0.01 | |
| October 1, 2014 through December 31, 2014 | |
| 0.04 | | |
| 0.02 | |
| January 1, 2015 through March 31, 2015 | |
| 0.02 | | |
| 0.01 | |
| April 1, 2015 through June 30, 2015 | |
| 0.02 | | |
| 0.02 | |
The last reported sales price of our common stock on the Pink
OTC on June 30, 2015 was $0.0170 per share.
Dividend Policy
We have not previously paid any cash dividends on our common
stock and do not anticipate or contemplate paying dividends on our common stock in the foreseeable future. We currently intend
to use all our available funds to develop our business. We can give no assurances that we will ever have excess funds available
to pay dividends.
Securities authorized for issuance under Equity Compensation
Plans
We do not have any equity compensation plans and we have not
authorized any securities to be issued under an approved plan.
Trading Information
Our common stock is currently approved for quotation on the
OTCQB Marketplace (“Pink OTC”) or pink sheets maintained by the Financial Industry Regulatory Authority, Inc. (FINRA)
under the symbol MYEC.
Item 10. Recent Sales of Unregistered Securities
Stock Issuance
On May 29, 2012 the Company issued 3,000,000,000 shares of common
stock as compensation to its principal stockholder under the terms of an employment agreement, having a fair value of $30,000 ($0.00001/share),
based upon recent quoted trading price. The principal stockholder is considered an insider and would be deemed a sophisticated
investor in that he has sufficient knowledge and experience in financial and business matters to make him capable of evaluating
the merits and risks of receiving the shares. The securities were not registered under the Securities Act, or the securities laws
of any state, and were offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities
Act, as a transaction by the Company not involving any public offering.
On December 21, 2012, the Company issued 255,000,000 shares
of its common stock, having a fair value of $2,550 ($0.00001/share) in settlement of outstanding accounts payable of $2,550, based
upon recent quoted trading price. At the date of settlement the quoted fair value of the Company’s stock was par. No
gain or loss was recognized on the transaction. The settlement was issued to Titan International Securities, Inc. who is deemed
an accredited investor. The securities were not registered under the Securities Act, or the securities laws of any state, and were
offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended,
as a transaction by the Company not involving any public offering.
During the year ended December 31, 2012, the Company issued
an aggregate of 260,000,000 shares of its common stock to Sweetsun Intertrade, Inc., who is deemed an accredited investor, for
the conversion of a $2,600 convertible note payable, based upon recent quoted trading price. At the date of settlement the quoted fair
value of the Company’s stock was par. No gain or loss was recognized on the transaction. The securities were not registered
under the Securities Act, or the securities laws of any state, and were offered or issued in reliance on the exemption from registration
afforded by Section 4(2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving any public offering.
As of December 31, 2013, Tangiers, who is deemed an accredited
investor, sold $9,250 of its convertible debt to other investors and the Company was required to settle the debt with 925,000,000
shares of its common stock. At the date of settlement the quoted fair value of the Company’s stock was par. No gain
or loss was recognized on the transaction. The securities were not registered under the Securities Act, or the securities laws
of any state, and were offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities
Act of 1933, as amended, as a transaction by the Company not involving any public offering.
During the year ended December 31, 2013, the Company issued
250,000,000 shares of its common stock to Sierra Global, LLC, who is deemed an accredited investor, for a subscription receivable
of $17,500. The securities were not registered under the Securities Act, or the securities laws of any state, and were offered
or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended, as
a transaction by the Company not involving any public offering.
The Company contracted with an outside consultant, Kenneth Hobbs,
to develop its website. The process began at the end of March, 2014 and continued through June with the support of additional consultants.
Compensation was 500,000 shares of common stock, having a fair value of $15,000 ($0.03/share), based upon recent quoted trading
price. Mr. Hobbs is deemed a sophisticated investor in that he has sufficient knowledge and experience in financial and business
matters to make him capable of evaluating the merits and risks of receiving the shares. The securities were not registered under
the Securities Act, or the securities laws of any state, and were offered or issued in reliance on the exemption from registration
afforded by Section 4(2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving any public offering.
On February 14, 2014, the Company issued 400,000,000 shares
of its common stock to Sierra Global, LLC, who is deemed an accredited investor, for a subscription receivable, having a fair value
of $28,000 ($0.00007/share), based upon recent quoted trading price. The securities were not registered under the Securities Act,
or the securities laws of any state, and were offered or issued in reliance on the exemption from registration afforded by Section
4(2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving any public offering.,
Additionally, on January 17, 2014, the Company issued 25,000,000
shares of its common stock to Asher Enterprise, Inc. on January 17, 2014, who is deemed an accredited investor for the settlement
of debt, having a fair value of $3,225 ($0.000129/share), based upon recent quoted trading price. The securities were not registered
under the Securities Act, or the securities laws of any state, and were offered or issued in reliance on the exemption from registration
afforded by Section 4(2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving any public offering.
On September 23, 2014, the Company entered into a severance
agreement with one of its executives resulting in the authorization of 5,555,556 shares of the Company’s common stock having
a fair value of $0.0194/share, based upon quoted trading price at the date of the executed agreement. The company recorded
$107,778 in stock compensation as this award was authorized by the Board of Directors on September 23, 2014. The stock was
issued on November 6, 2014.
On October 29, 2014, the Company issued 2,941,176 shares of
common stock to TCA Global Credit Master Fund, LP, an investment management company, who is deemed an accredited investor, for
advisory fees not to exceed $100,000 as part of the terms for securing a $5,000,000 line of credit. If the originally issued shares
were to exceed $100,000 the remaining shares are to be refunded to the Company. The securities issued were not registered under
the Securities Act, or the securities laws of any state, and were offered or issued in reliance on the exemption from registration
afforded by Section 4(2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving any public offering.
On October 29, 2014, as part of the TCA Global Credit Master
Fund, LP the Company agreed to pay a broker fee of 6% of the initial debenture to an accredited investor of 970,000 of common stock
having a fair market value of $32,980 which resulted in a $20 gain, based upon quoted trading price at the date of the executed
agreement. The securities were not registered under the Securities Act, or the securities laws of any state, and were offered or
issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended, as a
transaction by the Company not involving any public offering.
On October 30, 2014, the Company established a share reserve
of common stock to an accredited investor in the amount of 101,102,941 as part of the terms of the Debenture to TCA Global Credit
Master Fund, LP, to be five (5) times such number of shares of Common Stock as shall be necessary to effect the full conversion
per Article VII, Section 4 of the Debenture. As of June 30, 2015, the share reserve of common stock is 200,927,475. This
is based on the stock price at June 30, 2015 with an eighty percent (80%) discount.
On January 27,
2015, the Company issued 7,500,000 shares of its common stock to Hermen Cruz, who is deemed an accredited investor, as consideration
for his participation in the early development of the Company in 2007, having a fair value of $135,750 ($0.0181/share), based upon
recent quoted trading price. The securities were not registered under the Securities Act, or the securities laws of any state,
and were offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933,
as amended, as a transaction by the Company not involving any public offering.
On February
6, 2015, the Company issued 2,500,000 shares of its common stock to Erwin Sillerico, who is deemed an accredited investor, as consideration
for his participation in the early development of the Company in 2007, having a fair value of $49,750 ($0.0199/share), based upon
recent quoted trading price. The securities were not registered under the Securities Act, or the securities laws of any state,
and were offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933,
as amended, as a transaction by the Company not involving any public offering.
On March 24, 2015, the Company entered into a severance agreement
with its National Account Sales Manager resulting in the authorization of 833,335 shares of the Company’s common stock having
a fair value of $16,250 ($0.0195/share), based upon quoted trading price at the date of the executed agreement. At December 31,
2014, the Company recorded $6,417 as common stock payable. This award was authorized by the Board of Directors on March 24, 2015.
The stock was issued on March 24, 2015.
On April 2, 2015, the Company issued and executed a convertible
note to an accredited investor for $15,900. The Company converted accounts payable for services provided to allow the Company to
become DTC eligible of $14,500 plus interest of $1,400 incurred on January 29, 2014. The note has a term of one year and bears
interest at 10% and is unsecured. The debt is convertible based upon 50% of the stock price at January 29, 2014 of a price per
share of $0.0016. On April 7, 2015, the note was converted to 19,875,000 shares of the Company’s common stock which resulted
in a loss of $389,550.
On May 6, 2015, MyECheck issued 150,000,000 shares of its common
stock as payment of the purchase price for 100% of the issued and outstanding capital stock of Seergate, Ltd. The common
stock issued in connection with the Seergate transaction was valued at $0.02 per share and was calculated using the volume-weighted
sales price per share on the OTC – PINK for a consecutive period of ten (10) business days. The securities were not
registered under the Securities Act, or the securities laws of any state, and were offered or issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving
any public offering.
On April 16, 2015, the Company approved the partial assignment
of $40,000 of a debt dated October 5, 2010. On April 21, 2015, the Company authorized the conversion of such debt into 40,000,000
shares of common stock to an accredited investor at $0.001 per share. The note was converted during the three months ended June
30, 2015 and the Company recorded a loss on conversion of $840,000.
Convertible Debt Payable
April 26, 2010 Convertible Debt – Asher Enterprises,
Inc.
Terms
On April 26, 2010, the Company issued and executed a convertible
note for $50,000. The Company paid $3,000 in debt issue costs and received net proceeds of $47,000. The note had a term of one
year and bears interest at 8%, default interest rate of 22%, and was unsecured.
Conversion
The debt is convertible based upon 55% of the average of the
three lowest closing prices within the prior ten trading day period. The conversion option may be exercised in the event of default
or in whole or part at the option of the holder of the note prior to the debt’s maturity.
The Note was not issued with the intent
of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation.
In addition the notes contain a conversion price adjustment which is based upon 60% of the average of the three lowest closing
bid prices within the prior fifteen trading day period. Therefore, the estimated fair value of the conversion feature of $26,182
(based on observable inputs) was bifurcated from the Note and accounted for as a separate derivative liability. The Note
Derivative is carried at fair value (using the Black Scholes Model) until the Note is converted or otherwise extinguished. Any
changes in fair value are recognized in earnings.
At December 31, 2014 and 2013, the fair
value of the Note Derivative was estimated to be $0.00 and $0.00, resulting in a gain of $0.00 and $12,218 for 2014 and 2013, respectively.
October 29, 2014 Convertible Debt – TCA Global Credit
Master Fund, LP
Terms
On October 29, 2014, the Company issued and executed a convertible
note for $550,000. The Company paid $60,975 in fees and received net proceeds of $489,025. In addition, the stock compensation
are disclosed in Item 10, page 24. For value received, the Company promises to pay to the order of the Holder, by no later than
July 29, 2015 interest on the outstanding principal amount under the Debenture, at the rate of eleven percent (11%) per annum simple
interest from the Effective Date.
Conversion
The debt is convertible based upon 80% of the average daily
volume weighted average price of the Company’s Common Stock during the five (5) trading days immediately prior to the Conversion
Date.
Additionally, the note contains a ratchet provision. The Company
determined under ASC 815, that the embedded conversion feature (if offering of common stock is at no consideration or at a price
that is lower than the effective conversion price on the date shares are offered for sale, then a ratchet down of effective exercise
price to price per share offered for common stock would be used to determine additional shares to be issued). The Company has determined
that this ratchet provision indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore,
is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting
period, the Company will mark this derivative financial instrument to fair value.
At October 29, 2014 the estimated fair
value of the conversion feature of $488,246 (based on observable inputs) was bifurcated from the Note and accounted for as a separate
derivative liability. The Note Derivative is carried at fair value (using the Black Scholes Model) until the Note is converted
or otherwise extinguished. Any changes in fair value are recognized in earnings.
The initial derivative expense of $488,246
was reported in the statement of operations. At June 30, 2015 the derivative expense was decreased by $274,770 leaving a balance
of $164,598.
Convertible Debt Payable (Cont.)
At December 31, 2014 the balance on the note was $550,000. As
reported in the current balance sheet prepaid interest of $33,737 was included in the prepaid expense amount of $135,444 with $9,638
included in interest expense of $23,066. (See Exhibit 10.21)
At June 30, 2015 the balance on the note was $550,000. As reported
in the current balance sheet prepaid interest of $4,819 was included in the prepaid expense amount of $26,852 with $28,914 included
in interest expense of $36,593.
Convertible Notes Payable
From time to time the Company raises working capital due to
issuances of convertible notes as further described below. During the six months ended June 30, 2015, we entered into multiple
convertible notes payable with five (5) containing embedded derivative liabilities (conversion options). At June 30, 2015, these
notes consist of the following:
On April 2, 2015, the Company issued and executed a convertible
note for $15,900. The Company converted accounts payable for services provided to allow the Company to become DTC eligible of $14,500
plus interest of $1,400 incurred on January 29, 2014. The note has a term of one year and bears interest at 10% and is unsecured.
The debt is convertible based upon 50% of the stock price at January 29, 2014 of a price per share of $0.0016. During the three
months ended June 30, 2015 the note was converted into 19,875,000 shares of common stock. The Company recorded a loss on conversion
of $389,550.
On April 6, 2015, the Company issued and executed a convertible
promissory note to Charlie Abujudeh for $40,000, due April 6, 2016, bearing interest at the rate of 10% per annum. This note shall
be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy
percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being April 6, 2015 as posted at
the OTC Markets exchange of $0.0102 per share for a total common stock issuance of 3,913,894. (Substantially in the Form 10 attached
as Exhibit 10.28)
On April 8. 2015, the Company issued and executed a convertible
promissory note to Charlie Abujudeh for $13,000, due April 8, 2016, bearing interest at the rate of 10% per annum. This note shall
be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy
percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being April 8, 2015 as posted at
the OTC Markets exchange of $0.0098 per share for a total common stock issuance of 1,326,531. (Substantially in the Form 10 attached
as Exhibit 10.28)
On April 16, 2015, the Company issued and executed a convertible
promissory note to Charlie Abujudeh for $30,000, due April 16, 2016, bearing interest at the rate of 10% per annum. This note shall
be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy
percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being April 16, 2015 as posted
at the OTC Markets exchange of $0.0087 per share for a total common stock issuance of 3,456,221. (Substantially in the Form 10
attached as Exhibit 10.28)
On April 23, 2015, the Company issued and executed a convertible
promissory note to Charlie Abujudeh for $25,000, due April 23, 2016, bearing interest at the rate of 10% per annum. This note shall
be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy
percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being April 23, 2015 as posted
at the OTC Markets exchange of $0.0096 per share for a total common stock issuance of 2,606,882. (Substantially in the Form 10
attached as Exhibit 10.28)
On May 6, 2015, the Company issued and executed a convertible
promissory note to Charlie Abujudeh for $20,000, due May 6, 2016, bearing interest at the rate of 10% per annum. This note shall
be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy
percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being May 6, 2015 as posted at
the OTC Markets exchange of $0.0094 per share for a total common stock issuance of 2,132,196. (Substantially in the Form 10 attached
as Exhibit 10.28)
Convertible Notes Payable with Embedded Derivative Liabilities
(Conversion Options)
On October 29, 2014, the Company issued and executed a convertible
debenture to TCA Global Credit Master Fund, LP for $550,000. The Company paid $60,975 in fees and received net proceeds of $489,025.
In addition, the stock compensation are disclosed in Item 10, page 24. For value received, the Company promises to pay to the order
of the Holder, by no later than July 29, 2015 interest on the outstanding principal amount under the Debenture, at the rate of
eleven percent (11%) per annum simple interest from the Effective Date. (Attached as Exhibit 10.21)
Convertible Notes Payable with Embedded Derivative Liabilities
(Conversion Options (Cont.))
On May 12, 2015, the Company issued and executed a Callable
Secured Convertible Note to Charlie Abujudeh for $40,000, due May 12, 2016, bearing interest at the rate of 10% per annum. The
conversion price shall be calculated at the election of the Holder the lesser of (i) 70% of the Trading Price of the Borrower’s
Common Stock on the issue date or (ii) the Trading Price of the Borrower’s Common Stock on the Conversion Date. The lowest
price the Holder can convert (including discount) is $0.001 per share. (Substantially in the Form 10 attached as Exhibit 10.29)
On May
28, 2015, the Company issued and executed a Callable Secured Convertible Note to Johann Gumpp for $30,000, due May 28, 2016, bearing
interest at the rate of 10% per annum. The conversion price shall be calculated at 70% of the Trading Price of the Borrower’s
Common Stock on the defined Conversion Date. The Common Stock to the Holder shall be restricted pursuant to SEC Rule 144 with a
twelve month holding period. (Substantially in the Form 10
attached as Exhibit 10.30)
On June
8, 2015, the Company issued and executed a Callable Secured Convertible Note to Johann Gumpp for $40,000, due June 8, 2016, bearing
interest at the rate of 10% per annum. The conversion price shall be calculated at 70% of the Trading Price of the Borrower’s
Common Stock on the defined Conversion Date. The Common Stock to the Holder shall be restricted pursuant to SEC Rule 144 with a
twelve month holding period. (Substantially in the Form 10 attached
as Exhibit 10.30)
On June
19, 2015, the Company issued and executed a Callable Secured Convertible Note to Johann Gumpp for $40,000, due June 19, 2016, bearing
interest at the rate of 10% per annum. The conversion price shall be calculated at 70% of the Trading Price of the Borrower’s
Common Stock on the defined Conversion Date. The Common Stock to the Holder shall be restricted pursuant to SEC Rule 144 with a
twelve month holding period. (Substantially in the Form 10
attached as Exhibit 10.30)
Item 11: Description of Registrant’s
Securities to be Registered
Authorized Capital Stock
We are authorized to issue 5,000,000,000 shares of capital stock,
of which 4,900,000,000 are shares of common stock, par value $.00001 per share (the “Common Stock”), and 100,000,000
shares of preferred stock, par value $.00001 per share (the “Preferred Stock”).
As of June 30, 2015, we have issued and outstanding securities
on a fully diluted basis:
| ● | 4,073,145,067 shares of common stock |
| ● | no shares of preferred stock; |
| ● | no warrants to acquire shares of our common stock; and |
| ● | no unissued and unvested restricted stock grants. |
Common Stock
The holders of the common stock are entitled to one vote per
share. In addition, the holders of our common stock will be entitled to receive ratably such dividends, if any, as may be declared
by our Board of Directors out of legally available funds; however, the current policy of our Board of Directors is to retain earnings,
if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of the common stock will be entitled
to share ratably in all assets that are legally available for distribution. The holders of the common stock will have no preemptive,
subscription, redemption or conversion rights. The rights, preferences and privileges of holders of the common stock will be subject
to, and may be adversely affected by, the rights of the holders of any series of preferred stock, which may be designated solely
by action of our Board of Directors and issued in the future.
Each outstanding share of common stock is entitled to one vote
and each fractional share is entitled to a corresponding fractional vote on each matter submitted to a vote of shareholders. Cumulative
voting is allowed in the election of directors of the Company.
The holders of a majority of the shares who are entitled to
vote at a shareholders meeting and who are present in person or by proxy shall be necessary for and shall constitute a quorum for
the transaction of business at shareholder meetings, except as otherwise provided by the Wyoming statutes. If a quorum is not present
or represented at a meeting of the shareholders, those present in person or represented by proxy shall have the power to adjourn
the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented.
At an adjourned meeting where a quorum is present or represented, any business may be transacted which might have been transacted
at the meeting as originally notified.
When a quorum is present at a meeting of shareholders, the vote
of the holders of a majority of the issued and outstanding shares having voting power, present in person or represented by proxy,
shall decide any question brought before the meeting, unless the question is one which, by express provision of the statutes, requires
a higher vote in which case the express provision shall govern. The shareholders present at a duly constituted meeting
may continue to transact business until adjournment, despite the withdrawal of enough shareholders holding, in the aggregate, issued
and outstanding shares having voting power to leave less than a quorum.
Preferred Stock
Our Board of Directors will be authorized,
subject to any limitations prescribed by law, without further vote or action by our stockholders, to issue from time to time shares
of preferred stock in one or more series. Each series of preferred stock will have such number of shares, designations, preferences,
voting powers, qualifications and special or relative rights or privileges as shall be determined by our Board of Directors, which
may include, among others, distinct classes or series, dividend rights, voting rights, liquidation preferences, redemption rights,
conversion rights and preemptive rights.
Warrants
In connection with the sale of the Shares, MyECheck has entered
into warrant agreements with Youngal Group Ltd. And Anshan Finance Ltd. (the “Warrants”). The terms of the Warrants
provide the Investors the opportunity to purchase up to 4,000,000 additional shares of MyECheck’s common stock for a purchase
price of $4.00 per share or $2.00 per share, respectively. The Warrants may only be exercised following the effective time of the
proposed merger between MyECheck and Sekoya and the right to exercise the warrants terminates as of 5:00 p.m. local time in Vancouver,
B.C. on the third anniversary of issuance. The Warrants were to be issued in reliance upon an exemption from the registration requirements
of the Act provided by Regulation S and may only be transferred in accordance with the provisions of Regulation S, pursuant to
an effective registration under the Act, or pursuant to an available exemption from registration under the Act. Upon conversion
of the Note all associated warrants were cancelled.
On December 31, 2011 by order of a Board Resolution all non-qualified
stock options and warrants were cancelled.
Prior to exercise, the warrants do not
confer upon holders any voting or any other rights as a stockholder. No fractional shares will be issued upon exercise of the warrants.
If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we may, in our discretion,
upon exercise, round up to the nearest whole number the number of shares of our common stock to be issued to the warrant holder
or otherwise equitably adjust the exercise amount and exercise price per share.
Registration Rights
We have agreed to include all shares of
common stock sold in private placements, including any warrants issued in connection therewith, or for fees, as well as certain
share that have been issued as consideration for services, in our next filed "resale" registration statement with the
Securities and Exchange Commission.
Item 12: Indemnification of Directors and Officers
The Corporation Laws of the State of Wyoming and MyECheck’s
Bylaws provide for indemnification of MyECheck’s Directors for liabilities and expenses that they may incur in such capacities.
In general, Directors and Officers are indemnified with respect to actions taken in good faith in a manner reasonably believed
to be in, or not opposed to, the best interests of MyECheck, and with respect to any criminal action or proceeding, actions that
the indemnitee had no reasonable cause to believe were unlawful. Furthermore, the personal liability of the Directors is limited
as provided in MyECheck’s Articles of Incorporation.
Regarding indemnification for liabilities arising under the
Securities Act of 1933, which may be permitted to directors or officers under Wyoming law, we are informed that, in the opinion
of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore,
unenforceable.
Item 13: Financial Statements and Supplementary Data
The consolidated financial statements required to be filed pursuant
to this Item 8 begin on page F-1 of this report.
Item 14: Changes in Disagreements with Accountants on Accounting
and Financial Disclosure
PMB Helin Donovan, LLP, the Company’s Independent Registered
Public Accounting Firm (the “Firm”), has been the only auditor since 2010 and there have been no disagreements between
MyECheck and the Firm.
Item 15: Financial Statements and Exhibits
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
| |
|
|
/s/ Edward
R. Starrs |
| |
|
|
EDWARD R. STARRS |
| |
|
|
President and Chief Executive Officer |
| |
|
|
|
| |
|
|
/s/ Bruce M. Smith |
| |
|
|
BRUCE M. SMITH |
| |
|
|
Chief Financial Officer |
| |
|
|
|
| Date: |
September 23, 2015 |
|
|
MYECHECK, INC.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2014 AND 2013
Contents
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
MyECheck, Inc.
We have audited
the accompanying consolidated balance sheets of MyECheck, Inc. (“the Company”) as of December 31, 2014 and 2013, and
the related consolidated statements of operations, consolidated statements of stockholders’ deficit and consolidated statements
of cash flows for each of the years in the two-year period ended December 31, 2014. These consolidated financial statements are
the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted
our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion,
the consolidated financial statements referred to above present fairly, in all material respects, the financial position of MyECheck,
Inc. as of December 31, 2014 and 2013, and the results of its operations and its cash flows for each of the years in the two-year
period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.
The accompanying
consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in
Note 3 to the financial statements, the Company has sustained net losses from operations and has an accumulated deficit. These
factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this
regard are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
/s/ PMB Helin
Donovan, LLP
PMB Helin Donovan, LLP
Seattle, Washington
April 7, 2015
MyECheck, Inc.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2014 AND 2013
| | |
December 31, 2014 | | |
December 31, 2013 | |
| | |
| | |
| |
| ASSETS | |
| | | |
| | |
| | |
| | | |
| | |
| Current Assets | |
| | | |
| | |
| Cash | |
$ | 51,261 | | |
$ | 65 | |
| Accounts receivable | |
| 146,740 | | |
| 6,000 | |
| Employee advances | |
| 2,500 | | |
| - | |
| Capitalized loan fees -Net | |
| 150,869 | | |
| - | |
| Prepaid expenses | |
| 135,444 | | |
| - | |
| Total Current Assets | |
| 486,814 | | |
| 6,065 | |
| | |
| | | |
| | |
| Fixed Assets - Net | |
| 61,730 | | |
| 3,374 | |
| Intangible Assets - Net Website net | |
| 20,250 | | |
| - | |
| Other Assets -Deposits | |
| 70,502 | | |
| - | |
| Total Other Assets | |
| 152,482 | | |
| 3,374 | |
| | |
| | | |
| | |
| Total Assets | |
$ | 639,296 | | |
$ | 9,439 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | |
| | |
| | | |
| | |
| Current Liabilities | |
| | | |
| | |
| Accounts payable and accrued expenses | |
$ | 395,613 | | |
$ | 442,295 | |
| Payroll taxes payable | |
| 251,285 | | |
| 207,779 | |
| Accrued payroll | |
| 47,710 | | |
| 82,901 | |
| Accrued rent | |
| 32,904 | | |
| - | |
| Loans payable - related party | |
| 34,036 | | |
| - | |
| Loans payable - other | |
| 56,415 | | |
| - | |
| Derivative liability | |
| 439,368 | | |
| - | |
| Deferred revenue | |
| 25,000 | | |
| - | |
| Convertible notes - net | |
| 550,000 | | |
| 54,750 | |
| Total Current Liabilities | |
| 1,832,331 | | |
| 787,725 | |
| | |
| | | |
| | |
| Stockholders' Deficit | |
| | | |
| | |
| Preferred stock, $0.00001 par value, 100,000,000 authorized, one issued and outstanding | |
| - | | |
| - | |
| Common stock, $0.00001 par value, 4,900,000,000 shares authorized, 4,127,436,732 and 4,692,470,000 shares issued and outstanding, respectively | |
| 51,274 | | |
| 46,925 | |
| Treasury stock | |
| (10,001 | ) | |
| - | |
| Additional paid in capital | |
| 3,452,036 | | |
| 3,077,627 | |
| Subscription receivable | |
| - | | |
| (17,500 | ) |
| Common stockto be issued | |
| 191,917 | | |
| - | |
| Accumulated deficit | |
| (4,878,261 | ) | |
| (3,885,338 | ) |
| Total Stockholders' Deficit | |
| (1,193,035 | ) | |
| (778,286 | ) |
| | |
| | | |
| | |
| Total Liabilities and Stockholders' Deficit | |
$ | 639,296 | | |
$ | 9,439 | |
The accompanying notes are an integral part
of these consolidated financial statements
MyECheck, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND
2013
| | |
For the Years Ended December 31, | |
| | |
2014 | | |
2013 | |
| Revenues | |
$ | 952,156 | | |
$ | 89,496 | |
| | |
| | | |
| | |
| Cost of revenues | |
| 99,976 | | |
| - | |
| Gross Profit | |
| 852,180 | | |
| 89,496 | |
| | |
| | | |
| | |
| General and administrative | |
| 1,203,794 | | |
| 72,943 | |
| Research and development | |
| 254,580 | | |
| 7,000 | |
| Total Operating Expenses | |
| 1,458,374 | | |
| 79,943 | |
| | |
| | | |
| | |
| Income or (Loss) from Operations | |
| (606,194 | ) | |
| 9,553 | |
| | |
| | | |
| | |
| Other Income /(Expense) | |
| | | |
| | |
| Derivative liability | |
| (488,246 | ) | |
| - | |
| Change in fair value of derivative liabilities | |
| 48,878 | | |
| 24,351 | |
| Interest expense net of interest income | |
| (24,266 | ) | |
| (26,613 | ) |
| Loss on convertible note | |
| (62,980 | ) | |
| - | |
| Other income forgiveness of debt | |
| 140,685 | | |
| 130,167 | |
| Total Other Income/(Expense) | |
| (385,929 | ) | |
| 127,905 | |
| Net income or (loss) before income taxes | |
| (992,123 | ) | |
| 137,458 | |
| Provision for income taxes | |
| (800 | ) | |
| (800 | ) |
| Net (Loss) or Income | |
$ | (992,923 | ) | |
$ | 136,658 | |
| | |
| | | |
| | |
| Basic earnings per share | |
$ | 0.00 | | |
$ | 0.00 | |
| | |
| | | |
| | |
| Diluted earnings per share | |
$ | 0.00 | | |
$ | 0.00 | |
| | |
| | | |
| | |
| Weighted average number of shares outstanding during the period -
basic | |
| 4,198,671,107 | | |
| 4,153,976,849 | |
| Weighted average number of shares outstanding during the period -
fully diluted | |
| 4,198,671,107 | | |
| 4,178,976,849 | |
The accompanying notes are an integral part
of these consolidated financial statements
MyECheck, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2014 AND
2013
| | |
Preferred Stock | | |
Common Stock | | |
Treasury Stock | | |
Additional | | |
Subscription | | |
Common Stock | | |
Accumulated | | |
| |
| | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Paid
-in Capital | | |
Receivable | | |
Payable | | |
Deficit | | |
Total | |
| Balance, December 31, 2012 | |
| - | | |
$ | - | | |
| 3,517,470,000 | | |
$ | 35,175 | | |
| - | | |
$ | - | | |
$ | 2,897,653 | | |
$ | - | | |
$ | - | | |
$ | (4,021,996 | ) | |
$ | (1,089,168 | ) |
| Conversion of debt to common stock | |
| - | | |
| - | | |
| 925,000,000 | | |
| 9,250 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 9,250 | |
| Net Income or (loss) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 29,965 | | |
| 29,965 | |
| Balance, August 31, 2013 | |
| - | | |
| - | | |
| 4,442,470,000 | | |
| 44,425 | | |
| - | | |
| - | | |
| 2,897,653 | | |
| - | | |
| - | | |
| (3,992,031 | ) | |
| (1,049,953 | ) |
| September Net profit | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 30,764 | | |
| 30,764 | |
| Stock issued for cash | |
| - | | |
| - | | |
| 250,000,000 | | |
| 2,500 | | |
| - | | |
| - | | |
| 15,000 | | |
| (17,500 | ) | |
| - | | |
| - | | |
| - | |
| Forgiveness of accrued compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 84,281 | | |
| - | | |
| - | | |
| - | | |
| 84,281 | |
| Forgiveness of note payable, related party | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 62,964 | | |
| - | | |
| - | | |
| - | | |
| 62,964 | |
| Forgiveness of note payable, related party | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 17,729 | | |
| - | | |
| - | | |
| - | | |
| 17,729 | |
| Net Income or (loss) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 75,929 | | |
| 75,929 | |
| Balance, December 31, 2013 | |
| - | | |
$ | - | | |
| 4,692,470,000 | | |
$ | 46,925 | | |
| - | | |
$ | - | | |
$ | 3,077,627 | | |
$ | (17,500 | ) | |
$ | - | | |
$ | (3,885,338 | ) | |
$ | (778,286 | ) |
| Purchase shares of Treasury Stock at par | |
| (1 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1 | ) |
| Subscription receivable | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| | | |
| - | | |
| 45,500 | | |
| - | | |
| - | | |
| 45,500 | |
| Conversion of debt to common stock | |
| - | | |
| - | | |
| 25,000,000 | | |
| 250 | | |
| - | | |
| - | | |
| 94,750 | | |
| - | | |
| - | | |
| - | | |
| 95,000 | |
| Purchase shares of Treasury Stock at par | |
| - | | |
| - | | |
| (1,000,000,000 | ) | |
| - | | |
| (1,000,000,000 | ) | |
| (10,000 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| (10,000 | ) |
| Subscription receivable | |
| - | | |
| - | | |
| 400,000,000 | | |
| 4,000 | | |
| - | | |
| - | | |
| 24,000 | | |
| (28,000 | ) | |
| - | | |
| - | | |
| - | |
| Common stock for services capitalized loan fees | |
| - | | |
| - | | |
| 2,941,176 | | |
| 29 | | |
| - | | |
| - | | |
| 99,971 | | |
| - | | |
| - | | |
| - | | |
| 100,000 | |
| Common stock for broker fees | |
| - | | |
| - | | |
| 970,000 | | |
| 10 | | |
| - | | |
| - | | |
| 32,970 | | |
| - | | |
| - | | |
| - | | |
| 32,980 | |
| Common stock for services | |
| - | | |
| - | | |
| 500,000 | | |
| 5 | | |
| - | | |
| - | | |
| 14,995 | | |
| - | | |
| - | | |
| - | | |
| 15,000 | |
| Common stock payable for services | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 185,500 | | |
| - | | |
| 185,500 | |
| Common stock for compensation | |
| - | | |
| - | | |
| 5,555,556 | | |
| 55 | | |
| - | | |
| - | | |
| 107,723 | | |
| - | | |
| 6,417 | | |
| - | | |
| 114,195 | |
| Net income or (loss) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (992,923 | ) | |
| (992,923 | ) |
| Balance, December
31, 2014 | |
| (1 | ) | |
| - | | |
| 4,127,436,732 | | |
| 51,274 | | |
| (1,000,000,000 | ) | |
| (10,001 | ) | |
| 3,452,036 | | |
| - | | |
| 191,917 | | |
| (4,878,261 | ) | |
$ | (1,193,035 | ) |
The accompanying notes are an integral part
of these consolidated financial statements
MyECheck, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND
2013
| | |
For the Years Ended December 31, | |
| | |
2014 | | |
2013 | |
| Cash Flows from Operating Activities: | |
| | | |
| | |
| Net income (loss) | |
$ | (992,923 | ) | |
$ | 136,658 | |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |
| | | |
| | |
| Depreciation and amortization expense | |
| 51,061 | | |
| 178 | |
| Loss on debt conversion | |
| 62,980 | | |
| - | |
| Change in fair value of derivative liabilities | |
| 439,368 | | |
| (24,351 | ) |
| Warrants issued for services | |
| - | | |
| 390 | |
| Stock based Compensation | |
| 299,695 | | |
| - | |
| Other income forgiveness of debt | |
| (147,164 | ) | |
| (130,167 | ) |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| (Increase) Decrease in: | |
| | | |
| | |
| Accounts receivable | |
| (140,740 | ) | |
| (6,000 | ) |
| Employee advances | |
| (2,500 | ) | |
| - | |
| Prepaid expenses | |
| (135,444 | ) | |
| - | |
| Increase in: | |
| | | |
| | |
| Accounts payable and accrued expenses | |
| 125,730 | | |
| 41,388 | |
| Deferred revenue | |
| 25,000 | | |
| - | |
| Payroll taxes payable | |
| 15,971 | | |
| - | |
| Accrued payroll | |
| - | | |
| 18,271 | |
| Net Cash (Used by) Provided by Operating Activities | |
| (398,966 | ) | |
| 36,367 | |
| | |
| | | |
| | |
| Cash Flows from Investing Activities | |
| | | |
| | |
| Purchase of computer equipment | |
| (62,561 | ) | |
| (3,552 | ) |
| Purchase of website | |
| (9,000 | ) | |
| - | |
| Security deposit on new facility | |
| (70,502 | ) | |
| - | |
| Purchase of treasury stock | |
| (10,001 | ) | |
| - | |
| Net Cash Used by Investing Activities | |
| (152,064 | ) | |
| (3,552 | ) |
| | |
| | | |
| | |
| Cash Flows from Financing Activities: | |
| | | |
| | |
| Repayment of convertible debt | |
| (22,750 | ) | |
| (22,750 | ) |
| Proceeds from loan payable - related parties | |
| 34,036 | | |
| - | |
| Proceeds from stock subscription receivable | |
| 45,500 | | |
| - | |
| Proceeds of convertible debenture | |
| 489,025 | | |
| - | |
| Proceeds from note payable | |
| 56,415 | | |
| - | |
| Repayment of shareholders | |
| - | | |
| (10,000 | ) |
| Net Cash Provided by (Used by) Financing Activities | |
| 602,226 | | |
| (32,750 | ) |
| | |
| | | |
| | |
| Net Increase in Cash | |
| 51,196 | | |
| 65 | |
| | |
| | | |
| | |
| Cash at Beginning of Period | |
| 65 | | |
| - | |
| | |
| | | |
| | |
| Cash at End of Period | |
$ | 51,261 | | |
$ | 65 | |
| | |
| | | |
| | |
| Supplemental Disclosure of Cash Flow Information | |
| | | |
| | |
| Cash Paid for: | |
| | | |
| | |
| Taxes | |
$ | 4,800 | | |
$ | - | |
| Interest | |
$ | - | | |
$ | - | |
| | |
| | | |
| | |
| Supplemental Disclosure of Non Cash Investing and Financing Activities | |
| | | |
| | |
| Forgiveness of accrued officers comp | |
$ | - | | |
$ | 84,281 | |
| Forgiveness of N/P R/P | |
$ | - | | |
$ | 62,964 | |
| Forgiveness of N/P R/P | |
$ | - | | |
$ | 17,729 | |
| Common shares issued website | |
$ | 15,000 | | |
$ | - | |
| Common shares issued capitalized loan fees | |
$ | 133,000 | | |
$ | - | |
| Issuance for debt | |
$ | 32,000 | | |
$ | 8,860 | |
| Subscription receivable | |
$ | 28,000 | | |
$ | 17,500 | |
The accompanying notes are an integral part
of these consolidated financial statements
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND NATURE
OF OPERATIONS
Organization
MyECheck, Inc. (“MEC”) (“the Company”) was
incorporated in the state of Delaware on October 29, 2004. The Company’s office is located at Folsom, California. On May
25, 2012 the Company was redomiciled in the State of Wyoming. In addition, the Company registered as a foreign corporation in the
State of California on October 16, 2014.
GreenPay, LLC (“GreenPay”), a wholly owned subsidiary
of the Company, incorporated in the State of Wyoming on March 11, 2014 was acquired by MyEcheck on August 20, 2014. After the acquisition,
GreenPay registered as a foreign limited liability company in the State of California on November 10, 2014.
Sekoya Holdings, Ltd. (“Sekoya”) was incorporated in
Nevada on May 19, 2005, and is an inactive company.
Reverse Acquisition and Recapitalization
On March 14, 2008, Sekoya Holdings, Ltd. (“Sekoya”),
then a development stage company, merged with MEC and MEC became the surviving corporation. This transaction was accounted for
as a reverse acquisition. Sekoya did not have any operations and majority-voting control was transferred to MEC. The transaction
also required a recapitalization of MEC. Since MEC acquired a controlling voting interest, it was deemed the accounting acquirer,
while Sekoya was deemed the legal acquirer. The historical financial statements of the Company are of those of MEC and of the consolidated
entities from the date of merger and subsequent.
On August 20, 2014, MyECheck completed the acquisition of its licensee,
GreenPay, LLC. GreenPay, LLC is now a wholly owned subsidiary of MyECheck, Inc. GreenPay assets are owned by MyECheck, however
Greenpay will be operated as a separate entity and will move forward with an independent board of directors and management in 2015.
Basis of Presentation
The accompanying consolidated financial statements of the Company
have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) under
the accrual basis of accounting.
Nature of Operations
The Company provides software that enables merchants and banks to
receive and process real –time payments from consumers, businesses and government agencies. Payment can be initiated online,
via point of sale terminals, or over the telephone. The Company also licenses patented technology in the mobile payments and banking
industries.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
All significant intercompany accounts and balances have been eliminated
in consolidation.
Risks and Uncertainties
The Company’s operations are subject
to significant risk and uncertainties including financial, operational, regulatory and other risks including the potential risk
of business failure.
The Company has experienced, and in the
future expects to continue to experience, variability in its sales and earnings. The factors expected to contribute
to this variability include, among others, (i) the uncertainty associated with the commercialization and ultimate success of the
product, (ii) intense competition and rapid technological changes for the mobile payment processing industry and (iii) general
economic conditions which may cast doubt on future success.
See Note 3 regarding going concern matters.
Fiscal Year
The Company has adopted a December 31 fiscal
year end.
Use of Estimates and Assumptions
The preparation of consolidated financial statements in conformity
with accounting principles generally accepted in the U.S. of America requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact,
among others, the following: the fair value of warrants granted, estimates of the probability and potential magnitude of contingent
liabilities and the valuation allowance for deferred tax assets due to continuing operating losses.
Making estimates requires management to exercise significant judgment.
It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed
at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the
near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original
maturities of three months or less at the time of purchase to be cash equivalents. At December 31, 2014 and 2013, the Company had
no cash equivalents.
The Company minimizes its credit risk associated with cash by periodically
evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At
December 31, 2014 and 2013, there were no balances that exceeded the federally insured limit.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are recorded at the
invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business
but mitigates the associated risks by performing credit checks and actively pursuing past due accounts.
The Company recognizes an allowance for
losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on
an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment
of specific identifiable customer accounts considered at risk or uncollectible.
In 2014 and 2013, the Company recorded
no bad debt expense.
Capitalized Loan Fees
On October 29, 2014, the Company obtained a loan facility which
resulted in the capitalization of loan fees of $193,975 being amortized over the life of the loan. For the year ended December
31, 2014, the amortized loan fees was $43,106 for a net amount reported on the Balance Sheet of $150,869. See Notes 5 & 6.
Revenue Recognition
The Company records revenue when all of the following have occurred;
(1) persuasive evidence of an arrangement exists, (2) product delivery has occurred, (3) the sales price to the customer is fixed
or determinable, and (4) collectability is reasonably assured.
The Company earns revenue from services, which has included the
following: electronic check processing, financial verification, identity verification, check guarantee services and licensing of
intellectual property. The services are performed under the terms of a contract with a customer, which states the services to be
utilized and the terms and fixed price for all services under contract. The price of these services may be a fixed fee per transaction
and/or a percentage of the transaction processed depending on the service.
Revenue from electronic check processing is derived from fees collected
from merchants to convert merchant customer check data into an electronic image of a paper draft, which allows the Company to deposit
the funds to the merchant’s bank through image clearing with the Federal Reserve on behalf of the bank. The Company recognizes
the revenue related to electronic check processing fees when the services are performed.
Revenue from financial verification is derived from fees collected
from merchants to process requests to validate financial verifications to an outside service provider under contract with the Company.
This revenue is recognized when the transaction is processed, since the Company has no further obligations.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Revenue from check guarantee services is derived from fees collected
from merchants to process transaction to an outside service provider under contract with the Company. This revenue is recognized
when the transaction is processed, since the Company has no further obligations.
The Company derives revenue from monthly maintenance fees and initial
customer set-up fees. Monthly maintenance fee revenue billed monthly and is recognized as services are performed. Initial set-up
fees are recognized over the respective customer relationship period. Payments received in advance of completing the earnings process
are recorded as deferred revenue and recognized over the remaining service period.
Customers & Concentrations
Three customers comprised 98% of the total revenue for the year
ended December 31, 2014 and two customers comprised 100% of the total revenue for the year ended December 31, 2013. Two customers
represented 100% of net accounts receivable at December 31, 2014 and one customer represented 100% of net accounts receivable at
December 31, 2013.
Fair Value of Financial Instruments
The Company measures assets and liabilities
at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents
the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction
between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset
or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value
on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels
of inputs to measure fair value:
| · | Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. |
| · | Level 2 – Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices
for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities;
or inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| · | Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to
determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. |
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Fair Value of Financial Instruments
The following tables set forth our assets and liabilities measured
at recurring or non-recurring, at December 31, 2014 and December 31, 2013, and the fair value calculation input hierarchy level
that we have determined applies to each asset and liability category.
| | |
| | |
| | |
| | |
Carrying | |
| | |
Fair Value Measurements Using Inputs | | |
Amount at | |
| Financial Instruments | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
December 31, 2014 | |
| | |
| | |
| | |
| | |
| |
| Liabilities: | |
| | | |
| | | |
| | | |
| | |
| Derivative Instruments – Convertible | |
$ | - | | |
$ | - | | |
$ | 439,368 | | |
$ | 439,368 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total | |
$ | - | | |
$ | - | | |
$ | 439,368 | | |
$ | 439,368 | |
| | |
| | | |
| | | |
| | | |
| Carrying | |
| | |
| Fair Value Measurements Using Inputs | | |
| Amount at | |
| Financial Instruments | |
| Level 1 | | |
| Level 2 | | |
| Level 3 | | |
| December 31, 2013 | |
| | |
| | | |
| | | |
| | | |
| | |
| Liabilities: | |
| | | |
| | | |
| | | |
| | |
| Derivative Instruments – Convertible | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Total | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
Market price and estimated fair value of common stock used to measure
the Derivative Instruments-Warrants at December 31, 2014 and December 31, 2013:
| | |
December 31, 2014 | | |
December 31, 2013 | |
| Market price and estimated fair value of common stock: | |
| .0218 | | |
| 0.00001 | |
| Exercise price | |
| .0174 | | |
| 0.00006 | |
| Expected term (years) | |
| .58 | | |
| 1 | |
| Dividend yield | |
| - | | |
| - | |
| Expected volatility | |
| 217 | % | |
| 830 | % |
| Risk-free interest rate | |
| 12 | % | |
| 13 | % |
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
The risk-free rate of return reflects the interest rate for the
United States Treasury Note with similar time-to-maturity to that of the convertible debt.
The recorded value of other financial assets and liabilities, which
consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses
approximate the fair value of the respective assets and liabilities at December 31, 2014 and December 31, 2013 based upon the short-term
nature of the assets and liabilities.
Embedded Conversion Features
The Company evaluates embedded conversion features within convertible
debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated
from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the
conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt
with Conversion and Other Options” for consideration of any beneficial conversion feature.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures
to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase
warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative
financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value
and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.
For option-based simple derivative financial instruments, the Company
uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The
classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is
re-assessed at the end of each reporting period.
Beneficial Conversion Feature
For conventional convertible debt where
the rate of conversion is below market value, the Company records a "beneficial conversion feature" ("BCF")
and related debt discount.
When the Company records a BCF, the relative
fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional
paid in capital) and amortized to interest expense over the life of the debt.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Debt Issue Costs and Debt Discount
The Company may record debt issue costs
and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the
form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion
of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Original Issue Discount
For certain convertible debt issued, the
Company may provide the debt holder with an original issue discount. The original issue discount would be recorded to
debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.
Extinguishments of Liabilities
The Company accounts for extinguishments of liabilities in accordance
with ASC 860 - “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. When
the conditions are met for extinguishment accounting, the liabilities are derecognized and the gain or loss on the sale is recognized.
Income Taxes
We account for income taxes under the liability method, whereby
deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect
when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely
than not that some or all of these deferred tax assets will not be realized. Our policy is to prescribe a recognition threshold
and measurement attribute for the recognition and measurement of a tax position taken or expected to be taken in a tax return.
We have analyzed our filing positions in all jurisdictions where
we are required to file returns, and found no positions that would require a liability for unrecognized income tax positions to
be recognized. We are subject to tax examinations. In the event that we are assessed penalties and or interest, penalties will
be charged to other financing expense and interest will be charged to interest expense.
Earnings (Loss) Per Share
Basic net earnings (loss) per share is computed by dividing net
income (loss) for the period by the weighted average number of common stock outstanding during each period. Diluted earnings (loss)
per share is computed by dividing net income (loss) for the period by the weighted average number of common stock, common stock
equivalents and potentially dilutive securities outstanding during each period.
The Company uses the “treasury stock” method to determine
whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For the year ended December 31,
2013 the Company reflected net income and a dilutive net income.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
The Company had the following potential common stock equivalents
at December 31, 2014:
| Convertible debt – face amount of $550,000, conversion price of $0.0174 | |
| 31,609,195 | |
| Common Stock Payable (See Note 11 – Stockholders’ Deficit) | |
| 10,833,335 | |
| Total common stock equivalents | |
| 42,442,530 | |
The Company had the following potential common stock equivalents
at December 31, 2013:
| Convertible debt – face amount of $50,000, conversion price of $0.002 | |
| 25,000,000 | |
| Total common stock equivalents | |
| 25,000,000 | |
Advertising
Advertising is expensed as incurred. For 2014 and 2013, advertising
expense was $74,461 and $4,231, respectively.
Stock-Based Compensation
Periodically, we issue common shares or
options to purchase our common shares to our officers, directors, employees, or other parties. Compensation expense for these equity
awards are recognized over the vesting period, based on the fair value on the grant date. We recognize compensation expense for
only the portion of options that are expected to vest, rather than record forfeitures when they occur. If the actual number of
forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in the future
periods. We determine the fair value of equity awards using the Black-Scholes valuation model.
Cost of Computer Software Developed
or Obtained for Internal Use
The Company capitalizes certain costs incurred
for computer software developed or obtained for internal use, which are incurred during the application development stage. These
capitalized costs are to be amortized on a straight-line basis over the expected useful life of the software. Costs related to
preliminary project activities and post-implementation activities are expensed as incurred. For the years ended December 31, 2014
and 2013, no costs for the development of internal use software have been capitalized.
Recent Accounting Pronouncements
On April 10, 2014, the FASB issued Accounting Standards Update (ASU)
No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria
for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. This
standard was effective for the Company on January 1, 2015. The Company does not expect significant impact to the financial statements
upon implementation of ASU No. 2014-08.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Recent Accounting Pronouncements
(Cont.)
On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts
with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer
of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP
when it becomes effective. The new standard will be effective for the Company on January 1, 2017. Early application is not permitted.
The Company is currently evaluating the impact of ASU No. 2014-09.
On August 27, 2014, the FASB issued ASU No. 2014-15, Presentation
of Financial Statements - Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability
to Continue as a Going Concern, which is intended to define management’s responsibility to evaluate whether there is substantial
doubt about the Company’s ability to continue as a going concern and to provide related footnote disclosures. This standard
will be effective for the Company for the year ending on December 31, 2016. Early application is permitted. The Company is currently
evaluating the impact of ASU No. 2014-15.
NOTE 3 – GOING CONCERN
The Company’s accountants have expressed substantial doubt
about the Company’s ability to continue as a going concern as a result of its history of net operating losses. The Company’s
ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to successfully deliver license
and service agreements and obtain financing until revenue can generate cash flow to meet operating requirements. The outcome of
these matters cannot be predicted at this time. These consolidated financial statements do not include any adjustments to the amounts
and classifications of assets and liabilities that might be necessary should the Company be unable to continue its business.
As reflected in the accompanying consolidated financial statements,
the Company has a net loss of $992,923 in 2014 and a net income of $136,658 in 2013, and net cash used by operations of $398,966
and net cash provided by operations of $36,367 for years ended December 31, 2014 and 2013, respectively; a working capital deficit
of $1,345,517 and $781,660 and a stockholders’ deficit of $1,193,035 and $778,286 at December 31, 2014 and 2013, respectively.
The ability of the Company to continue as a going concern is dependent
on Management's plans, which include the raising of capital through debt and/or equity markets. The Company will require additional
funding during the next twelve months to finance the growth of its current and expected operations and achieve strategic objectives.
Additionally, the Company will need to continually generate revenues through its current business operations in order to generate
enough cash flow to fund operations through 2015.
The Company is also dependent on maintaining their positive approval
status with the Federal Reserve. If the Company were to lose this approval, their ability to provide services would be affected
negatively. The Company is also dependent on bank sponsorship when processing transactions directly with the Federal Reserve.
If the Company were to lose bank sponsorship, their ability to provide services would be affected negatively.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 3 – GOING CONCERN (CONT.)
The Company believes its current available cash, along with anticipated
revenues, may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available
in amounts or terms acceptable to the Company, if at all.
NOTE 4 – PROPERTY AND EQUIPMENT
For the years ended December 31, 2014 and 2013 property and equipment
is as follows:
| | |
12/31/2014 | | |
12/31/2013 | |
| | |
| | |
| |
| Computer equipment | |
$ | 33,139 | | |
$ | 3,552 | |
| Furniture and fixtures | |
| 22,018 | | |
| - | |
| Leasehold improvements | |
| 10,956 | | |
| - | |
| Accumulated depreciation | |
| (4,383 | ) | |
| (178 | ) |
| Net Fixed Assets | |
$ | 61,730 | | |
$ | 3,374 | |
For the years ended December 31, 2014 and 2013, the Company recorded
a depreciation expense of $4,205 and $178, respectively.
Note 5 – INTANGIBLE
ASSETS
Using the Company’s employees and outside consultants, the
company invested $24,000 in the year ended December 31, 2014 to develop a new website as a critical component of its new marketing
plan. In addition, $8,505 in content was expensed. The Company’s website went live on July 25, 2014. The Company has elected
to amortize the capitalized costs over a thirty six month period for both financial reporting and for income tax purposes once
the website is placed in service. For the years ended December 31, 2014 and 2013, $3,750 in amortization was included in operating
expenses compared to zero in 2013.
| | |
12/31/2014 | | |
12/31/2013 | |
| | |
| | |
| |
| Intangible assets website | |
$ | 24,000 | | |
$ | - | |
| Accumulated amortization | |
| (3,750 | ) | |
| - | |
| Intangible assets website - net | |
$ | 20,250 | | |
$ | - | |
For the year ended December 31, 2014, total depreciation and amortization
expense recorded in the operating expenses consisted of the following components: depreciation of $4,205, website amortization
of $3,750 and capitalized loan fees of $43,106 for a total of $51,061.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 6 - Convertible
note
June 26, 2009 Convertible Debt in Default – Tangiers
Investors, LP
Terms
On June 26, 2009, the Company issued redeemable convertible debt
totaling $35,000. The Company paid $2,800 in debt issue costs and received net proceeds of $32,200. The note was due on June 26,
2010, and went into default. The note bears interest at 8% and is unsecured.
Conversion
The debt is convertible based upon 60% of the average of the three
lowest closing bid prices within the prior fifteen trading day period. The conversion option may be exercised in the event of default
or in whole or part at the option of the holder of the note prior to the debt’s maturity. If any portion of the principal
and/or interest are not paid within 10 days of when it is due (beginning June 26, 2010), the discount multiplier used to determine
the conversion price decreases 1% for each period of 10 business days that any portion of the amount due remains unpaid by the
Company for all conversions thereafter.
If the average price per share (as computed above based upon a 60%
discount) of the Company’s stock is below $0.10, the Company has the right to prepay the portion of the Debenture that the
Holder elected to convert, plus any unpaid interest, at 150% of such amount. The Company has the option with written notice to
the Holder to prepay the note at 150% of the principal amount and accrued interest to the date of payment.
If conversion is held up by a third party or the Company cannot
convert the note into common stock, all amounts are accelerated for payment and redeemable in cash at a price of 175% of principal
plus all unpaid accrued interest to date.
If the note goes into default, the holder may elect to cancel any
outstanding conversion notice and declare all amounts due and payable in cash at a price of 150% of principal plus all unpaid accrued
interest to date.
On or before the 4th business day following the receipt
of debt proceeds, June 30, 2009, the Company was required to file a Form 8-K announcing this debt transaction. Since the Company
did not file an 8-K within this time period, the discount multiplier used to determine the conversion price decreases by 1% for
each period of 5 business days that the 8-K is not filed by the Company following the June 30th due date. The Company
did not file an 8-K by June 30, 2009 and sought a waiver from the Holder for this penalty. On November 9, 2009, the debt holder
waived the condition to file the 8-K. As a result, the Company re-measured the derivative financial instrument using a fixed discount
multiplier of 60%.
The Note was not issued with the intent of
effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation.
In addition the notes contain a conversion price adjustment which is based upon 60% of the average of the three lowest closing
bid prices within the prior fifteen trading day period.
Therefore, the estimated fair value of the
conversion feature of $30,333 (based on observable inputs) was bifurcated from the Note and accounted for as a separate derivative
liability. The Note Derivative is carried at the estimated fair value (using the Black Scholes Model) until the Note is converted
or otherwise extinguished. Any changes in fair value are recognized in earnings.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 6 - Convertible
note (CONT.)
June 26, 2009 Convertible Debt in Default – Tangiers
Investors, LP (Cont.)
At December 31, 2014 and 2013, the fair value
of the Note Derivative was estimated to be $0 and $0, resulting in a gain of $0 and $12,133 for 2014 and 2013, respectively.
During the year ended December 31, 2013, the Company paid $22,750
of this debt leaving a balance owing at December 31, 2013 of $22,750. On September 23, 2014, the Company paid the remaining balance
of $22,750 plus $440 for a combined total paid of $23,190.
April 26, 2010 Convertible Debt in Default– Asher Enterprises,
Inc.
Terms
On April 26, 2010, the Company issued and executed a convertible
note for $50,000. The Company paid $3,000 in debt issue costs and received net proceeds of $47,000. The note has a term of one
year and bears interest at 8%, default interest rate of 22%, and is unsecured.
Conversion
The debt is convertible based upon 55% of the average of the three
lowest closing prices within the prior ten trading day period. The conversion option may be exercised in the event of default or
in whole or part at the option of the holder of the note prior to the debt’s maturity.
Additionally, the note contains a ratchet provision. The Company
determined under ASC 815, that the embedded conversion feature (if offering of common stock is at no consideration or at a price
that is lower than the effective conversion price on the date shares are offered for sale, then a ratchet down of effective exercise
price to price per share offered for common stock would be used to determine additional shares to be issued).
The Company has determined that this ratchet provision indicates
that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded derivative financial
liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this
derivative financial instrument it’s estimated to fair value.
For the years ended December 31, 2013 and 2012, the note was in
default. At December 31, 2013 the balance on the note was $32,000. On January 17, 2014, the debt was converted into 25,000,000
shares of common stock, at a price per share of $0.002. The estimated fair market value on the conversion date was $0.0038 per
share for an estimated a fair value of $95,000 resulting in a loss to the Company of $63,000 which was recorded in the first quarter
of 2014.
The Note was not issued with the intent of
effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation.
In addition the notes contain a conversion price adjustment which is based upon 60% of the average of the three lowest closing
bid prices within the prior fifteen trading day period. Therefore, the estimated fair value of the conversion feature of $26,182
(based on observable inputs) was bifurcated from the Note and accounted for as a separate derivative liability. The Note
Derivative is carried at the estimated fair value (using the Black Scholes Model) until the Note is converted or otherwise extinguished.
Any changes in the estimated fair value are recognized in earnings.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 6 - Convertible
note (CONT.)
April 26, 2010 Convertible Debt in Default– Asher Enterprises,
Inc. (Cont.)
At December 31, 2014 and 2013, the estimated
fair value of the Note Derivative was estimated to be $0 and $0, resulting in a gain of $0 and $12,218 for 2014 and 2013, respectively.
October 29, 2014 Convertible Debt – TCA Global Credit
Master Fund, LP
Terms
On October 29, 2014, the Company issued and executed a convertible
note for $550,000 receiving net proceeds of $489,025. The Company paid $60,975 in fees, 2,941,176 shares of common stock for advisory
fees not to exceed $100,000 and $33,000 in broker fees for a total capitalized loan fee amount of $193,975. For value received,
the Company promises to pay to the order of the Holder, by no later than July 29, 2015 interest on the outstanding principal amount
under the Debenture, at the rate of eleven percent (11%) per annum simple interest from the Effective Date. The stock compensation
is further disclosed in Note 11.
Conversion
The debt is convertible based upon 80% of the average daily volume
weighted average price of the Company’s Common Stock during the five (5) trading days immediately prior to the Conversion
Date.
Additionally, the note contains a ratchet provision. The Company
determined under ASC 815, that the embedded conversion feature (if offering of common stock is at no consideration or at a price
that is lower than the effective conversion price on the date shares are offered for sale, then a ratchet down of effective exercise
price to price per share offered for common stock would be used to determine additional shares to be issued). The Company has determined
that this ratchet provision indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore,
is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting
period, the Company will mark this derivative financial instrument to its estimated fair value.
At December 31, 2014 the balance on the note was $550,000. As reported
in the current balance sheet prepaid interest of $33,737 was included in the prepaid expense amount of $135,444 with $9,638 included
in interest expense of $23,066.
Therefore, the estimated fair value of the
conversion feature of $439,368 (based on observable inputs) was bifurcated from the Note and accounted for as a separate derivative
liability. The Note Derivative is carried at its estimated fair value (using the Black Scholes Model) until the Note is converted
or otherwise extinguished. Any changes in fair value are recognized in earnings.
The initial derivative expense was $488,246
reported in the statement of operations. At December 31, 2014 the derivative expense was revalued and decreased by $48,878 leaving
a balance of $439,368.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 7 - Loans Payable
– Related Parties
During the year ended December 31, 2013, the Company repaid $10,000
in notes payable to a related party and the related party forgave $62,964, which was recorded as an in-kind contribution of capital.
At December 31, 2014 there was no related party activity.
The Company’s major shareholder has agreed to advance short
term funding until revenue or other funding has been obtained. The advances and repayments will fluctuate depending on cash flow.
As of December 31, 2014, the amount owed the shareholder was $14,036.
On December 4, 2014, the Company’s Chief Financial Officer
has agreed to advance the company a short term bridge loan. The repayment of the bridge loan will be the principal amount only
with zero interest calculated due March 31, 2015. As of December 31, 2014, the amount owed the shareholder was $20,000.
NOTE 8 – LEASES
On October 1, 2013, the Company entered into a secured lease with
QTS Data Center. The terms of this agreement are three (3) years at $500 per month. The following table represents the future lease
payments:
| 12/31/2015 | |
| 6,000 | |
| 12/31/2016 | |
| 4,500 | |
| Total | |
$ | 10,500 | |
The lease expense for the years ended December 31, 2014 and 2013
were $7,000 and $13,082, respectively. In October of 2013 QTS bought the contracts from Herakles Data Center, $4,500 was paid to
QTS and $8,582 was paid to Herakles for the year ended December 31, 2013 for a combined total of $13,082.
NOTE 9 – FACILITIES
On July 1, 2014, MyECheck, leased approximately 3700 square feet
of Class A Office Space in the City of Folsom California as its corporate headquarters and primary product development center.
This is a 42 month full service lease expiring on December 31, 2017 with an average rent per month of $4,735. The rent increases
annually by $0.05 per square foot. Both physical and electronic security features are employed at this location.
On October 28, 2014, MyECheck amended its original lease agreement
with Maidu Investment, LLC (Maidu Investment) at the office development known as College Point Business Center, located at 2600
E. Bidwell Street in the City of Folsom, State of California, to include an expansion space defined as Suite 190. The Company took
possession of the property on December 5, 2014. The lease term on the expansion space is 42 months expiring on June 30, 2018 with
an average combined rent per month of $10,998.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 9 – FACILITIES
(CONT.)
MyECheck paid an additional security deposit in the amount of $20,000,
for a combined deposit amount of $52,812. The security deposit is not an advance rental deposit or a measure of damages incurred
by Landlord in case of MyECheck’s default. Provided MyECheck is not in default under the new lease through the fifteenth
(15th) full calendar month after the commencement of the Expansion Space Term, the Landlord will return fifty percent
(50%) of the additional security deposit to the Company.
The table below shows the future rents as amended:
| | |
Original | | |
Amendment
Space | | |
Combined | |
| For the years ended December 31, | |
| | | |
| | | |
| | |
| 2015 | |
| 66,408 | | |
| 56,624 | | |
| 123,032 | |
| 2016 | |
| 68,280 | | |
| 79,380 | | |
| 147,660 | |
| 2017 | |
| 64,219 | | |
| 81,497 | | |
| 145,716 | |
| 2018 | |
| - | | |
| 41,278 | | |
| 41,278 | |
| Totals | |
$ | 198,907 | | |
$ | 258,779 | | |
$ | 457,686 | |
The rent expense for 2014 was $29,797 which was included in operating
expenses as compared to zero in 2013.
Note 10 - Commitments
and Contingencies
Litigations, claims and assessments
From time to time, the Company may become involved in various lawsuits
and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties,
and an adverse result in these or other matters may arise from time to time that may harm its business. The Company is currently
not aware of any such legal proceedings or claims, other than disclosed below; that they believe will have, individually or in
the aggregate, a material adverse effect on its business, financial condition or operating results.
On October 10, 2014, the Company filed a complaint with the United
States District Court, Sacramento Division, against Zipmark, Inc. and Jay Bhattacharya, Inc. for damages for breach of contract
in the amount of $35,000 plus interest from June 1, 2012, patent infringement damages in an amount no less than $500,000 and that
such amounts be tripled, and for a temporary and permanent injunction prohibiting defendants from using the patented MyECheck technology
for online check processing. MyECheck has been informed that the defendants Zipmark and Jay Bhattacharya continue to operate Zipmark’s
business using technology that infringes on MyECheck’s patented technology.
In addition, defendant Zipmark breached the Services Agreement by
failing to pay the second part of the required license fee. As of the date of the filing, Zipmark and/or Jay Bhattacharya have
filed a motion to dismiss and challenge the venue. The Company has filed a response to these motions and continues to vigorously
pursue all claims against Zipmark and Jay Bhattacharya.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 10 - Commitments
and Contingencies (CONT.)
On December 11, 2014, the Company filed a complaint with the United
States District Court, Sacramento Division, against Sweetsun Intertrade, Inc., Seven Mile Securities, Titan International Securities,
Inc. and Scottsdale Capital Advisors Corporation for declaratory relief for cancellation of share certificates, damages for fraud,
including punitive damages from Sweetsun, and preliminary and permanent injunctions restraining them from transferring any shares
of the Company’s common stock. In 2010, the Company entered into a settlement agreement with Tangiers Investors, LP on a
note due Tangiers in the amount of $32,200 plus attorney fees. Sweetsun was to have purchased the note from Tangiers satisfying
the liability. Sweetsun failed to purchase the note and induced the Company to issue shares to Titan International Securities,
Inc. as if the note had been paid. The Company first learned of the false claim of defendant Sweetsun’s representations,
and the additional issuance of fraudulent shares to Seven Mile Securities in October, 2013. Defendant Scottsdale Capital Advisors
Corporation currently holds an unknown amount of the shares of stock in the Company that was originally issued to defendant Sweetsun,
as they are a brokerage company. At December 20, 2014, there was a stop transfer enforced on the shares on Titan International
Securities. To date, these shares have not been transferred and remain in their entirety until this matter is resolved. MyECheck
paid the note thereby eliminating the liability and on October 9, 2014, Tangiers acknowledged that it had been paid in full.
On March 12, 2015, Seven Mile Securities submitted all the required
documentation to the Company’s transfer agent which permitted the return of 275,000,000 shares of common stock that was part
of the subject matter of this litigation. The litigation will continue against the other defendants in this action.
In late 2014, an individual, Cecil E. Boozer, contacted the Company,
contending that he had been promised a twenty percent (20%) equity interest in the Company as well as retaining a fifty percent
(50%) membership interest as the “co-founder” of the Company’s wholly owned subsidiary, GreenPay, LLC, a Wyoming
limited liability company. The Company also received a letter from Mr. Boozer dated March 25, 2015 which contained similar
claims. As of the date of this filing, no legal proceeding has been initiated by this individual. However, as
a cautionary measure, on February 5, 2015, the Company referred this matter to outside counsel and, following an active investigation,
the Company believes that the claims asserted by this individual lack legal merit.
Consulting, Service and License Agreements
On September 1, 2013, the Company entered into a software and license
agreement with a related party, in addition the Company will provide consulting and maintenance services for a period of 12 months
following the date of execution of this agreement. In addition, the Company will charge a transaction fee for transactions 1 through
200,000 per calendar month at $0.25 per transaction and transactions 200,001 and over will charge a transaction fee of $0.20 per
transaction. The Company received $75,000 in licensing fees for the year ended December 31, 2013. The license holder generated
no transaction fees as of December 31, 2013. At December 31, 2014 maintenance fees totaled $4,000 compared to $500 in 2013.
On November 23rd, 2013, Sierra Global, LLC agreed to
purchase a license from the Company. On February 24th, 2014, Sierra Global agreed to purchase an additional license
for its wholly owned subsidiary, GreenPay, LLC. On June 13, 2014, the Company announced that it would acquire GreenPay, LLC. The
merger was completed on August 20th, 2014. The net purchase price for the licenses sold to Sierra Global was determined
to be $412,000 after the acquisition of GreenPay, LLC.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 10 - Commitments
and Contingencies (CONT.)
The patent license issued to GreenPay, LLC on February 24th,
2014 will remain with Sierra Global per the terms and conditions of the merger.
In October, 2014, the Software License and Services Agreement between
the Company and Sierra Global, LLC, dated November 23, 2013, was amended to include a 2014 Software Module License Fee in
the amount of $500,000.
The Company entered into a License Agreement with GreenPay, LLC
on February 24, 2014. Subsequent to that Agreement, the Company and Sierra Global, LLC entered into business discussions,
the point of which was the purchase of GreenPay by the Company. In anticipation of that transaction, the Company’s CEO became
an unpaid business consultant to GreenPay and was authorized to establish a bank account for GreenPay. After the acquisition of
GreenPay by the Company, the bank account was retained by Sierra Global (the Company executed a license under which Sierra Global
was permitted to use the GreenPay trade name for limited purposes). During this time, the Company’s CEO did not participate
in any ownership of either Sierra Global or GreenPay.
Note 11 - Stockholders’
Deficit
Amendment to Articles of Incorporation
On June 11, 2012, the Company filed an Amendment of Articles of
Incorporation with the State of Wyoming to increase authorized shares as follows:
| · | Common Stock – 4,900,000,000 – Par value $0.00001 per share |
| · | Preferred Stock Class, Series A – Par value $0.0001 per share – 10,000,000 shares authorized |
| · | Preferred Stock Class, Serious B – Par value - $0.0001 per share – 90,000,000 shares authorized |
Each Share of Series A Preferred Stock (PS) is entitled to vote
together with the holders of the Company’s common stock on all matters and is entitled to 4 times the sum of: i) the total
number of shares of common stock which are issued and outstanding at the time of voting, plus, ii) the total number of shares of
Series B and Series C Preferred Stock which are issued and outstanding at the time of voting. Each share of Preferred Stock is
convertible into the number of shares of Common Stock which equal four times the sum of: i) total number of shares issued and outstanding
at the time of conversion, plus ii) the total number of shares of Series B and Series C Preferred Stocks which are issued and outstanding
at the time of conversion.
Issuance of Convertible Preferred Stock – related party
On May 29, 2012, the Company issued one share of restricted Series
A Preferred Stock (PS) to the major shareholder as part of the employment agreement.
On October 6, 2014, the Company purchased all rights, titles and
interest in the one (1) share of MyECheck, Inc. Preferred Class Stock, Series A, stock outstanding. The purchase price paid by
the Company for one (1) share of MyECheck, Inc. Preferred Class Stock, Series A, stock was one dollar ($1.00).
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 11 - Stockholders’
Deficit (CONT.)
Issuance of Common Stock
During the year ended December 31, 2013, Tangiers sold $9,250 of
its convertible debt to other investors and the Company was required to settle the debt with 925,000,000 shares of its common stock.
At the date of settlement the quoted fair value of the Company’s stock was par. No gain or loss was recognized on the
transaction.
On January 17, 2014, the Company issued 25,000,000 shares of its
common stock to Asher Enterprise, Inc., who is deemed an accredited investor for the settlement of debt, having a fair value of
$3,225 ($0.000129/share), based upon recent quoted trading price.
On February 14, 2014, the Company was able to utilize cash flow
generated from operations to purchase 1,000,000,000 shares of MyECheck’s common stock from its major shareholder for $10,000.
The Company contracted with an outside consultant to develop its
website. The process began at the end of March, 2014 and continued through June with the support of additional consultants.
Compensation was 500,000 shares of common stock, having a fair value
of $15,000 ($0.03/share), based upon recent quoted trading price, and were issued on August 15, 2014.
On February 14, 2014, the Company issued 400,000,000 shares of its
common stock to an accredited investor for a subscription receivable, having a fair value of $28,000 ($0.00007/share), based upon
recent quoted trading price. In addition, during the year ended December 31, 2013, the company issued 250,000,000 shares of its
common stock to the same accredited investor for a subscription receivable of $17,500.
On September 23, 2014, the Company entered into a severance agreement
with one of its executives resulting in the authorization of 5,555,556 shares of the Company’s common stock having a fair
value of $0.0194/share, based upon quoted trading price at the date of the executed agreement. The company recorded $107,778 in
stock compensation as this award was authorized by the Board of Directors on September 23, 2014. The stock was issued on November
6, 2014.
On October 29, 2014, the Company issued 2,941,176 shares of common
stock to TCA Global Credit Master Fund, LP, an investment management company, who is deemed an accredited investor, for advisory
fees not to exceed $100,000 as part of the terms for securing a $5,000,000 line of credit.
On October 29, 2014, as part of the TCA Global Credit Master Fund,
LP the Company agreed to pay a broker fee of 6% of the initial debenture to an accredited investor of 970,000 of common stock having
a fair market value of $32,980 which resulted in a $20 gain.
On October 30, 2014, the Company established a share reserve of
common stock to an accredited investor in the amount of 101,102,941 as part of the terms of the Debenture to TCA Global Credit
Master Fund, LP, to be five (5) times such number of shares of Common Stock as shall be necessary to effect the full conversion
per Article VII, Section 4 of the Debenture. As of December 31, 2014, the share reserve of common stock is 158,045,975.
This is based on the stock price at December 31, 2014 with an eighty percent (80%) discount.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 11 - Stockholders’
Deficit (CONT.)
On January 27, 2015,
the Company issued 7,500,000 shares of its common stock to Hermen Cruz, who is deemed an accredited investor, as consideration
for his participation in the early development of the Company in 2007, having a fair value of $135,750 ($0.0181/share), based upon
recent quoted trading price. The securities were not registered under the Securities Act, or the securities laws of any state,
and were offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933,
as amended, as a transaction by the Company not involving any public offering.
On February
6, 2015, the Company issued 2,500,000 shares of its common stock to Erwin Sillerico, who is deemed an accredited investor, as consideration
for his participation in the early development of the Company in 2007, having a fair value of $49,750 ($0.0199/share), based upon
recent quoted trading price. The securities were not registered under the Securities Act, or the securities laws of any state,
and were offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933,
as amended, as a transaction by the Company not involving any public offering.
On March 24, 2015, the Company entered into a severance agreement
with its National Account Sales Manager resulting in the authorization of 833,335 shares of the Company’s common stock having
a fair value of $16,250 ($0.0195/share), based upon quoted trading price at the date of the executed agreement. At December
31, 2014, the company recorded $6,417 as common stock payable. This award was authorized by the Board of Directors on March 24,
2015. The stock was issued on March 24, 2015.
Forgiveness of Debt
During the year ended December 31, 2013, the Company’s officers
forgave accrued salaries of $84,281 and this was recorded by the Company as contributed capital.
During the year ended December 31, 2013, the Company’s officers
forgave notes payable of $62,964 and this was recorded by the Company as contributed capital.
During the year ended December 31, 2013, a related party forgave
note payable of $17,729 and this was recorded by the Company as contributed capital.
On September 11, 2014 a settlement agreement and mutual release
of claims was executed in the amount of $5,000 for debt owed on legal services incurred from 2007 through 2009 totaling $71,446.
At December 31, 2013, the $71,446 was included in both accounts payable and accrued liabilities.
At December 31, 2014 and 2013, the Company reviewed its old accounts
payable as part of the restructuring process and determined with legal counsel that $27,233 and $96,921, respectively, met the
criteria of being over the four year statute of limitations and management has determined that they were no longer collectible
by the creditors. These amounts were included in Cost Recovery as other income.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 12 - Income Taxes
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due. Deferred taxes relate to differences between the basis
of assets and liabilities for financial and income tax reporting which will be either taxable or deductible when the assets or
liabilities are recovered or settled.
At December 31, 2014, the Company has a net operating loss carry-forward
of approximately $2,865,359 available to offset future taxable income expiring beginning 2024 through 2033. Utilization of future
net operating losses may be limited due to potential ownership changes under Section 382 of the Internal Revenue Code.
There was $800 income tax expense for the years ended December 31,
2014 and 2013 due to the Company’s net income.
We have incurred losses since inception, which
have generated net operating loss carryforwards. Taxable loss was $221,764 and taxable income of $206,201 for the years
ended December 31, 2014 and 2013, respectively. At December 31, 2014, we had a federal net operating loss carryforward of approximately
$2,854,373, after applying the taxable loss from 2014 of $221,764 and taxable income of $206,201 that will expire beginning in
2024.
Current or future ownership changes may limit
the future realization of these net operating losses. Our policy is to record interest and penalties associated with
unrecognized tax benefits as additional income taxes in the consolidated statements of operations. As of January 1, 2014, we had
no unrecognized tax benefits, or any tax related interest or penalties. There were no changes in our unrecognized tax benefits
during the year ended December 31, 2014. We did not recognize any interest or penalties during 2014 or 2013 related to unrecognized
tax benefits.
Section 382 of the Internal Revenue Code
generally imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income
when a corporation has undergone significant changes in its stock ownership. There can be no assurance that we will be able to
utilize any net operating loss carryforwards in the future.
We recognize deferred tax assets and liabilities
for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for
the expected future tax benefit to be derived from tax loss carryforwards. We have established a valuation allowance
to reflect the likelihood of realization of deferred tax assets.
There is no income tax benefit for the losses
for the years ended December 31, 2014 and 2013, since management has determined that the realization of the net deferred tax asset
is not more likely than not to be realized and has created a valuation allowance for the entire amount of such benefit.
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
Note 12 - Income Taxes
(CONT.)
At December 31, 2014 and 2013, the significant components of our
deferred tax assets and liabilities were as follows:
| | |
2014 | | |
2013 | |
| Deferred tax assets: | |
| | | |
| | |
| Net operating loss | |
$ | 2,854,373 | | |
$ | 2,632,609 | |
| Stock compensation non taxable | |
| (299,695 | ) | |
| - | |
| Derivative Liability | |
| (439,368 | ) | |
| - | |
| Accrued expenses | |
| (123,010 | ) | |
| (182,100 | ) |
| Gross Deferred tax assets | |
| 1,992,300 | | |
| 2,450,509 | |
| Less: Valuation Allowance | |
| (1,992,300 | ) | |
| (2,450,509 | ) |
| Net deferred tax assets | |
$ | - | | |
$ | - | |
A reconciliation of the Federal statutory rate to the Company’s
effective tax rate for the years ended December 31, 2014 and 2013 is as follows:
| | |
2014 | | |
2013 | |
| Federal Statutory rate | |
| 34.0 | % | |
| 34.0 | % |
| State income taxes, net of federal benefit | |
| 8.84 | % | |
| 8.84 | % |
| Increase or Decrease in deferred benefit of income taxes resulting from: | |
| | | |
| | |
| Change in valuation allowance | |
| (-39.0 | )% | |
| (-39.8 | )% |
| Effective tax rate | |
| 0.0 | % | |
| 0.0 | % |
NOTE 13 – SUBSEQUENT EVENTS
The Company has evaluated for subsequent events between the balance
sheet dated as of December 31, 2014, the date the financial statements were available to be issued and concluded that the events
or transactions occurring during that time period requiring recognition or disclosure have been made.
On January 27, 2015, MyECheck entered into a copier equipment lease
with Caltronics Business Systems. The terms of this agreement are for thirty nine (39) months at $155 per month with a fair market
value buyout at the end of the thirty nine month lease. The following table represents the future lease payments:
| 12/31/2015 | |
$ | 1,705 | |
| 12/31/2016 | |
| 1,860 | |
| 12/31/2017 | |
| 1,860 | |
| 12/31/2018 | |
| 620 | |
| Total | |
$ | 6,045 | |
MyECheck, Inc.
Notes to Consolidated Financial Statements
December 31, 2014 and 2013
NOTE 13 – SUBSEQUENT EVENTS (CONT.)
On January 27, 2015,
the Company issued 7,500,000 shares of its common stock to Hermen Cruz, who is deemed an accredited investor, as consideration
for his participation in the early development of the Company in 2007, having a fair value of $135,750 ($0.0181/share), based upon
recent quoted trading price. The securities were not registered under the Securities Act, or the securities laws of any state,
and were offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933,
as amended, as a transaction by the Company not involving any public offering.
On January 30, 2015, MyECheck signed an agreement to acquire 100%
of the stock of Seergate, Ltd, developer of a comprehensive electronic payment platform for banks. The Seergate system will be
integrated with the MyECheck payment systems adding multiple new capabilities to MyECheck’s payment platform. The acquisition
is expected to close in April, 2015, subject to due diligence and after the completion of technical bank integration.
On February
6, 2015, the Company issued 2,500,000 shares of its common stock to Erwin Sillerico, who is deemed an accredited investor, as consideration
for his participation in the early development of the Company in 2007, having a fair value of $49,750 ($0.0199/share), based upon
recent quoted trading price. The securities were not registered under the Securities Act, or the securities laws of any state,
and were offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933,
as amended, as a transaction by the Company not involving any public offering.
On April 2, 2015, the Company issued and executed a convertible
note for $15,900. The Company converted a debt for services provided to allow the Company to become of DTC eligible of $14,500
plus interest of $1,400 incurred on January 29, 2014. The note has a term of one year and bears interest at 10% and is unsecured.
The debt is convertible based upon 50% of the stock price at January 29, 2014 of a price per share of $0.0016.
MYECHECK, INC.
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2015
AND
DECEMBER 31, 2014
TABLE OF CONTENTS
MyECheck,
Inc.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2015 AND DECEMBER 31,
2014
| | |
June 30, 2015 | | |
December 31, 2014 | |
| | |
(Unaudited) | | |
(Audited) | |
| | |
| | |
| |
| ASSETS | |
| | | |
| | |
| | |
| | | |
| | |
| Current Assets | |
| | | |
| | |
| Cash | |
$ | 22,850 | | |
$ | 51,261 | |
| Accounts receivable - Net | |
| 80,200 | | |
| 146,740 | |
| Employee advances | |
| 2,500 | | |
| 2,500 | |
| Capitalized loan fees -Net | |
| 21,551 | | |
| 150,869 | |
| Prepaid expenses | |
| 26,852 | | |
| 135,444 | |
| Total Current Assets | |
| 153,953 | | |
| 486,814 | |
| | |
| | | |
| | |
| Fixed Assets - Net | |
| 94,234 | | |
| 61,730 | |
| Intangible Assets - Net Website net | |
| 23,371 | | |
| 20,250 | |
| IP - Mobile App - Seergate- net | |
| 3,120,982 | | |
| - | |
| Other Assets -Deposits | |
| 52,812 | | |
| 70,502 | |
| Total Other Assets | |
| 3,291,399 | | |
| 152,482 | |
| | |
| | | |
| | |
| Total Assets | |
$ | 3,445,352 | | |
$ | 639,296 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
| | |
| | | |
| | |
| Current Liabilities | |
| | | |
| | |
| Accounts payable and accrued expenses | |
$ | 359,979 | | |
$ | 395,613 | |
| Accrued liabilities | |
| 184,338 | | |
| - | |
| Payroll taxes payable | |
| 234,060 | | |
| 251,285 | |
| Payroll liabilities | |
| 61,145 | | |
| 47,710 | |
| Accrued rent | |
| 34,776 | | |
| 32,904 | |
| Loans payable - related party | |
| 30,013 | | |
| 34,036 | |
| Loans payable - other | |
| 91,218 | | |
| 56,415 | |
| Derivative liability | |
| 276,264 | | |
| 439,368 | |
| Deferred revenue | |
| - | | |
| 25,000 | |
| Convertible notes - net | |
| 828,000 | | |
| 550,000 | |
| Total Current Liabilities | |
| 2,099,793 | | |
| 1,832,331 | |
| | |
| | | |
| | |
| Stockholders' Deficit | |
| | | |
| | |
| Preferred stock, $0.00001 par value, 100,000,000 authorized, none outstanding | |
| - | | |
| - | |
| Common stock, $0.00001 par value, 4,900,000,000 shares authorized, 4,073,145,067 and 4,127,436,732 shares issued and outstanding, respectively | |
| 50,731 | | |
| 51,274 | |
| Treasury stock | |
| (10,001 | ) | |
| (10,001 | ) |
| Additional paid in capital | |
| 7,939,779 | | |
| 3,452,036 | |
| Common stock to be issued | |
| - | | |
| 191,917 | |
| Accumulated deficit | |
| (6,634,950 | ) | |
| (4,878,261 | ) |
| Total Stockholders' Equity | |
| 1,345,559 | | |
| (1,193,035 | ) |
| | |
| | | |
| | |
| Total Liabilities and Stockholders' Equity | |
$ | 3,445,352 | | |
$ | 639,296 | |
The accompanying condensed notes are an
integral part of these consolidated financial statements
MyECheck,
Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
(Unaudited)
| | |
For the Three Months Ended June 30, | | |
For the Six Months Ended June 30, | |
| | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| | |
| | |
| | |
| | |
| |
| Revenues | |
$ | 181,801 | | |
$ | 362,281 | | |
$ | 558,109 | | |
$ | 724,063 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| 2,344 | | |
| 44,527 | | |
| 2,344 | | |
| 44,527 | |
| Gross Profit | |
| 179,457 | | |
| 317,754 | | |
| 555,765 | | |
| 679,536 | |
| | |
| | | |
| | | |
| | | |
| | |
| General and administrative | |
| 410,539 | | |
| 114,611 | | |
| 978,767 | | |
| 148,098 | |
| Research and development | |
| 166,133 | | |
| 41,359 | | |
| 230,960 | | |
| 41,359 | |
| Total Operating Expenses | |
| 576,672 | | |
| 155,970 | | |
| 1,209,727 | | |
| 189,457 | |
| | |
| | | |
| | | |
| | | |
| | |
| Income or (Loss) from Operations | |
| (397,215 | ) | |
| 161,784 | | |
| (653,962 | ) | |
| 490,079 | |
| | |
| | | |
| | | |
| | | |
| | |
| Other Income /(Expense) | |
| | | |
| | | |
| | | |
| | |
| Net change in fair value of derivative liabilities and initial | |
| (9,912 | ) | |
| - | | |
| 163,104 | | |
| - | |
| Interest income (expense), net | |
| (18,717 | ) | |
| (1 | ) | |
| (36,593 | ) | |
| (2,934 | ) |
| Loss on convertible note | |
| (1,229,550 | ) | |
| - | | |
| (1,229,550 | ) | |
| - | |
| Other income and expenses | |
| 1,114 | | |
| (47 | ) | |
| 1,114 | | |
| (63,047 | ) |
| Other income cost recovery | |
| - | | |
| 53,485 | | |
| - | | |
| 53,095 | |
| Total other income/(expense) | |
| (1,257,065 | ) | |
| 53,437 | | |
| (1,101,925 | ) | |
| (12,886 | ) |
| Net income or (loss) before income taxes | |
| (1,654,280 | ) | |
| - | | |
| (1,755,887 | ) | |
| - | |
| Provision for income taxes | |
| - | | |
| - | | |
| (800 | ) | |
| - | |
| Net (Loss) or Income | |
$ | (1,654,280 | ) | |
$ | 215,221 | | |
$ | (1,756,687 | ) | |
$ | 477,193 | |
| | |
| | | |
| | | |
| | | |
| | |
| Basic earnings per share | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | |
| | |
| | | |
| | | |
| | | |
| | |
| Diluted earnings per share | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares outstanding during the period - basic | |
| 4,123,327,847 | | |
| 4,264,293,204 | | |
| 4,123,327,847 | | |
| 4,264,293,204 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares outstanding during the period - fully diluted | |
| 4,123,327,847 | | |
| 4,264,293,204 | | |
| 4,123,327,847 | | |
| 4,264,293,204 | |
The accompanying condensed notes are an
integral part of these consolidated financial statements
MyECheck,
Inc.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
(Unaudited)
| |
|
For the Six Months Ended June 30, | |
| |
|
2015 | | |
2014 | |
| Cash Flows from Operating Activities: |
|
| | | |
| | |
| Net income (loss) |
|
$ | (1,756,687 | ) | |
$ | 477,193 | |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
| | | |
| | |
| Depreciation and amortization expense |
|
| 142,065 | | |
| 1,265 | |
| Amortization of IP |
|
| 96,980 | | |
| - | |
| Loss on debt conversion |
|
| 1,229,550 | | |
| 63,047 | |
| Interest and prepaid insurance expense |
|
| 64,185 | | |
| - | |
| Stock based services |
|
| - | | |
| 4,250 | |
| Net change in fair value of derivative liabilities |
|
| (163,104 | ) | |
| - | |
| Gain on extinguishment of debt |
|
| (19,321 | ) | |
| - | |
| Stock based Compensation |
|
| 9,833 | | |
| - | |
| Changes in operating assets and liabilities: |
|
| | | |
| | |
| (Increase) Decrease in: |
|
| | | |
| | |
| Accounts receivable |
|
| 66,540 | | |
| 572,252 | |
| Prepaid expenses & other assets |
|
| - | | |
| (46,602 | ) |
| Increase (Decrease) in: |
|
| | | |
| | |
| Accounts payable and accrued expenses |
|
| (29,420 | ) | |
| (5,920 | ) |
| Deferred revenue |
|
| (25,000 | ) | |
| (1,500 | ) |
| Payroll taxes payable |
|
| (17,225 | ) | |
| - | |
| Accrued payroll |
|
| 13,435 | | |
| - | |
| Net Cash Provided (Used by) by Operating Activities |
|
| (388,169 | ) | |
| 1,063,985 | |
| |
|
| | | |
| | |
| Cash Flows from Investing Activities |
|
| | | |
| | |
| Purchase of P, P & E |
|
| (16,693 | ) | |
| (13,058 | ) |
| Security deposit on new facility |
|
| - | | |
| (32,812 | ) |
| Cost incurred capitalized website |
|
| - | | |
| (17,000 | ) |
| Purchase of treasury stock |
|
| - | | |
| (10,000 | ) |
| Net Cash Used by Investing Activities |
|
| (16,693 | ) | |
| (72,870 | ) |
| |
|
| | | |
| | |
| Cash Flows from Financing Activities: |
|
| | | |
| | |
| (Repayment)/Proceeds for loan payable - related parties |
|
| (4,023 | ) | |
| 29,029 | |
| Proceeds from convertible debt |
|
| 278,000 | | |
| - | |
| Net proceeds from acquistion Seergate |
|
| 17,413 | | |
| | |
| (Repayment)/Proceeds for loan payable - other |
|
| 85,061 | | |
| - | |
| Net Cash Provided by Financing Activities |
|
| 376,451 | | |
| 29,029 | |
| |
|
| | | |
| | |
| Net Decrease in Cash |
|
| (28,411 | ) | |
| 1,020,144 | |
| |
|
| | | |
| | |
| Cash at Beginning of Period |
|
| 51,261 | | |
| 65 | |
| |
|
| | | |
| | |
| Cash at End of Period |
|
$ | 22,850 | | |
$ | 1,020,209 | |
| |
|
| | | |
| | |
| Supplemental Disclosure of Non Cash Investing and Financing Activities |
|
| | | |
| | |
| Common shares issued services and common stock payable |
|
$ | 201,750 | | |
$ | - | |
| Acquisiton of Moble Application assets from Seergate |
|
$ | 3,231,884 | | |
$ | - | |
| Issuance for debt |
|
$ | 54,702 | | |
$ | - | |
| Conversion of convertible note to note payable |
|
$ | - | | |
$ | 32,000 | |
| Stock issued for subscription receivable |
|
$ | - | | |
$ | 28,000 | |
The accompanying condensed notes are an
integral part of these consolidated financial statements
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND NATURE
OF OPERATIONS
Basis of Presentation
The accompanying consolidated financial
statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States
of America (U.S. GAAP) under the accrual basis of accounting.
The consolidated financial information
as of December 31, 2014 is derived from the audited consolidated financial statements presented in the Company’s Form 10
dated August 9, 2015. The unaudited condensed interim consolidated financial statements should be read in conjunction with the
Company’s Form 10, which contains the audited consolidated financial statements and notes thereto, together with the Management’s
Discussion and Analysis, dated August 9, 2015.
Certain information or footnote disclosures
normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in
the United States of America have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange
Commission for interim condensed financial reporting. Accordingly, they do not include all the information and footnotes necessary
for a comprehensive presentation of condensed financial position, results of operations, or cash flows. It is management’s
opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary
for a fair consolidated financial statement presentation. The interim results for the period ended June 30, 2015 are not necessarily
indicative of results for the full fiscal year.
Organization
MyECheck, Inc. (“MEC”) (“the
Company”) was incorporated in the state of Delaware on October 29, 2004. The Company’s office is located at Folsom,
California. On May 25, 2012 the Company was redomiciled in the State of Wyoming. In addition, the Company registered as a foreign
corporation in the State of California on October 16, 2014.
GreenPay, LLC (“GreenPay”),
a wholly owned subsidiary of the Company, incorporated in the State of Wyoming on March 11, 2014 was acquired by MyEcheck on August
20, 2014. After the acquisition, GreenPay registered as a foreign limited liability company in the State of California on November
10, 2014.
Sekoya Holdings, Ltd. (“Sekoya”)
was incorporated in Nevada on May 19, 2005, and is an inactive company.
The Company acquired Seergate, Ltd an
Israeli corporation on May 6, 2015.
Reverse Acquisition and Recapitalization
On March 14, 2008, Sekoya Holdings, Ltd.
(“Sekoya”), then a development stage company, merged with MEC and MEC became the surviving corporation. This transaction
was accounted for as a reverse acquisition. Sekoya did not have any operations and majority-voting control was transferred to
MEC. The transaction also required a recapitalization of MEC. Since MEC acquired a controlling voting interest, it was deemed
the accounting acquirer, while Sekoya was deemed the legal acquirer. The historical consolidated financial statements of the Company
are of those of MEC and of the consolidated entities from the date of merger and subsequent.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 1 – ORGANIZATION, BASIS
OF PRESENTATION AND NATURE OF OPERATIONS
(CONT.)
Acquisition of GreenPay, LLC
On August 20, 2014, MyECheck completed
the acquisition of its licensee, GreenPay, LLC. GreenPay, LLC is now a wholly owned subsidiary of MyECheck, Inc. GreenPay assets
are owned by MyECheck, however GreenPay will be operated as a separate entity and will move forward with an independent board
of directors and management in 2015.
Acquisition of Seergate, Ltd.
On May 6, 2015, MyECheck, Inc. completed
its acquisition of Seergate, Ltd. Seergate is an Israeli corporation that has developed an innovative cloud based platform for
billing and payments. MyECheck acquired 100% of the issued and outstanding shares of Seergate in exchange for 150,000,000 shares
of MyECheck common stock. The 150,000,000 shares of common stock exchanged in connection with the Seergate acquisition were valued
based on a ten day average of the price prior to closing.
The adjusted purchase price of the Acquisition
totaled $3,075,030, which includes three (3) $25,000 pre-closing cash payments used for the development of technology specifically
for the Company. The True Up Payment payable is included in liabilities at May 6, 2015. The Acquisition agreement allows for a
ninety (90) day period to finalize the closing balance sheet in order to determine the net working capital adjustment that would
be factored into the final purchase amount. On May 7, 2015, we issued 150,000,000 shares of our common stock valued at $0.02 based
on a ten day average of the price prior to closing as settlement of the True Up Payment.
Under the purchase method of accounting,
the estimated purchase price of the Acquisition was allocated to Seergate’s net tangible and identifiable intangible assets
and liabilities assumed based on their estimated fair values as of the date of the completion of the Acquisition, as follows:
| Cash | |
$ | 67,413 | |
| Computer equipment | |
| 6,145 | |
| Other assets | |
| 7,777 | |
| Total Assets | |
| 81,335 | |
| | |
| | |
| Less Liabilities | |
| | |
| Payroll accrual | |
| (45,885 | ) |
| Development costs and travel reimbursement owed by MyECheck to Seergate | |
| (178,382 | ) |
| Total liabilities | |
| (224,267 | ) |
| Excess liabilities greater than assets | |
| (142,932 | ) |
| IP for mobile application | |
| 3,217,962 | |
| | |
| | |
| | |
$ | 3,075,030 | |
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 1 – ORGANIZATION, BASIS
OF PRESENTATION AND NATURE OF OPERATIONS
(CONT.)
The estimated fair value of certain assets
and liabilities have been determined by management and are subject to change upon the finalization of the purchase accounting.
No portion of the intangible assets, including goodwill, is expected to be deducted for tax purposes.
The results of operations of Seergate
are included in the Company’s condensed consolidated statements of operations from the date of the acquisition of May 6,
2015, including approximately $0 of revenue and approximately $193,000 of net loss. The following unaudited supplemental pro forma
information assumes that the Acquisition had occurred as of January 1, 2014
| | |
| | |
For the year | |
| | |
For the six months | | |
ended | |
| | |
Ended 06/30/2015 | | |
12/31/2014 | |
| | |
Unaudited | | |
Unaudited | |
| | |
| | |
| |
| Revenues | |
$ | 558,109 | | |
$ | 952,156 | |
| Cost of revenues | |
| (2,344 | ) | |
| (99,976 | ) |
| Gross Profit | |
| 555,765 | | |
| 852,180 | |
| | |
| | | |
| | |
| General and administrative | |
| 1,013,732 | | |
| 1,527,837 | |
| Loss from disposal of assets | |
| - | | |
| 13,289 | |
| Research and development | |
| 609,075 | | |
| 1,098,297 | |
| Total Operating Expenses | |
| 1,622,807 | | |
| 2,639,423 | |
| Income or (Loss) from Operations | |
| (1,067,042 | ) | |
| (1,787,243 | ) |
| Other Income/(Expense) | |
| | | |
| | |
| Derivative liability | |
| (139,670 | ) | |
| (488,246 | ) |
| Change in fair value of derivative liabilities | |
| 303,044 | | |
| 48,878 | |
| Interest expense net of interest income | |
| (37,586 | ) | |
| (28,142 | ) |
| Loss on convertible note | |
| (1,229,550 | ) | |
| (62,980 | ) |
| Other income and expenses | |
| 1,114 | | |
| - | |
| Other income cost recovery | |
| - | | |
| 140,685 | |
| Total Other Income/(Expense) | |
| (1,102,648 | ) | |
| (389,805 | ) |
| Net income or (loss) before income taxes | |
| (2,169,960 | ) | |
| (2,177,048 | ) |
| Provision for income taxes | |
| (800 | ) | |
| (800 | ) |
| Net (Loss) or Income | |
$ | (2,170,760 | ) | |
$ | (2,177,848 | ) |
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND THE
NATURE OF OPERATIONS (CONT.)
The unaudited consolidated pro forma financial information
is not necessarily indicative of the results that would have occurred if the Acquisition had occurred on the dates indicated or
that may result in the future.
Nature of Operations
The Company provides software that enables
merchants and banks to receive and process real–time payments from consumers, businesses and government agencies. Payment
can be initiated online, via point of sale terminals, or over the telephone. The Company also licenses patented technology in
the mobile payments and banking industries.
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Principles of Consolidation
All significant intercompany accounts
and balances have been eliminated in consolidation.
Risks and
Uncertainties
The Company’s
operations are subject to significant risk and uncertainties including financial, operational, regulatory and other risks including
the potential risk of business failure.
The Company has
experienced, and in the future expects to continue to experience, variability in its sales and earnings. The factors
expected to contribute to this variability include, among others, (i) the uncertainty associated with the commercialization and
ultimate success of the product, (ii) intense competition and rapid technological changes for the mobile payment processing industry
and (iii) general economic conditions which may cast doubt on future success.
See Note 3 regarding going concern matters.
Fiscal
Year
The Company has
adopted a December 31 fiscal year end.
Use of Estimates and Assumptions
The preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the U.S. of America requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates
and assumptions impact, among others, the following: the fair value of warrants granted, the fair value of other derivative liabilities,
estimates of the probability and potential magnitude of contingent liabilities and the valuation allowance for deferred tax assets
due to continuing operating losses.
Making estimates requires management to
exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or
set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating
its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could
differ significantly from our estimates.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
Cash and Cash Equivalents
The Company considers all highly liquid
investments with original maturities of three months or less at the time of purchase to be cash equivalents. At June 30, 2015
and 2014, the Company had no cash equivalents.
The Company minimizes its credit risk
associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times
may exceed federally insured limits. At June 30, 2015 and 2014, there were no balances that exceeded the federally insured limit.
Accounts Receivable and Allowance
for Doubtful Accounts
Accounts receivable
are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary
course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts.
The Company recognizes
an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance
is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well
as an assessment of specific identifiable customer accounts considered at risk or uncollectible.
In 2015 and 2014,
the Company recorded no bad debt expense.
Capitalized Loan Fees
On October 29, 2014, the Company obtained
a loan facility which resulted in the capitalization of loan fees of $193,975 being amortized over the life of the loan. As of
June 30, 2015, the accrued amortization was ($172,424) for a net amount reported on the Balance Sheet of $21,551. See Notes 5
& 6. For the six months ended June 30, 2015 the amortization expense was $129,318.
Revenue Recognition
The Company records revenue when all of
the following have occurred; (1) persuasive evidence of an arrangement exists, (2) product delivery has occurred, (3) the sales
price to the customer is fixed or determinable, and (4) collectability is reasonably assured.
The Company earns revenue from services,
which has included the following: electronic check processing, financial verification, identity verification, check guarantee
services and licensing of intellectual property. The services are performed under the terms of a contract with a customer, which
states the services to be utilized and the terms and fixed price for all services under contract. The price of these services
may be a fixed fee per transaction and/or a percentage of the transaction processed depending on the service.
Revenue from electronic check processing
is derived from fees collected from merchants to convert merchant customer check data into an electronic image of a paper draft,
which allows the Company to deposit the funds to the merchant’s bank through image clearing with the Federal Reserve on
behalf of the bank. The Company recognizes the revenue related to electronic check processing fees when the services are performed.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
Revenue Recognition (Cont.)
Revenue from financial verification is
derived from fees collected from merchants to process requests to validate financial verifications to an outside service provider
under contract with the Company. The cost for the service provider is recorded in cost of revenue when applicable. This revenue
is recognized when the transaction is processed, since the Company has no further obligations.
Revenue from check guarantee services
is derived from fees collected from merchants to process transaction to an outside service provider under contract with the Company.
The cost for the service provider is recorded in cost of revenue when applicable. This revenue is recognized when the transaction
is processed, since the Company has no further obligations.
The Company derives revenue from monthly
maintenance fees and initial customer set-up fees. Monthly maintenance fee revenue billed monthly and is recognized as services
are performed. Initial set-up fees are recognized over the respective customer relationship period. Payments received in advance
of completing the earnings process are recorded as deferred revenue and recognized over the remaining service period.
Customers & Concentrations
One customer comprised 88% of the total
revenue for the six months ended June 30, 2015 and three customers comprised 98% of the total revenue for the year ended December
31, 2014. The Company had two customers represent 100% of accounts receivable at June 30, 2015 and two customers represented 100%
of net accounts receivable at December 31, 2014.
Fair Value of Financial Instruments
The Company measures
assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements,
which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be,
in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants
would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework
for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned
a hierarchical level.
The following
are the hierarchical levels of inputs to measure fair value:
| · | Level
1 – Observable inputs that reflect quoted market prices in active markets for identical
assets or liabilities. |
| · | Level
2 – Inputs reflect quoted prices for identical assets or liabilities in markets
that are not active; quoted prices for similar assets or liabilities in active markets;
inputs other than quoted prices that are observable for the assets or liabilities; or
inputs that are derived principally from or corroborated by observable market data by
correlation or other means. |
| · | Level
3 – Unobservable inputs reflecting the Company’s assumptions incorporated
in valuation techniques used to determine fair value. These assumptions are required
to be consistent with market participant assumptions that are reasonably available. |
The risk-free rate of return reflects
the interest rate for the United States Treasury Note with similar time-to-maturity to that of the convertible debt.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
Fair Value of Financial Instruments
(Cont.)
The recorded value of other financial
assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts
payable and accrued expenses approximate the fair value of the respective assets and liabilities at June 30, 2015 and June 30,
2014 based upon the short-term nature of the assets and liabilities.
Embedded Conversion Features
The Company evaluates embedded conversion
features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion
feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair
value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated
under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature.
Derivative Financial Instruments
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at
its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to
income.
For option-based
simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments
at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments
should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
Beneficial
Conversion Feature
For conventional
convertible debt where the rate of conversion is below market value, the Company records a "beneficial conversion feature"
("BCF") and related debt discount.
When the Company
records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt
instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt.
Debt Issue
Costs and Debt Discount
The Company may
record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These
costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life
of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Original
Issue Discount
For certain convertible
debt issued, the Company may provide the debt holder with an original issue discount. The original issue discount would
be recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
Extinguishments of Liabilities
The Company accounts for extinguishments
of liabilities in accordance with ASC 860 - “Accounting for Transfers and Servicing of Financial Assets and Extinguishment
of Liabilities”. When the conditions are met for extinguishment accounting, the liabilities are derecognized and the gain
or loss on the sale is recognized.
Income Taxes
We account for income taxes under the
liability method, whereby deferred income tax liabilities or assets at the end of each period are determined using the tax rate
expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets
when it is more likely than not that some or all of these deferred tax assets will not be realized. Our policy is to prescribe
a recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be
taken in a tax return.
We have analyzed our filing positions
in all jurisdictions where we are required to file returns, and found no positions that would require a liability for unrecognized
income tax positions to be recognized. We are subject to tax examinations. In the event that we are assessed penalties and or
interest, penalties will be charged to other financing expense and interest will be charged to interest expense.
Earnings (Loss) Per Share
Basic net earnings (loss) per share is
computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during each period.
Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common
stock, common stock equivalents and potentially dilutive securities outstanding during each period.
The Company uses the “treasury stock”
method to determine whether there is a dilutive effect of outstanding convertible debt, option and warrant contracts. For the
year ended June 30, 2015 the Company reflected net income and a dilutive net income.
The Company had the following potential
common stock equivalents at June 30, 2015:
| Convertible debt – face amount of $550,000, conversion price of $0.0137 | |
$ | 40,145,985 | |
| Convertible Promissory Note – face amount of $40,000, conversion price of $0.0102 | |
| 3,913,894 | |
| Convertible Promissory Note – face amount of $13,000, conversion price of $0.0098 | |
| 1,326,531 | |
| Convertible Promissory Note – face amount of $30,000, conversion price of $0.0087 | |
| 3,456,221 | |
| Convertible Promissory Note – face amount of $25,000, conversion price of $0.0096 | |
| 2,606,882 | |
| Convertible Promissory Note – face amount of $20,000, conversion price of $0.0094 | |
| 2,132,196 | |
| Callable Secured Convertible Note – face amount of $40,000, conversion price of $0.0120 | |
| 3,333,333 | |
| Callable Secured Convertible Note – face amount of $30,000, conversion price of $0.0120 | |
| 2,500,000 | |
| Callable Secured Convertible Note – face amount of $40,000, conversion price of $0.0120 | |
| 3,333,333 | |
| Callable Secured Convertible Note – face amount of $40,000, conversion price of $0.0087 | |
| 3,333,333 | |
| Total common
stock equivalents | |
$ | 68,415,043 | |
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
Earnings (Loss) Per Share
The Company had the following potential common stock equivalents
at December 31, 2014:
| Convertible debt – face amount of $550,000, conversion price of $0.0174 | |
| 31,609,195 | |
| Common Stock Payable (See Note 11 – Stockholders’ Deficit) | |
| 10,833,335 | |
| Total common stock equivalents | |
| 42,442,530 | |
Advertising
Advertising is expensed as incurred. For June 30, 2015 and
2014, advertising expense was $28,767 and $10,443, respectively.
Stock-Based Compensation
Periodically,
we issue common shares or options to purchase our common shares to our officers, directors, employees, or other parties. Compensation
expense for these equity awards are recognized over the vesting period, based on the fair value on the grant date. We recognize
compensation expense for only the portion of options that are expected to vest, rather than record forfeitures when they occur.
If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense
may be required in the future periods. We determine the fair value of equity awards using the Black-Scholes valuation model.
Cost of Computer Software Developed
or Obtained for Internal Use
The Company capitalizes certain costs
incurred for computer software developed or obtained for internal use, which are incurred during the application development stage.
These capitalized costs are to be amortized on a straight-line basis over the expected useful life of the software. Costs related
to preliminary project activities and post-implementation activities are expensed as incurred. For the six months ended June 30,
2015 and 2014, no costs for the development of internal use software have been capitalized.
Recent
Accounting Pronouncements
New
Accounting Standards Issued But Not Yet Adopted
From time to time, new accounting pronouncements
are issued by the FASB, which are adopted by the Company as of the specified date. Unless otherwise discussed, management believes
the impact of recently issued standards, which are not yet effective, will not have a material impact on its consolidated financial
statements upon adoption.
In February 2015, the FASB issued ASU
No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-12”). ASU 2015-02
affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 is
effective for us on January 1, 2016, with early adoption permitted. We do not believe that this pronouncement will have an impact
on our consolidated financial statements
In April 2015, the FASB issued ASU No.
2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU
2015-03”). The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented
in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The
recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 is
effective for us on January 1, 2016, with early adoption permitted. We are currently evaluating the potential changes from this
ASU to our future financial reporting and disclosures.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 3 – GOING CONCERN
The Company’s accountants have expressed
substantial doubt about the Company’s ability to continue as a going concern as a result of its history of net operating
losses. The Company’s ability to achieve and maintain profitability and positive cash flow is dependent upon our ability
to successfully deliver license and service agreements and obtain financing until revenue can generate cash flow to meet operating
requirements.
The outcome of these matters cannot be
predicted at this time. These consolidated financial statements do not include any adjustments to the amounts and classifications
of assets and liabilities that might be necessary should the Company be unable to continue its business.
As reflected in the accompanying consolidated
financial statements, the Company had a net loss of $1,756,687 in 2015 and a net income of $477,193, in 2014, and net cash used
by operations of $388,169 and net cash provided by operations of $1,063,985 for six months ended June 30, 2015 and 2014, respectively.
The Company had a working capital deficit of $1,945,840 at June 30, 2015 and $1,345,517 at December 31, 2014 and a stockholders’
equity of $1,345,559 at June 30, 2015 and a stockholders’ deficit of $1,193,035 at December 31, 2014.
The ability of the Company to continue
as a going concern is dependent on Management's plans, which include the raising of capital through debt and/or equity markets.
The Company will require additional funding during the next twelve months to finance the growth of its current and expected operations
and achieve strategic objectives. Additionally, the Company will need to continually generate revenues through its current business
operations in order to generate enough cash flow to fund operations through 2015.
The Company is also dependent on maintaining
their positive approval status with the Federal Reserve. If the Company were to lose this approval, their ability to provide services
would be affected negatively. The Company is also dependent on bank sponsorship when processing transactions directly with the
Federal Reserve. If the Company were to lose bank sponsorship, their ability to provide services would be affected negatively.
The Company believes its current available cash, along with
anticipated revenues, may be insufficient to meet its cash needs for the near future. There can be no assurance that financing
will be available in amounts or terms acceptable to the Company, if at all.
NOTE 4 – PROPERTY AND EQUIPMENT
For the six months ended June 30, 2015 and the year ended December
31, 2014 property and equipment is as follows:
| | |
6/30/2015 | | |
12/31/2014 | |
| | |
| | |
| |
| Computer equipment | |
$ | 57,760 | | |
$ | 33,139 | |
| Furniture and fixtures | |
| 56,571 | | |
| 22,018 | |
| Leasehold improvements | |
| 10,956 | | |
| 10,956 | |
| Accumulated depreciation | |
| (31,233 | ) | |
| (4,383 | ) |
| Net Fixed Assets | |
$ | 94,234 | | |
$ | 61,730 | |
For the six months ended June 30, 2015 and the year ended December
31, 2014, the Company recorded a depreciation expense of $8,745 and $4,205, respectively.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
Note 5 – INTANGIBLE
ASSETS
Using the Company’s employees and outside consultants,
the company invested $24,000 to develop a new website as a critical component of its new marketing plan. The Company’s website
went live on July 25, 2014. The Company has elected to amortize the capitalized costs over a thirty six month period for both
financial reporting and for income tax purposes once the website is placed in service.
For the six months ended June 30, 2015 and the year ended December
31, 2014 intangible assets are as follows:
| | |
6/30/2015 | | |
12/31/2014 | |
| | |
| | |
| |
| Intangible assets website | |
$ | 31,123 | | |
$ | 24,000 | |
| Accumulated amortization | |
| (7,752 | ) | |
| (3,750 | ) |
| Intangible assets website - net | |
$ | 23,371 | | |
$ | 20,250 | |
For the six months ended June 30, 2015 and 2014, $4,002 and
$0 in amortization was included in operating expenses, respectively.
For the six months ended June 30, 2015,
total depreciation and amortization expense recorded in the operating expenses consisted of the following components: depreciation
of $8,745, website amortization of $4,002 and amortization of capitalized loan fees of $129,318 for a total of $142,065.
Note 6 - Convertible
notes payable
April 26, 2010 Convertible Debt in Default– Asher
Enterprises, Inc.
Terms
On April 26, 2010, the Company issued
and executed a convertible note for $50,000. The Company paid $3,000 in debt issue costs and received net proceeds of $47,000.
The note had a term of one year and bears interest at 8%, default interest rate of 22%, and was unsecured.
Conversion
The debt is convertible based upon 55%
of the average of the three lowest closing prices within the prior ten trading day period. The conversion option may be exercised
in the event of default or in whole or part at the option of the holder of the note prior to the debt’s maturity.
For the years ended December 31, 2013
and 2012, the note was in default. At December 31, 2013 the balance on the note was $32,000. On January 17, 2014, the debt was
converted into 25,000,000 shares of common stock, at a price per share of $0.002. The estimated fair market value on the conversion
date was $0.0038 per share for an estimated a fair value of $95,000 resulting in a loss to the Company of $63,000 which was recorded
in the first quarter of 2014.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
Note
6 - Convertible notes payable (CONT.)
October 29, 2014 Convertible Debt
– TCA Global Credit Master Fund, LP
Terms
On October 29, 2014, the Company issued
and executed a convertible note for $550,000 receiving net proceeds of $489,025. The Company paid $60,975 in fees, 2,941,176 shares
of common stock for advisory fees not to exceed $100,000 and $33,000 in broker fees for a total capitalized loan fee amount of
$193,975. For value received, the Company promises to pay to the order of the Holder, by no later than July 29, 2015 interest
on the outstanding principal amount under the Debenture, at the rate of eleven percent (11%) per annum simple interest from the
Effective Date. The stock issued for services is further disclosed in Note 11.
Conversion
The debt is convertible based upon 80%
of the average daily volume weighted average price of the Company’s Common Stock during the five (5) trading days immediately
prior to the Conversion Date.
Additionally, the note contains a ratchet
provision. The Company determined under ASC 815, that the embedded conversion feature (if offering of common stock is at no consideration
or at a price that is lower than the effective conversion price on the date shares are offered for sale, then a ratchet down of
effective exercise price to price per share offered for common stock would be used to determine additional shares to be issued).
The Company has determined that this ratchet
provision indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded
derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company
will mark this derivative financial instrument to its estimated fair value.
On October 29, 2014, the estimated fair
value of the conversion feature of $488,246 was bifurcated from the Note and accounted for as a separate derivative liability.
The Note Derivative is carried at its estimated fair value (using the Black Scholes Model) until the Note is converted or otherwise
extinguished. Any changes in fair value are recognized in earnings.
At December 31, 2014 the balance on the
note was $550,000. As reported in the current balance sheet prepaid interest of $33,737 was included in the prepaid expense amount
of $135,444 with $9,638 included in interest expense of $23,066.
At June 30, 2015 the derivative liability
was revalued and decreased by $274,770 leaving a balance of $164,598 compared to the balance at December 31, 2014 of $439,368.
At June 30, 2015 the balance on the note
was $550,000. As reported in the current balance sheet prepaid interest of $4,819 was included in the prepaid expense amount of
$26,852 with $28,914 included in interest expense of $36,593.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
Note
6 - Convertible notes payable (CONT.)
On April 2, 2015, the Company issued and
executed a convertible note for $15,900. The Company converted accounts payable for services provided to allow the Company to
become DTC eligible of $14,500 plus interest of $1,400 incurred on January 29, 2014. The note has a term of one year and bears
interest at 10% and is unsecured. The debt is convertible based upon 50% of the stock price at January 29, 2014 of a price per
share of $0.0016. During the three months ended June 30, 2015 the note was converted into 19,875,000 shares of common stock. The
Company recorded a loss on conversion in the amount of $389,550.
On April 16, 2015, the Company approved
the partial assignment of $40,000 of a debt dated October 5, 2010. On April 21, 2015, the Company authorized the conversion of
such debt into 40,000,000 shares of common stock at $0.001 per share. The note was converted during the three months ended June
30, 2015 and the Company recorded a loss on conversion in the amount of $840,000.
Convertible Promissory Notes
From time to time the Company raises working capital due to
issuances of convertible notes as further described below. During the six months ended June 30, 2015, we entered into multiple
convertible notes payable with five (5) containing embedded derivative liabilities (conversion options). At June 30, 2015, these
notes consist of the following:
| 1) Convertible Promissory Note for $40,000 to Charlie Abujudeh dated April 6, 2015, due April 6, 2016, bearing interest at the rate of 10% per annum. This note shall be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being April 6, 2015 as posted at the OTC Markets exchange of $0.0102 per share for a total common stock issuance of 3,913,894. | |
$ | 40,000 | |
| | |
| | |
| 2) Convertible Promissory Note for $13,000 to Charlie Abujudeh dated April 8, 2015, due April 8, 2016, bearing interest at the rate of 10% per annum. This note shall be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being April 8, 2015 as posted at the OTC Markets exchange of $0.0098 per share for a total common stock issuance of 1,326,531. | |
| 13,000 | |
| | |
| | |
| 3) Convertible Promissory Note for $30,000 to Charlie Abujudeh dated April 16, 2015, due April 16, 2016, bearing interest at the rate of 10% per annum. This note shall be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being April 16, 2015 as posted at the OTC Markets exchange of $0.0087 per share for a total common stock issuance of 3,456,221. | |
| 30,000 | |
| | |
| | |
| 4) Convertible Promissory Note for $25,000 to Charlie Abujudeh dated April 23, 2015, due April 23, 2016, bearing interest at the rate of 10% per annum. This note shall be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being April 23, 2015 as posted at the OTC Markets exchange of $0.0096 per share for a total common stock issuance of 2,606,882. | |
| 25,000 | |
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
Convertible Promissory Notes
(Cont.)
| 5) Convertible Promissory Note for $20,000 to Charlie Abujudeh dated May 6, 2015, due May 6, 2016, bearing interest at the rate of 10% per annum. This note shall be paid in full or in part to Holder by conversion into Common Stock at the maturity date based upon the discounted price of seventy percent (70%) of the closing price of the Company’s Common Stock on the date of this Note being May 6, 2015 as posted at the OTC Markets exchange of $0.0094 per share for a total common stock issuance of 2,132,196. | |
| 20,000 | |
| | |
| | |
| Total Convertible Promissory Notes | |
$ | 128,000 | |
Convertible Notes Payable with Embedded Derivative Liabilities
(Conversion Options)
During the six months ended June 30, 2015, we entered into
convertible notes payable with embedded derivative liabilities (conversion options). At June 30, 2015, these notes consist of
the following:
| 1) On October 29, 2014, the Company issued and executed a convertible Debenture to TCA Global Credit Master Fund, LP for $550,000. The Company paid $60,975 in fees and received net proceeds of $489,025. In addition, the stock compensation are disclosed in Item 10, page 24. For value received, the Company promises to pay to the order of the Holder, by no later than July 29, 2015 interest on the outstanding principal amount under the Debenture, at the rate of eleven percent (11%) per annum simple interest from the Effective Date. (3) | |
| 550,000 | |
| | |
| | |
| 2) Callable Secured Convertible Note for $40,000 to Charlie Abujudeh dated May 12, 2015, due May 12, 2016, bearing interest at the rate of 10% per annum. The conversion price shall be calculated at the election of the Holder the lesser of (i) 70% of the Trading Price of the Borrower’s Common Stock on the issue date or (ii) the Trading Price of the Borrower’s Common Stock on the Conversion Date. The lowest price the Holder can convert (including discount) is $0.001 per share. (3) | |
| 40,000 | |
| | |
| | |
| 3) Callable Secured Convertible Note for $30,000 to Johann Gumpp dated May 28, 2015, due May 28, 2016, bearing interest at the rate of 10% per annum. The conversion price shall be calculated at 70% of the Trading Price of the Borrower’s Common Stock on the defined Conversion Date. The Common Stock to the Holder shall be restricted pursuant to SEC Rule 144 with a twelve month holding period. (3). | |
| 30,000 | |
| | |
| | |
| 4) Callable Secured Convertible Note for $40,000 to Johann Gumpp dated June 8, 2015, due June 8, 2016, bearing interest at the rate of 10% per annum. The conversion price shall be calculated at 70% of the Trading Price of the Borrower’s Common Stock on the defined Conversion Date. The Common Stock to the Holder shall be restricted pursuant to SEC Rule 144 with a twelve month holding period. (3). | |
| 40,000 | |
| | |
| | |
| 5) Callable Secured Convertible Note for $40,000 to Johann Gumpp dated June 19, 2015, due June 19, 2016, bearing interest at the rate of 10% per annum. The conversion price shall be calculated at 70% of the Trading Price of the Borrower’s Common Stock on the defined Conversion Date. The Common Stock to the Holder shall be restricted pursuant to SEC Rule 144 with a twelve month holding period. (3). | |
| 40,000 | |
| | |
| | |
| Total convertible notes payable with embedded derivative liability | |
$ | 700,000 | |
| | |
| | |
| Total convertible promissory notes & convertible notes payable with embedded derivative liability | |
$ | 828,000 | |
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
Note 6 - Convertible
notes payable (CONT.)
(1) Note contains
certain representations, warranties, covenants and events of default, and increases in the amount of the principal and interest
rate under the note in the event of such defaults.
(2) The embedded derivative liability associated with the conversion
option of the note was bifurcated from the note and recorded at its fair value on the date of issuance and at each reporting date.
(3) We have classified this note as current due to our expectation
to either repay or convert the note on a current basis.
The total estimated fair value of the embedded derivative liability
associated with the conversion options of these convertible notes payable at inception was $139,940 for the convertible notes
with embedded derivatives added in 2015, of which $0 was discounted against the notes and no interest expense was recorded upon
issuance. See Note 7, Fair Value Measurements, for a discussion of the changes in the fair value of the embedded derivative
liability during the six months ended June 30, 2015.
The following tables set forth our assets
and liabilities measured at recurring or non-recurring, at June 30, 2015 and December 31, 2014, and the fair value calculation
input hierarchy level that we have determined applies to each asset and liability category.
| | |
| | |
| | |
| | |
Carrying | |
| | |
Fair Value Measurements Using Inputs | | |
Amount at | |
| Financial Instruments | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
June 30, 2015 | |
| | |
| | |
| | |
| | |
| |
| Liabilities: | |
| | | |
| | | |
| | | |
| | |
| Callable Secured Convertible Note (1) | |
$ | - | | |
$ | - | | |
$ | 29,333 | | |
$ | 29,333 | |
| Callable Secured Convertible Note (2) | |
| - | | |
| | | |
| 22,000 | | |
| 20,000 | |
| Callable Secured Convertible Note (3) | |
| - | | |
| | | |
| 30,000 | | |
| 30,000 | |
| Callable Secured Convertible Note (4) | |
| | | |
| | | |
| 30,333 | | |
| 30,333 | |
| Derivative Instruments – Convertible | |
| - | | |
| - | | |
| 164,598 | | |
| 164,598 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total | |
$ | - | | |
$ | - | | |
$ | 276,264 | | |
$ | 276,264 | |
| | |
| | |
| | |
| | |
Carrying | |
| | |
Fair Value Measurements Using Inputs | | |
Amount at | |
| Financial Instruments | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
December 31, 2014 | |
| | |
| | |
| | |
| | |
| |
| Liabilities: | |
| | | |
| | | |
| | | |
| | |
| Derivative Instruments – Convertible | |
$ | - | | |
$ | - | | |
$ | 439,368 | | |
$ | 439,368 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total | |
$ | - | | |
$ | - | | |
$ | 439,368 | | |
$ | 439,368 | |
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
Note 6 - Convertible
notes payable (CONT.)
Fair Value of Financial Instruments
Market price and estimated fair value of common stock used
to measure the Derivative Instruments-Warrants at June 30, 2015 and December 31, 2014:
| | |
June 30, 2015 | | |
December 31, 2014 | |
| Market price and estimated fair value of common stock: | |
| .0171 | | |
| 0.0218 | |
| Exercise price - range | |
| 0.012 - 0.0137 | | |
| 0.0174 | |
| Expected term range – (years) | |
| .29 – 1yr | | |
| .58 | |
| Discount range | |
| 70% - 80% | | |
| - | |
| Dividend yield | |
| - | | |
| - | |
| Expected volatility | |
| 115 | % | |
| 217 | % |
| Risk-free interest rate - range | |
| 0.02 – 0.28 | | |
| 0.12 | % |
Note 7 - Loans Payable
– Related Parties
The Company’s major shareholder
has agreed to advance short term funding until revenue or other funding has been obtained. The advances and repayments will fluctuate
depending on cash flow. As of June 30, 2015, the amount owed the shareholder was $523.
On December 4, 2014, the Company’s
Chief Financial Officer agreed to advance the company a short term bridge loan. The repayment of the bridge loan will be the principal
amount only with zero interest calculated due in the 3rd Quarter, of 2015. As of June 30, 2015, the amount owed the
CFO was $20,000.
The Company acquired related party debt
associated with the acquisition of Seergate in the amount of $9,500.
NOTE
8 – LEASES
On October 1, 2013, the Company entered
into a secured lease with QTS Data Center. The terms of this agreement are three (3) years at $500 per month.
For the six months ended June 30, 2015,
the lease expense was $3,094.
NOTE
9 – FACILITIES
On July 1, 2014, MyECheck, leased approximately
3700 square feet of Class A Office Space in the City of Folsom California as its corporate headquarters and primary product development
center. This is a 42 month full service lease expiring on December 31, 2017 with an average rent per month of $4,735. The rent
increases annually by $0.05 per square foot. Both physical and electronic security features are employed at this location.
On October 28, 2014, MyECheck amended
its original lease agreement with Maidu Investment, LLC (Maidu Investment) at the office development known as College Point Business
Center, located at 2600 E. Bidwell Street in the City of Folsom, State of California, to include an expansion space defined as
Suite 190. The Company took possession of the property on December 5, 2014. The lease term on the expansion space is 42 months
expiring on June 30, 2018 with an average combined rent per month of $10,998.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE
9 – FACILITIES
MyECheck paid an additional security deposit
in the amount of $20,000, for a combined deposit amount of $52,812. The security deposit is not an advance rental deposit or a
measure of damages incurred by Landlord in case of MyECheck’s default. Provided MyECheck is not in default under the new
lease through the fifteenth (15th) full calendar month after the commencement of the Expansion Space Term, the Landlord
will return fifty percent (50%) of the additional security deposit to the Company.
On March 1, 2015, Seergate, entered into
a sublease with YK. Multimedia, Ltd. renting one room within the offices of an Executive Suite located on level 1 at “Gamla
Building in Park” in Ra’anana, Israel. This lease is open ended and can be terminated with a thirty day written notice
of intent to vacate the premises at any time. The monthly rent is $900 U.S. and is prepaid in increments of three months in advance.
There was no deposit or guarantee required.
The rent expense for the six months ended
June 30, 2015 was $74,174 which was included in operating expenses.
Note
10 - Commitments and Contingencies
Litigations, claims and assessments
From time to time, the Company may become
involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject
to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.
The Company is currently not aware of any such legal proceedings or claims, other than disclosed below; that they believe will
have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.
MyECheck, Inc. vs Zipmark Inc., Jay Bhattacharya
On October 10, 2014, the Company filed
a complaint with the United States District Court, Sacramento Division, against Zipmark, Inc. and Jay Bhattacharya, Inc. for damages
for breach of contract in the amount of $35,000 plus interest from June 1, 2012, patent infringement damages in an amount no less
than $500,000 and that such amounts be tripled, and for a temporary and permanent injunction prohibiting defendants from using
the patented MyECheck technology for online check processing. MyECheck has been informed that the defendants Zipmark and Jay Bhattacharya
continue to operate Zipmark’s business using technology that infringes on MyECheck’s patented technology.
In addition, defendant Zipmark breached
the Services Agreement by failing to pay the second part of the required license fee. As of the date of the filing, Zipmark and/or
Jay Bhattacharya have filed a motion to dismiss and challenge the venue. The Company has filed a response to these motions and
continues to vigorously pursue all claims against Zipmark and Jay Bhattacharya.
As of the date of the filing the Company
has received the Scheduling Order from the Court that sets out the dates for completing discovery, disclosing expert witnesses,
filing dispositive motions and pre-trial dates. These dates commence November 6, 2015 and continue through June 20, 2016.
MyECheck, Inc. vs Sweetsun Intertrade, Inc., Seven
Miles Securities, Titan International Securities, Inc. and Scottsdale Capital Advisors Corporation
On December 11, 2014, the Company filed
a complaint with the United States District Court, Sacramento Division, against Sweetsun Intertrade, Inc., Seven Mile Securities,
Titan International Securities, Inc. and Scottsdale Capital Advisors Corporation for declaratory relief for cancellation of share
certificates, damages for fraud, including punitive damages from Sweetsun, and preliminary and permanent injunctions restraining
them from transferring any shares of the Company’s common stock. In 2010, the Company entered into a settlement agreement
with Tangiers Investors, LP on a note due Tangiers in the amount of $32,200 plus attorney fees. Sweetsun was to have purchased
the note from Tangiers satisfying the liability.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
Note
10 - Commitments and Contingencies (CONT.)
Sweetsun failed to purchase the note and
induced the Company to issue shares to Titan International Securities, Inc. as if the note had been paid. The Company first learned
of the false claim of defendant Sweetsun’s representations, and the additional issuance of fraudulent shares to Seven Mile
Securities in October, 2013. Defendant Scottsdale Capital Advisors Corporation currently holds an unknown amount of the shares
of stock in the Company that was originally issued to defendant Sweetsun, as they are a brokerage company.
At December 20, 2014, there was a stop
transfer enforced on the shares on Titan International Securities. To date, these shares have not been transferred and remain
in their entirety. MyECheck paid the note thereby eliminating the liability and on October 9, 2014, Tangiers acknowledged that
it had been paid in full.
On September 8, 2014, the Brooklyn New
York’s U.S. Attorney’s Office filed a criminal indictment against Titan International Securities, Inc. and other defendants
charging them with a fraudulent scheme to conceal the true ownership of stocks and funds and engage in market manipulation of
U.S. public companies. On September 15, 2014, the International Financial Services Commission of Belize suspended Titan International
Securities, Inc., a Belize international business company, from “trading in financial and commodity-based derivative instruments
and other securities” until further notice. To date, these shares of the Company have not been transferred and remain in
their entirety. As of the date of this filing there have been no new developments.
On March 12, 2015, Seven Mile Securities submitted all the
required documentation to the Company’s transfer agent which permitted the return of 275,000,000 shares of common stock
that was part of the subject matter of this litigation. The cancellation of the 275,000,000 shares for Seven Mile Securities was
completed on April 14, 2015 and returned to common stock. The litigation continues against the other defendants in this action.
Seven Mile Securities has been removed as a defendant in this litigation.
Cecil Edwin Boozer
In late 2014, an individual, Cecil E.
Boozer, contacted the Company, contending that he had been promised a twenty percent (20%) equity interest in the Company as well
as retaining a fifty percent (50%) membership interest as the “co-founder” of the Company’s wholly owned subsidiary,
GreenPay, LLC, a Wyoming limited liability company. The Company also received a letter from Mr. Boozer dated March 25, 2015
which contained similar claims. As of the date of this filing, no legal proceeding has been initiated by this individual.
However, as a cautionary measure, on February 5, 2015, the Company referred this matter to outside counsel and, following an active
investigation, the Company believes that the claims asserted by this individual lack legal merit. As of the date of this filing
there have been no new developments.
TCA Global Credit Master Fund, L.P. v. MyECheck, Inc.,
et al.
On July 13, 2015, TCA Global Credit Master Fund, L.P. initiated
a breach of contract action against MyECheck and several other defendants in the Circuit Court of the 17th Judicial
Circuit in and for Broward County, Florida. TCA is a holder of the Company’s convertible notes and has filed its action
against MyECheck seeking damages for alleged breaches by MyECheck of the provisions of the convertible notes. Although MyECheck
intends to file an answer to TCA’s complaint within the time allotted under Florida law, as of the date of this filing the
Company is engaged in settlement discussions with TCA in an effort to resolve the dispute.
Consulting, Service and License
Agreements
In October, 2014, the Software License
and Services Agreement between the Company and its major customer dated November 23, 2013, was amended to include a
2014 Software Module License Fee in the amount of $500,000. The Company recorded $86,200 as revenue in the quarter ending June
30, 2015 and $83,300 in December 31, 2014. The Company recorded the revenue as it was earned and payment was received.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
Note
10 - Commitments and Contingencies (CONT.)
Consulting, Service and License
Agreements
The Company entered into a License Agreement
with GreenPay, LLC on February 24, 2014. Subsequent to that Agreement, the Company and Sierra Global, LLC entered into business
discussions, the point of which was the purchase of GreenPay by the Company. In anticipation of that transaction, the Company’s
CEO became an unpaid business consultant to GreenPay and was authorized to establish a bank account for GreenPay. After the acquisition
of GreenPay by the Company, the bank account was retained by Sierra Global (the Company executed a license under which Sierra
Global was permitted to use the GreenPay trade name for limited purposes). During this time, the Company’s CEO did not participate
in any ownership of either Sierra Global or GreenPay.
Note
11 - Stockholders’ Deficit
Amendment to Articles of Incorporation
On June 11, 2012, the Company filed an
Amendment of Articles of Incorporation with the State of Wyoming to increase authorized shares as follows:
| · | Common
Stock – 4,900,000,000 – Par value $0.00001 per share |
| · | Preferred
Stock Class, Series A – Par value $0.00001 per share – 10,000,000 shares
authorized |
| · | Preferred
Stock Class, Serious B – Par value - $0.00001 per share – 90,000,000 shares
authorized |
Each Share of Series A Preferred Stock
(PS) is entitled to vote together with the holders of the Company’s common stock on all matters and is entitled to 4 times
the sum of: i) the total number of shares of common stock which are issued and outstanding at the time of voting, plus, ii) the
total number of shares of Series B and Series C Preferred Stock which are issued and outstanding at the time of voting.
Each share of Preferred Stock is convertible
into the number of shares of Common Stock which equal four times the sum of: i) total number of shares issued and outstanding
at the time of conversion, plus ii) the total number of shares of Series B and Series C Preferred Stocks which are issued and
outstanding at the time of conversion.
Issuance of Convertible Preferred
Stock – related party
On May 29, 2012, the Company issued one
share of restricted Series A Preferred Stock (PS) to the major shareholder as part of the employment agreement.
On October 6, 2014, the Company purchased
all rights, titles and interest in the one (1) share of MyECheck, Inc. Preferred Class Stock, Series A, stock outstanding. The
purchase price paid by the Company for one (1) share of MyECheck, Inc. Preferred Class Stock, Series A, stock was one dollar ($1.00).
Issuance of Common Stock
On October 30, 2014, the Company established
a share reserve of common stock to an accredited investor in the amount of 101,102,941 as part of the terms of the Debenture to
TCA Global Credit Master Fund, LP, to be five (5) times such number of shares of Common Stock as shall be necessary to effect
the full conversion per Article VII, Section 4 of the Debenture. As of June 30, 2015, the share reserve of common stock
is 200,927,475. This is based on the stock price at June 30, 2015 with an eighty percent (80%) discount.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
Note
11 - Stockholders’ Deficit (CONT.)
Issuance of Common Stock (Cont.)
On January 27, 2015, the Company issued
7,500,000 shares of its common stock to Hermen Cruz, who is deemed an accredited investor, as consideration for his participation
in the early development of the Company in 2007, having a fair value of $135,750 ($0.0181/share), based upon recent quoted trading
price. The securities were not registered under the Securities Act, or the securities laws of any state, and were offered
or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended, as
a transaction by the Company not involving any public offering.
On February 6, 2015, the Company
issued 2,500,000 shares of its common stock to Erwin Sillerico, who is deemed an accredited investor, as consideration for his
participation in the early development of the Company in 2007, having a fair value of $49,750 ($0.0199/share), based upon recent
quoted trading price. The securities were not registered under the Securities Act, or the securities laws of any state,
and were offered or issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933,
as amended, as a transaction by the Company not involving any public offering.
On March 24, 2015, the Company entered
into a severance agreement with its National Account Sales Manager resulting in the authorization of 833,335 shares of the Company’s
common stock having a fair value of $16,250 ($0.0195/share), based upon quoted trading price at the date of the executed agreement.
At December 31, 2014, the company recorded $6,417 as common stock payable. This award was authorized by the Board of Directors
on March 24, 2015. The stock was issued on March 24, 2015.
On April 2, 2015, the Company issued and
executed a convertible note for $15,900. The Company converted accounts payable for services provided to allow the Company to
become DTC eligible of $14,500 plus interest of $1,400 incurred on January 29, 2014. The note has a term of one year and bears
interest at 10% and is unsecured. The debt is convertible based upon 50% of the stock price at January 29, 2014 of a price per
share of $0.0016. On April 7, 2015, the note was converted to 19,875,000 shares of the Company’s common stock which resulted
in a loss of $389,550.
On May 6, 2015, MyECheck issued 150,000,000 shares of its common
stock as payment of the purchase price for 100% of the issued and outstanding capital stock of Seergate, Ltd. The common
stock issued in connection with the Seergate transaction was valued at $0.02 per share and was calculated using the volume-weighted
sales price per share on the OTC – PINK for a consecutive period of ten (10) business days. The securities were not
registered under the Securities Act, or the securities laws of any state, and were offered or issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933, as amended, as a transaction by the Company not involving
any public offering.
On April 16, 2015, the Company approved the partial assignment
of $40,000 of a debt dated October 5, 2010. On April 21, 2015, the Company authorized the conversion of such debt into 40,000,000
shares of common stock at $0.001 per share which resulted in a loss of $840,000.
Cancellation of Common Stock Issuance
The cancellation of the 275,000,000 shares for Seven Mile Securities
was completed on April 14, 2015 and returned to common stock. On March 12, 2015, Seven Mile Securities submitted all the required
documentation to the Company’s transfer agent which permitted the return of 275,000,000 shares of common stock that was
part of an ongoing litigation. Seven Mile Securities has been removed as a defendant in this litigation.
MyECheck,
Inc.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014
NOTE 12 – MAJOR EVENTS
During the second quarter of 2015, MyECheck
entered into agreements with two new business partners which further expands the Company’s customer base. In April of this
year MyECheck entered into a Services Agreement with NXR Global, a leading distributor of health and wellness products, pursuant
to which MyECheck agreed to process payments from NXR Global’s customers.
On May 17, 2015, entered into an Authorized
Reseller Agreement with Avidia Bank. Under the terms of the Reseller Agreement between MyECheck and Avidia Bank, MyECheck agreed
to authorize Avidia Bank to sell MyECheck’s data processing services and its mobile payment system to Avidia’s customers.
NOTE 13 – SUBSEQUENT EVENTS
The Company has evaluated for subsequent
events at the date the consolidated financial statements were available to be issued and concluded that the events or transactions
occurring during that time period requiring recognition or disclosure have been made.
On July 1, 2015, a Callable Secured Convertible
Note was executed and issued to Johann Gumpp for $30,000, bearing interest at the rate of 10% per annum. The conversion price
shall be calculated at (i) 70% of the Trading Price of the Borrower’s Common Stock on the defined Conversion Date. The Common
Stock to the Holder shall be restricted pursuant to SEC Rule 144 with a twelve month holding period. (3)
On July 14, 2015, the Company executed
an Assignment of Remaining Balance owed by MyECheck to Conwell Kirkpatrick relating to debt incurred prior to December 21, 2010
in the amount of $53,054.91.
On July 29, 2015, the Company executed
and awarded a combined total of 90,000,000 shares of MyECheck common stock to its Employees at a fair market value of $0.0129
per share.
| Exhibit
No. |
|
Description |
| 2.1 |
|
Agreement and Plan of Merger
dated as of February 4, 2008, by and between MyECheck, Inc. and Sekoya Holdings, Ltd. * |
| 3.1 (i) |
|
Amendment to the Articles of
Incorporation of MyECheck, Inc. * |
| 3.1 (ii) |
|
Amendment to the ByLaws of MyECheck,
Inc. * |
| 10.1 |
|
Software License and Services
Agreement, dated September 1, 2013, by and between MyECheck, Inc. and INTERPAY, Inc. * |
| 10.2 |
|
Software License and Services
Agreement, dated November 23, 2013, by and between MyECheck, Inc. and Sierra Global, LLC * |
| 10.3 |
|
MyECheck Service Agreement, dated
September 5, 2014, by and between MyECheck, Inc. and VX Gateway, Inc. * |
| 10.4 |
|
Software License and Services
Agreement, dated March 19, 2014, by and between MyECheck, Inc. and ITONIS, INC. * |
| 10.5 |
|
Software License and Services
Agreement, dated February 24, 2014, by and between MyECheck, Inc. and GreenPay, LLC * |
| 10.6 |
|
MyECheck Service Agreement, dated
July 11, 2014, by and between MyECheck, Inc. and Simplifile, LLC * |
| 10.7 |
|
Settlement Agreement and Mutual
General Release, dated November 9, 2010, by and between MyECheck, Inc. and Tangiers Investors, LP * |
| 10.8 |
|
Securities Purchase Agreement,
dated as of April 26, 2010, by and between MyECheck, Inc. and Asher Enterprises, Inc. * |
| 10.9 |
|
Convertible Promissory Note,
dated as of April 26, 2010, by and between MyECheck, Inc. and Asher Enterprises, Inc. * |
| 10.10 |
|
Private Placement Subscription
Agreement, dated as of March 2008, by and between Anshan Finance, Ltd. and MyECheck, Inc. * |
| 10.11 |
|
Private Placement Subscription
Agreement, dated as of March 2008, by and between Youngal Group, Ltd. and MyECheck, Inc. * |
| 10.12 |
|
Complaint for Damages for Breach
of Contract and Patent Infringement, date of filing October 10, 2014, MyECheck, Inc. (Plaintiff) vs Zipmark, Inc. and Jay
Bhattacharya (Defendant) * |
| 10.13 |
|
Master Space Agreement, dated
October 1, 2013, by and between Quality Investment Properties Sacramento, LLC and MyECheck, Inc. * |
| 10.14 |
|
College Point Business Center
Standard Lease Agreement, dated June 13, 2014, by and between Maidu Investments, LLC and MyECheck, Inc. * |
| 10.15 |
|
First Amendment to the College
Point Business Center Standard Lease Agreement, dated October 28, 2014, by and between Maidu Investments, LLC and MyECheck,
Inc. * |
| 10.16 |
|
Securities Purchase Agreement,
dated October 29, 2014, by and between MyECheck, Inc. and TCA Global Credit Master Fund, LP * |
| 10.17 |
|
Patent License Agreement, dated
June 24, 2008, by and between Edward R. Starrs and MyECheck, Inc. * |
| 10.18 |
|
Services Agreement gVerify, dated
June 11, 2014, by and between Giact Systems, Inc. and MyECheck, Inc. * |
| 10.19 |
|
Intellectual Property License
Agreement, dated August 20, 2014, by and between MyECheck, Inc. and Sierra Global, LLC * |
| 10.20 |
|
Sierra Global Amendment to Exhibit
A – Software Modules License Fees, dated October 1, 2014, by and between MyECheck, Inc. and Sierra Global, LLC * |
| 10.21 |
|
Senior Secured, Convertible,
Redeemable Debenture, dated October 29, 2014, by and between MyECheck, Inc. and TCA Global Credit Master Fund, LP * |
| 10.22 |
|
Caltronics Business Systems Lease
Agreement, dated January 27, 2015, by and between MyECheck, Inc. and Caltronics Business Systems * |
| 10.23 |
|
Membership Purchase Agreement,
dated August 20, 2014, by and between MyECheck, Inc. and GreenPay, LLC * |
| 10.24 |
|
Share Purchase Agreement, dated
May 5, 2015, by and among MyECheck, Inc. and Seergate, Ltd. * |
| 10.25 |
|
Complaint for Declaratory Relief
for Cancellation of Share Certificates; Damages for Fraud; Preliminary and Permanent Injunctions, dated December 10, 2014,
by and between MyECheck, Inc. (Plaintiff) vs Sweetsun Intertrade, Inc., Seven Mile Securities, Titan International Securities,
Inc. and Scottsdale Capital Advisors Corporation * |
| 10.26 |
|
Seergate, Ltd. Audited Annual
Report at December 31, 2014 and 2013 * |
| 10.27 |
|
MyECheck, Inc. and Seergate,
Ltd. Unaudited Pro Forma Condensed Combined Financial Information for the Twelve Months Ended December 31, 2014 and the Six
Months Ended June 30, 2015 * |
| 10.28 |
|
Convertible Promissory Note by
and between Charlie Abujudeh * |
| 10.29 |
|
Callable Secured Convertible
Note by and between Charlie Abujudeh * |
| Exhibit
No. |
|
Description |
| 10.30 |
|
Callable Secured
Convertible Note by and between Johann Gumpp * |
| 10.31 |
|
MyECheck Authorized Reseller
Agreement by and between MyECheck, Inc. and Avidia Bank * |
| 10.32 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Monthly Filter Club, LLC |
| 10.33 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Cuallix Consumer Services, Inc. |
| 10.34 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and SionicMobile Corporation |
| 10.35 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Withum Smith & Brown |
| 10.36 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Dad’s Custom Roast Coffee |
| 10.37 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and New Age Telecom, Inc. |
| 10.38 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Mesorah Heritage Foundation |
| 10.39 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Mesorah Publication, Ltd. |
| 10.40 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Sushi Groove, LLC |
| 10.41 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and eze Systems, Inc. |
| 10.42 |
|
GreenPay Software License and
Service Agreement by and between GreenPay, LLC and MJ SafePay, LLC |
| 10.43 |
|
GreenPay Authorized Reseller
Agreement by and between Greenpay, LLC and Maverick BankCard, LLC |
| 10.44 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and truCrowd Texas, Inc. |
| 10.45 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Lucid Integrated Systems |
| 10.46 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Boss Tech Support, LLC |
| 10.47 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Vergence Entertainment, LLC |
| 10.48 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and The Mother of All Survival Kits |
| 10.49 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Credit Shop, Incorporated |
| 10.50 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Nutronix Revolution, Inc. |
| 10.51 |
|
MyECheck Partnership Agreement
by and between MyECheck, Inc. and Hercules Credit Union |
| 10.52 |
|
MyECheck Authorized Reseller
Agreement by and between MyECheck, Inc. and Access Payment Systems, Inc. |
| 10.53 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Fantasy Grudge, LLC |
| 10.54 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Elite Tech Help, LLC |
| 10.55 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and Kokopay, Inc. |
| 10.56 |
|
MyECheck Services Agreement by
and between MyECheck, Inc. and PacNet Services Ltd. |
| 10.57 |
|
MyECheck Authorized Reseller
Agreement by and between MyECheck, Inc, and Peter Farinas DBA PK and Maverick, Inc. |
| 10.58 |
|
Memorandum of Understanding |
| 10.59 |
|
Award Letter |
| 10.60 |
|
Debt Purchase Agreement by and
between Redwood Management, LLC and TCA Global Credit Master, LP |
| 10.61 |
|
Exchange Agreement, dated July
16, 2015, by and between MyECheck, Inc. and Redwood Management, LLC |
| 10.62 |
|
Ten Percent Convertible Note,
dated July 15, 2015, by and between MyECheck, Inc. and Redwood Management, LLC |
| 31.1 |
|
Certification of the Principal
Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 |
|
Certification of the Principal
Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1 |
|
Certification of the Principal
Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
| 32.2 |
|
Certification of the Principal
Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
* Previously Filed
Exhibit 10.32
MyEcheck Services
Agreement
This
Service Agreement, along with the attached Exhibits (collectively known as the “Agreement”), is made and entered by
and between the company and/or individual listed below, with a place of business within the United States of America (hereinafter
referred to as “the Customer”), and MyEcheck, Inc., a Wyoming Corporation, with principal offices within the State
of California, (hereinafter referred to as “MyEcheck”), all or each of which shall also hereinafter be referred to
as the “party” or “parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas
MyEcheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas
the Customer is engaged in payment acceptance; |
| C. | The
Service Documentation described below contains the terms under which MyEcheck has agreed
to provide Services to the Customer. |
| D. | MyEcheck
has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby
mutually agree that:
1. Service
Documentation. The “Service Documentation” includes;
| (a) | This
Agreement includes Three Exhibits, and may include additional price schedules, addendums,
and/or attachments; |
| (b) | User
guides, which may include software (APIs), and software licenses, if applicable, specifications,
instructions, and notices; |
| (c) | Third
party application form(s) for any desired supplemental services. |
The
Service Documentation also applies to any Service that is provided by an affiliate of MyEcheck and any Service that is used by
an affiliate or a subsidiary of the Customer. “MyEcheck” includes each such affiliate, and “Customer”
includes each such affiliate and subsidiary. All terms defined in this Agreement shall have the same meaning when used in the
Service Documentation. If there is a conflict among the documents that make up the Service Documentation, the documents will govern
in the order set forth above. Customer acknowledges receiving a copy of the Service Documentation for each Service it requested
when it entered into this Agreement.
2. Changes
to Services. MyEcheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days
prior written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not
be bound by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change.
 | 1 | Page |
MyEcheck Services
Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyEcheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyEcheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law,
becomes insolvent or is otherwise unable to make its debts when due, or if MyEcheck otherwise determines, in its sole discretion,
that a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyEcheck’s rights with respect to transactions which occurred
before termination. MyEcheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyEcheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyEcheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and
charges, or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyEcheck may assess finance
charges at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees
that are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first
to unpaid interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this
Agreement constitute MyEcheck’s or its vendors’ confidential information (“Confidential Information”).
MyEcheck or its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not
acquire any interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service
Documentation. Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other
than as specifically contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer,
sublicense or otherwise make any of it available to any person or entity, other than its employees who have a need to use the
Confidential Information in connection with the applicable Service. Customer shall notify MyEcheck immediately if it knows or
suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”)
of any Confidential Information, and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all
actions, including without limitation initiating court proceedings to recover possession or prevent further Unauthorized Use of
the Confidential Information and obtain redress for any injury caused to MyEcheck as a result of such Unauthorized Use. In addition,
except as permitted by applicable law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative
works of any software provided pursuant to this Agreement.
| | 2 | Page |
MyEcheck Services
Agreement
6. Third
Party Networks; Use of Required Software. If MyEcheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyEcheck or Customer, MyEcheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer
shall use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Customer
to use the Service(s) in accordance with the Service Documentation.
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET
FORTH IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyEcheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyEcheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyEcheck’s applicable policies, procedures or practices as MyEcheck may from time to time establish and make available
to Customer; (iii) MyEcheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyEcheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyEcheck’s
intra-day net funds position.
(b) Customer
shall promptly furnish written proof of loss to MyEcheck and notify MyEcheck if it becomes aware of any third party claim related
to a Service. Customer shall cooperate fully (and at its own expense) with MyEcheck in recovering a loss. If Customer is reimbursed
by or on behalf of MyEcheck, MyEcheck or its designee will be subrogated to all rights of Customer.
(c) Any
claim, action or proceeding against MyEcheck for losses or damages arising from a Service, including MyEcheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyEcheck.
(d) MyEcheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyEcheck’s reasonable control.
(e) Except
in the case of MyEcheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyEcheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyEcheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or (iii) if the Service
includes a license or sublicense of any software to Customer, the use or distribution of the software by Customer or any person
gaining access to the software through Customer that is inconsistent with the license or sublicense.
| | 3 | Page |
MyEcheck Services
Agreement
(f) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL
BREACH OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES
ACTUALLY PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR
DAMAGES WERE INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR
DAMAGES WERE INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL (INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER
ANY CLAIM IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS
OF THE FORM OF THE CLAIM OR ACTION.
9. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified
and applied in a manner consistent therewith, and MyEcheck will incur no liability to Customer as a result of the inconsistency
or modification and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise
affect the enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyEcheck and Customer and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Customer
agrees to provide MyEcheck promptly upon MyEcheck’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which MyEcheck may require Customer
to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyEcheck.
| | 4 | Page |
MyEcheck Services
Agreement
(e) Customer
expressly warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyEcheck shall use the most
recent address for Customer in MyEcheck’s records, and any notice from MyEcheck will be effective when sent. Customer shall
use the address where Customer’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Customer will be effective when actually received by MyEcheck. MyEcheck will be entitled to rely on any notice
from Customer that it believes in good faith was authorized by an authorized representative of Customer and, except as expressly
stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each
party will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyEcheck. Unencrypted electronic transmissions are not secure. Customer assumes the
entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Customer
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyEcheck’s prior
written consent. MyEcheck may assign its rights and obligations with respect to the Service Documentation to any successor by
merger, consolidation or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyEcheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer
authorizes MyEcheck to issue a press release, which may contain Customer’s stock ticker symbol; that describes the nature
of the relationship between MyEcheck and Customer.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n) This
Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyEcheck Services
Agreement
IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyEcheck |
| |
|
|
| /s/ Ian R. Bruce |
|
/s/ Rod R. Zalunardo |
| Signature |
|
Signature |
| |
|
|
| Company Name: |
|
MyEcheck, Inc. |
| |
|
Rod R Zalunardo |
| Monthly Filter Club, LLC |
|
Senior VP, Operations / COO |
| |
|
|
| Individual Name: |
|
2600 East Bidwell Street, Suite 140 |
| |
|
Folsom, California 95630 |
| Ian Bruce |
|
|
| |
|
www.MyEcheck.com |
| Title: |
Owner/President |
|
844-MyEcheck (844-693-2432) |
| |
|
|
Customer.Support@MyEcheck.com |
| Principal Address: |
|
Date of Agreement: 08/18/2014 |
| |
|
|
|
| 7579 E. 100 N. |
|
Effective Date: 08/18/2014 |
| |
|
|
|
| Greenfield, IN 46140 |
|
|
|
| |
|
|
|
| ian@monthlyfilterclub.com |
|
|
|
| |
|
|
|
| 317-586-7515 Phone |
|
|
|
| | 6 | Page |
MyEcheck Services
Agreement
Exhibit
A
Services
and Fees
Basic
Services
MyEcheck
will provide fully electronic check services to Customer. MyEcheck will receive data transmissions from Customer and will use
the data to create and process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing
system, for deposits into Customer account(s), and for transfers out of Customer accounts.
This
basic service enables the Customer to verify their user provided data, check the status of their bank account, prove the transaction
is authorized, and predict the probability of most problems before the transaction is approved and processed for deposit.
Check
21 Service Fees
The per item/transaction
fee for the Electronic Check creation will be eleven cents ($0.11). There are no volume limitations or discounts.
Available
Supplemental Services
Scrub Services,
like the Basic Check 21 Service, generates a check image and pushes it to your bank for payment. It offers minimal financial verification.
Transactions are immediately and automatically evaluated and approved or declined based upon the real time results of multiple
fraud control tools and database searches. For example, it will check the payee against a database of known bad check writers
and verify that the account is open and in good standing.
Guarantee Services,
like the Basic Check 21 and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating
transaction data, you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the
returned item for its full face value.
These services
are available for additional fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyEcheck Services
Agreement
Exhibit
B
Supplemental
Consulting Services
1. STATEMENT
OF WORK. MyEcheck may render services, working individually or with the
Customer and/or third parties retained by Customer, (the "Consulting Services") to Customer on a time and materials
basis as may be agreed upon in a written Statement of Work, which will become a part of this Agreement. No Supplemental Consulting
Services will be preformed until such time as a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT
ADMINISTRATION. The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyEcheck
all assistance and guidance reasonably requested by MyEcheck for the performance of the Consulting Services. Customer acknowledges
that the timely performance of the Consulting Services is dependent both on reasonable access to and assistance by Customer, including
the Customer Technical Contact. MyEcheck acknowledges that the success of Customer's business shall depend on MyEcheck's ability
to provide the Consulting Services on a timely basis in accordance with the dates specified by Customer, and shall use all reasonable
efforts to complete all Services efficiently and on or ahead of schedule
3. COMPENSATION.
MyEcheck shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer
shall also reimburse MyEcheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the
Consulting Services. MyEcheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements
due MyEcheck. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree
that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will
be conducted on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation
of a Statement of Work.
| Hourly
(Subject to Scheduling and Availability): |
$125.00/Hour |
4. THIRD
PARTY SOFTWARE. Customer acknowledges that in order for MyEcheck to perform the Consulting Services, Customer may need
to obtain additional third party services ("Third Party Services") or third party technology ("Third Party Technology").
Customer agrees that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms
set forth in the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software
or Third Party Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect
to any Third Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such
agreements are the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service
providers.
| | 8 | Page |
MyEcheck
Services Agreement
5. LICENSE
TO Customer MATERIALS. Customer acknowledges that in order to perform the Services, MyEcheck may require access to and
use of certain software or other materials of Customer or Customer's suppliers (including access to code relating to the Software
or that may effect the performance of the Software) ("Customer Materials"). Customer grants to MyEcheck a royalty-free,
non-exclusive license to access and use the Customer Materials (including through subcontractors) as required for MyEcheck's performance
of the Services hereunder.
6. RIGHTS
AND OWNERSHIP. To the extent that any modification, enhancement, extension, interface or derivative work to any MyEcheck
Software or any other deliverable that is produced through the Consulting Services, Customer shall have the same usage rights
in such as Customer has currently has. Customer acknowledges and agrees that other than any Third Party Software or any Customer
Materials or Software, MyEcheck continues to own all computer programs, utilities and intellectual property which aid MyEcheck
in performing the Consulting Services or which are produced as a result of these Services.
7. Independent
Contractors. MyEcheck agrees that it shall be considered an independent contractor and that it shall not be deemed
to be an employee of Customer. MyEcheck and its employees, agents and contractors performing services hereunder shall not be entitled
to any employee benefits of Customer.
8.
Project Pricing and Expenses. MyEcheck shall incur all reasonable
expenses in the performance of the services contained herein including but not limited to contractors and consultants used for
software development, testing, quality assurance and deployment during the term of this agreement.
From
time to time there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained
herein, any single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or
it shall not be deemed a reimbursable expense.
9.
Billing schedule. Billing is monthly and payment is due upon receipt
of bill for services provided the prior month. Payments will be processed and collected from the Customer as a Check 21 item (no
fee to Customer).
MyEcheck
reserves the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue
to make timely payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees. During the term of this Agreement
and for a period of one (1) year following completion of any work hereunder, neither party shall solicit employment of any current
or prior employee of the other.
11.
ATTACHMENTS. Any Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | 9 | Page |
MyEcheck Services
Agreement
Exhibit
C
Attached as
Exhibit C, will be a completed New Merchant Integration Information form. This form must be completed and submitted to MyEcheck
in a timely manner. Customer bank integration typically takes between four and six weeks. This process can not begin until this
form has been completed and delivered. It will be the Customer’s responsibility to direct their bank to work with MyEcheck
in order to facilitate the Check 21 deposits. MyEcheck will not be responsible for any delays imposed by the Customer’s
bank.
Upon submission
of the New Merchant Integration Information Form, MyEcheck will provide the Customer with a Customer Service Contact. This individual
will work with the Customer and their bank in order to complete the integration process.
In is understood
by all parties that the contact individuals provide by the Customer and MyEcheck are free to exchange any and all needed information
in order to execute the terms and conditions of this Service Agreement.
| | 10 | Page |
Exhibit 10.33
MyECheck
Services Agreement
This Service Agreement,
along with the attached Exhibits (collectively known as the “Agreement”), is made and entered by and between the
company and/or individual listed below, with a place of business within the United States of America (hereinafter referred
to as “the Customer”), and MyECheck, Inc., a Wyoming Corporation, with principal offices within the State of California,
(hereinafter referred to as “MyECheck”), all or each of which shall also hereinafter be referred to as the “party”
or “parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas
MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas
the Customer is engaged in payment acceptance; |
| C. | The
Service Documentation described below contains the terms under which MyECheck has agreed
to provide Services to the Customer. |
| D. | MyECheck
has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby
mutually agree that:
| 1. | Service
Documentation. The “Service Documentation” includes; |
| (a) | This
Agreement includes Three Exhibits, and may include additional price schedules, addendums,
and/or attachments; |
| (b) | User
guides, which may include software (APIs), and software licenses, if applicable, specifications,
instructions, and notices; |
| (c) | Third
party application form(s) for any desired supplemental services. |
The
Service Documentation also applies to any Service that is provided by an affiliate of MyECheck and any Service that is used by
an affiliate or a subsidiary of the Customer. “MyECheck” includes each such affiliate, and “Customer”
includes each such affiliate and subsidiary. All terms defined in this Agreement shall have the same meaning when used in the
Service Documentation. If there is a conflict among the documents that make up the Service Documentation, the documents will govern
in the order set forth above. Customer acknowledges receiving a copy of the Service Documentation for each Service it requested
when it entered into this Agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days
prior written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not
be bound by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change.
| | 1 | Page |
MyECheck
Services Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyECheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyECheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law,
becomes insolvent or is otherwise unable to make its debts when due, or if MyECheck otherwise determines, in its sole discretion,
that a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyECheck’s rights with respect to transactions which occurred
before termination. MyECheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyECheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyECheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and
charges, or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyECheck may assess finance
charges at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees
that are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first
to unpaid interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this
Agreement constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”).
MyECheck or its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not
acquire any interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service
Documentation. Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other
than as specifically contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer,
sublicense or otherwise make any of it available to any person or entity, other than its employees who have a need to use the
Confidential Information in connection with the applicable Service. Customer shall notify MyECheck immediately if it knows or
suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”)
of any Confidential Information, and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all
actions, including without limitation initiating court proceedings to recover possession or prevent further Unauthorized Use of
the Confidential Information and obtain redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition,
except as permitted by applicable law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative
works of any software provided pursuant to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Customer, MyECheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer
shall use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Customer
to use the Service(s) in accordance with the Service Documentation.
| | 2 | Page |
MyECheck
Services Agreement
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET
FORTH IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Customer; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(b) Customer
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Customer shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Customer is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Customer.
(c) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(d) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(e) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or (iii) if the Service
includes a license or sublicense of any software to Customer, the use or distribution of the software by Customer or any person
gaining access to the software through Customer that is inconsistent with the license or sublicense.
| | 3 | Page |
MyECheck
Services Agreement
(f) MYECHECK WILL ONLY BE LIABLE
TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH OF THIS AGREEMENT.
MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY PAID BY
COMPANY TO MYECHECK
DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE INCURRED (OR, IF NO MYECHECK
FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE INCURRED). IN NO EVENT WILL
EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL (INCLUDING WITHOUT LIMITATION
COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM IS BASED ON CONTRACT OR TORT,
OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF THE FORM OF THE CLAIM OR ACTION.
9. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified
and applied in a manner consistent therewith, and MyECheck will incur no liability to Customer as a result of the inconsistency
or modification and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise
affect the enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyECheck and Customer and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Customer
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which MyECheck may require Customer
to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
| | 4 | Page |
MyECheck
Services Agreement
(e) Customer
expressly warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Customer in MyECheck’s records, and any notice from MyECheck will be effective when sent. Customer shall
use the address where Customer’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Customer will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice
from Customer that it believes in good faith was authorized by an authorized representative of Customer and, except as expressly
stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each
party will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Customer assumes the
entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Customer
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior
written consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by
merger, consolidation or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer authorizes
MyECheck to issue a press release, which may contain Customer’s stock ticker symbol; that describes the nature of the relationship
between MyECheck and Customer.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n) This Agreement may
be executed as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyECheck
Services Agreement
IN WITNESS WHEREOF,
the parties have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyECheck |
| |
|
|
| /s/ Francisco Lopez |
|
/s/ Rod R. Zalunardo |
| Signature |
|
Signature |
| |
|
|
| Cuallix Consumer Services Inc. |
|
MyECheck, Inc. |
| |
|
|
| Francisco J. Lopez |
|
Rod R. Zalunardo |
| Chief Operations Officer/COO |
|
Senior VP, Operations/COO |
| |
|
|
| 10999 W IH 10 Ste. 305 |
|
2900 East Bidwell Street |
| San Antonio, Texas 78230 |
|
Folsom, California 95630 |
| |
|
|
| www.cuallix.com |
|
www.MyECheck.com |
| 1 855 460 5050 |
|
844-MyECheck (844-693-2432) |
| service@cuallix.com |
|
Support@MyECheck.com |
| |
|
|
| |
|
Date of Agreement: September
30, 2014 |
| |
|
|
| |
|
Effective Date: |
9/30/2014 |
| | 6 | Page |
MyECheck
Services Agreement
Exhibit
A
Services
and Fees
Basic
Services
MyECheck will provide
fully electronic check services to Customer. MyECheck will receive data transmissions from Customer and will use the data to create
and process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits
into Customer account(s), and for transfers out of Customer accounts.
This basic service
enables the Customer to verify their user provided data, check the status of their bank account, prove the transaction is authorized,
and predict the probability of most problems before the transaction is approved and processed for deposit.
Check
21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.17 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.17 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.17 | |
Available
Supplemental Services
Scrub Services, like the Basic Check
21 Service, generates a check image and pushes it to your bank for payment. It offers minimal financial verification. Transactions
are immediately and automatically evaluated and approved or declined based upon the real time results of multiple fraud control
tools and database searches. For example, it will check the payee against a database of known bad check writers and verify that
the account is open and in good standing.
Guarantee Services, like the Basic
Check 21 and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating transaction
data, you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the returned item
for its full face value.
These services are available for
additional fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyECheck
Services Agreement
Exhibit
B
Supplemental
Consulting Services
1. STATEMENT
OF WORK. MyECheck may render services, working individually or with the
Customer and/or third parties retained by Customer, (the "Consulting Services") to Customer on a time and materials
basis as may be agreed upon in a written Statement of Work, which will become a part of this Agreement. No Supplemental Consulting
Services will be preformed until such time as a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT
ADMINISTRATION. The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyECheck
all assistance and guidance reasonably requested by MyECheck for the performance of the Consulting Services. Customer acknowledges
that the timely performance of the Consulting Services is dependent both on reasonable access to and assistance by Customer, including
the Customer Technical Contact. MyECheck acknowledges that the success of Customer's business shall depend on MyECheck’s
ability to provide the Consulting Services on a timely basis in accordance with the dates specified by Customer, and shall use
all reasonable efforts to complete all Services efficiently and on or ahead of schedule
3. COMPENSATION.
MyECheck shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer
shall also reimburse MyECheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the
Consulting Services. MyECheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements
due MyECheck. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree
that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be
conducted on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation of
a Statement of Work.
| Hourly (Subject to Scheduling and Availability): |
|
$125.00/Hour |
4. THIRD PARTY
SOFTWARE. Customer acknowledges that in order for MyECheck to perform the Consulting Services, Customer may need to obtain
additional third party services ("Third Party Services") or third party technology ("Third Party Technology").
Customer agrees that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms
set forth in the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software
or Third Party Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect
to any Third Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such
agreements are the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service
providers.
| | 8 | Page |
MyECheck
Services Agreement
5. LICENSE
TO Customer MATERIALS. Customer acknowledges that in order to perform the Services, MyECheck may require access to and
use of certain software or other materials of Customer or Customer's suppliers (including access to code relating to the Software
or that may affect the performance of the Software) ("Customer Materials"). Customer grants to MyECheck a royalty-free,
non-exclusive license to access and use the Customer Materials (including through subcontractors) as required for MyECheck’s
performance of the Services hereunder.
6. RIGHTS AND
OWNERSHIP. To the extent that any modification, enhancement, extension, interface or derivative work to any MyECheck Software
or any other deliverable that is produced through the Consulting Services, Customer shall have the same usage rights in such as
Customer has currently has. Customer acknowledges and agrees that other than any Third Party Software or any Customer Materials
or Software, MyECheck continues to own all computer programs, utilities and intellectual property which aid MyECheck in performing
the Consulting Services or which are produced as a result of these Services.
7. Independent
Contractors. MyECheck agrees that it shall be considered an independent contractor and that it shall not be deemed
to be an employee of Customer. MyECheck and its employees, agents and contractors performing services hereunder shall not be entitled
to any employee benefits of Customer.
8.
Project Pricing and Expenses.
MyECheck shall incur all reasonable expenses in the performance of the services contained herein
including but not limited to contractors and consultants used for software development, testing, quality assurance and deployment
during the term of this agreement.
From time to time
there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained herein, any
single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or it shall not
be deemed a reimbursable expense.
9.
Billing schedule.
Billing is monthly and payment is due upon receipt of bill for services provided the prior month.
Payments will be processed and collected from the Customer as a Check 21 item (no fee to Customer).
MyECheck reserves
the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue to
make timely payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees.
During the term of this Agreement and for a period of one (1) year following completion of any work
hereunder, neither party shall solicit employment of any current or prior employee of the other.
11. ATTACHMENTS. Any
Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | 9 | Page |
MyECheck
Services Agreement
Exhibit
C
Attached as Exhibit C, will be a
completed New Merchant Integration Information form. This form must be completed and submitted to MyECheck in a timely manner.
Customer bank integration typically takes between four and six weeks. This process cannot begin until this form has been completed
and delivered. It will be the Customer’s responsibility to direct their bank to work with MyECheck in order to facilitate
the Check 21 deposits. MyECheck will not be responsible for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant
Integration Information Form, MyECheck will provide the Customer with a Customer Service Contact. This individual will work with
the Customer and their bank in order to complete the integration process.
In is understood by all parties that
the contact individuals provide by the Customer and MyECheck are free to exchange any and all needed information in order to execute
the terms and conditions of this Service Agreement.
| | 10 | Page |
Exhibit 10.34
MyEcheck Services Agreement
This Service Agreement,
along with the attached Exhibits (collectively known as the “Agreement”), is made and entered by and between the
company and/or individual listed below, with a place of business within the United States of America (hereinafter referred
to as “the Customer”), and MyEcheck, Inc., a Wyoming Corporation, with principal offices within the State of California,
(hereinafter referred to as “MyEcheck”), all or each of which shall also hereinafter be referred to as the “party”
or “parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas MyEcheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas the Customer is engaged in payment acceptance; |
| C. | The Service Documentation described below contains the terms under which MyEcheck has agreed to provide Services to the Customer. |
| D. | MyEcheck has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby mutually agree that:
1. Service
Documentation. The “Service Documentation” includes;
| (a) | This Agreement includes Three Exhibits, and may include additional price schedules, addendums, and/or attachments; |
| (b) | User guides, which may include software (APIs), and software licenses, if applicable, specifications, instructions, and notices; |
| (c) | Third party application form(s) for any desired supplemental services. |
The Service Documentation
also applies to any Service that is provided by an affiliate of MyEcheck and any Service that is used by an affiliate or a subsidiary
of the Customer. “MyEcheck” includes each such affiliate, and “Customer” includes each such affiliate and
subsidiary. All terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is
a conflict among the documents that make up the Service Documentation, the documents will govern in the order set forth above.
Customer acknowledges receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
2. Changes
to Services. MyEcheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change.
| | 1 | Page |
MyEcheck Services Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyEcheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyEcheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law, becomes
insolvent or is otherwise unable to make its debts when due, or if MyEcheck otherwise determines, in its sole discretion, that
a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyEcheck’s rights with respect to transactions which occurred before
termination. MyEcheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyEcheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyEcheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and charges,
or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyEcheck may assess finance charges
at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that
are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid
interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this
Agreement constitute MyEcheck’s or its vendors’ confidential information (“Confidential Information”).
MyEcheck or its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not
acquire any interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service
Documentation. Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other
than as specifically contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer,
sublicense or otherwise make any of it available to any person or entity, other than its employees who have a need to use the
Confidential Information in connection with the applicable Service. Customer shall notify MyEcheck immediately if it knows or
suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”)
of any Confidential Information, and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all
actions, including without limitation initiating court proceedings to recover possession or prevent further Unauthorized Use of
the Confidential Information and obtain redress for any injury caused to MyEcheck as a result of such Unauthorized Use. In addition,
except as permitted by applicable law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative
works of any software provided pursuant to this Agreement.
6. Third Party
Networks; Use of Required Software. If MyEcheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyEcheck or Customer, MyEcheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Customer to
use the Service(s) in accordance with the Service Documentation.
| | 2 | Page |
MyEcheck Services Agreement
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyEcheck is under
no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction (each, an
“Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyEcheck related to the
Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation or MyEcheck’s
applicable policies, procedures or practices as MyEcheck may from time to time establish and make available to Customer; (iii)
MyEcheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s protection,
or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv) could result,
in MyEcheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory authority,
including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyEcheck’s
intra-day net funds position.
(b) Customer shall promptly
furnish written proof of loss to MyEcheck and notify MyEcheck if it becomes aware of any third party claim related to a Service.
Customer shall cooperate fully (and at its own expense) with MyEcheck in recovering a loss. If Customer is reimbursed by or on
behalf of MyEcheck, MyEcheck or its designee will be subrogated to all rights of Customer.
(c) Any claim, action
or proceeding against MyEcheck for losses or damages arising from a Service, including MyEcheck’s honoring or dishonoring
a check covered by a Service, must be brought within one year from the date of the act or omission or in the case of a check from
the date the check was first paid or returned by MyEcheck.
(d) MyEcheck will have
no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances beyond MyEcheck’s
reasonable control.
(e) Except in the case of MyEcheck’s
gross negligence or intentional misconduct, Customer shall indemnify and hold MyEcheck, its directors, officers, employees and
agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance with the Service Documentation,
including without limitation any warranty MyEcheck is required to make to a third party in connection with a Service; (ii) an act
or omission of any agent, courier or authorized representative of Customer; or (iii) if the Service includes a license or sublicense
of any software to Customer, the use or distribution of the software by Customer or any person gaining access to the software through
Customer that is inconsistent with the license or sublicense.
| | 3 | Page |
MyEcheck Services Agreement
(f) MYECHECK WILL ONLY
BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH OF THIS
AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY PAID
BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE INCURRED
(OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE INCURRED).
IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL (INCLUDING
WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM IS BASED
ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF THE FORM
OF THE CLAIM OR ACTION.
9. General.
(a) The Service Documentation
will be governed by the laws of the state of California, without regard to conflicts of laws principles. In the event any legal
action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such action will be brought
in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties hereby submit to the
jurisdiction and venue of said court.
(b) Any portion of the
Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and applied in a
manner consistent therewith, and MyEcheck will incur no liability to Customer as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The Service Documentation
is the entire agreement between MyEcheck and Customer and supersedes all prior representations, conditions, warranties, understandings,
proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion will constitute a modification
of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Customer agrees to
provide MyEcheck promptly upon MyEcheck’s request any existing financial statements or other information pertaining to Customer’s
financial condition or any previously unprepared financial statements which MyEcheck may require Customer to prepare and/or to
be audited or reviewed by independent certified public accountants acceptable to MyEcheck.
| | 4 | Page |
MyEcheck Services Agreement
(e) Customer expressly
warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation any
sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections 4, 5, 6,
8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either party may
provide notice to the other party by mail, personal delivery, or electronic transmission. MyEcheck shall use the most recent address
for Customer in MyEcheck’s records, and any notice from MyEcheck will be effective when sent. Customer shall use the address
where Customer’s relationship manager is located and address any notice to the attention of such manager. Any notice from
Customer will be effective when actually received by MyEcheck. MyEcheck will be entitled to rely on any notice from Customer that
it believes in good faith was authorized by an authorized representative of Customer and, except as expressly stated in the Service
Documentation, shall have no obligation to verify the signature (including an electronic signature). Each party will have a reasonable
time after receipt of any notice to act on it.
(h) All uses of the Services
through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”) will be deemed to be
authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized party to (i) use the
Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or receive information and
communications to MyEcheck. Unencrypted electronic transmissions are not secure. Customer assumes the entire risk for unauthorized
use of Codes and any unencrypted electronic transmissions.
(i) Customer may not
assign or transfer its rights or obligations with respect to the Service Documentation without MyEcheck’s prior written consent.
MyEcheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(j) Unless otherwise
provided in the Service Documentation, the term “Business Day” means that part of a business day occurring prior to
the cutoff time determined in accordance with MyEcheck’s applicable funds availability policy.
(k) The parties do not
intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer authorizes MyEcheck to issue
a press release, which may contain Customer’s stock ticker symbol; that describes the nature of the relationship between
MyEcheck and Customer.
(m) This Agreement may
be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(n) This Agreement may be executed as a
faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyEcheck Services Agreement
IN WITNESS WHEREOF, the
parties have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
|
| Customer |
|
MyEcheck |
|
| |
|
|
|
|
| /s/ Robert J. Burroughs |
|
/s/ Rod Zalunardo |
| Signature |
|
Signature |
|
| |
|
|
|
|
| Company Name: |
|
MyEcheck, Inc. |
|
| |
|
|
Rod R Zalunardo |
|
| |
SionicMobile |
|
Senior VP, Operations / COO |
| |
|
|
|
|
| Individual Name: |
|
2600 East Bidwell Street, Suite 140 |
| |
|
|
Folsom, California 95630 |
| |
Bob Burroughs |
|
|
|
| |
|
|
www.MyEcheck.com |
|
| Title: |
EVP Product |
|
844-MyEcheck (844-693-2432) |
| |
|
|
Customer.Support@MyEcheck.com |
| |
|
|
|
|
| Email Contact: |
|
Date of Agreement: |
09/02/2014 |
| |
|
|
|
|
| |
burroughs@sionicmobile.com |
|
Effective Date: |
09/02/2014 |
| |
|
|
|
|
| Phone Contact: |
|
|
|
| |
|
|
|
|
| |
404-213-5513 cell |
|
|
|
| |
|
|
|
|
| Principal Address: |
|
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| |
|
|
|
|
| |
|
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|
| |
909 West Peachtree St, NW |
|
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| |
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| |
Atlanta, GA 30309 |
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www.sionicmobile.com |
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| | 6 | Page |
MyEcheck Services Agreement
Exhibit A
Services and Fees
Basic Services
MyEcheck will provide
fully electronic check services to Customer. MyEcheck will receive data transmissions from Customer and will use the data to create
and process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits
into Customer account(s), and for transfers out of Customer accounts.
This basic service enables
the Customer to verify their user provided data, check the status of their bank account, prove the transaction is authorized, and
predict the probability of most problems before the transaction is approved and processed for deposit.
Check 21 Service Fees
The per item/transaction fee for the Electronic
Check creation will be eleven cents ($0.11). There are no volume limitations or discounts.
Scrub Services Fee
Scrub Services, like the Basic Check 21
Service, generates a check image and pushes it to your bank for payment. Transactions are immediately and automatically evaluated
and approved or declined based upon the real time results of multiple fraud control tools and database searches.
Sionic would use the Scrub Service for
new account registration/set-up, and each subsequent financial transaction.
The per item/transaction fee for the Scrub
service will be twenty-five cents ($0.25). There are no volume limitations or discounts.
Guarantee Services
Fee
Level and types of services are to be determined.
| | 7 | Page |
MyEcheck Services Agreement
Service Summary
MyEcheck will receive data from SionicMobile
to create, format and transmit for further processing, fully electronic checks in accordance with ANSI X9.XX standards.
MyEcheck services will be primarily used
by SionicMobile for two transaction types, Signup, and Purchase.
1) Signup
When a new customer registers within the
SionicMobile system, SionicMobile will collect customer registration data:
| · | Format the data for MyEcheck. |
| · | Pass formatted data to MyEcheck. |
| · | Transaction data will be recorded in the MyEcheck database. |
| · | MyEcheck will validate the customer’s bank account using Scrub Services. |
| · | MyEcheck will return to Sionic Mobile a risk score, or an approved/declined (decision) packet and
a secure MyEcheck token. |
| · | Approved transactions – Sionic will pass the result to the customer, the customer record
in the MyEcheck database will be appended accordingly. |
2) Purchase
When a registered Sionic Mobile customer
makes a purchase, the customer will select electronic check as payment type:
| · | Customer approves transaction. |
| · | SionicMobile app will send merchant ID, purchase amount, and customer’s MyEcheck token to
Sionic. |
| · | Sionic will pass the token to MyEcheck. |
| · | MyEcheck will validate the customer’s bank account. |
| · | MyEcheck will return to SionicMobile a risk score, or an approved/declined (decision) packet. |
| · | Sionic will pass the result to the customer. |
| · | On approved transactions, MyEcheck will create the item and transmit to SionicMobile’s bank
for clearing. |
| | 8 | Page |
MyEcheck Services Agreement
Exhibit B
Supplemental Consulting
Services
1. STATEMENT
OF WORK. MyEcheck may render services, working individually or with the Customer and/or third parties retained by
Customer, (the "Consulting Services") to Customer on a time and materials basis as may be agreed upon in a written Statement
of Work, which will become a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as
a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT ADMINISTRATION.
The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyEcheck all assistance and guidance
reasonably requested by MyEcheck for the performance of the Consulting Services. Customer acknowledges that the timely performance
of the Consulting Services is dependent both on reasonable access to and assistance by Customer, including the Customer Technical
Contact. MyEcheck acknowledges that the success of Customer's business shall depend on MyEcheck's ability to provide the Consulting
Services on a timely basis in accordance with the dates specified by Customer, and shall use all reasonable efforts to complete
all Services efficiently and on or ahead of schedule
3. COMPENSATION.
MyEcheck shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer
shall also reimburse MyEcheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the Consulting
Services. MyEcheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements
due MyEcheck. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree
that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be conducted
on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation of a Statement
of Work.
| Hourly (Subject
to Scheduling and Availability): |
$125.00/Hour |
4. THIRD PARTY SOFTWARE.
Customer acknowledges that in order for MyEcheck to perform the Consulting Services, Customer may need to obtain additional third
party services ("Third Party Services") or third party technology ("Third Party Technology"). Customer agrees
that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms set forth in
the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software or Third Party
Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect to any Third
Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such agreements are
the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service providers.
| | 9 | Page |
MyEcheck Services Agreement
5. LICENSE TO Customer
MATERIALS. Customer acknowledges that in order to perform the Services, MyEcheck may require access to and use of certain
software or other materials of Customer or Customer's suppliers (including access to code relating to the Software or that may
effect the performance of the Software) ("Customer Materials"). Customer grants to MyEcheck a royalty-free, non-exclusive
license to access and use the Customer Materials (including through subcontractors) as required for MyEcheck's performance of the
Services hereunder.
6. RIGHTS AND OWNERSHIP.
To the extent that any modification, enhancement, extension, interface or derivative work to any MyEcheck Software or any other
deliverable that is produced through the Consulting Services, Customer shall have the same usage rights in such as Customer has
currently has. Customer acknowledges and agrees that other than any Third Party Software or any Customer Materials or Software,
MyEcheck continues to own all computer programs, utilities and intellectual property which aid MyEcheck in performing the Consulting
Services or which are produced as a result of these Services.
7. Independent
Contractors. MyEcheck agrees that it shall be considered an independent contractor and that it shall not be deemed
to be an employee of Customer. MyEcheck and its employees, agents and contractors performing services hereunder shall not be entitled
to any employee benefits of Customer.
8.
Project Pricing and Expenses. MyEcheck
shall incur all reasonable expenses in the performance of the services contained herein including but not limited to contractors
and consultants used for software development, testing, quality assurance and deployment during the term of this agreement.
From time to time there
may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained herein, any single
expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or it shall not be deemed
a reimbursable expense.
9.
Billing schedule. Billing
is monthly and payment is due upon receipt of bill for services provided the prior month. Payments will be processed and collected
from the Customer as a Check 21 item (no fee to Customer).
MyEcheck reserves the right
to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue to make timely
payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees. During
the term of this Agreement and for a period of one (1) year following completion of any work hereunder, neither party shall solicit
employment of any current or prior employee of the other.
11. ATTACHMENTS. Any Statement
of Work(s) will be attached and will become a part of this Service Agreement.
| | 10 | Page |
MyEcheck Services Agreement
Exhibit B
Statement of Work (1)
This Statement of Work
has been prepared to summarize the supplemental services that MyEcheck will provide in order to facilitate the implementation of
the commercial applications as listed in Exhibit A.
Services/Tasks to
be Preformed
| · | Develop a tool set to process the SionicMobile outbound ACH settlement to merchants. |
| · | The time-line and delivery dates for this effort are to be determined. |
Compensation
The items listed within
this Statement of Work (1), will be provided to Sionic, by MyEcheck at no cost.
Any additional work will
be outlined within a separate SoW, and will be priced as noted in Exhibit B.
Technical Contact
| Sionic |
|
MyEcheck |
| |
|
|
| Andrew Choi |
|
Steve Blandford |
| |
|
|
| choi@sionicmobile.com |
|
steve.blandford@myecheck.com |
| |
|
|
| Statement of Work Approvals: |
|
|
| |
|
|
| Bob Burroughs |
|
Rod Zalunardo |
| |
|
|
| Date: 9/2/2014 |
|
|
| | 11 | Page |
MyEcheck Services Agreement
Exhibit C
Attached as Exhibit C, will be a completed
New Merchant Integration Information form. This form must be completed and submitted to MyEcheck in a timely manner. Customer bank
integration typically takes between four and six weeks. This process can not begin until this form has been completed and delivered.
It will be the Customer’s responsibility to direct their bank to work with MyEcheck in order to facilitate the Check 21 deposits.
MyEcheck will not be responsible for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant Integration
Information Form, MyEcheck will provide the Customer with a Customer Service Contact. This individual will work with the Customer
and their bank in order to complete the integration process.
In is understood by all parties that the
contact individuals provide by the Customer and MyEcheck are free to exchange any and all needed information in order to execute
the terms and conditions of this Service Agreement.
| | 12 | Page |
Exhibit 10.35
MyEcheck Services Agreement
This Service Agreement, along
with the attached Exhibits (collectively known as the “Agreement”), is made and entered by and between the company
and/or individual listed below, with a place of business within the United States of America (hereinafter referred to as “the
Customer”), and MyEcheck, Inc., a Wyoming Corporation, with principal offices within the State of California, (hereinafter
referred to as “MyEcheck”), all or each of which shall also hereinafter be referred to as the “party” or
“parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas MyEcheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas the Customer is engaged in payment acceptance; |
| C. | The Service Documentation described below contains the terms under which MyEcheck has agreed to provide Services to the Customer. |
| D. | MyEcheck has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby mutually agree that:
| 1. | Service Documentation. The “Service Documentation” includes; |
| (a) | This Agreement includes Three Exhibits, and may include additional price schedules, addendums, and/or attachments; |
| (b) | User guides, which may include software (APIs), and software licenses, if applicable, specifications, instructions, and notices; |
| (c) | Third party application form(s) for any desired supplemental services. |
The Service Documentation
also applies to any Service that is provided by an affiliate of MyEcheck and any Service that is used by an affiliate or a subsidiary
of the Customer. “MyEcheck” includes each such affiliate, and “Customer” includes each such affiliate and
subsidiary. All terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is
a conflict among the documents that make up the Service Documentation, the documents will govern in the order set forth above.
Customer acknowledges receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
2. Changes to Services. MyEcheck
may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior written notification. If
Customer discontinues using the affected Service before the change becomes effective, it will not be bound by the change. If Customer
continues to use a Service after the change becomes effective, it will be bound by the change
| | 1 | Page |
MyEcheck Services Agreement
3. Term and
Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyEcheck may
terminate any Service following notice to Customer of a breach of any provision of the Service Documentation. MyEcheck may
also terminate any Service without notice to Customer if Customer is subject to a petition under applicable state or federal
bankruptcy law, becomes insolvent or is otherwise unable to make its debts when due, or if MyEcheck otherwise determines, in
its sole discretion, that a material adverse change has occurred in Customer’s ability to perform its obligations under
the Service Documentation. The termination of a Service will not affect Customers or MyEcheck’s rights with respect to
transactions which occurred before termination. MyEcheck shall not be liable to Customer for any losses or damages Customer
may incur as a result of any termination of any Service.
4. Service
Fees. Customer shall pay MyEcheck the fees described in the attached Exhibits for the specific services selected
and/or used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby
authorize MyEcheck to create remotely created checks drawn from Customer’s checking account(s), and use the checks to
collect all fees and charges, or it may send an invoice to Customer for such amounts, which Customer shall promptly pay.
MyEcheck may assess finance charges at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law,
whichever is less, on any invoiced fees that are not paid within thirty (30) days of the due date and shall apply payments
and other reductions of amounts owed first to unpaid interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials,
source code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant
to this Agreement constitute MyEcheck’s or its vendors’ confidential information (“Confidential
Information”). MyEcheck or its vendors, as applicable, will remain the sole owner of all such Confidential Information,
and Customer will not acquire any interest in or rights to it as a result of Customer’s use of any Service except as
set forth in the Service Documentation. Customer will maintain the confidentiality of the Confidential Information and will
not use for any purpose (other than as specifically contemplated by this Agreement) or disclose (or permit its employees or
agents to disclose), copy, transfer, sublicense or otherwise make any of it available to any person or entity, other than its
employees who have a need to use the Confidential Information in connection with the applicable Service. Customer shall
notify MyEcheck immediately if it knows or suspects that there has been any unauthorized disclosure, possession, use or
knowledge (each, an “Unauthorized Use”) of any Confidential Information, and if it is responsible for the
Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation initiating court
proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain redress for
any injury caused to MyEcheck as a result of such Unauthorized Use. In addition, except as permitted by applicable law,
Customer may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided
pursuant to this Agreement.
6. Third Party Networks; Use of
Required Software. If MyEcheck determines that any funds transfer or communications network, Internet service
provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable for
use by MyEcheck or
| | 2 | Page |
MyEcheck Services Agreement
7. Customer, MyEcheck
may, upon notice to Customer, suspend or discontinue the affected Service. Customer shall use and maintain in good working order
(and at its own expense) software, hardware and other equipment necessary for Customer to use the Service(s) in accordance with
the Service Documentation.
8. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY
EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE
SERVICES INCLUDING WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN
THOSE EXPRESSLY SET FORTH IN THE SERVICE DOCUMENTATION.
9. Liability and
Indemnification.
(a) MyEcheck is
under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyEcheck
related to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service
Documentation or MyEcheck’s applicable policies, procedures or practices as MyEcheck may from time to time establish
and make available to Customer; (iii) MyEcheck has reason to believe may not have been duly authorized, should not be honored
for its or Customer’s protection, or involves funds subject to a hold, dispute, restriction or legal process that
prevents their withdrawal; or (iv) could result, in MyEcheck’s sole discretion, in a violation of any law, rule or
regulation of any federal or state regulatory authority, including without limitation any Federal Reserve risk control
program or guidelines such as the limitations on MyEcheck’s intra-day net funds position.
(b)
Customer shall promptly furnish written proof of loss to MyEcheck
and notify MyEcheck if it becomes aware of any third party claim related to a Service. Customer shall cooperate fully (and at
its own expense) with MyEcheck in recovering a loss. If Customer is reimbursed by or on behalf of MyEcheck, MyEcheck or its designee
will be subrogated to all rights of Customer.
(c) Any claim, action
or proceeding against MyEcheck for losses or damages arising from a Service, including MyEcheck’s honoring or dishonoring
a check covered by a Service, must be brought within one year from the date of the act or omission or in the case of a check from
the date the check was first paid or returned by MyEcheck.
(d) MyEcheck will have
no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances beyond MyEcheck’s
reasonable control.
(e) Except
in the case of MyEcheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyEcheck, its
directors, officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a
Service in accordance with the Service Documentation, including without limitation any warranty MyEcheck is required to make
to a third party in connection with a Service; (ii) an act or omission of any agent, courier or authorized representative of
Customer; or (iii) if the Service includes a license or sublicense of any software to Customer, the use or distribution of
the software by Customer or any person
| | 3 | Page |
MyEcheck Services Agreement
(f) gaining access to
the software through Customer that is inconsistent with the license or sublicense.
(g) MYECHECK WILL ONLY
BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH OF THIS
AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY PAID
BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE INCURRED
(OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE INCURRED).
IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL (INCLUDING
WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM IS BASED
ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF THE FORM
OF THE CLAIM OR ACTION.
10.
General.
(a) The Service
Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles. In the
event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the
parties hereby submit to the jurisdiction and venue of said court.
(b) Any portion of the
Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and applied in a
manner consistent therewith, and MyEcheck will incur no liability to Customer as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyEcheck and Customer and supersedes all prior representations,
conditions, warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any
right on one occasion will constitute a modification of the Service Documentation or be a waiver of that right on a
subsequent occasion.
(d) Customer agrees to
provide MyEcheck promptly upon MyEcheck’s request any existing financial statements or other information pertaining to Customer’s
financial condition or any previously unprepared financial statements which MyEcheck may require Customer to prepare and/or to
be audited or reviewed by independent certified public accountants acceptable to MyEcheck.
| | 4 | Page |
MyEcheck Services Agreement
(e) Customer expressly
warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation any
sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections 4, 5, 6,
8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either party may
provide notice to the other party by mail, personal delivery, or electronic transmission. MyEcheck shall use the most recent
address for Customer in MyEcheck’s records, and any notice from MyEcheck will be effective when sent. Customer shall
use the address where Customer’s relationship manager is located and address any notice to the attention of such
manager. Any notice from Customer will be effective when actually received by MyEcheck. MyEcheck will be entitled to rely on
any notice from Customer that it believes in good faith was authorized by an authorized representative of Customer and,
except as expressly stated in the Service Documentation, shall have no obligation to verify the signature (including an
electronic signature). Each party will have a reasonable time after receipt of any notice to act on it.
(h) All uses of the
Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”) will be
deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized party
to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyEcheck. Unencrypted electronic transmissions are not secure. Customer assumes the
entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Customer may not
assign or transfer its rights or obligations with respect to the Service Documentation without MyEcheck’s prior written
consent. MyEcheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger,
consolidation or corporate reorganization.
(j) Unless otherwise
provided in the Service Documentation, the term “Business Day” means that part of a business day occurring prior
to the cutoff time determined in accordance with MyEcheck’s applicable funds availability policy.
(k) The parties do not
intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer authorizes MyEcheck to
issue a press release, which may contain Customer’s stock ticker symbol; that describes the nature of the relationship
between MyEcheck and Customer.
(m) This Agreement may
be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(n) This Agreement may be executed as a
faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyEcheck Services Agreement
IN WITNESS WHEREOF, the parties
have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyEcheck |
| |
|
|
| /s/ Kevin Smith |
|
/s/ Rod Zalunardo |
| Signature |
|
Signature |
| |
|
|
| Company Name: |
|
MyEcheck, Inc. |
| |
|
Rod R Zalunardo |
| Withum, Smith & Brown |
|
Senior VP, Operations / COO |
| |
|
|
| Individual Name: |
|
2600 East Bidwell Street, Suite 140 |
| |
|
Folsom, California 95630 |
| Kevin Smith |
|
|
| |
|
www.MyEcheck.com |
| Title: |
System Administrator |
|
844-MyEcheck (844-693-2432) |
| |
|
Customer.Support@MyEcheck.com |
| Principal Address: |
|
Date of Agreement: |
09/08/2014 |
| |
|
|
| 331 Newman Springs Rd. |
|
Effective Date: |
10/01/2014 |
| |
|
|
| Suite 125 |
|
|
| |
|
|
| Red Bank, NJ 07701 |
|
|
| |
|
|
| |
|
|
| | 6 | Page |
MyEcheck Services Agreement
Exhibit
A
Services and Fees
Basic Services
MyEcheck will provide fully
electronic check services to Customer. MyEcheck will receive data transmissions from Customer and will use the data to create and
process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits into
Customer account(s), and for transfers out of Customer accounts.
This basic service enables
the Customer to verify their user provided data, check the status of their bank account, prove the transaction is authorized, and
predict the probability of most problems before the transaction is approved and processed for deposit.
Check 21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.15 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.15 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.15 | |
Available Supplemental
Services
Scrub Services, like the Basic Check 21 Service,
generates a check image and pushes it to your bank for payment. It offers minimal financial verification. Transactions are immediately
and automatically evaluated and approved or declined based upon the real time results of multiple fraud control tools and database
searches. For example, it will check the payee against a database of known bad check writers and verify that the account is open
and in good standing.
Guarantee Services, like the Basic Check 21
and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating transaction data,
you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the returned item for
its full face value.
These services are available for additional
fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyEcheck Services Agreement
Exhibit B
Supplemental Consulting
Services
1. STATEMENT
OF WORK. MyEcheck may render services, working individually or with the Customer and/or third parties retained by
Customer, (the "Consulting Services") to Customer on a time and materials basis as may be agreed upon in a written Statement
of Work, which will become a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as
a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT ADMINISTRATION.
The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyEcheck all assistance and guidance
reasonably requested by MyEcheck for the performance of the Consulting Services. Customer acknowledges that the timely performance
of the Consulting Services is dependent both on reasonable access to and assistance by Customer, including the Customer Technical
Contact. MyEcheck acknowledges that the success of Customer's business shall depend on MyEcheck's ability to provide the Consulting
Services on a timely basis in accordance with the dates specified by Customer, and shall use all reasonable efforts to complete
all Services efficiently and on or ahead of schedule
3. COMPENSATION.
MyEcheck shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer
shall also reimburse MyEcheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the Consulting
Services. MyEcheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements
due MyEcheck. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree
that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be conducted
on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation of a Statement
of Work.
Hourly (Subject to Scheduling
and Availability): $125.00/Hour
4. THIRD PARTY SOFTWARE.
Customer acknowledges that in order for MyEcheck to perform the Consulting Services, Customer may need to obtain additional third
party services ("Third Party Services") or third party technology ("Third Party Technology"). Customer agrees
that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms set forth in
the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software or Third Party
Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect to any Third
Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such agreements are
the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service providers.
| | 8 | Page |
MyEcheck Services Agreement
5. LICENSE TO Customer
MATERIALS. Customer acknowledges that in order to perform the Services, MyEcheck may require access to and use of certain
software or other materials of Customer or Customer's suppliers (including access to code relating to the Software or that may
effect the performance of the Software) ("Customer Materials"). Customer grants to MyEcheck a royalty-free, non-exclusive
license to access and use the Customer Materials (including through subcontractors) as required for MyEcheck's performance of the
Services hereunder.
6.
RIGHTS AND OWNERSHIP. To the extent that any modification, enhancement, extension, interface or derivative work
to any MyEcheck Software or any other deliverable that is produced through the Consulting Services, Customer shall have the same
usage rights in such as Customer has currently has. Customer acknowledges and agrees that other than any Third Party Software
or any Customer Materials or Software, MyEcheck continues to own all computer programs, utilities and intellectual property which
aid MyEcheck in performing the Consulting Services or which are produced as a result of these Services.
7.
Independent Contractors. MyEcheck agrees that it shall be considered
an independent contractor and that it shall not be deemed to be an employee of Customer. MyEcheck and its employees, agents and
contractors performing services hereunder shall not be entitled to any employee benefits of Customer.
8.
Project Pricing and Expenses.
MyEcheck shall incur all reasonable expenses in the performance of the services contained herein
including but not limited to contractors and consultants used for software development, testing, quality assurance and deployment
during the term of this agreement.
From
time to time there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained
herein, any single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or
it shall not be deemed a reimbursable expense.
9.
Billing schedule.
Billing is monthly and payment is due upon receipt of bill for services provided the prior month.
Payments will be processed and collected from the Customer as a Check 21 item (no fee to Customer).
MyEcheck
reserves the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue
to make timely payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees.
During the term of this Agreement and for a period of one (1) year following completion of any work
hereunder, neither party shall solicit employment of any current or prior employee of the other.
11. ATTACHMENTS. Any
Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | 9 | Page |
Exhibit
10.36
MyEcheck
Services Agreement
This
Service Agreement, along with the attached Exhibits (collectively known as the “Agreement”), is made and entered by
and between the company and/or individual listed below, with a place of business within the United States of America (hereinafter
referred to as “the Customer”), and MyEcheck, Inc., a Wyoming Corporation, with principal offices within the State
of California, (hereinafter referred to as “MyEcheck”), all or each of which shall also hereinafter be referred to
as the “party” or “parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas
MyEcheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas
the Customer is engaged in payment acceptance; |
| C. | The Service
Documentation described below contains the terms under which MyEcheck has agreed to provide
Services to the Customer. |
| D. | MyEcheck
has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore,
the parties do hereby mutually agree that:
| 1. | Service
Documentation. The “Service Documentation” includes; |
| (a) | This Agreement
includes Three Exhibits, and may include additional price schedules, addendums, and/or
attachments; |
| (b) | User guides,
which may include software (APIs), and software licenses, if applicable, specifications,
instructions, and notices; |
| (c) | Third party
application form(s) for any desired supplemental services. |
The
Service Documentation also applies to any Service that is provided by an affiliate of MyEcheck and any Service that is used by
an affiliate or a subsidiary of the Customer. “MyEcheck” includes each such affiliate, and “Customer”
includes each such affiliate and subsidiary. All terms defined in this Agreement shall have the same meaning when used in the
Service Documentation. If there is a conflict among the documents that make up the Service Documentation, the documents will govern
in the order set forth above. Customer acknowledges receiving a copy of the Service Documentation for each Service it requested
when it entered into this Agreement.
2. Changes
to Services. MyEcheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days
prior written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not
be bound by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change
| | 1 | Page |
MyEcheck
Services Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyEcheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyEcheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law,
becomes insolvent or is otherwise unable to make its debts when due, or if MyEcheck otherwise determines, in its sole discretion,
that a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyEcheck’s rights with respect to transactions which occurred
before termination. MyEcheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyEcheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyEcheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and
charges, or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyEcheck may assess finance
charges at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees
that are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first
to unpaid interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this
Agreement constitute MyEcheck’s or its vendors’ confidential information (“Confidential Information”).
MyEcheck or its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not
acquire any interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service
Documentation. Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other
than as specifically contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer,
sublicense or otherwise make any of it available to any person or entity, other than its employees who have a need to use the
Confidential Information in connection with the applicable Service. Customer shall notify MyEcheck immediately if it knows or
suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”)
of any Confidential Information, and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all
actions, including without limitation initiating court proceedings to recover possession or prevent further Unauthorized Use of
the Confidential Information and obtain redress for any injury caused to MyEcheck as a result of such Unauthorized Use. In addition,
except as permitted by applicable law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative
works of any software provided pursuant to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyEcheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyEcheck or
| | 2 | Page |
MyEcheck
Services Agreement
7. Customer,
MyEcheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer shall use and maintain in good working
order (and at its own expense) software, hardware and other equipment necessary for Customer to use the Service(s) in accordance
with the Service Documentation.
8. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET
FORTH IN THE SERVICE DOCUMENTATION.
9. Liability
and Indemnification.
(a) MyEcheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyEcheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyEcheck’s applicable policies, procedures or practices as MyEcheck may from time to time establish and make available
to Customer; (iii) MyEcheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyEcheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyEcheck’s
intra-day net funds position.
(b) Customer
shall promptly furnish written proof of loss to MyEcheck and notify MyEcheck if it becomes aware of any third party claim related
to a Service. Customer shall cooperate fully (and at its own expense) with MyEcheck in recovering a loss. If Customer is reimbursed
by or on behalf of MyEcheck, MyEcheck or its designee will be subrogated to all rights of Customer.
(c) Any
claim, action or proceeding against MyEcheck for losses or damages arising from a Service, including MyEcheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyEcheck.
(d) MyEcheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyEcheck’s reasonable control.
(e) Except
in the case of MyEcheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyEcheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyEcheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or (iii) if the Service
includes a license or sublicense of any software to Customer, the use or distribution of the software by Customer or any person
| | 3 | Page |
MyEcheck
Services Agreement
(f) gaining
access to the software through Customer that is inconsistent with the license or sublicense.
(g) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL
BREACH OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES
ACTUALLY PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR
DAMAGES WERE INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR
DAMAGES WERE INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL (INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER
ANY CLAIM IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS
OF THE FORM OF THE CLAIM OR ACTION.
10. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified
and applied in a manner consistent therewith, and MyEcheck will incur no liability to Customer as a result of the inconsistency
or modification and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise
affect the enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyEcheck and Customer and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Customer
agrees to provide MyEcheck promptly upon MyEcheck’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which MyEcheck may require Customer
to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyEcheck.
| | 4 | Page |
MyEcheck
Services Agreement
(e) Customer
expressly warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyEcheck shall use the most
recent address for Customer in MyEcheck’s records, and any notice from MyEcheck will be effective when sent. Customer shall
use the address where Customer’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Customer will be effective when actually received by MyEcheck. MyEcheck will be entitled to rely on any notice
from Customer that it believes in good faith was authorized by an authorized representative of Customer and, except as expressly
stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each
party will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyEcheck. Unencrypted electronic transmissions are not secure. Customer assumes the
entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Customer
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyEcheck’s prior
written consent. MyEcheck may assign its rights and obligations with respect to the Service Documentation to any successor by
merger, consolidation or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyEcheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer
authorizes MyEcheck to issue a press release, which may contain Customer’s stock ticker symbol; that describes the nature
of the relationship between MyEcheck and Customer.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n) This
Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyEcheck
Services Agreement
IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyEcheck |
| |
|
|
| /s/ Samuel J.
Cure |
|
/s/ Rod Zalunardo |
| Signature |
|
Signature |
| |
|
|
| Company Name: |
|
MyEcheck, Inc. |
| |
|
Rod R Zalunardo |
| Dad’s
Custom Roast Coffee |
|
Senior VP, Operations / COO |
| |
|
|
| Individual Name: |
|
2600 East Bidwell Street,
Suite 140 |
| |
|
Folsom, California 95630 |
| Samuel
J. Cure |
|
|
| |
|
www.MyEcheck.com |
| Title: |
Co-Founder/CTO |
|
844-MyEcheck (844-693-2432) |
| |
|
Customer.Support@MyEcheck.com |
| |
|
|
| Principal Address: |
|
Date of Agreement: |
10/08/2014 |
| |
|
|
| 485
Palm Street |
|
Effective Date: |
10/08/2014 |
| |
|
|
| Canton,
GA 30015 |
|
|
| |
|
|
| |
|
|
| |
|
|
| Phone:
(676) 294-2231 |
|
|
| |
|
|
|
|
| | 6 | Page |
MyEcheck
Services Agreement
Exhibit
A
Services
and Fees
Basic
Services
MyEcheck
will provide fully electronic check services to Customer. MyEcheck will receive data transmissions from Customer and will use
the data to create and process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing
system, for deposits into Customer account(s), and for transfers out of Customer accounts.
This
basic service enables the Customer to verify their user provided data, check the status of their bank account, prove the transaction
is authorized, and predict the probability of most problems before the transaction is approved and processed for deposit.
Check
21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.17 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.17 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.17 | |
Available
Supplemental Services
Scrub
Services, like the Basic Check 21 Service, generates a check image and pushes it to your bank for payment. It offers minimal financial
verification. Transactions are immediately and automatically evaluated and approved or declined based upon the real time results
of multiple fraud control tools and database searches. For example, it will check the payee against a database of known bad check
writers and verify that the account is open and in good standing.
Guarantee
Services, like the Basic Check 21 and Scrub Services, generates a check image and pushes it to your bank for payment. In addition
to validating transaction data, you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider
buys the returned item for its full face value.
These
services are available for additional fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyEcheck
Services Agreement
Exhibit
B
Supplemental
Consulting Services
1.
STATEMENT OF WORK.
MyEcheck may render services, working individually or with the Customer and/or third parties retained by Customer, (the "Consulting
Services") to Customer on a time and materials basis as may be agreed upon in a written Statement of Work, which will become
a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as a duly authorized Statement
of Work is prepared and approved by all Parties.
2.
PROJECT ADMINISTRATION. The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide
MyEcheck all assistance and guidance reasonably requested by MyEcheck for the performance of the Consulting Services. Customer
acknowledges that the timely performance of the Consulting Services is dependent both on reasonable access to and assistance by
Customer, including the Customer Technical Contact. MyEcheck acknowledges that the success of Customer's business shall depend
on MyEcheck's ability to provide the Consulting Services on a timely basis in accordance with the dates specified by Customer,
and shall use all reasonable efforts to complete all Services efficiently and on or ahead of schedule
3.
COMPENSATION. MyEcheck shall be paid fees on a time and materials basis in accordance with the Statement of Work
signed by both parties. Customer shall also reimburse MyEcheck for reasonable travel, lodging, meal and other expenses reasonably
incurred while providing the Consulting Services. MyEcheck shall provide Customer with accurate invoices detailing the consulting
hours, fees and expense reimbursements due MyEcheck. Customer payment for Services and expenses shall be due thirty (30) days
from the date of invoice. The parties agree that Customer shall not be charged nor shall it be liable for any travel time incurred
in connection herewith.
All
work will be conducted on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation
of a Statement of Work.
| Hourly
(Subject to Scheduling and Availability): |
|
$125.00/Hour |
4.
THIRD PARTY SOFTWARE. Customer acknowledges that in order for MyEcheck to perform the Consulting Services, Customer
may need to obtain additional third party services ("Third Party Services") or third party technology ("Third Party
Technology"). Customer agrees that the rights and licenses with respect to Third Party Technology and Third Party Services
shall be under terms set forth in the pertinent purchase, license or services agreements between Customer and the vendors of such
Third Party Software or Third Party Services. Customer shall execute and comply with appropriate purchase, license, or services
agreements with respect to any Third Party Software or Third Party Services. Any amounts payable to third party vendors or service
providers under such agreements are the sole responsibility of Customer and shall be paid directly by Customer to such third party
vendors or service providers.
| | 8 | Page |
MyEcheck
Services Agreement
5.
LICENSE TO Customer MATERIALS. Customer acknowledges that in order to perform the Services, MyEcheck may require
access to and use of certain software or other materials of Customer or Customer's suppliers (including access to code relating
to the Software or that may effect the performance of the Software) ("Customer Materials"). Customer grants to MyEcheck
a royalty-free, non-exclusive license to access and use the Customer Materials (including through subcontractors) as required
for MyEcheck's performance of the Services hereunder.
6.
RIGHTS AND OWNERSHIP. To the extent that any modification, enhancement, extension, interface or derivative work
to any MyEcheck Software or any other deliverable that is produced through the Consulting Services, Customer shall have the same
usage rights in such as Customer has currently has. Customer acknowledges and agrees that other than any Third Party Software
or any Customer Materials or Software, MyEcheck continues to own all computer programs, utilities and intellectual property which
aid MyEcheck in performing the Consulting Services or which are produced as a result of these Services.
7.
Independent Contractors. MyEcheck agrees that it shall be considered
an independent contractor and that it shall not be deemed to be an employee of Customer. MyEcheck and its employees, agents and
contractors performing services hereunder shall not be entitled to any employee benefits of Customer.
8.
Project Pricing and Expenses. MyEcheck shall incur all reasonable
expenses in the performance of the services contained herein including but not limited to contractors and consultants used for
software development, testing, quality assurance and deployment during the term of this agreement.
From
time to time there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained
herein, any single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or
it shall not be deemed a reimbursable expense.
9.
Billing schedule. Billing is monthly and payment is due upon receipt
of bill for services provided the prior month. Payments will be processed and collected from the Customer as a Check 21 item (no
fee to Customer).
MyEcheck
reserves the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue
to make timely payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees. During the term of this Agreement
and for a period of one (1) year following completion of any work hereunder, neither party shall solicit employment of any current
or prior employee of the other.
11.
ATTACHMENTS. Any Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | 9 | Page |
MyEcheck
Services Agreement
Exhibit
C
Attached
as Exhibit C, will be a completed New Merchant Integration Information form. This form must be completed and submitted to MyEcheck
in a timely manner. Customer bank integration typically takes between four and six weeks. This process cannot begin until this
form has been completed and delivered. It will be the Customer’s responsibility to direct their bank to work with MyEcheck
in order to facilitate the Check 21 deposits. MyEcheck will not be responsible for any delays imposed by the Customer’s
bank.
Upon
submission of the New Merchant Integration Information Form, MyEcheck will provide the Customer with a Customer Service Contact.
This individual will work with the Customer and their bank in order to complete the integration process.
In
is understood by all parties that the contact individuals provide by the Customer and MyEcheck are free to exchange any and all
needed information in order to execute the terms and conditions of this Service Agreement.
| | 10 | Page |
Exhibit 10.37
MyEcheck Services
Agreement
This
Service Agreement, along with the attached Exhibits (collectively known as the “Agreement”), is made and entered by
and between the company and/or individual listed below, with a place of business within the United States of America (hereinafter
referred to as “the Customer”), and MyEcheck, Inc., a Wyoming Corporation, with principal offices within the State
of California, (hereinafter referred to as “MyEcheck”), all or each of which shall also hereinafter be referred to
as the “party” or “parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas MyEcheck provides Payment
Data Processing Services (“Services”); |
| B. | Whereas the Customer is engaged in
payment acceptance; |
| C. | The Service Documentation described
below contains the terms under which MyEcheck has agreed to provide Services to the Customer. |
| D. | MyEcheck has agreed to provide Services
to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby
mutually agree that:
| 1. | Service Documentation.
The “Service Documentation” includes; |
| (a) | This Agreement includes Three Exhibits,
and may include additional price schedules, addendums, and/or attachments; |
| (b) | User guides, which may include software
(APIs), and software licenses, if applicable, specifications, instructions, and notices; |
| (c) | Third party application form(s)
for any desired supplemental services. |
The
Service Documentation also applies to any Service that is provided by an affiliate of MyEcheck and any Service that is used by
an affiliate or a subsidiary of the Customer. “MyEcheck” includes each such affiliate, and “Customer”
includes each such affiliate and subsidiary. All terms defined in this Agreement shall have the same meaning when used in the
Service Documentation. If there is a conflict among the documents that make up the Service Documentation, the documents will govern
in the order set forth above. Customer acknowledges receiving a copy of the Service Documentation for each Service it requested
when it entered into this Agreement.
2. Changes
to Services. MyEcheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days
prior written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not
be bound by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change
| | 1 | Page |
MyEcheck
Services Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyEcheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyEcheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law,
becomes insolvent or is otherwise unable to make its debts when due, or if MyEcheck otherwise determines, in its sole discretion,
that a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyEcheck’s rights with respect to transactions which occurred
before termination. MyEcheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyEcheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyEcheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and
charges, or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyEcheck may assess finance
charges at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees
that are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first
to unpaid interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this
Agreement constitute MyEcheck’s or its vendors’ confidential information (“Confidential Information”).
MyEcheck or its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not
acquire any interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service
Documentation. Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other
than as specifically contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer,
sublicense or otherwise make any of it available to any person or entity, other than its employees who have a need to use the
Confidential Information in connection with the applicable Service. Customer shall notify MyEcheck immediately if it knows or
suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”)
of any Confidential Information, and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all
actions, including without limitation initiating court proceedings to recover possession or prevent further Unauthorized Use of
the Confidential Information and obtain redress for any injury caused to MyEcheck as a result of such Unauthorized Use. In addition,
except as permitted by applicable law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative
works of any software provided pursuant to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyEcheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyEcheck or
| | 2 | Page |
MyEcheck
Services Agreement
7. Customer,
MyEcheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer shall use and maintain in good working
order (and at its own expense) software, hardware and other equipment necessary for Customer to use the Service(s) in accordance
with the Service Documentation.
8. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET
FORTH IN THE SERVICE DOCUMENTATION.
9. Liability
and Indemnification.
(a) MyEcheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyEcheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyEcheck’s applicable policies, procedures or practices as MyEcheck may from time to time establish and make available
to Customer; (iii) MyEcheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyEcheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyEcheck’s
intra-day net funds position.
(b) Customer
shall promptly furnish written proof of loss to MyEcheck and notify MyEcheck if it becomes aware of any third party claim related
to a Service. Customer shall cooperate fully (and at its own expense) with MyEcheck in recovering a loss. If Customer is reimbursed
by or on behalf of MyEcheck, MyEcheck or its designee will be subrogated to all rights of Customer.
(c) Any
claim, action or proceeding against MyEcheck for losses or damages arising from a Service, including MyEcheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyEcheck.
(d) MyEcheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyEcheck’s reasonable control.
(e) Except
in the case of MyEcheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyEcheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyEcheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or (iii) if the Service
includes a license or sublicense of any software to Customer, the use or distribution of the software by Customer or any person
| | 3 | Page |
MyEcheck
Services Agreement
(f) gaining
access to the software through Customer that is inconsistent with the license or sublicense.
(g) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL
BREACH OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES
ACTUALLY PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR
DAMAGES WERE INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR
DAMAGES WERE INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL (INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER
ANY CLAIM IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS
OF THE FORM OF THE CLAIM OR ACTION.
10. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified
and applied in a manner consistent therewith, and MyEcheck will incur no liability to Customer as a result of the inconsistency
or modification and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise
affect the enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyEcheck and Customer and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Customer
agrees to provide MyEcheck promptly upon MyEcheck’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which MyEcheck may require Customer
to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyEcheck.
| | 4 | Page |
MyEcheck
Services Agreement
(e) Customer expressly
warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation any
sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyEcheck shall use the most
recent address for Customer in MyEcheck’s records, and any notice from MyEcheck will be effective when sent. Customer shall
use the address where Customer’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Customer will be effective when actually received by MyEcheck. MyEcheck will be entitled to rely on any notice
from Customer that it believes in good faith was authorized by an authorized representative of Customer and, except as expressly
stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each
party will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyEcheck. Unencrypted electronic transmissions are not secure. Customer assumes the
entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Customer
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyEcheck’s prior
written consent. MyEcheck may assign its rights and obligations with respect to the Service Documentation to any successor by
merger, consolidation or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyEcheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer
authorizes MyEcheck to issue a press release, which may contain Customer’s stock ticker symbol; that describes the nature
of the relationship between MyEcheck and Customer.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n) This
Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyEcheck
Services Agreement
IN WITNESS WHEREOF,
the parties have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyEcheck |
| |
|
|
| /s/ Noe Bernes |
|
/s/ Ed Starrs |
| Signature |
|
Signature |
| |
|
|
| Company Name: |
|
MyEcheck, Inc. |
| |
|
Ed Starrs |
| New Age Telecom, Inc. |
|
President & CEO |
| |
|
|
| Individual Name: |
|
2600 East Bidwell Street, Suite 140 |
| |
|
Folsom, California 95630 |
| Noe Bernes |
|
|
| |
|
www.MyEcheck.com |
| Title: |
President |
|
844-MyEcheck (844-693-2432) |
| |
|
Customer.Support@MyEcheck.com |
| |
|
|
| Principal Address: |
|
Date of Agreement: |
10/20/2014 |
| |
|
|
|
| 360
W 9th Ave |
|
Effective Date: |
|
| |
|
|
| Escondido, CA 92025 |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| | 6 | Page |
MyEcheck
Services Agreement
Exhibit
A
Services
and Fees
Basic
Services
MyEcheck
will provide fully electronic check services to Customer. MyEcheck will receive data transmissions from Customer and will use
the data to create and process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing
system, for deposits into Customer account(s), and for transfers out of Customer accounts.
This
basic service enables the Customer to verify their user provided data, check the status of their bank account, prove the transaction
is authorized, and predict the probability of most problems before the transaction is approved and processed for deposit.
Check
21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.17 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.17 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.17 | |
Available
Supplemental Services
Scrub Services,
like the Basic Check 21 Service, generates a check image and pushes it to your bank for payment. It offers minimal financial verification.
Transactions are immediately and automatically evaluated and approved or declined based upon the real time results of multiple
fraud control tools and database searches. For example, it will check the payee against a database of known bad check writers
and verify that the account is open and in good standing.
Guarantee Services,
like the Basic Check 21 and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating
transaction data, you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the
returned item for its full face value.
These services
are available for additional fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyEcheck
Services Agreement
Exhibit
B
Supplemental
Consulting Services
1.
STATEMENT OF WORK.
MyEcheck may render services, working individually or with the Customer and/or third parties retained by Customer, (the "Consulting
Services") to Customer on a time and materials basis as may be agreed upon in a written Statement of Work, which will become
a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as a duly authorized Statement
of Work is prepared and approved by all Parties.
2.
PROJECT ADMINISTRATION. The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide
MyEcheck all assistance and guidance reasonably requested by MyEcheck for the performance of the Consulting Services. Customer
acknowledges that the timely performance of the Consulting Services is dependent both on reasonable access to and assistance by
Customer, including the Customer Technical Contact. MyEcheck acknowledges that the success of Customer's business shall depend
on MyEcheck's ability to provide the Consulting Services on a timely basis in accordance with the dates specified by Customer,
and shall use all reasonable efforts to complete all Services efficiently and on or ahead of schedule
3.
COMPENSATION. MyEcheck shall be paid fees on a time and materials basis in accordance with the Statement of Work
signed by both parties. Customer shall also reimburse MyEcheck for reasonable travel, lodging, meal and other expenses reasonably
incurred while providing the Consulting Services. MyEcheck shall provide Customer with accurate invoices detailing the consulting
hours, fees and expense reimbursements due MyEcheck. Customer payment for Services and expenses shall be due thirty (30) days
from the date of invoice. The parties agree that Customer shall not be charged nor shall it be liable for any travel time incurred
in connection herewith.
All
work will be conducted on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation
of a Statement of Work.
| Hourly (Subject to Scheduling and
Availability): |
$125.00/Hour |
4.
THIRD PARTY SOFTWARE. Customer acknowledges that in order for MyEcheck to perform the Consulting Services, Customer
may need to obtain additional third party services ("Third Party Services") or third party technology ("Third Party
Technology"). Customer agrees that the rights and licenses with respect to Third Party Technology and Third Party Services
shall be under terms set forth in the pertinent purchase, license or services agreements between Customer and the vendors of such
Third Party Software or Third Party Services. Customer shall execute and comply with appropriate purchase, license, or services
agreements with respect to any Third Party Software or Third Party Services. Any amounts payable to third party vendors or service
providers under such agreements are the sole responsibility of Customer and shall be paid directly by Customer to such third party
vendors or service providers.
| | 8 | Page |
MyEcheck
Services Agreement
5.
LICENSE TO Customer MATERIALS. Customer acknowledges that in order to perform the Services, MyEcheck may require
access to and use of certain software or other materials of Customer or Customer's suppliers (including access to code relating
to the Software or that may effect the performance of the Software) ("Customer Materials"). Customer grants to MyEcheck
a royalty-free, non-exclusive license to access and use the Customer Materials (including through subcontractors) as required
for MyEcheck's performance of the Services hereunder.
6.
RIGHTS AND OWNERSHIP. To the extent that any modification, enhancement, extension, interface or derivative work
to any MyEcheck Software or any other deliverable that is produced through the Consulting Services, Customer shall have the same
usage rights in such as Customer has currently has. Customer acknowledges and agrees that other than any Third Party Software
or any Customer Materials or Software, MyEcheck continues to own all computer programs, utilities and intellectual property which
aid MyEcheck in performing the Consulting Services or which are produced as a result of these Services.
7.
Independent Contractors. MyEcheck agrees that it shall be considered
an independent contractor and that it shall not be deemed to be an employee of Customer. MyEcheck and its employees, agents and
contractors performing services hereunder shall not be entitled to any employee benefits of Customer.
8.
Project Pricing and Expenses. MyEcheck shall incur all reasonable
expenses in the performance of the services contained herein including but not limited to contractors and consultants used for
software development, testing, quality assurance and deployment during the term of this agreement.
From
time to time there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained
herein, any single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or
it shall not be deemed a reimbursable expense.
9.
Billing schedule. Billing is monthly and payment is due upon receipt
of bill for services provided the prior month. Payments will be processed and collected from the Customer as a Check 21 item (no
fee to Customer).
MyEcheck
reserves the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue
to make timely payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees. During the term of this Agreement
and for a period of one (1) year following completion of any work hereunder, neither party shall solicit employment of any current
or prior employee of the other.
11. ATTACHMENTS. Any
Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | 9 | Page |
MyEcheck
Services Agreement
Exhibit
C
Attached as
Exhibit C, will be a completed New Merchant Integration Information form. This form must be completed and submitted to MyEcheck
in a timely manner. Customer bank integration typically takes between four and six weeks. This process cannot begin until this
form has been completed and delivered. It will be the Customer’s responsibility to direct their bank to work with MyEcheck
in order to facilitate the Check 21 deposits. MyEcheck will not be responsible for any delays imposed by the Customer’s
bank.
Upon submission
of the New Merchant Integration Information Form, MyEcheck will provide the Customer with a Customer Service Contact. This individual
will work with the Customer and their bank in order to complete the integration process.
In is understood
by all parties that the contact individuals provide by the Customer and MyEcheck are free to exchange any and all needed information
in order to execute the terms and conditions of this Service Agreement.
| | 10 | Page |
Exhibit 10.38
MyEcheck Services Agreement
This Service Agreement, along
with the attached Exhibits (collectively known as the “Agreement”), is made and entered by and between the company
and/or individual listed below, with a place of business within the United States of America (hereinafter referred to as “the
Customer”), and MyEcheck, Inc., a Wyoming Corporation, with principal offices within the State of California, (hereinafter
referred to as “MyEcheck”), all or each of which shall also hereinafter be referred to as the “party” or
“parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas MyEcheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas the Customer is engaged in payment acceptance; |
| C. | The Service Documentation described below contains the terms under which MyEcheck has agreed to provide Services to the Customer. |
| D. | MyEcheck has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby mutually agree that:
| 1. | Service Documentation. The “Service Documentation” includes; |
| (a) | This Agreement includes Three Exhibits, and may include additional price schedules, addendums, and/or attachments; |
| (b) | User guides, which may include software (APIs), and software licenses, if applicable, specifications, instructions, and notices; |
| (c) | Third party application form(s) for any desired supplemental services. |
The Service Documentation
also applies to any Service that is provided by an affiliate of MyEcheck and any Service that is used by an affiliate or a subsidiary
of the Customer. “MyEcheck” includes each such affiliate, and “Customer” includes each such affiliate and
subsidiary. All terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is
a conflict among the documents that make up the Service Documentation, the documents will govern in the order set forth above.
Customer acknowledges receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
2. Changes
to Services. MyEcheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change
| | 1 | Page |
MyEcheck Services Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyEcheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyEcheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law, becomes
insolvent or is otherwise unable to make its debts when due, or if MyEcheck otherwise determines, in its sole discretion, that
a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyEcheck’s rights with respect to transactions which occurred before
termination. MyEcheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyEcheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyEcheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and charges,
or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyEcheck may assess finance charges
at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that
are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid
interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyEcheck’s or its vendors’ confidential information (“Confidential Information”). MyEcheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not acquire any
interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service Documentation.
Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Customer shall notify MyEcheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyEcheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyEcheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyEcheck or
| | 2 | Page |
MyEcheck Services Agreement
7. Customer,
MyEcheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer shall use and maintain in good working
order (and at its own expense) software, hardware and other equipment necessary for Customer to use the Service(s) in accordance
with the Service Documentation.
8. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
9. Liability
and Indemnification.
(a) MyEcheck is under
no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction (each, an
“Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyEcheck related to the
Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation or MyEcheck’s
applicable policies, procedures or practices as MyEcheck may from time to time establish and make available to Customer; (iii)
MyEcheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s protection,
or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv) could result,
in MyEcheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory authority,
including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyEcheck’s
intra-day net funds position.
(b) Customer shall promptly
furnish written proof of loss to MyEcheck and notify MyEcheck if it becomes aware of any third party claim related to a Service.
Customer shall cooperate fully (and at its own expense) with MyEcheck in recovering a loss. If Customer is reimbursed by or on
behalf of MyEcheck, MyEcheck or its designee will be subrogated to all rights of Customer.
(c) Any claim, action
or proceeding against MyEcheck for losses or damages arising from a Service, including MyEcheck’s honoring or dishonoring
a check covered by a Service, must be brought within one year from the date of the act or omission or in the case of a check from
the date the check was first paid or returned by MyEcheck.
(d) MyEcheck will have
no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances beyond MyEcheck’s
reasonable control.
(e) Except in the case of MyEcheck’s gross negligence
or intentional misconduct, Customer shall indemnify and hold MyEcheck, its directors, officers, employees and agents harmless from
all losses or damages that arise out of (i) the performance of a Service in accordance with the Service Documentation, including
without limitation any warranty MyEcheck is required to make to a third party in connection with a Service; (ii) an act or omission
of any agent, courier or authorized representative of Customer; or (iii) if the Service includes a license or sublicense of any
software to Customer, the use or distribution of the software by Customer or any person
| | 3 | Page |
MyEcheck Services Agreement
(f) gaining access to
the software through Customer that is inconsistent with the license or sublicense.
(g) MYECHECK WILL ONLY
BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH OF THIS
AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY PAID
BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE INCURRED
(OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE INCURRED).
IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL (INCLUDING
WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM IS BASED
ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF THE FORM
OF THE CLAIM OR ACTION.
10. General.
(a) The Service Documentation
will be governed by the laws of the state of California, without regard to conflicts of laws principles. In the event any legal
action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such action will be brought
in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties hereby submit to the
jurisdiction and venue of said court.
(b) Any portion of the
Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and applied in a
manner consistent therewith, and MyEcheck will incur no liability to Customer as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The Service Documentation
is the entire agreement between MyEcheck and Customer and supersedes all prior representations, conditions, warranties, understandings,
proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion will constitute a modification
of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Customer agrees
to provide MyEcheck promptly upon MyEcheck’s request any existing financial statements or other information pertaining to
Customer’s financial condition or any previously unprepared financial statements which MyEcheck may require Customer to prepare
and/or to be audited or reviewed by independent certified public accountants acceptable to MyEcheck.
| | 4 | Page |
MyEcheck Services Agreement
(e) Customer expressly
warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation any
sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections 4, 5, 6,
8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either party may
provide notice to the other party by mail, personal delivery, or electronic transmission. MyEcheck shall use the most recent address
for Customer in MyEcheck’s records, and any notice from MyEcheck will be effective when sent. Customer shall use the address
where Customer’s relationship manager is located and address any notice to the attention of such manager. Any notice from
Customer will be effective when actually received by MyEcheck. MyEcheck will be entitled to rely on any notice from Customer that
it believes in good faith was authorized by an authorized representative of Customer and, except as expressly stated in the Service
Documentation, shall have no obligation to verify the signature (including an electronic signature). Each party will have a reasonable
time after receipt of any notice to act on it.
(h) All uses of the
Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”) will be deemed
to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized party to (i) use
the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or receive information
and communications to MyEcheck. Unencrypted electronic transmissions are not secure. Customer assumes the entire risk for unauthorized
use of Codes and any unencrypted electronic transmissions.
(i) Customer may not
assign or transfer its rights or obligations with respect to the Service Documentation without MyEcheck’s prior written consent.
MyEcheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(j) Unless otherwise
provided in the Service Documentation, the term “Business Day” means that part of a business day occurring prior to
the cutoff time determined in accordance with MyEcheck’s applicable funds availability policy.
(k) The parties do not
intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer authorizes MyEcheck to issue
a press release, which may contain Customer’s stock ticker symbol; that describes the nature of the relationship between
MyEcheck and Customer.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n) This Agreement may be
executed as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyEcheck Services Agreement
IN WITNESS WHEREOF, the parties
have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyEcheck |
| |
|
|
| /s/ Mayer Pasternak |
|
/s/ Ed Starrs |
| Signature |
|
Signature |
| |
|
|
| Company Name: |
|
MyEcheck, Inc. |
| |
|
Ed Starrs |
| Mesorah Heritage Foundation |
|
President & CEO |
| |
|
|
| Individual Name: |
|
2600 East Bidwell Street, Suite 140 |
| |
|
Folsom, California 95630 |
| Mayer Pasternak |
|
|
| |
|
www.MyEcheck.com |
| Title: |
CTO |
|
844-MyEcheck (844-693-2432) |
| |
|
Customer.Support@MyEcheck.com |
| Principal Address: |
|
Date of Agreement: |
10/23/2014 |
| |
|
|
| 4401 Second
Avenue |
|
Effective Date: |
|
| |
|
|
| Brooklyn, NY 11232 |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| | 6 | Page |
MyEcheck Services Agreement
Exhibit
A
Services and Fees
Basic Services
MyEcheck will provide fully
electronic check services to Customer. MyEcheck will receive data transmissions from Customer and will use the data to create and
process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits into
Customer account(s), and for transfers out of Customer accounts.
This basic service enables
the Customer to verify their user provided data, check the status of their bank account, prove the transaction is authorized, and
predict the probability of most problems before the transaction is approved and processed for deposit.
Check 21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.25 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.20 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.15 | |
Available Supplemental
Services
Scrub Services, like the Basic Check 21 Service,
generates a check image and pushes it to your bank for payment. It offers minimal financial verification. Transactions are immediately
and automatically evaluated and approved or declined based upon the real time results of multiple fraud control tools and database
searches. For example, it will check the payee against a database of known bad check writers and verify that the account is open
and in good standing.
Guarantee Services, like the Basic Check 21
and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating transaction data,
you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the returned item for
its full face value.
These services are available for additional
fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyEcheck Services Agreement
Exhibit
B
Supplemental Consulting
Services
1. STATEMENT
OF WORK. MyEcheck may render services, working individually or with the Customer and/or third parties retained by
Customer, (the "Consulting Services") to Customer on a time and materials basis as may be agreed upon in a written Statement
of Work, which will become a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as
a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT ADMINISTRATION.
The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyEcheck all assistance and guidance
reasonably requested by MyEcheck for the performance of the Consulting Services. Customer acknowledges that the timely performance
of the Consulting Services is dependent both on reasonable access to and assistance by Customer, including the Customer Technical
Contact. MyEcheck acknowledges that the success of Customer's business shall depend on MyEcheck's ability to provide the Consulting
Services on a timely basis in accordance with the dates specified by Customer, and shall use all reasonable efforts to complete
all Services efficiently and on or ahead of schedule
3. COMPENSATION.
MyEcheck shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer
shall also reimburse MyEcheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the Consulting
Services. MyEcheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements
due MyEcheck. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree
that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be conducted
on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation of a Statement
of Work.
Hourly (Subject to Scheduling
and Availability): $125.00/Hour
4. THIRD PARTY SOFTWARE.
Customer acknowledges that in order for MyEcheck to perform the Consulting Services, Customer may need to obtain additional third
party services ("Third Party Services") or third party technology ("Third Party Technology"). Customer agrees
that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms set forth in
the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software or Third Party
Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect to any Third
Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such agreements are
the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service providers.
| | 8 | Page |
MyEcheck Services Agreement
5. LICENSE TO Customer
MATERIALS. Customer acknowledges that in order to perform the Services, MyEcheck may require access to and use of certain
software or other materials of Customer or Customer's suppliers (including access to code relating to the Software or that may
effect the performance of the Software) ("Customer Materials"). Customer grants to MyEcheck a royalty-free, non-exclusive
license to access and use the Customer Materials (including through subcontractors) as required for MyEcheck's performance of the
Services hereunder.
6. RIGHTS AND OWNERSHIP.
To the extent that any modification, enhancement, extension, interface or derivative work to any MyEcheck Software or any other
deliverable that is produced through the Consulting Services, Customer shall have the same usage rights in such as Customer has
currently has. Customer acknowledges and agrees that other than any Third Party Software or any Customer Materials or Software,
MyEcheck continues to own all computer programs, utilities and intellectual property which aid MyEcheck in performing the Consulting
Services or which are produced as a result of these Services.
7.
Independent Contractors. MyEcheck agrees that it shall be considered
an independent contractor and that it shall not be deemed to be an employee of Customer. MyEcheck and its employees, agents and
contractors performing services hereunder shall not be entitled to any employee benefits of Customer.
8.
Project Pricing and Expenses.
MyEcheck shall incur all reasonable expenses in the performance of the services contained herein
including but not limited to contractors and consultants used for software development, testing, quality assurance and deployment
during the term of this agreement.
From
time to time there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained
herein, any single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or
it shall not be deemed a reimbursable expense.
9.
Billing schedule.
Billing is monthly and payment is due upon receipt of bill for services provided the prior month.
Payments will be processed and collected from the Customer as a Check 21 item (no fee to Customer).
MyEcheck
reserves the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue
to make timely payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees.
During the term of this Agreement and for a period of one (1) year following completion of any work
hereunder, neither party shall solicit employment of any current or prior employee of the other.
11. ATTACHMENTS. Any
Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | 9 | Page |
MyEcheck Services Agreement
Exhibit
C
Attached as Exhibit C, will be a completed
New Merchant Integration Information form. This form must be completed and submitted to MyEcheck in a timely manner. Customer bank
integration typically takes between four and six weeks. This process cannot begin until this form has been completed and delivered.
It will be the Customer’s responsibility to direct their bank to work with MyEcheck in order to facilitate the Check 21 deposits.
MyEcheck will not be responsible for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant Integration
Information Form, MyEcheck will provide the Customer with a Customer Service Contact. This individual will work with the Customer
and their bank in order to complete the integration process.
In is understood by all parties that the contact
individuals provide by the Customer and MyEcheck are free to exchange any and all needed information in order to execute the terms
and conditions of this Service Agreement.
| | 10 | Page |
Exhibit 10.39
MyEcheck Services
Agreement
This
Service Agreement, along with the attached Exhibits (collectively known as the “Agreement”), is made and entered by
and between the company and/or individual listed below, with a place of business within the United States of America (hereinafter
referred to as “the Customer”), and MyEcheck, Inc., a Wyoming Corporation, with principal offices within the State
of California, (hereinafter referred to as “MyEcheck”), all or each of which shall also hereinafter be referred to
as the “party” or “parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas
MyEcheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas
the Customer is engaged in payment acceptance; |
| C. | The
Service Documentation described below contains the terms under which MyEcheck has agreed
to provide Services to the Customer. |
| D. | MyEcheck
has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby
mutually agree that:
| 1. | Service
Documentation. The “Service Documentation” includes; |
| (a) | This
Agreement includes Three Exhibits, and may include additional price schedules, addendums,
and/or attachments; |
| (b) | User
guides, which may include software (APIs), and software licenses, if applicable, specifications,
instructions, and notices; |
| (c) | Third
party application form(s) for any desired supplemental services. |
The
Service Documentation also applies to any Service that is provided by an affiliate of MyEcheck and any Service that is used by
an affiliate or a subsidiary of the Customer. “MyEcheck” includes each such affiliate, and “Customer”
includes each such affiliate and subsidiary. All terms defined in this Agreement shall have the same meaning when used in the
Service Documentation. If there is a conflict among the documents that make up the Service Documentation, the documents will govern
in the order set forth above. Customer acknowledges receiving a copy of the Service Documentation for each Service it requested
when it entered into this Agreement.
2. Changes
to Services. MyEcheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days
prior written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not
be bound by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change
| | 1 | Page |
MyEcheck
Services Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyEcheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyEcheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law,
becomes insolvent or is otherwise unable to make its debts when due, or if MyEcheck otherwise determines, in its sole discretion,
that a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyEcheck’s rights with respect to transactions which occurred
before termination. MyEcheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyEcheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyEcheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and
charges, or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyEcheck may assess finance
charges at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees
that are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first
to unpaid interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this
Agreement constitute MyEcheck’s or its vendors’ confidential information (“Confidential Information”).
MyEcheck or its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not
acquire any interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service
Documentation. Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other
than as specifically contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer,
sublicense or otherwise make any of it available to any person or entity, other than its employees who have a need to use the
Confidential Information in connection with the applicable Service. Customer shall notify MyEcheck immediately if it knows or
suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”)
of any Confidential Information, and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all
actions, including without limitation initiating court proceedings to recover possession or prevent further Unauthorized Use of
the Confidential Information and obtain redress for any injury caused to MyEcheck as a result of such Unauthorized Use. In addition,
except as permitted by applicable law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative
works of any software provided pursuant to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyEcheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyEcheck or
| | 2 | Page |
MyEcheck
Services Agreement
7. Customer,
MyEcheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer shall use and maintain in good working
order (and at its own expense) software, hardware and other equipment necessary for Customer to use the Service(s) in accordance
with the Service Documentation.
8. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET
FORTH IN THE SERVICE DOCUMENTATION.
9. Liability
and Indemnification.
(a) MyEcheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyEcheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyEcheck’s applicable policies, procedures or practices as MyEcheck may from time to time establish and make available
to Customer; (iii) MyEcheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyEcheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyEcheck’s
intra-day net funds position.
(b) Customer
shall promptly furnish written proof of loss to MyEcheck and notify MyEcheck if it becomes aware of any third party claim related
to a Service. Customer shall cooperate fully (and at its own expense) with MyEcheck in recovering a loss. If Customer is reimbursed
by or on behalf of MyEcheck, MyEcheck or its designee will be subrogated to all rights of Customer.
(c) Any
claim, action or proceeding against MyEcheck for losses or damages arising from a Service, including MyEcheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyEcheck.
(d) MyEcheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyEcheck’s reasonable control.
(e) Except
in the case of MyEcheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyEcheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyEcheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or (iii) if the Service
includes a license or sublicense of any software to Customer, the use or distribution of the software by Customer or any person
| | 3 | Page |
MyEcheck
Services Agreement
(f) gaining
access to the software through Customer that is inconsistent with the license or sublicense.
(g) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL
BREACH OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES
ACTUALLY PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR
DAMAGES WERE INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR
DAMAGES WERE INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL (INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER
ANY CLAIM IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS
OF THE FORM OF THE CLAIM OR ACTION.
10. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified
and applied in a manner consistent therewith, and MyEcheck will incur no liability to Customer as a result of the inconsistency
or modification and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise
affect the enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyEcheck and Customer and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Customer
agrees to provide MyEcheck promptly upon MyEcheck’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which MyEcheck may require Customer
to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyEcheck.
| | 4 | Page |
MyEcheck
Services Agreement
(e) Customer expressly
warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation any
sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyEcheck shall use the most
recent address for Customer in MyEcheck’s records, and any notice from MyEcheck will be effective when sent. Customer shall
use the address where Customer’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Customer will be effective when actually received by MyEcheck. MyEcheck will be entitled to rely on any notice
from Customer that it believes in good faith was authorized by an authorized representative of Customer and, except as expressly
stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each
party will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyEcheck. Unencrypted electronic transmissions are not secure. Customer assumes the
entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Customer
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyEcheck’s prior
written consent. MyEcheck may assign its rights and obligations with respect to the Service Documentation to any successor by
merger, consolidation or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyEcheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer
authorizes MyEcheck to issue a press release, which may contain Customer’s stock ticker symbol; that describes the nature
of the relationship between MyEcheck and Customer.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n) This
Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyEcheck
Services Agreement
IN WITNESS WHEREOF,
the parties have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyEcheck |
| |
|
|
| /s/ Mayer Pasternak |
|
/s/ Ed Starrs |
| Signature |
|
Signature |
| |
|
|
| Company Name: |
|
MyEcheck, Inc. |
| |
|
Ed Starrs |
| Mesorah Publication,
Ltd |
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President & CEO |
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| Individual Name: |
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2600 East Bidwell Street, Suite 140 |
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Folsom, California 95630 |
| Mayer Pasternak |
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www.MyEcheck.com |
| Title: |
CTO |
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844-MyEcheck (844-693-2432) |
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Customer.Support@MyEcheck.com |
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| Principal Address: |
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Date of Agreement: |
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| 4401 Second Avenue |
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Effective Date: |
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| Brooklyn, NY 11232 |
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| | 6 | Page |
MyEcheck
Services Agreement
Exhibit
A
Services
and Fees
Basic
Services
MyEcheck
will provide fully electronic check services to Customer. MyEcheck will receive data transmissions from Customer and will use
the data to create and process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing
system, for deposits into Customer account(s), and for transfers out of Customer accounts.
This
basic service enables the Customer to verify their user provided data, check the status of their bank account, prove the transaction
is authorized, and predict the probability of most problems before the transaction is approved and processed for deposit.
Check
21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.25 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.20 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.15 | |
Available
Supplemental Services
Scrub Services,
like the Basic Check 21 Service, generates a check image and pushes it to your bank for payment. It offers minimal financial verification.
Transactions are immediately and automatically evaluated and approved or declined based upon the real time results of multiple
fraud control tools and database searches. For example, it will check the payee against a database of known bad check writers
and verify that the account is open and in good standing.
Guarantee Services,
like the Basic Check 21 and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating
transaction data, you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the
returned item for its full face value.
These services
are available for additional fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyEcheck
Services Agreement
Exhibit
B
Supplemental
Consulting Services
1.
STATEMENT OF WORK.
MyEcheck may render services, working individually or with the Customer and/or third parties retained by Customer, (the "Consulting
Services") to Customer on a time and materials basis as may be agreed upon in a written Statement of Work, which will become
a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as a duly authorized Statement
of Work is prepared and approved by all Parties.
2.
PROJECT ADMINISTRATION. The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide
MyEcheck all assistance and guidance reasonably requested by MyEcheck for the performance of the Consulting Services. Customer
acknowledges that the timely performance of the Consulting Services is dependent both on reasonable access to and assistance by
Customer, including the Customer Technical Contact. MyEcheck acknowledges that the success of Customer's business shall depend
on MyEcheck's ability to provide the Consulting Services on a timely basis in accordance with the dates specified by Customer,
and shall use all reasonable efforts to complete all Services efficiently and on or ahead of schedule
3.
COMPENSATION. MyEcheck shall be paid fees on a time and materials basis in accordance with the Statement of Work
signed by both parties. Customer shall also reimburse MyEcheck for reasonable travel, lodging, meal and other expenses reasonably
incurred while providing the Consulting Services. MyEcheck shall provide Customer with accurate invoices detailing the consulting
hours, fees and expense reimbursements due MyEcheck. Customer payment for Services and expenses shall be due thirty (30) days
from the date of invoice. The parties agree that Customer shall not be charged nor shall it be liable for any travel time incurred
in connection herewith.
All
work will be conducted on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation
of a Statement of Work.
| Hourly (Subject to Scheduling and
Availability): |
$125.00/Hour |
4.
THIRD PARTY SOFTWARE. Customer acknowledges that in order for MyEcheck to perform the Consulting Services, Customer
may need to obtain additional third party services ("Third Party Services") or third party technology ("Third Party
Technology"). Customer agrees that the rights and licenses with respect to Third Party Technology and Third Party Services
shall be under terms set forth in the pertinent purchase, license or services agreements between Customer and the vendors of such
Third Party Software or Third Party Services. Customer shall execute and comply with appropriate purchase, license, or services
agreements with respect to any Third Party Software or Third Party Services. Any amounts payable to third party vendors or service
providers under such agreements are the sole responsibility of Customer and shall be paid directly by Customer to such third party
vendors or service providers.
| | 8 | Page |
MyEcheck
Services Agreement
5.
LICENSE TO Customer MATERIALS. Customer acknowledges that in order to perform the Services, MyEcheck may require
access to and use of certain software or other materials of Customer or Customer's suppliers (including access to code relating
to the Software or that may effect the performance of the Software) ("Customer Materials"). Customer grants to MyEcheck
a royalty-free, non-exclusive license to access and use the Customer Materials (including through subcontractors) as required
for MyEcheck's performance of the Services hereunder.
6.
RIGHTS AND OWNERSHIP. To the extent that any modification, enhancement, extension, interface or derivative work
to any MyEcheck Software or any other deliverable that is produced through the Consulting Services, Customer shall have the same
usage rights in such as Customer has currently has. Customer acknowledges and agrees that other than any Third Party Software
or any Customer Materials or Software, MyEcheck continues to own all computer programs, utilities and intellectual property which
aid MyEcheck in performing the Consulting Services or which are produced as a result of these Services.
7.
Independent Contractors. MyEcheck agrees that it shall be considered
an independent contractor and that it shall not be deemed to be an employee of Customer. MyEcheck and its employees, agents and
contractors performing services hereunder shall not be entitled to any employee benefits of Customer.
8.
Project Pricing and Expenses. MyEcheck shall incur all reasonable
expenses in the performance of the services contained herein including but not limited to contractors and consultants used for
software development, testing, quality assurance and deployment during the term of this agreement.
From
time to time there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained
herein, any single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or
it shall not be deemed a reimbursable expense.
9.
Billing schedule. Billing is monthly and payment is due upon receipt
of bill for services provided the prior month. Payments will be processed and collected from the Customer as a Check 21 item (no
fee to Customer).
MyEcheck
reserves the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue
to make timely payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees. During the term of this Agreement
and for a period of one (1) year following completion of any work hereunder, neither party shall solicit employment of any current
or prior employee of the other.
11. ATTACHMENTS. Any
Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | 9 | Page |
MyEcheck
Services Agreement
Exhibit
C
Attached as
Exhibit C, will be a completed New Merchant Integration Information form. This form must be completed and submitted to MyEcheck
in a timely manner. Customer bank integration typically takes between four and six weeks. This process cannot begin until this
form has been completed and delivered. It will be the Customer’s responsibility to direct their bank to work with MyEcheck
in order to facilitate the Check 21 deposits. MyEcheck will not be responsible for any delays imposed by the Customer’s
bank.
Upon submission
of the New Merchant Integration Information Form, MyEcheck will provide the Customer with a Customer Service Contact. This individual
will work with the Customer and their bank in order to complete the integration process.
In is understood
by all parties that the contact individuals provide by the Customer and MyEcheck are free to exchange any and all needed information
in order to execute the terms and conditions of this Service Agreement.
| | 10 | Page |
Exhibit 10.40
MyECheck Services Agreement
This Services Agreement (this “Agreement”)
dated November 7th, 2014 is made by and between MyECheck, Inc., a Wyoming corporation whose address is 2600 East Bidwell Street,
Folsom, CA 95630, (“MyECheck”), and __Sushi Groove, LLC___ whose address is _2910 Highland Dr , SLC, UT 84106___(“Company”).
| A. | Whereas MyECheck provides Payment Data Processing Services
(“Services”); |
| B. | Whereas Company is engaged in payment acceptance; and |
| C. | The Service Documentation described below contains the
terms under which MyECheck has agreed to provide Services to the Company. |
NOW THEREFORE, MYECHECK AND COMPANY AGREE AS
FOLLOWS:
1. Service
Documentation. The “Service Documentation” includes;
| (a) | This Agreement and all
exhibits, addendums and attachments; |
| (i) | User guides which include
software and software licenses if applicable, price schedules, specifications, instructions, and notices; |
| (b) | The application form(s)
for each Service. |
The Service Documentation also applies to any
Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of Company. “MyECheck”
includes each such affiliate, and “Company” includes each such affiliate and subsidiary. All terms defined in this
Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among the documents that make
up the Service Documentation, the documents will govern in the order set forth above. Company acknowledges receiving a copy of
the Service Documentation for each Service it requested when it entered into this Agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Company discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Company continues to use a Service after the change becomes effective, it will be bound by the change.
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party (unless a Service
is terminated sooner in accordance with the Service Documentation). MyECheck may terminate any Service following notice to Company
of a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to Company if
Company is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise unable to
make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change has occurred
in Company’s ability to perform its obligations under the Service Documentation. The termination of a Service will not affect
Companys or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall not be liable
to Company for any losses or damages Company may incur as a result of any termination of any Service.
4. Service
Fees. Company shall pay MyECheck the fees described in the Service Documentation. You hereby authorize MyECheck to create
remotely created checks drawn from Company’s checking account(s), and use the checks to collect all fees and charges, or
it may send an invoice to Company for such amounts, which Company shall promptly pay. MyECheck may assess finance charges at a
rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not
paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest
and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Company will not acquire any interest
in or rights to it as a result of Company’s use of any Service except as set forth in the Service Documentation. Company
will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Company shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Company may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Company, MyECheck may, upon notice to Company, suspend or discontinue the affected Service. Company shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Company to
use the Service(s) in accordance with the Service Documentation.
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDOR. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Company’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Company; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Company’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(b) Company
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Company shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Company is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Company.
(c) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(d) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(e) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Company shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Company; or (iii) if the Service
includes a license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining
access to the software through Company that is inconsistent with the license or sublicense.
(f) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
9. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Company as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyECheck and Company and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Company
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Company’s financial condition or any previously unprepared financial statements which MyECheck may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(e) Company
expressly warrants that a Service will not be used in a manner which violates any federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Company in MyECheck’s records, and any notice from MyECheck will be effective when sent. Company shall
use the address where Company’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Company will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice from
Company that it believes in good faith was authorized by an authorized representative of Company and, except as expressly stated
in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each party
will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Company’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Company. Company’s failure to protect Codes may allow an unauthorized party
to (i) use the Services, (ii) access Company’s electronic communications and financial data, and/or (iii) send or receive
information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Company assumes the entire risk
for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Company
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior written
consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Company
authorizes MyECheck to issue a press release, which may contain Company’s stock ticker symbol; that describes the nature
of the relationship between MyECheck and Company.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have entered
into this Agreement as of the date first set forth above.
| Agreed: |
|
Accepted: |
| Company |
|
MyECheck |
| |
|
|
|
| By: |
/s/ David Ayala |
|
Signature: |
/s/ Edward Starrs |
| |
|
|
|
| Name: |
David Ayala |
|
Edward Starrs |
| |
|
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| Company: |
Sushi Groove, LLC |
|
MyECheck |
| |
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| Title: |
Chef/Owner |
|
President and CEO |
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Effective Date: |
1/21/2015 |
Exhibit A
Levels of Service
| 1) | (Level 1) Basic Electronic Check Service |
MyECheck will provide fully electronic
check services to Customer. MyECheck will receive data transmissions from Customer and will use the data to create and process
fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits into Customer
account(s).
Fee
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.25 | |
| 500,001 – 999,999 | |
$ | 0.20 | |
| 1,000,000 and more | |
$ | 0.15 | |
| | |
| | |
| 2) | (Level 2) Check Authorization Service |
The MyECheck Check
Authorization service is comprised of 4 unique verification levels that include real time data, negative data, proprietary data
and routing number validation. The verifications check the transaction data against specific databases that indicate what a paying
financial institution is reporting on the account at the end of the prior day’s processing cycle. The response will tell
you if the account is open, valid and in a positive status, or if the account is not located, and many
other responses.
| Fees | |
Fee per Transaction |
| Check Authorization Service + Level 1 | |
$0.25 + Level 1 Fee |
| 3) | (Level 3) Basic Electronic Check Service +ID |
Provides domestic
identity verification using a wide array of reliable consumer data based on a single lookup. Detects discrepancies with an
identity to gain better insight into the risks associated with an ID. It meets compliance regulations for CIP, OFAC, and FFIEC.
| Fees | |
Fee per Transaction |
| +ID + Level 1 | |
$0.49 + Level 1 Fee |
Exhibit B
Supplemental Consulting
Services
1. STATEMENT
OF WORK. MyECheck may render services, working individually or with the Customer and/or third parties retained by
Customer, (the "Consulting Services") to Customer on a time and materials basis as may be agreed upon in a written Statement
of Work, which will become a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as
a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT ADMINISTRATION.
The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyECheck all assistance and guidance
reasonably requested by MyECheck for the performance of the Consulting Services. Customer acknowledges that the timely performance
of the Consulting Services is dependent both on reasonable access to and assistance by Customer, including the Customer Technical
Contact. MyECheck acknowledges that the success of Customer's business shall depend on MyECheck's ability to provide the Consulting
Services on a timely basis in accordance with the dates specified by Customer, and shall use all reasonable efforts to complete
all Services efficiently and on or ahead of schedule
3. COMPENSATION.
MyECheck shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer
shall also reimburse MyECheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the Consulting
Services. MyECheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements
due MyECheck. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree
that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be conducted
on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation of a Statement
of Work.
Hourly (Subject to Scheduling
and Availability): $125.00/Hour
4. THIRD PARTY SOFTWARE.
Customer acknowledges that in order for MyECheck to perform the Consulting Services, Customer may need to obtain additional third
party services ("Third Party Services") or third party technology ("Third Party Technology"). Customer agrees
that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms set forth in
the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software or Third Party
Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect to any Third
Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such agreements are
the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service providers.
5. LICENSE TO Customer
MATERIALS. Customer acknowledges that in order to perform the Services, MyECheck may require access to and use of certain
software or other materials of Customer or Customer's suppliers (including access to code relating to the Software or that may
effect the performance of the Software) ("Customer Materials"). Customer grants to MyECheck a royalty-free, non-exclusive
license to access and use the Customer Materials (including through subcontractors) as required for MyECheck's performance of the
Services hereunder.
6. RIGHTS AND OWNERSHIP.
To the extent that any modification, enhancement, extension, interface or derivative work to any MeECheck Software or any other
deliverable that is produced through the Consulting Services, Customer shall have the same usage rights in such as Customer has
currently has. Customer acknowledges and agrees that other than any Third Party Software or any Customer Materials or Software,
MyECheck continues to own all computer programs, utilities and intellectual property which aid MyECheck in performing the Consulting
Services or which are produced as a result of these Services.
7. Independent
Contractors. MyECheck agrees that it shall be considered an independent contractor and that it shall not be deemed
to be an employee of Customer. MyECheck and its employees, agents and contractors performing services hereunder shall not be entitled
to any employee benefits of Customer.
8.
Project Pricing and Expenses. MyECheck
shall incur all reasonable expenses in the performance of the services contained herein including but not limited to contractors
and consultants used for software development, testing, quality assurance and deployment during the term of this agreement.
From time to time there may be a need for Customer
to incur certain expenses. Notwithstanding anything else to the contrary contained herein, any single expense in excess of two
hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or it shall not be deemed a reimbursable expense.
9. Billing
schedule. Billing is monthly and payment is due upon receipt of bill for services provided
the prior month. Payments will be processed and collected from the Customer as a Check 21 item (no fee to Customer).
MyECheck reserves the right to discontinue the provision
of services under the Statement of Work in the event that Customer fails to continue to make timely payment of fees and expenses
due hereunder.
10. Non-Solicitation
of Employees. During the term of this Agreement and
for a period of one (1) year following completion of any work hereunder, neither party shall solicit employment of any
current or prior employee of the other.
11. ATTACHMENTS. Any Statement of Work(s) will be
attached and will become a part of this Service Agreement.
Exhibit C
Attached as Exhibit C, will be a completed New Merchant Integration
Information form. This form must be completed and submitted to MyECheck in a timely manner. Customer bank integration typically
takes between four and six weeks. This process cannot begin until this form has been completed and delivered. It will be the Customer’s
responsibility to direct their bank to work with MyECheck in order to facilitate the Check 21 deposits. MyECheck will not be responsible
for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant Integration Information Form,
MyECheck will provide the Customer with a Customer Service Contact. This individual will work with the Customer and their bank
in order to complete the integration process.
In is understood by all parties that the contact individuals provide
by the Customer and MyECheck are free to exchange any and all needed information in order to execute the terms and conditions of
this Agreement.
This Exhibit may not apply, if the Customer is going to use the
licensed Software to develop, deliver, and support their own solutions. In those cases, the Customer will be solely responsible
for their banking relationships and set-up.
Exhibit 10.41
MyECheck Services Agreement
This Service Agreement, along with the attached
Exhibits (collectively known as the “Agreement”), is made and entered by and between the company and/or individual
listed below, with a place of business within the United States of America (hereinafter referred to as “the Customer”),
and MyECheck, Inc., a Wyoming Corporation, with principal offices within the State of California, (hereinafter referred to as “MyECheck”),
all or each of which shall also hereinafter be referred to as the “party” or “parties” respectively, and
is effectively on the date listed below.
RECITALS
| A. | Whereas MyECheck provides Payment Data Processing Services
(“Services”); |
| B. | Whereas the Customer is engaged in payment acceptance; |
| C. | The Service Documentation described below contains the
terms under which MyECheck has agreed to provide Services to the Customer. |
| D. | MyECheck has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby mutually agree that:
1.Service Documentation. The
“Service Documentation” includes;
(a) This
Agreement includes Three Exhibits, and may include additional price schedules, addendums, and/or attachments;
(b) User
guides, which may include software (APIs), and software licenses, if applicable, specifications, instructions, and notices;
(c) Third
party application form(s) for any desired supplemental services.
The Service Documentation also applies to
any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of the Customer.
“MyECheck” includes each such affiliate, and “Customer” includes each such affiliate and subsidiary. All
terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order set forth above. Customer acknowledges
receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
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MyECheck Services Agreement
2. Changes to Services. MyECheck
may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior written notification. If
Customer discontinues using the affected Service before the change becomes effective, it will not be bound by the change. If Customer
continues to use a Service after the change becomes effective, it will be bound by the change.
3. Term and Termination. Unless
terminated sooner in accordance with the Service Documentation, this Agreement and all Services will continue in effect until
terminated by either party upon 30 days prior written notice to the other party. MyECheck may terminate any Service following notice
to Customer of a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to
Customer if Customer is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise
unable to make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change
has occurred in Customer’s ability to perform its obligations under the Service Documentation. The termination of a Service
will not affect Customers or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall
not be liable to Customer for any losses or damages Customer may incur as a result of any termination of any Service.
4. Service Fees. Customer shall
pay MyECheck the fees described in the attached Exhibits for the specific services selected and/or used. All transactional fees
for the current month will be based on the volumes from the prior month. You hereby authorize MyECheck to create remotely created
checks drawn from Customer’s checking account(s), and use the checks to collect all fees and charges, or it may send an invoice
to Customer for such amounts, which Customer shall promptly pay. MyECheck may assess finance charges at a rate of 1.5% per month
(18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not paid within thirty (30)
days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest and then to other fees
and charges.
5. Confidential Information.
Unless otherwise provided in the Service Documentation, all user guides and other written materials, source code, object code,
trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement constitute
MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or its vendors,
as applicable, will remain the sole owner of all such Confidential Information, and Customer will not acquire any interest in or
rights to it as a result of Customer’s use of any Service except as set forth in the Service Documentation. Customer will
maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically contemplated
by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise make any
of it available to any person or entity, other than its employees who have a need to use the Confidential Information in connection
with the applicable Service. Customer shall notify MyECheck immediately if it knows or suspects that there has been any unauthorized
disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information, and if it is
responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation initiating
court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain redress
for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable law, Customer
may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant to this
Agreement.
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MyECheck Services Agreement
6. Third Party Networks; Use of Required
Software. If MyECheck determines that any funds transfer or communications network, Internet service provider, or other
system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable for use by MyECheck or Customer,
MyECheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer shall use and maintain in good working
order (and at its own expense) software, hardware and other equipment necessary for Customer to use the Service(s) in accordance
with the Service Documentation.
7. NO REPRESENTATIONS OR WARRANTIES
OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS OR IMPLIED REPRESENTATIONS
OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING WITHOUT LIMITATION ANY
WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH IN THE SERVICE DOCUMENTATION.
8. Liability and Indemnification.
(d) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Customer; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(e) Customer
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Customer shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Customer is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Customer.
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MyECheck Services Agreement
(f) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(g) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(h) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or (iii) if the Service
includes a license or sublicense of any software to Customer, the use or distribution of the software by Customer or any person
gaining access to the software through Customer that is inconsistent with the license or sublicense.
(i) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
9. General.
(j) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(k) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Customer as a result of the inconsistency or
modification and
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MyECheck Services Agreement
(l) Application.
If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the enforceability
or validity of the Service Documentation.
(m) The
Service Documentation is the entire agreement between MyECheck and Customer and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(n) Customer
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which MyECheck may require Customer to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(o) Customer
expressly warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(p) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(q) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Customer in MyECheck’s records, and any notice from MyECheck will be effective when sent. Customer shall
use the address where Customer’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Customer will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice
from Customer that it believes in good faith was authorized by an authorized representative of Customer and, except as expressly
stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each
party will have a reasonable time after receipt of any notice to act on it.
(r) All
uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Customer assumes the entire
risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(s) Customer
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior written
consent. MyECheck may assign its rights and
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MyECheck Services Agreement
(t) obligations
with respect to the Service Documentation to any successor by merger, consolidation or corporate reorganization.
(u) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(v) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(w) Customer
authorizes MyECheck to issue a press release, which may contain Customer’s stock ticker symbol; that describes the nature
of the relationship between MyECheck and Customer.
(v) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(x) This
Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
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MyECheck Services Agreement
IN WITNESS WHEREOF, the parties have entered
into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyECheck |
| |
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| /s/ Anders Rehnvall |
|
/s/ Ed Starrs |
| Signature |
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Signature |
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| Company Name: |
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MyECheck, Inc. |
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Ed Starrs |
| eze System, Inc. |
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President & CEO |
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| Individual Name: |
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2600 East Bidwell Street, Suite 140
Folsom, California 95630 |
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| Anders Rehnvall |
|
www.MyECheck.com |
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844-MyECheck (844-693-2432) |
| Title: |
CEO |
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Customer.Support@MyECheck.com |
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| Principal Address: |
|
Date of Agreement: |
12/23/2014 |
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| 2600 E. Bidwell St, Ste 215 |
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Effective Date: |
12/23/2014 |
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| Folsom, CA 95630 |
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MyECheck Services Agreement
Exhibit A
Services and Fees
Basic Services
MyECheck will provide fully electronic check
services to Customer. MyECheck will receive data transmissions from Customer and will use the data to create and process fully
electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits into Customer account(s),
and for transfers out of Customer accounts.
This basic service enables the Customer to
verify their user provided data, check the status of their bank account, prove the transaction is authorized, and predict the probability
of most problems before the transaction is approved and processed for deposit.
Check 21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.25- | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.20 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.15 | |
Available Supplemental
Services
Scrub Services, like the Basic Check 21 Service, generates a
check image and pushes it to your bank for payment. It offers minimal financial verification. Transactions are immediately and
automatically evaluated and approved or declined based upon the real time results of multiple fraud control tools and database
searches. For example, it will check the payee against a database of known bad check writers and verify that the account is open
and in good standing.
Guarantee Services, like the Basic Check 21 and Scrub Services,
generates a check image and pushes it to your bank for payment. In addition to validating transaction data, you are insured if
the item is returned unpaid. When a payee defaults, the check guarantee provider buys the returned item for its full face value.
These services are available for additional fees. For more information,
please contact MyECheck sales (sales@MyECheck.com).
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MyECheck Services Agreement
Exhibit B
Supplemental Consulting
Services
1. STATEMENT
OF WORK. MyECheck may render services, working individually or with the Customer and/or third parties retained by
Customer, (the "Consulting Services") to Customer on a time and materials basis as may be agreed upon in a written Statement
of Work, which will become a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as
a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT ADMINISTRATION. The
Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyECheck all assistance and guidance reasonably
requested by MyECheck for the performance of the Consulting Services. Customer acknowledges that the timely performance of the
Consulting Services is dependent both on reasonable access to and assistance by Customer, including the Customer Technical Contact.
MyECheck acknowledges that the success of Customer's business shall depend on MyECheck's ability to provide the Consulting Services
on a timely basis in accordance with the dates specified by Customer, and shall use all reasonable efforts to complete all Services
efficiently and on or ahead of schedule
3. COMPENSATION. MyECheck shall
be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer shall also
reimburse MyECheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the Consulting Services.
MyECheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements due MyECheck.
Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree that Customer
shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be conducted on an hourly fee
basis and billed per the rate listed below. Rates are subject to change prior to the preparation of a Statement of Work.
| Hourly (Subject to Scheduling and Availability): | |
$ | 125.00 | /Hour |
4. THIRD PARTY SOFTWARE. Customer
acknowledges that in order for MyECheck to perform the Consulting Services, Customer may need to obtain additional third party
services ("Third Party Services") or third party technology ("Third Party Technology"). Customer agrees that
the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms set forth in the pertinent
purchase, license or services agreements between Customer and the vendors of such Third Party Software or Third Party Services.
Customer shall execute and comply with appropriate purchase, license, or services agreements with respect to any Third Party Software
or Third Party Services. Any amounts payable to third party vendors or service providers under such agreements are the sole responsibility
of Customer and shall be paid directly by Customer to such third party vendors or service providers.
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MyECheck Services Agreement
5. LICENSE TO Customer MATERIALS.
Customer acknowledges that in order to perform the Services, MyECheck may require access to and use of certain software or other
materials of Customer or Customer's suppliers (including access to code relating to the Software or that may effect the performance
of the Software) ("Customer Materials"). Customer grants to MyECheck a royalty-free, non-exclusive license to access
and use the Customer Materials (including through subcontractors) as required for MyECheck's performance of the Services hereunder.
6. RIGHTS AND OWNERSHIP. To the
extent that any modification, enhancement, extension, interface or derivative work to any MyECheck Software or any other deliverable
that is produced through the Consulting Services, Customer shall have the same usage rights in such as Customer has currently has.
Customer acknowledges and agrees that other than any Third Party Software or any Customer Materials or Software, MyECheck continues
to own all computer programs, utilities and intellectual property which aid MyECheck in performing the Consulting Services or which
are produced as a result of these Services.
7. Independent
Contractors. MyECheck agrees that it shall be considered an independent contractor and that it shall not be deemed
to be an employee of Customer. MyECheck and its employees, agents and contractors performing services hereunder shall not be entitled
to any employee benefits of Customer.
8. Project
Pricing and Expenses. MyECheck shall incur all reasonable expenses in the performance
of the services contained herein including but not limited to contractors and consultants used for software development, testing,
quality assurance and deployment during the term of this agreement.
From time to time there may be a need for Customer
to incur certain expenses. Notwithstanding anything else to the contrary contained herein, any single expense in excess of two
hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or it shall not be deemed a reimbursable expense.
9. Billing
schedule. Billing is monthly and payment is due upon receipt of bill for services provided
the prior month. Payments will be processed and collected from the Customer as a Check 21 item (no fee to Customer).
MyECheck reserves the right to discontinue the
provision of services under the Statement of Work in the event that Customer fails to continue to make timely payment of fees and
expenses due hereunder.
10. Non-Solicitation
of Employees. During the term of this Agreement and for a period of one (1) year following
completion of any work hereunder, neither party shall solicit employment of any current or prior employee of the other.
11. ATTACHMENTS. Any Statement of Work(s) will
be attached and will become a part of this Service Agreement.
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MyECheck Services Agreement
Exhibit C
Attached as Exhibit C, will be a completed New Merchant Integration
Information form. This form must be completed and submitted to MyECheck in a timely manner. Customer bank integration typically
takes between four and six weeks. This process cannot begin until this form has been completed and delivered. It will be the Customer’s
responsibility to direct their bank to work with MyECheck in order to facilitate the Check 21 deposits. MyECheck will not be responsible
for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant Integration Information
Form, MyECheck will provide the Customer with a Customer Service Contact. This individual will work with the Customer and their
bank in order to complete the integration process.
In is understood by all parties that the contact individuals
provide by the Customer and MyECheck are free to exchange any and all needed information in order to execute the terms and conditions
of this Service Agreement.
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Exhibit 10.42
GreenPay Software License and Services Agreement
This Software License
and Service Agreement, along with the attached Exhibits (collectively known as the “Agreement”), is made and entered
by and between the company and/or individual listed below, with a place of business within the United States of America
(hereinafter referred to as “the Customer”), and GreenPay, LLC., a Wyoming Corporation, with principal offices within
the State of Wyoming, (hereinafter referred to as “GreenPay”), all or each of which shall also hereinafter be referred
to as the “party” or “parties” respectively, and is effective on the date listed below.
RECITALS
| A. | GreenPay has licensing rights to a United States Patent
(“Patent”). |
| B. | The Customer wishes to license the Intellectual Property,
and related software applications, developed by MyEcheck, with GreenPay, for processing electronic checks as generally described
in the Patent (“Software”). |
| C. | GreenPay provides Payment Data Processing Services (“Services”). |
| D. | The Customer is engaged in payment acceptance. |
| E. | The Service Documentation described herein contains the
terms under which GreenPay has agreed to provide Software and Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby mutually
agree that:
1. Service
Documentation. The “Service Documentation” includes:
(a) This
Agreement includes Five Exhibits, and may include additional price schedules, addendums, and/or attachments.
(b) Software,
and software licenses, User Guides and Manuals, which include Specifications, Instructions, and Notices.
(c) The
Services that will be provided under the terms of this Agreement.
(d) Definitions
used in the Agreement and Service Documentation. The following definitions apply throughout this Agreement:
| 1.d.1 | "Documentation" means GreenPay's published user manuals relating to the Software as of
the Effective Date or as it relates to any Modification or Major Release as of the date of delivery of each Modification or Major
Release, as applicable. |
| 1.d.2 | "Error" means any failure of the Software to operate in conformance with the Documentation
in any material respect. |
| 1.d.3 | "Maintenance" shall mean the Software and Services provided by GreenPay to the Customer
as set forth in Section 5 and Exhibits A through D. |
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GreenPay Software License and Services Agreement
| 1.d.4 | "Modification" shall mean any revisions, enhancements, bug fixes, patches, Error resolutions
and all other changes to the Software required to insure that the Software operates in conformance with the Documentation and Specifications. |
| 1.d.5 | "Production" means the Customer's use of the Software to provide ecommerce functionality
to their customers (or potential customers) through a live/active Customer hosted service or services provided by their partner(s),
affiliate(s), or any other third party service they may contract with. |
| 1.d.6 | "Professional Services Agreement" means the agreement attached hereto as Exhibit B and
all written Statements of Work entered into by the Parties. |
| 1.d.7 | "Software" further means any and all software modules referenced in Exhibits A through
E and any and all Major Releases, Modifications, Revisions, Enhancements, interim releases, bug fixes and patches applicable to
the GreenPay software modules and their related Documentation. |
| 1.d.8 | "Source Code" means the Software fully documented in its source code (i.e., human readable)
form; (ii) a compiler, similar computer program or any other software which is necessary to convert the source code form into the
object code form of the Software; and (iii) runtime software necessary to execute the source code form of the Software, including
but not limited to interpreters and templates. Also for the purposes of this Agreement, "Commentary" shall include explanations,
flow charts, schematics, algorithms, subroutine descriptions, class and object descriptions, memory and overlay maps, statements
of principles of operations, architecture standards, data flow descriptions, class, base-class and sub-class descriptions, data
structures and control logic of the software and any other documentation of the source code form of the Software, all in sufficient
detail to enable a trained programmer through study of such materials to maintain and/or modify the software without undue experimentation. |
The Service Documentation
also applies to any Software or Service that is provided by an affiliate of GreenPay and any Software or Service that is used by
an affiliate or a subsidiary of the Customer. “GreenPay” includes each such affiliate, and “Customer” includes
each such affiliate and subsidiary. All terms defined in this Agreement shall have the same meaning when used in the Service Documentation.
If there is a conflict among the documents that make up the Service Documentation, the documents will govern in the order set forth
above. Customer acknowledges receiving a copy of the Service Documentation for each Service and the Software it requested when
it entered into this Agreement.
2. Changes
to Services. GreenPay may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change.
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GreenPay Software License and Services Agreement
3. Software
License. Subject to the terms and conditions of this Agreement, including all Exhibits, GreenPay hereby grants to
Customer (and its successors and assigns as permitted herein) a perpetual, non-sublicensable, non-exclusive, non-transferable (except
as otherwise expressly set forth herein), enterprise-wide right and license to use, maintain, modify, enhance and create derivative
works from the Software (in object code form only and only in accordance with the Documentation) and the Documentation for Customer's
business use in accordance with the provisions of Exhibit E, and to make as many backup (non-use other than for disaster testing
and recovery purposes) copies as may be necessary, provided that Customer shall keep a record of each such backup copy and the
location of its storage, and shall provide any and all such records to GreenPay upon request. Customer must reproduce and include
any and all copyright, proprietary and any other notices that appear on the original Software and any media therefore on any copies
made by Customer. Customer may exercise its rights hereunder through third party subcontractors for the sole purpose of assisting
Customer in its permitted use of the Software; provided, however, that each such third party subcontractor must agree in a legally
binding writing, to which GreenPay is a named third party beneficiary, to be bound by terms and conditions at least as protective
of and beneficial to GreenPay as those set forth herein.
4. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. GreenPay may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. GreenPay may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law, becomes
insolvent or is otherwise unable to make its debts when due, or if GreenPay otherwise determines, in its sole discretion, that
a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or GreenPay’s rights with respect to transactions which occurred before
termination. GreenPay shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
5. Fees.
Customer shall pay GreenPay the fees described in the attached Exhibits for the specific services selected and/or used. All transactional
fees for the current month will be based on the volumes from the prior month. You hereby authorize GreenPay to create remotely
created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and charges, or it may send
an invoice to Customer for such amounts, which Customer shall promptly pay. GreenPay may assess finance charges at a rate of 1.5%
per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not paid within
thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest and then
to other fees and charges.
6. Maintenance.
Maintenance Terms. Maintenance
provided by GreenPay shall be pursuant to GreenPay's standard maintenance terms, a copy of which is attached hereto as Exhibit
D. Maintenance shall be provided solely to the Service and Software set forth in Exhibit A.
| | 3 | Page |
GreenPay Software License and Services Agreement
Maintenance Fees and
Payment. Customer shall pay to GreenPay the Maintenance fee(s) set forth in Exhibit D for twelve (12) months from the Effective
Date. Additional periods in one year increments and shall be priced at GreenPay's then-current fee schedule; provided, however,
that in no event shall Customer’s Maintenance fee relating to the Software licenses purchased under the terms of this Agreement
be increased by more than ten percent (10%) from year to year after the second consecutive 12 month term of licensing. Customer's
payment of Maintenance fees shall be due in advance, on the first day of each month, (maybe prorated for partial months). In the
event that Maintenance is discontinued or suspended, to reinstate or renew Maintenance Customer must first pay GreenPay Maintenance
fees for the interim period during which Maintenance was discontinued or suspended and GreenPay may in its sole discretion elect
not to accept such renewal or reinstatement.
7. Confidential
Information. Unless otherwise provided in the Service Documentation, all Software, all user guides and other written materials,
source code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to
this Agreement constitute GreenPay’s, or its vendors’, confidential information (“Confidential Information”).
GreenPay, or its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will
not acquire any interest in or rights to it as a result of Customer’s use of any Service or Software except as set forth
in the Service Documentation. Customer will maintain the confidentiality of the Confidential Information and will not use for any
purpose (other than as specifically contemplated by this Agreement) or disclose (or permit its employees or agents to disclose),
copy, transfer, sublicense or otherwise make any of it available to any person or entity, other than its employees who have a need
to use the Confidential Information in connection with the applicable Service. Customer shall notify GreenPay immediately if it
knows or suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”)
of any Confidential Information, and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all
actions, including without limitation initiating court proceedings to recover possession or prevent further Unauthorized Use of
the Confidential Information and obtain redress for any injury caused to GreenPay as a result of such Unauthorized Use. In addition,
except as permitted by applicable law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative
works of any Software provided pursuant to this Agreement.
8. Third
Party Networks; Use of Required Software. If GreenPay determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by GreenPay or Customer, GreenPay may, upon notice to Customer, suspend or discontinue the affected Service. Customer shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Customer to
use the Service(s) in accordance with the Service Documentation.
9. NO
REPRESENTATIONS OR WARRANTIES OF GREENPAY OR SOFTWARE VENDORS. NEITHER GREENPAY NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
| | 4 | Page |
GreenPay Software License and Services Agreement
10. Liability
and Indemnification.
(a) GreenPay
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with GreenPay related
to the Service, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or GreenPay’s applicable policies, procedures or practices as GreenPay may from time to time establish and make available
to Customer; (iii) GreenPay has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in GreenPay’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on GreenPay’s
intra-day net funds position.
(b) Customer
shall promptly furnish written proof of loss to GreenPay and notify GreenPay if it becomes aware of any third party claim related
to the Service. Customer shall cooperate fully (and at its own expense) with GreenPay in recovering a loss. If Customer is reimbursed
by or on behalf of GreenPay, GreenPay or its designee will be subrogated to all rights of Customer.
(c) Any
claim, action or proceeding against GreenPay for losses or damages arising from a Service, including GreenPay’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by GreenPay.
(d) GreenPay
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond GreenPay’s reasonable control.
(e) Customer
agrees to indemnify, defend and hold harmless GreenPay from and against all damages and costs (including reasonable attorneys'
fees) finally awarded against GreenPay (or finally settled upon) and arising from: (i) any claim of personal injury or tangible
personal property damage (excluding data) of whatsoever nature or kind arising, in whole or in part, out of, as a result of, or
in connection with the gross negligent or willful misconduct of Customer, its employees, subcontractors or agents; (ii) any claim
brought against GreenPay by a third party alleging that the Customer Materials (as defined in Exhibit C) directly infringe any
U.S. copyright or trademark or misappropriate any trade secret (recognized as such under the Uniform Trade Secrets Act) in existence
as of the Effective Date; or (iii) any claim brought against GreenPay by a third party arising from or relating to any modification
of the Software by Customer or any use of the Software other than as permitted under this Agreement. The parties acknowledge and
agree that Customer's obligations under this section are conditioned upon GreenPay providing Customer: (1) prompt written notice
of the existence of such claim, suit, action or proceeding (each a "claim"); (2) sole control over the defense or settlement
of such claim; and (3) assistance at Customer's request to the extent reasonably necessary for the defense of such claim. The foregoing
sets forth Customer's sole and exclusive obligation and GreenPay's sole and exclusive remedy for any claim of intellectual property
infringement or misappropriation relating to the Customer Materials. Notwithstanding the foregoing, Customer shall not indemnify,
defend or hold harmless GreenPay for any claims arising from: (a) any GreenPay intellectual property or software incorporated in
or combined with the Customer Materials where in the absence of such incorporated or combined item, there would not have been infringement;
(b) Customer Materials which have been altered or modified by GreenPay (other than in response to a request by Customer), where
in the absence of such alteration or modification the Customer Materials would not be infringing; (c) use of an any version of
the Customer Materials for which Customer has made available an updated, revised or repaired subsequent version; or (d) the gross
negligence or willful misconduct of GreenPay or any of its agents, subcontractors or employees. Upon notice of any claim of infringement
or upon reasonable belief of the likelihood of such a claim, Customer shall have the right, at its option, to: (x) obtain the rights
to continued use of the Customer Materials; (y) substitute other suitable, functionally-equivalent, non-infringing materials; or
(z) replace or modify the Customer Materials or their design so that they are no longer infringing. Furthermore, Customer agrees
to maintain commercial general liability insurance of at least $1 million, covering Customer's obligations contained herein on
a claims-made basis with coverage for at least one year from the date of completion of the services. The provisions of this section
shall survive for a period of one year following the earlier of (a) completion of the Maintenance services or (b) termination of
this Agreement.
| | 5 | Page |
GreenPay Software License and Services Agreement
(f) GreenPay
agrees to indemnify, defend and hold harmless Customer, its officers, directors, employees and agents from and against all damages
and costs (including reasonable attorneys' fees) finally awarded against Customer (or finally settled upon) and arising from or
relating to:
| (i) | any claim brought against Customer by a third party alleging
that the Software directly infringes any patent, copyright, trademark or other intellectual property right or misappropriates
any trade secret (recognized as such under the Uniform Trade Secrets Act). The parties acknowledge and agree that GreenPay's obligations
under this item (i) of this section are conditioned upon Customer providing GreenPay: (a) prompt written notice of the existence
of such claim, suit, action or proceeding (each a "claim"); provided that a failure of the Customer to promptly notify
GreenPay shall not relieve GreenPay of liability hereunder except to the extent that GreenPay 's defenses to such claim are materially
impaired by such failure to promptly notify; (b) sole control over the defense or settlement of such claim, it being agreed that
GreenPay shall not enter into any settlement imposing any liability or obligation on Customer without Customer's prior written
consent; and (c) assistance at GreenPay's request and sole expense, to the extent reasonably necessary for the defense or settlement
of such claim. If any claim that GreenPay is obligated to defend has occurred or, in GreenPay's opinion, is likely to occur, GreenPay
may, at its option and expense either (1) obtain for Customer the right to continue to use the applicable Software, (2) replace
or modify the Software so it becomes non-infringing, without materially adversely affecting the Software's specified functionality,
or (3) if (1) or (2) are not readily available after using reasonable commercial efforts or, if neither of the foregoing options
is commercially reasonable, refund all fees paid by Customer and terminate this Agreement; provided that termination pursuant
to this subsection 11(ii)(3) shall be deemed a termination by Customer for cause. Notwithstanding the foregoing, GreenPay shall
not indemnify, defend or hold harmless Customer for any claims solely based on: (a) any Customer or third party intellectual property
or software incorporated in or combined with the Software where in the absence of such incorporated or combined item, there would
not have been infringement, but excluding any third party software or intellectual property incorporated into the Software at
GreenPay's discretion; (b) Software which has been altered or modified by Customer, by any third party or by GreenPay at the request
of Customer (where GreenPay had no discretion as to the implementation of modifications to the Software or Documentation directed
by Customer), where in the absence of such alteration or modification the Software would not be infringing; or (c) use of any
version of the Software with respect to which GreenPay has made available a non-infringing updated, revised or repaired subsequent
version or other applicable update, patch or fix; |
| | 6 | Page |
GreenPay Software License and Services Agreement
| (ii) | the use of GreenPay's premises by Customer employees pursuant
to this Agreement; or |
| (iii) | any claim of personal injury or tangible personal property
damage (excluding data) of whatsoever nature or kind arising, in whole or in part, out of, as a result of, or in connection with
the gross negligent or willful misconduct of GreenPay, its employees, subcontractors or agents. Furthermore, GreenPay agrees to
maintain commercial general liability insurance of at least $1 million, covering GreenPay's obligations contained herein on a
claims-made basis with coverage for at least one year from the date of completion of the services. The provisions of this Section
11 herein shall survive for a period of one year following the earlier of (a) completion of the Maintenance services or (b) termination
of this Agreement. |
(g) GREENPAY
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO GREENPAY’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. GREENPAY’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO GREENPAY DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO GREENPAY FEES WERE PAID IN SUCH MONTH, GREENPAY FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
11. General.
(a) The
Agreement will be governed by the laws of the state of California, without regard to conflicts of laws principles. In the event
any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such action will
be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties hereby submit
to the jurisdiction and venue of said court.
(b) Any
portion of the Agreement which is inconsistent with applicable laws, regulations or rules will be deemed modified and applied in
a manner consistent therewith, and GreenPay will incur no liability to Customer as a result of the inconsistency or modification
and application. If any portion of the Agreement is deemed unenforceable or invalid, it will not otherwise affect the enforceability
or validity of the Agreement.
| | 7 | Page |
GreenPay Software License and Services Agreement
(c) The
Agreement is the entire agreement between GreenPay and Customer and supersedes all prior representations, conditions, warranties,
understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion will constitute
a modification of the Agreement or be a waiver of that right on a subsequent occasion.
(d) Customer
agrees to provide GreenPay promptly upon GreenPay’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which GreenPay may require Customer to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to GreenPay.
(e) Customer
expressly warrants that the Software and any Service(s) will not be used in a manner which violates any US federal or state law
including without limitation any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
3, 7, 9 and 10, plus all Exhibits of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. GreenPay shall use the most
recent address for Customer in GreenPay’s records, and any notice from GreenPay will be effective when sent. Customer shall
use the address where Customer’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Customer will be effective when actually received by GreenPay. GreenPay will be entitled to rely on any notice
from Customer that it believes in good faith was authorized by an authorized representative of Customer and, except as expressly
stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each
party will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Software and Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services or Software, (ii) access Customer’s electronic communications and financial data, and/or (iii)
send or receive information and communications to GreenPay. Unencrypted electronic transmissions are not secure. Customer assumes
the entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Customer
may not assign or transfer its rights or obligations with respect to the Agreement without GreenPay’s prior written consent.
GreenPay may assign its rights and obligations with respect to the Agreement to any successor by merger, consolidation or corporate
reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with GreenPay’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement. The parties are and
will remain as independent contractors.
| | 8 | Page |
GreenPay Software License and Services Agreement
(l) Customer
authorizes GreenPay to issue press release(s), which may contain Customer’s stock ticker symbol; that describes the nature
of the relationship between GreenPay and Customer.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n) This
Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
(o) Construction.
Section headings in this Agreement are for convenience only and are not to be used in interpreting this Agreement. As used in this
Agreement, the word "including" means "including but not limited to".
(p) The
parties acknowledge and agree that no implied rights or licenses are conveyed by this Agreement, that all rights are specific to
the parties and do not extend to their parents, subsidiaries or affiliates and that all rights in and to the Software not expressly
granted to Customer in this Agreement are reserved by GreenPay and its suppliers.
(q) Remedies.
Each party recognizes and agrees that there is no adequate remedy at law for a threatened or actual breach of Sections 3 and 7,
that such a breach would irreparably harm the non-breaching party and that such non-breaching party is entitled to seek equitable
relief (including an injunction) with respect to any such breach or potential breach, in addition to any other remedies available
at law.
(r) Waivers
and Amendments. Any waiver of or amendment to the terms of this Agreement shall be effective only if made in writing and signed
by an authorized and duly empowered representative of each of the parties hereto. No failure to exercise, and no delay in exercising
any right hereunder will operate as a waiver thereof, nor will any single or partial exercise of any right hereunder preclude further
exercise of any right hereunder.
(s) Severability.
If any provision of this Agreement is found by a court of competent jurisdiction to be unenforceable or invalid, that provision
shall be changed and interpreted to accomplish the objectives of such provision to the greatest extent possible under applicable
law and the remaining provisions shall remain in full force and effect. Customer agrees that Sections 7, 9 and 10 will remain in
effect notwithstanding the enforceability or unenforceability of any provision of this Agreement.
(t) Confidentiality
of Agreement. Neither party will disclose any terms of this Agreement, including prices or discounts, to anyone other than its
attorneys, accountants or other professional advisors or to any investor or potential investor who agrees to maintain the confidentiality
of such information. Notwithstanding the foregoing, either party may make limited disclosure of the terms of this Agreement to
the extent required by law, provided that the disclosing party: (i) provides the non-disclosing party reasonable prior notice of
such disclosure, and (ii) uses its best efforts to protect and limit the disclosure of such information to the extent possible.
Notwithstanding the foregoing, Customer agrees that GreenPay may acknowledge Customer as a GreenPay customer.
| | 9 | Page |
GreenPay Software License and Services Agreement
(u) Parties
Advised by Counsel. This Agreement has been negotiated between parties who are sophisticated and knowledgeable in the matters contained
herein and who have been represented by legal counsel. The provisions of this Agreement shall be interpreted in a reasonable manner
to effect the intentions of the parties and any rule of law (including Section 1654 of the California Civil Code and any other
authority of any jurisdiction of similar effect) which would require interpretation of any ambiguities in this Agreement against
the drafting party is not applicable and is hereby waived.
(v) Entire
Agreement. Both parties agree that this Agreement, along with the Exhibits hereto, is the complete and exclusive statement of the
mutual understanding of the parties and supersedes and cancels all previous and contemporaneous written and oral agreements and
communications relating to the subject matter of this Agreement.
(w) Reference.
Upon GreenPay's reasonable request (or the reasonable request of a third party directed to Customer by GreenPay), Customer may
act as a reference for GreenPay, including taking reference calls from prospective GreenPay customers to discuss the merits of
the Software and to share Customer's experience working with GreenPay.
(x) Promotion.
Each party hereby grants to the other party a nonexclusive, non-transferable, right and license to display such party's trademarks
and logo (subject to the terms and conditions of such party's standard trademark usage guidelines) for purposes of reference and
acknowledgement.
(y) Force
Majeure. Any delay in the performance of any duties or obligations of either party (except the payment of money owed) will not
be considered a breach of this Agreement if such delay is caused by a labor dispute, market shortage of materials, fire, earthquake,
flood or any other event beyond the control of such party, provided that such party uses reasonable efforts, under the circumstances,
to resume performance as soon as reasonably practicable.
(z) Government
Rights. The Software is a "commercial item," as that term is defined at 48 C.F.R. 2.101 (Oct. 1995), consisting of "commercial
computer software" and "commercial computer software documentation," as such terms are used in 48 C.F.R. 12.212
(Sept. 1995). Consistent with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4 (June 1995) (or an equivalent provision,
e.g., in supplements of various U.S. government agencies, as applicable), all U.S. Government users acquire the Software with only
those rights set forth herein.
(aa) Section
365(n) of Internal Revenue Code. All rights and licenses granted under or pursuant to this Agreement by GreenPay to Customer are,
and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (the "Code"),
licenses to rights to "intellectual property" as defined under the Code. The parties agree that Customer, as Customer
of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Code. The parties
further agree that, in the event of the commencement of bankruptcy proceeding by or against GreenPay under the Code, Customer shall
be entitled to retain all of its rights under this Agreement.
| | 10 | Page |
GreenPay Software License and Services Agreement
IN WITNESS WHEREOF, the
parties have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
GreenPay, Inc. |
| |
|
|
| /s/ Eric R. Robledo |
|
/s/ Ed Starrs |
| Signature |
|
Signature |
| |
|
|
| Company Name: |
|
GreenPay, Inc. |
| |
|
Ed Starrs |
| MJ SafePay, LLC |
|
Acting President and CEO |
| |
|
|
| Individual Name: |
|
1740 H Dell Range |
| |
|
Cheyenne, WY 82009 |
| Eric Robledo |
|
|
| |
|
www.GreenPay.com |
| Title: |
President/CEO |
|
929-800-2007 |
| |
|
|
Customer.Support@GreenPay.com |
| Principal Address: |
|
|
| |
|
Date of Agreement: 09/09/2014 |
| |
|
|
| 7371 PRAIRIE FALCON ROAD |
|
Effective Date: 10/16/2014 |
| |
|
|
| SUITE # 120 |
|
|
| |
|
|
| LAS VEGAS, NV 89128 |
|
|
| |
|
|
| |
|
|
| | 11 | Page |
GreenPay Software License and Services Agreement
Exhibit
A
Software License, Services
and Fees
Software Order
| 1) | The Licensed Software, will be delivered to run on the following for the Fee listed: |
| · | A one-time Software License fee of $0.00* Fee waived for this Agreement. |
| 2) | In Addition, GreenPay will deliver the following to the Customer (included in the fee listed above): |
| · | A mobile app (“App”) that is accessible and downloadable for devices running Android, iOS, and Windows to
be used to make mobile payments to a corresponding terminal, and supported by Software developed by GreenPay. |
| · | The Apps have been customized with security features designed to help enable users to conform to
general Federal and State laws to process payments for general and specialty retail. |
| · | The App will be fully branded pursuant to Customer’s specifications, including the App name, color schemes, and logo. |
| · | The App will run and operate on Customer’s Licensed Software to process payments including transaction fees payable to
both parties. |
| 3) | The Customer will use the Software to develop, enhance, and placing into production the following commercial applications
for use by the Customer and their end-user base: |
| · | Patent enabling x9 file creation software (checkEngine) [compiled C code, multi threaded] |
| · | Database Schema for payment system[for PGSQL] |
| · | Web applications for transaction collection and processing |
| · | Bank and Merchant reporting engine |
| · | Web based merchant reporting |
| · | Web based Administration (minimal) |
| · | The Customer shall implement, administer, host, and maintain the Apps and the Software for the corresponding hardware. |
The Customer
will use GreenPay proprietary software technology to create mobile apps that enable and facilitate electronic payment of funds
from a consumer’s bank account without need for the use of a check, a credit card, or a debit card that conform to ANSI X9
standards.
| | 12 | Page |
GreenPay Software License and Services Agreement
Basic Services
GreenPay will provide
fully electronic check services Software to the Customer. The Customer will use the Software to create and process fully electronic
checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits into Customer account(s), and
for transfers out of Customer accounts.
This basic service enables
the Customer to verify their user provided data, check the status of their bank account, prove the transaction is authorized, and
predict the probability of most problems before the transaction is approved and processed for deposit. The Customer will pay GreenPay
the following fees for the use of the Software and all related software tools.
Check 21 Service Fees
Total Transactions
per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.25 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.20 | |
| | |
| | |
| 1,000,000 and more | |
$ | 0.15 | |
Available Supplemental
Services
Scrub Services, like the Basic Check 21
Service, generates a check image and pushes it to your bank for payment. It offers minimal financial verification. Transactions
are immediately and automatically evaluated and approved or declined based upon the real time results of multiple fraud control
tools and database searches. For example, it will check the payee against a database of known bad check writers and verify that
the account is open and in good standing.
Guarantee Services, like the Basic Check
21 and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating transaction data,
you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the returned item for
its full face value.
These services are available for additional
fees. For more information, please contact GreenPay sales (sales@GreenPay.com).
| | 13 | Page |
GreenPay Software License and Services Agreement
Exhibit
B
Supplemental Consulting
Services
1. STATEMENT
OF WORK. GreenPay may render services, working individually or with the Customer and/or third parties retained by
Customer, (the "Consulting Services") to Customer on a time and materials basis as may be agreed upon in a written Statement
of Work, which will become a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as
a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT ADMINISTRATION.
The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide GreenPay all assistance and guidance
reasonably requested by GreenPay for the performance of the Consulting Services. Customer acknowledges that the timely performance
of the Consulting Services is dependent both on reasonable access to and assistance by Customer, including the Customer Technical
Contact. GreenPay acknowledges that the success of Customer's business shall depend on GreenPay's ability to provide the Consulting
Services on a timely basis in accordance with the dates specified by Customer, and shall use all reasonable efforts to complete
all Services efficiently and on or ahead of schedule
3. COMPENSATION. GreenPay
shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer shall
also reimburse GreenPay for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the Consulting
Services. GreenPay shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements
due GreenPay. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree
that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be conducted on an hourly
fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation of a Statement of Work.
| Hourly (Subject to Scheduling and
Availability): |
$125.00/Hour |
4. THIRD PARTY SOFTWARE.
Customer acknowledges that in order for GreenPay to perform the Consulting Services, Customer may need to obtain additional third
party services ("Third Party Services") or third party technology ("Third Party Technology"). Customer agrees
that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms set forth in
the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software or Third Party
Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect to any Third
Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such agreements are
the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service providers.
| | 14 | Page |
5.
LICENSE TO Customer MATERIALS. Customer acknowledges that in order to perform the Services, GreenPay may require
access to and use of certain software or other materials of Customer or Customer's suppliers (including access to code relating
to the Software or that may effect the performance of the Software) ("Customer Materials"). Customer grants to GreenPay
a royalty-free, non-exclusive license to access and use the Customer Materials (including through subcontractors) as required
for GreenPay's performance of the Services hereunder.
6.
RIGHTS AND OWNERSHIP. To the extent that any modification, enhancement, extension, interface or derivative work
to any GreenPay Software or any other deliverable that is produced through the Consulting Services, Customer shall have the same
usage rights in such as Customer has currently has. Customer acknowledges and agrees that other than any Third Party Software
or any Customer Materials or Software, GreenPay continues to own all computer programs, utilities and intellectual property which
aid GreenPay in performing the Consulting Services or which are produced as a result of these Services.
7.
Independent Contractors. GreenPay agrees that it shall be considered
an independent contractor and that it shall not be deemed to be an employee of Customer. GreenPay and its employees, agents and
contractors performing services hereunder shall not be entitled to any employee benefits of Customer.
8.
Project Pricing and Expenses. GreenPay shall incur all reasonable
expenses in the performance of the services contained herein including but not limited to contractors and consultants used for
software development, testing, quality assurance and deployment during the term of this agreement.
From
time to time there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained
herein, any single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or
it shall not be deemed a reimbursable expense.
9.
Billing schedule. Billing is monthly and payment is due upon receipt
of bill for services provided the prior month. Payments will be processed and collected from the Customer as a Check 21 item (no
fee to Customer).
GreenPay
reserves the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue
to make timely payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees. During the term of this Agreement
and for a period of one (1) year following completion of any work hereunder, neither party shall solicit employment of any current
or prior employee of the other.
11.
ATTACHMENTS. Any Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | 15 | Page |
GreenPay Software License and Services Agreement
Exhibit
B
Statement of Work (1)
This Statement of Work
has been prepared to summarize the supplemental services that the Customer wants to be performed by GreenPay in order to facilitate
the implementation of their commercial applications as listed in Exhibit A.
Services/Tasks to
be Preformed
| · | Refinement and custom labeling of mobile app |
| · | Web Page integration and enhancement |
| · | API integration and enhancement |
| · | Software installation on Customer equipment |
| · | Basic Database Schema for payment system [for PGSQL] |
| · | Bank and Merchant reporting engine |
| · | Web based merchant reporting |
| · | Web based Administration (minimal) |
| · | Up to 300 hours of total work |
The Customer shall implement,
administer, host, and maintain the Apps and the Software for the corresponding hardware.
Compensation
In exchange for the services
listed above, the Customer will pay GreenPay a fixed price consulting fee of $25,000.00. This fixed fee replaces the hourly
billing listed in Item 3 – Compensation. This fixed fee will be paid prior to the start of any work.
| | 16 | Page |
GreenPay Software License and Services Agreement
Statement of Work (1)
continued
Technical Contact
| MJ SafePay |
|
GreenPay |
| |
|
|
| DUSTIN BOLING |
|
Steve Blandford |
| |
|
|
| DUSTIN@MJSAFEPAY.COM |
|
steve.blandford@GreenPay.com |
| |
|
|
| Statement of Work Approvals: |
|
|
| |
|
|
| /s/ Eric R. Robledo |
|
/s/ Steve Blandford |
Date: September
09, 2014
| | 17 | Page |
GreenPay Software License and Services Agreement
Exhibit
C
Attached as Exhibit C, will be a completed
New Merchant Integration Information form. This form must be completed and submitted to GreenPay in a timely manner. Customer bank
integration typically takes between four and six weeks. This process can not begin until this form has been completed and delivered.
It will be the Customer’s responsibility to direct their bank to work with GreenPay in order to facilitate the Check 21 deposits.
GreenPay will not be responsible for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant Integration
Information Form, GreenPay will provide the Customer with a Customer Service Contact. This individual will work with the Customer
and their bank in order to complete the integration process.
In is understood by all parties that the
contact individuals provide by the Customer and GreenPay are free to exchange any and all needed information in order to execute
the terms and conditions of this Agreement.
This Exhibit may not apply, if the Customer
is going to use the licensed Software to develop, deliver, and support their own solutions. In those cases, the Customer will be
solely responsible for their banking relationships and set-up.
| | 18 | Page |
GreenPay Software License and Services Agreement
EXHIBIT
D
Software Maintenance
1. Scope
of Coverage. Upon payment of applicable fees, GreenPay will provide consulting and maintenance services pursuant to this
Exhibit ("Maintenance") for a period of twelve (12) months beginning with the Effective Month this Agreement.
2. Maintenance
Fees. For a period of one year, beginning with the Effective Date of this Agreement, the Customer will pay to GreenPay
the following monthly Maintenance Fee:
| |
Maintenance Fees: |
$2,000.00 per month, or fraction of month. |
3. Maintenance
Services. Subject to the terms of this Exhibit and Customer's payment of all Maintenance Fees, GreenPay will provide the
following:
3.1 Severity
Levels. GreenPay will use commercially reasonable efforts to acknowledge and address, as described below, reported and reproducible
material errors in the Software which prevent the Software from performing substantially in accordance with the Documentation (each
an "error or issue"). GreenPay recognizes three severity levels of Software errors or issues:
(a) Severity 1 - Major System
Impact. The Software suffers an error or issue which cannot be reasonably circumvented and which either (i) prevents Customer from
being able to execute transactions through the Software or (ii) otherwise so substantially impairs the performance of the Software
as to effectively render it unusable. GreenPay will use commercially reasonable efforts to acknowledge any such reported error
or issue as promptly as possible (but in no event longer than two (2) hours) and, if Customer is using the Software in Production,
will work 24 hours a day, 7 days a week using commercially reasonable efforts to promptly address and remedy such error or issue.
(b) Severity 2 - Moderate System
Impact. The Software suffers an error or issue (which is not of Severity 1) which cannot be reasonably circumvented and which substantially
impairs the use of one or more portions or features of the Software required by Customer to perform necessary business functions.
GreenPay will acknowledge any such reported error or issue promptly, but in no event longer than within four (4) hours and, if
Customer is using the Software in Production, will use commercially reasonable efforts to address and remedy such error with timeliness
corresponding to the severity of the impact of such error on Customer's business operation, including but not limited to working
continually to address and remedy such error during GreenPay's normal Maintenance hours.
(c) Severity 3 - Minor System
Impact. The Software suffers an error or issue (which is not of Severity 1 or Severity 2) which impairs the use of one or more
portions or features of the Software, but the reported error or issue can be reasonably circumvented. GreenPay will acknowledge
any such reported error or issue within one (1) business day and will work during GreenPay's normal Maintenance hours to provide
the appropriate resolution.
| | 19 | Page |
GreenPay Software License and Services Agreement
(d) Resolution. Except as otherwise
expressly set forth herein, GreenPay will use commercially reasonable efforts to resolve each reported error or issue with the
Software by providing either: (i) a reasonable work around, which may consist of specific administrative steps or alternative programming
calls; (ii) an object code patch to the Software; or (iii) a specific action plan regarding how GreenPay intends to address the
reported error or issue and an estimate on how long it may take to remedy or work around the error or issue. Customer acknowledges
that in order to perform Maintenance, GreenPay may require access to and a copy of code in Customer's possession (or that of Customer's
system integrator or consultants) relating to the Software or which may impact the performance of the Software. Customer agrees
to provide access, assistance and information to GreenPay as required to resolve errors or issues with the Software.
3.2 Available
Updates. At no additional cost to Customer, GreenPay will deliver to the Customer, as made commercially available by GreenPay,
bug fixes, maintenance updates and Major Releases for the Software ("Updates"), which will thereafter be considered "Software"
for all purposes except for those specifically exempt as listed in the Service Documentation. At its expense, and as deemed appropriate
by GreenPay in its sole discretion, GreenPay will furnish Customer with revised Documentation (including release notes identifying
each change) with each Update.
3.3 Other
Errors and Issues. If the Customer reports an error or issue with the Software that is not of Severity 1, 2 or 3, GreenPay shall
use commercially reasonable efforts to acknowledge such error or issue. If the Customer reports an error or issue with the Software
that is not of Severity 1, 2 or 3 and that is scheduled by GreenPay to be addressed in a later Update, GreenPay may address such
error or issue in such Update. Customer agrees to pay GreenPay at GreenPay's standard rates for all effort expended towards resolution
of any error or issue which is later determined to result from any cause other than an error or issue in the Software.
4. Software
Support.
4.1 First Line Support. Customer shall
establish and maintain the organization and processes to provide first line support directly to any of Customer's user. GreenPay
shall have no obligation to provide any first line support to Customer's users. First line support shall include: (a) a direct
response to Customer’s users with respect to problems or inquiries concerning the performance, functionality or operation
of the Software; (b) a diagnosis of problems or performance deficiencies in the Software; and (c) a resolution of problems or performance
deficiencies in the Software.
4.2 Second
Line Support. GreenPay shall maintain the organization and processes necessary to provide second line support for the Customer’s
use of the Software. Such second line support shall be provided to Customer only if, after reasonable commercial effort, the Customer
is unable to diagnose and/or resolve problems or performance deficiencies in the Software. Second line support will be provided
to up to two (2) designated and trained representatives of the Customer. GreenPay shall have no obligation to provide second line
support directly to any of Customer’s users. In order to assist GreenPay in providing such second line support, Customer
will provide GreenPay with the ability to access Customer's site(s) which utilize the Software (including but not limited to configuration
information and error logs) and provide assistance to GreenPay in order to facilitate GreenPay's use of remote administration tools
relating to the Software.
| | 20 | Page |
GreenPay Software License and Services Agreement
5. Service
Limitations. The Maintenance does not include, nor will GreenPay be obligated to provide, services required as a result
of: (a) any Customer modification, reconfiguration or maintenance of the Software not performed or recommended by GreenPay; (b)
any use of the Software on a system that does not meet GreenPay 's minimum standards for such as set forth in the applicable Documentation;
(c) any third party hardware or software not supported or embedded by GreenPay; (d) any configuration of the Software (or hardware
configurations) other than as recommended by GreenPay; or (e) any error caused by Customer's or any third party's negligence, abuse,
misapplication, or use of Software other than as expressly permitted under the Agreement.
6. Term
and Termination. This Maintenance Exhibit shall remain in effect for one (1) year from the Effective Date. This Maintenance
Exhibit shall automatically renew for additional one (1) year periods, unless either party provides notice of cancellation of Maintenance
to the other party at least thirty (30) days prior to the anniversary date of this Agreement. Customer may terminate this Exhibit
D if GreenPay materially breaches the terms of this Agreement and such breach remains uncured for thirty (30) days after written
notice. The expiration or termination of this Exhibit shall not terminate or otherwise affect the Agreement or Service Documentation.
| | 21 | Page |
GreenPay Software License and Services Agreement
Exhibit
E
Software License
1. License.
Subject to the terms and conditions of this Agreement, including all Exhibits, GreenPay hereby grants to Customer (and its successors
and assigns as permitted herein) a perpetual, non-sub licensable, non-exclusive, non-transferable (except as otherwise expressly
set forth herein), enterprise-wide right and license to use, maintain, modify, enhance and create derivative works from the Software
(in object code form only and only in accordance with the Documentation) and the Documentation for Customer's business use in accordance
with the provisions of Exhibit A, and to make as many backup (non-use other than for disaster testing and recovery purposes) copies
as may be necessary, provided that Customer shall keep a record of each such backup copy and the location of its storage, and shall
provide any and all such records to GreenPay upon request. Customer must reproduce and include any and all copyright, proprietary
and any other notices that appear on the original Software and any media therefore on any copies made by Customer. Customer may
exercise its rights hereunder through third party subcontractors for the sole purpose of assisting Customer in its permitted use
of the Software; provided, however, that each such third party subcontractor must agree in a legally binding writing, to which
GreenPay is a named third party beneficiary, to be bound by terms and conditions at least as protective of and beneficial to GreenPay
as those set forth herein.
2. Restrictions
on Use.
2.1 Proprietary
Rights. Customer acknowledges that the Software, its structure, organization and Source Code, and the Documentation are the property
and constitute valuable trade secrets of GreenPay and its suppliers. Customer agrees not to: (a) decompile or disassemble the Software,
separate the Software into its component parts, or in any way attempt to reconstruct or discover any source code or algorithms
of the Software by any means whatsoever; (b) remove any product identification, trademark, copyright, confidentiality, proprietary
or other notice contained on or within the Software; (c) modify or create any derivative works from the Software or any part thereof,
except to the extent that the Software provides for user-modifiable components (d) except as otherwise permitted herein, sell,
sublicense, lease, rent, loan, assign, convey or otherwise transfer the Software or any component thereof; (e) otherwise copy or
use the Software for any purpose or in any manner not expressly permitted in this Agreement; or (f) knowingly permit or encourage
any third party to do any of the foregoing. All assistance requested by Customer for integration with existing or proposed Customer
systems or software shall be provided by GreenPay in accordance with Section 7. All rights in and to the Software and Documentation
not expressly granted to Customer in this Agreement are reserved by GreenPay and its suppliers.
2.2 Restrictions.
Customer shall use the Software only on the operating system specified in Exhibit A; provided, however, that a breach of this sentence
by Customer shall not be considered a material breach.
| | 22 | Page |
GreenPay Software License and Services Agreement
3. Ordering
and Delivery. Exhibit A defines the scope of the use of Software and its is that description that defines the Customer’s
sole use of the Software for commercial use. This initial definition shall also be known as the “Order”.
An Order will be binding on both parties
when signed by authorized representatives of Customer. Revisions to the initial Order may be made as Amendments to Exhibit A. Each
Amendment, new Order, shall include the following information: (a) the Software licensed or to which Support and Maintenance shall
apply, and (b) the applicable fees. No additional or different terms in any purchase order or similar amendment document shall
modify the terms of this Agreement.
For purposes of this Agreement, initial
delivery of the Software and Documentation will be deemed to have occurred upon GreenPay providing Customer with a password to
access a web page from which Customer may download the Software and Documentation. The Software will be deemed accepted upon initial
delivery, subject to the warranties and limitations stated within this Agreement and Service Documentation.
4. License
Fees and Payment. Customer shall pay to GreenPay the license fees for the Software set forth in Exhibit A (the "License
Fees"). All fees hereunder exclude all applicable sales, use, value-added, property and other taxes, including duties and
similar mandatory payments, and Customer will be responsible for payment of all such taxes (other than taxes based on GreenPay's
net income), and any related penalties and interest, arising from the payment of such fees, the delivery or license of the Software,
or the provision of any services to Customer. All amounts under this Agreement are in U.S. dollars and payment must be made in
such. Customer will make all payments of amounts due under this Agreement to GreenPay free and clear of, and without reduction
for, any withholding taxes. If Customer is legally required to make any such withholding from any payment due to GreenPay under
this Agreement, the sum payable by Customer upon which such withholding is based shall be increased to the extent necessary to
ensure that, after such withholding, GreenPay receives an amount equal to the amount GreenPay would have received in the absence
of such withholding. Customer will provide GreenPay with official receipts issued by the appropriate taxing authority, or such
other evidence as GreenPay may reasonably request, to establish that such taxes have been paid.
5. Ownership
of Derivative Works. Any and all derivative works to the Software which are created pursuant to this Agreement shall be
owned by GreenPay, but the Customer shall have the same rights and licenses to such derivative works as Customer has to the Software.
6. Software
Maintenance. Maintenance provided by GreenPay shall be pursuant to GreenPay's standard maintenance terms, as outlined in
Exhibit D.
7. Services.
The Customer will be delivering commercial services using the licensed Software. The terms and conditions of these Services, if
any, including any and all fees, are detailed within Exhibit A.
| | 23 | Page |
GreenPay Software License and Services Agreement
8. Limited
Software Warranty. GreenPay warrants to the original end user (“Customer”), and not to subsequent end users,
of the software product(s) (“Software”) that for ninety (90) days from the Effective Date of this Agreement, that the
Software shall substantially conform with the specifications for the Software as stated within the Service Documentation. GreenPay
does not warrant (i) that the Software is error free, (ii) that Customer will be able to operate the Software without problems
or interruptions or (iii) that the Software will be free of vulnerability to intrusion or attack. Except for the limited warranty
set forth in this section, the Software is provided “AS IS.”
9. Disclaimer.
EXCEPT FOR THE LIMITED REPRESENTATIONS, WARRANTIES, AND COVENANTS EXPRESSLY STATED HEREIN, THE SOFTWARE, DOCUMENTATION AND MAINTENANCE,
AS WELL AS ALL SERVICES, ARE PROVIDED "AS IS," AND GREENPAY AND ITS SUPPLIERS HEREBY EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES
OF ANY KIND OR NATURE, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE LIMITED REPRESENTATIONS, WARRANTIES AND COVENENANTS EXPRESSLY
STATED HEREIN, GREENPAY AND ITS SUPPLIERS DO NOT WARRANT OR REPRESENT THAT THE SOFTWARE, DOCUMENTATION OR MAINTENANCE WILL BE FREE
FROM BUGS OR THAT THEIR USE WILL BE UNINTERRUPTED OR ERROR-FREE, OR MAKE ANY OTHER REPRESENTATIONS REGARDING THE USE, OR THE RESULTS
OF THE USE, OF THE SOFTWARE OR DOCUMENTATION IN TERMS OF CORRECTNESS, ACCURACY, RELIABILITY, OR OTHERWISE. CUSTOMER ACKNOWLEDGES
THAT GREENPAY IS NOT RESPONSIBLE FOR AND WILL HAVE NO LIABILITY FOR HARDWARE, SOFTWARE OR OTHER ITEMS OR ANY SERVICES PROVIDED
BY ANY PERSON OR ENTITY OTHER THAN GREENPAY OR ITS EMPLOYEES, AGENTS OR CONTRACTORS OR FOR NETWORK FAILURE. CUSTOMER FURTHER ACKNOWLEDGES
THAT IT HAS RELIED ON NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT.
| | 24 | Page |
GreenPay Software License and Services Agreement
10. Confidentiality.
In the course of performing this Agreement, the parties may disclose to each other Confidential Information. "Confidential
Information" shall mean any and all non-public technical and non-technical information provided by either party to the other,
including but not limited to (i) patent and patent applications; (ii) trade secrets; and (iii) proprietary information including,
but not limited to, ideas, sketches, techniques, drawings, works of authorship, models, inventions, know-how, processes, apparatuses,
equipment, algorithms, software programs, software source documents, and formulae related to the current, future and proposed products
and services of each of the parties, and including, without limitation, their respective information concerning research, experimental
work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing,
manufacturing, customer lists, investors, employees, business and contractual relationships, business forecasts, sales, merchandising,
marketing plans and information the disclosing party provides regarding third parties. All Confidential Information shall remain
the sole property of the disclosing party, and the receiving party shall have no interest in or rights with respect thereto except
as expressly set forth in this Agreement. Each party agrees: (i) not to use any Confidential Information of the other party for
any purpose except in the performance of its obligations under this Agreement or as otherwise expressly permitted hereunder; (ii)
to disclose such Confidential Information only to employees (or third party subcontractors permitted under this Agreement) who
have a need to know such Confidential Information for purposes of this Agreement and who are under a duty of confidentiality no
less restrictive than that set forth herein; (iii) to protect such Confidential Information from unauthorized use, access or disclosure
in the same manner that it protects its own similar Confidential Information, but in no event with less care than a reasonably
prudent business would exercise and (iv) to promptly notify the other party of any actual or potential unauthorized access to or
use of Confidential Information. The foregoing restrictions on disclosure shall not apply with respect to any information which:
(a) was or becomes generally known or publicly available through no act or failure to act on the part of the receiving party; (b)
is known by the receiving party without restrictions on disclosure at the time of receiving such information as evidenced by its
records; (c) is rightfully furnished to the receiving party without restrictions on disclosure by a third party without a breach
of such third party's obligations of confidentiality; or (d) is required by law to be disclosed by the receiving party, provided
that the receiving party: (x) gives the disclosing party prompt written notice of such requirement prior to such disclosure; (y)
provides assistance in obtaining an order protecting Confidential Information from disclosure; and (z) discloses information only
to the extent required by law. Customer further agrees not to disclose to any third party any performance information (including,
without limitation, benchmarks) relating to the Software except as otherwise expressly contemplated herein. This Section 10 will
survive any termination of the Agreement for a period of three (3) years with respect to non-technical information and in perpetuity
with respect to technical information, including the Software, the Documentation and any code.
11. Independent
Contractors. The relationship of GreenPay and Customer established by this Agreement is that of independent contractors,
and nothing contained in this Agreement shall be construed to: (i) give either party the power to direct and control the day-to-day
activities of the other, (ii) constitute the parties as partners, joint venturers, co-owners or otherwise as participants in a
joint or common undertaking, or (iii) allow either party to create or assume any obligation on behalf of the other party for any
purpose whatsoever.
12. Press
Release. The parties shall issue their respective or mutually agreed press release(s) by each party regarding Customer's
engagement of GreenPay and use of the Software pursuant to this Agreement (excluding any press release regarding any Letter of
Intent). GreenPay may develop and, with the Customer's prior written consent (such consent not to be unreasonably withheld or delayed)
publish a case study, highlighting the main benefits provided by GreenPay and the Software, when the first Customer site goes into
Production. GreenPay agrees not to publicly issue any press release without Customer's prior approval (which approval will not
be unreasonably withheld or delayed).
13. Notices.
Any notice required or permitted hereunder shall be in writing and delivered in person or by means evidenced by a delivery receipt
to the address specified below and will be effective upon receipt. Either party may change its contact information upon written
notice to the other party.
14. Software
Assignment. The Software may not be assigned or transferred by Customer (in whole or in part and whether voluntarily, involuntarily,
or by operation of law) without the prior written consent of GreenPay and any attempt to do so shall be null and void and of no
effect.
| | 25 | Page |
Exhibit 10.43
GreenPay Authorized Reseller Agreement
THIS AGREEMENT is made on the date listed
on the final page of this Agreement by and between GreenPay, LLC (“GreenPay”), with its principal place of business
located at 2600 East Bidwell, Suite 140, Folsom, Ca 95628, and company listed on the final page of this Agreement (the "Reseller"),
with its principal place of business located within the United States of America.
NOW, THEREFORE, in consideration of the
promises hereinafter made by the parties hereto, it is agreed as follows:
| 1. | The product (s) or product line (s) (“Products”) included in this agreement are, but
not limited to: Check 21 Electronic Check Services, Mobile Payment Applications, and Consulting Services. GreenPay represents and
warrants that it is the sole and exclusive owner of any and all intellectual property pertaining to the Products, and that its
use and sale of the Products does not infringe on any patents, trademarks, and/or any other intellectual property rights or any
third party. |
| 2. | Distribution Right: GreenPay hereby appoints and grants Reseller the non-exclusive and non-assignable
right to sell the Products of GreenPay to Merchants. The Merchants are primarily (but not exclusively) legal marijuana dispensaries
who will purchase the products and services from Reseller for the purpose of allowing the Merchant(s) to receive electronic check
payment processing and payment from the Merchants’ customers. The Reseller shall have a reseller permit or business license
issued by its State or its government where the Reseller’s company is located or registered. |
| 3. | Fees and Revenue Sharing: GreenPay and the Reseller have mutually negotiated and agree to the product
sales rates and fees, and the gross revenue sharing model as outlined in Exhibit A, which shall become and be a part of this Agreement.
Exhibit A may be mutually modified, in writing, with the written approval of the parties to this Agreement. |
| 4. | Other Parties: Reseller acknowledges and understands that there are other parties (“Contractors”)
that may have been contracted by GreenPay to provide software, banking, funds management, and/or other solutions that are integrated
within the Products offered for sale. These Contractors will benefit from the sales of the Products, but the Contractors’
sole compensation for their services shall be limited to the collective share of the gross revenue sharing model as outlined in
Exhibit A. |
| 5. | Logos, Trademarks, Service Marks, and Graphics Use: GreenPay will grant to the Reseller a limited
access ("Access") to certain GreenPay trademarks, service marks, logos, and other proprietary graphics ("Marks").
GreenPay represents and warrants that it is the sole and exclusive owner of any and all Marks and that its use and license of the
Marks does not infringe on any intellectual property rights of any third parties. Reseller’s access to the Marks shall be
for the duration of the Agreement as described herein, and under the following terms and conditions: |
| a. | This Access to Marks will be granted for the benefit of GreenPay’s Resellers, and others
with a legitimate intent to advertise and sell GreenPay’s products and services. The Access to use these Marks will require
prior review of their use and GreenPay’s written approval of the use. |
| b. | The Reseller must follow the published guidelines for use of the GreenPay Logos, Service Marks,
Trademarks, Graphics, Styles and Colors. |
| |
GreenPay’s Initial: |
BMS |
exhibit 10.43 - greenpay authorized reseller agreement by and between greenpay, llc and maverick bankcard,
llc
|
|
| |
Reseller’s Initial: |
AG |
GreenPay Authorized Reseller Agreement
| c. | The Reseller may not, under any circumstances, alter the appearance of the Marks, either by alteration,
size, color or combine with any other logo without the prior written permission by GreenPay. |
| d. | The Reseller may develop ‘Private Label’ identifiers, logos and the like, incorporating
the Marks for the purpose of marketing and branding. All Private Labels must include a statement like: “Powered by GreenPay”.
GreenPay must review and approve all incorporations of any Marks before their use and/or distribution. |
| e. | GreenPay retains full ownership rights to its Trademarks, Service Marks, Logos, and Graphics and
the Reseller does not acquire any rights, title or interest in or to the Marks beyond that set forth herein. |
| f. | If the Reseller uses the Marks in conjunction with logos, or other works, representing awards or
publications of companies granting such awards, it shall be the responsibility of the Reseller to give appropriate attribution
to such companies, and to correctly identify such logos or works with their respective companies. |
| g. | Breach of this section will be grounds for immediate termination of this Access, and any other
legal remedies GreenPay may deem appropriate. |
| 6. | GreenPay reserves the right to modify or terminate its Reseller Program at any time without notice
or liability, but the termination of this Agreement or the Reseller Program shall not relieve GreenPay of it continuing obligations
to Reseller to make payments to Reseller in accordance with Exhibit A based on Reseller’s sale of Products to any Merchant
prior to the termination of the Reseller Program. Greenpay’s obligation to pay Reseller its portion of the gross revenue
sharing model, and any other fees payable to Reseller, as outlined in Exhibit A, shall continue for as long as GreenPay and/or
its Contractors continue to provide any electronic check payment processing or other services to Merchants using any of the Products
sold by Reseller. |
| 7. | Non-existent in this contracted agreement is there any implied or hidden impose liability or obligation
on GreenPay for any expenditure made or incurred by the Reseller, or for any sale or promotional activity undertaken by the Reseller,
except pursuant to written and explicit request of representatives of GreenPay. |
| 8. | Term: The term of this Agreement shall be for one (1) years from the date hereof, unless sooner
terminated. Following such Initial Term, this Agreement shall be automatically renewed for successive one year, unless either party
notifies the other in writing of an intention not to renew the Agreement within ninety (90) days of the end of the Initial Term. |
Termination shall not relieve
either party of obligations incurred prior thereto. This Agreement may be terminated under the following stipulations without exception
under any circumstances:
| a. | by the Reseller at anytime upon thirty (30) days written notice to GreenPay. |
| b. | by GreenPay upon thirty (30) days written notice to the Reseller for cause or in the event the
Reseller breeches this contact (in any manner); |
| c. | by GreenPay upon thirty (30) days written notice to the Reseller in the event the Reseller becomes
involved in any arrangements with creditor, voluntary or involuntary bankruptcy proceedings under the Bankruptcy Laws of the United
States; |
| |
GreenPay’s Initial: |
BMS |
exhibit 10.43 - greenpay authorized reseller agreement by and between greenpay, llc and maverick bankcard,
llc
|
|
| |
Reseller’s Initial: |
AG |
GreenPay Authorized Reseller Agreement
GreenPay’s continuing
obligation to make payment to Reseller pursuant to Exhibit A shall survive any termination of this Agreement by either party. Notwithstanding
the termination of this Agreement by either Party, Greenpay’s obligation to pay Reseller its portion of gross revenue sharing
model, and any other fees payable to Reseller, as outlined in Exhibit A, shall continue for as long as GreenPay and/or the Contractors
continue to provide any electronic check payment processing or other services to Merchants using any of the Products sold by Reseller.
| 9. | Notice or Communication. Any notice or communication required or permitted hereunder (other than
Administrative Notice) shall be in writing and may be sent by registered mail, return receipt requested, postage prepaid and addressed
to the addresses set forth below, or emailed to such address as any party entitled to notice shall have communicated in writing
to the other party. Notices and communications to GreenPay and the Reseller are noted on the final page of this Agreement. |
| 10. | Relationship of Parties. The relationship between the parties established by this Agreement shall
be solely that of vendor and vendee and all rights and powers not expressly granted to the Reseller are expressly reserved to GreenPay.
The Reseller shall have no right, power or authority in any way to bind GreenPay to the fulfillment of any condition not herein
contained, or to any contract or obligation, expressed or implied |
| 11. | Indemnity. The Reseller agrees to hold GreenPay free and harmless from any and all claims, damages,
and expenses of every kind or nature whatsoever arising from acts of the Reseller of any of the provisions of this Agreement. GreenPay
agrees to hold Reseller free and harmless from any and all claims, damages, and expenses of every kind or nature whatsoever, arising
from a breach by GreenPay if any of the provisions of this Agreement. |
| 12. | Assignment. This Agreement constitutes a professional contract and Reseller shall not transfer
or assign same or any part thereof without the advance written consent of GreenPay. |
| 13. | Upon execution of this Agreement, GreenPay will immediately notify Reseller of each and every state
in which the sale of its Products may violate State law. Thereafter, Reseller will not be use or sell GreenPay products, and
any Service(s) in any states identified in writing by GreenPay pursuant to the preceding sentence. |
| 14. | Applicable Law. This Agreement shall be governed by the laws of the State of California and is
accepted by GreenPay at its Corporate Office noted above. All payments hereunder shall be made at GreenPay's Corporate Office address.
GreenPay's rights granted hereby are cumulative and in addition to any rights it may have at law or equity. |
| a) | Any portion of the Agreement which is inconsistent with applicable laws, regulations or rules will
be deemed modified and applied in a manner consistent therewith, and the Parties shall not incur any liability to each other as
a result of the inconsistency or modification and application. If any portion of the Agreement is deemed unenforceable or invalid,
it will not otherwise affect the enforceability or validity of the Agreement. |
| b) | The Agreement is the entire agreement between the Parties and supersedes all prior representations,
conditions, warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right
on one occasion will constitute a modification of the Agreement or be a waiver of that right on a subsequent occasion. |
| |
GreenPay’s Initial: |
BMS |
exhibit 10.43 - greenpay authorized reseller agreement by and between greenpay, llc and maverick bankcard,
llc
|
|
| |
Reseller’s Initial: |
AG |
GreenPay Authorized Reseller Agreement
| c) | Any/All sections of this agreement, plus all Exhibits of this Agreement, will survive termination
of this Agreement. |
| d) | Parties may not assign or transfer its rights or obligations with respect to this Agreement without
the other written consent. Each Party may assign its rights and obligations with respect to this Agreement to any successor by
merger, consolidation or corporate reorganization. |
| e) | The parties do not intend that any agency or partnership relationship be created between them by
this Agreement. The parties are and will remain as independent contractors. |
| f) | The Parties agree that they will not issue press release(s) which describes the nature of the relationship
between the Parties and may include historical information about the respective Parties, without the express written consent of
the other party, and which consent may be withheld by either party in its sole judgement. |
| g) | This Agreement may be executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. |
| h) | This Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed
signatures deemed as original. |
| i) | Construction. Section headings in this Agreement are for convenience only and are not to be used
in interpreting this Agreement. As used in this Agreement, the word "including" means "including but not limited
to". |
| j) | Confidentiality of Agreement. Neither party will disclose any terms of this Agreement, including
prices or discounts, to anyone other than its attorneys, accountants or other professional advisors or to any investor or potential
investor who agrees to maintain the confidentiality of such information. Notwithstanding the foregoing, either party may make limited
disclosure of the terms of this Agreement to the extent required by law, provided that the disclosing party: (i) provides the non-disclosing
party reasonable prior notice of such disclosure, and (ii) uses its best efforts to protect and limit the disclosure of such information
to the extent possible. Notwithstanding the foregoing, the Parties agree that each may acknowledge the other as a customer. |
| k) | Parties Advised by Counsel. This Agreement has been negotiated between Parties who are sophisticated
and knowledgeable in the matters contained herein and who have been represented by legal counsel. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intentions of the Parties and any rule of law (including Section 1654
of the California Civil Code and any other authority of any jurisdiction of similar effect) which would require interpretation
of any ambiguities in this Agreement against the drafting Party is not applicable and is hereby waived. |
| l) | Entire Agreement. Both Parties agree that this Agreement, along with the Exhibits hereto, is the
complete and exclusive statement of the mutual understanding of the Parties and supersedes and cancels all previous and contemporaneous
written and oral agreements and communications relating to the subject matter of this Agreement. |
| |
GreenPay’s Initial: |
BMS |
exhibit 10.43 - greenpay authorized reseller agreement by and between greenpay, llc and maverick bankcard,
llc
|
|
| |
Reseller’s Initial: |
AG |
GreenPay Authorized Reseller Agreement
| m) | Force Majeure. Any delay in the performance of any duties or obligations of either Party will not
be considered a breach of this Agreement if such delay is caused by a labor dispute, market shortage of materials, fire, earthquake,
flood or any other event beyond the control of such Party, provided that such Party uses reasonable efforts, under the circumstances,
to resume performance as soon as reasonably practicable. |
| n) | Government Rights. The Software is a "commercial item," as that term is defined at 48
C.F.R. 2.101 (Oct. 1995), consisting of "commercial computer software" and "commercial computer software documentation,"
as such terms are used in 48 C.F.R. 12.212 (Sept. 1995). Consistent with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4
(June 1995) (or an equivalent provision, e.g., in supplements of various U.S. government agencies, as applicable), all U.S. Government
users acquire the Software with only those rights set forth herein. |
| |
GreenPay’s Initial: |
BMS |
| greenpay authorized reseller agreement by and between greenpay, llc and maverick bankcard, llc |
|
| |
Reseller’s Initial: |
AG |
GreenPay
Authorized Reseller Agreement
IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed by their duly authorized officers as of the date and year indicated above.
| Accepted: Maverick Bankcard, Inc. |
|
Accepted: |
|
| Reseller |
|
GreenPay |
|
| |
|
|
|
| /s/ Alan Griefer |
|
/s/ Bruce M.
Smith |
| Signature |
|
Signature |
|
| |
|
|
|
| CEO |
|
CFO |
| Title |
|
Title |
|
| |
|
|
|
| |
|
|
| |
|
2600 E. Bidwell, Suite 140 |
| 28720 Roadside Drive, Suite
101 |
|
Folsom, CA 95628 |
|
| |
|
|
|
| Agoura Hills, CA 91301 |
|
www.GrnPay.com |
|
| |
|
|
|
| |
|
Customer.Support@GrnPay.com |
| |
|
|
|
| |
|
Date of Agreement: |
11/5/2014 |
| |
|
|
|
| |
|
Effective Date: |
|
| |
GreenPay’s Initial: |
BMS |
exhibit 10.43 - greenpay authorized reseller agreement by and between greenpay, llc and maverick bankcard,
llc
|
|
| |
Reseller’s Initial: |
AG |
GreenPay Authorized Reseller Agreement
Exhibit A
Fees and Revenue Sharing
The basic tenet of this Agreement and the
marketing efforts between the Parties is the delivery of a mobile payment solution for the legal marijuana dispensaries. A marketing
and sales plan will be developed, and a program put into place that will initially target the existing customers of the Parties.
Follow-on program will target new customers.
Billing and collections will be determined
based upon the final product(s) sold and will be detailed as a modification to this Exhibit A.
Shared Fees:
| · | The Consumer will be charged a fee of 3.95 percent (3.95%) of the funds loaded to their mobile account. |
| · | The Merchant may be charged a fee as determined by Reseller. |
| · | Additional fees as mutually determined over time. |
Revenue Sharing:
A critical piece of this Agreement is the
revenue sharing models outlined below:
| · | Net revenue from the Consumer fees listed above are shared three ways: |
| o | One Third to Contractors |
| · | Gross Revenue from the Reseller’s Merchant fees listed above are shared |
two ways:
Gross revenue is a factor of the Total Gross
Revenue received by GreenPay arising out of the Products and related services sold to the Merchants by Reseller.
Additional Un-shared Fees / Revenue:
In addition, the Reseller may add up to an additional one percent
to the fees changed to the Consumer which are not a part of the revenue sharing model. This one percent is exclusive
for the Reseller.
In addition, GreenPay will charge a fixed transaction fee
of 25 cents ($0.25) to the Merchant for each transaction which are not a part of the revenue sharing model. This fee is
exclusive for GreenPay.
| |
GreenPay’s Initial: |
BMS |
exhibit 10.43 - greenpay authorized reseller agreement by and between greenpay, llc and maverick bankcard,
llc
|
|
| |
Reseller’s Initial: |
AG |
Exhibit 10.44
MyECheck Services Agreement
This Service Agreement, along with
the attached Exhibits (collectively known as the “Agreement”), is made and entered by and between the company and/or
individual listed below, with a place of business within the United States of America (hereinafter referred to as “the
Customer”), and MyECheck, Inc., a Wyoming Corporation, with principal offices within the State of California, (hereinafter
referred to as “MyECheck”), all or each of which shall also hereinafter be referred to as the “party”
or “parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas the Customer is engaged in payment acceptance; |
| C. | The Service Documentation described
below contains the terms under which MyECheck has agreed to provide Services to the Customer. |
| D. | MyECheck has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby mutually agree that:
1. Service
Documentation. The “Service Documentation” includes;
| (a) | This
Agreement includes Three Exhibits, and may include additional price schedules, addendums,
and/or attachments; |
| (b) | User
guides, which may include software (APIs), and software licenses, if applicable, specifications,
instructions, and notices; |
| (c) | Third
party application form(s) for any desired supplemental services. |
The Service Documentation also applies
to any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of the
Customer. “MyECheck” includes each such affiliate, and “Customer” includes each such affiliate and subsidiary.
All terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict
among the documents that make up the Service Documentation, the documents will govern in the order set forth above. Customer acknowledges
receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time
upon 30 days prior written notification. If Customer discontinues using the affected Service before the change becomes effective,
it will not be bound by the change. If Customer continues to use a Service after the change becomes effective, it will be
bound by the change.
| |  |
| | 1 | Page |
MyECheck Services Agreement
3.
Term and Termination. Unless terminated sooner in
accordance with the Service Documentation, this Agreement and all Services will continue in effect until terminated by either
party upon 30 days prior written notice to the other party. MyECheck may terminate any Service following notice to Customer of
a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to Customer if
Customer is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise unable to
make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change has occurred
in Customer’s ability to perform its obligations under the Service Documentation. The termination of a Service will not
affect Customers or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall not
be liable to Customer for any losses or damages Customer may incur as a result of any termination of any Service.
4.
Service Fees. Customer shall pay MyECheck the fees
described in the Service Documentation. You hereby authorize MyECheck to create remotely created checks drawn from Customer’s
checking account(s), and use the checks to collect all fees and charges, or it may send an invoice to Customer for such amounts,
which Customer shall promptly pay. MyECheck may assess finance charges at a rate of 1.5% per month (18% per annum) or the highest
rate permitted by law, whichever is less, on any invoiced fees that are not paid within thirty (30) days of the due date and shall
apply payments and other reductions of amounts owed first to unpaid interest and then to other fees and charges.
5.
Confidential Information. Unless otherwise provided
in the Service Documentation, all user guides and other written materials, source code, object code, trademarks and other intellectual
property included in the Service Documentation provided pursuant to this Agreement constitute MyECheck’s or its vendors’
confidential information (“Confidential Information”). MyECheck or its vendors, as applicable, will remain the sole
owner of all such Confidential Information, and Customer will not acquire any interest in or rights to it as a result of Customer’s
use of any Service except as set forth in the Service Documentation. Customer will maintain the confidentiality of the Confidential
Information and will not use for any purpose (other than as specifically contemplated by this Agreement) or disclose (or permit
its employees or agents to disclose), copy, transfer, sublicense or otherwise make any of it available to any person or entity,
other than its employees who have a need to use the Confidential Information in connection with the applicable Service. Customer
shall notify MyECheck immediately if it knows or suspects that there has been any unauthorized disclosure, possession, use or
knowledge (each, an “Unauthorized Use”) of any Confidential Information, and if it is responsible for the Unauthorized
Use, it will, at its expense, promptly take all actions, including without limitation initiating court proceedings to recover
possession or prevent further Unauthorized Use of the Confidential Information and obtain redress for any injury caused to MyECheck
as a result of such Unauthorized Use. In addition, except as permitted by applicable law, Customer may not decompile, reverse
engineer, disassemble, modify, or create derivative works of any software provided pursuant to this Agreement.
| | |
| | 2 | Page |
MyECheck Services Agreement
6.
Third Party Networks; Use of Required Software. If
MyECheck determines that any funds transfer or communications network, Internet service provider, or other system(s) it has selected
to provide a Service is unavailable, inaccessible or otherwise unsuitable for use by MyECheck or Customer, MyECheck may, upon
notice to Customer, suspend or discontinue the affected Service. Customer shall use and maintain in good working order (and at
its own expense) software, hardware and other equipment necessary for Customer to use the Service(s) in accordance with the Service
Documentation.
7.
NO REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS.
NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES
OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH IN THE SERVICE DOCUMENTATION.
8.
Liability and Indemnification.
(d)
MyECheck is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction
or instruction (each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with
MyECheck related to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service
Documentation or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and
make available to Customer; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for
its or Customer’s protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their
withdrawal; or (iv) could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal
or state regulatory authority, including without limitation any Federal Reserve risk control program or guidelines such as the
limitations on MyECheck’s intra-day net funds position.
(e)
Customer shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third
party claim related to a Service. Customer shall cooperate fully (and at its own expense) with MyECheck in recovering a loss.
If Customer is reimbursed by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Customer.
(f)
Any claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s
honoring or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or
in the case of a check from the date the check was first paid or returned by MyECheck.
(g)
MyECheck will have no liability for failure to perform or delay in performing a Service if the failure or delay is due
to circumstances beyond MyECheck’s reasonable control.
| | |
| | 3 | Page |
MyECheck
Services Agreement
(h)
Except in the case of MyECheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyECheck,
its directors, officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service
in accordance with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third
party in connection with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or
(iii) if the Service includes a license or sublicense of any software to Customer, the use or distribution of the software by
Customer or any person gaining access to the software through Customer that is inconsistent with the license or sublicense.
(i)
MYECHECK WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE
OR MATERIAL BREACH OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT
OF THE FEES ACTUALLY PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH
LOSS OR DAMAGES WERE INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES
OR DAMAGES WERE INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL (INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER
ANY CLAIM IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS
OF THE FORM OF THE CLAIM OR ACTION.
9. General.
(j)
The Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws
principles. In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree
that such action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that
the parties hereby submit to the jurisdiction and venue of said court.
(k)
Any portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed
modified and applied in a manner consistent therewith, and MyECheck will incur no liability to Customer as a result of the inconsistency
or modification and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise
affect the enforceability or validity of the Service Documentation.
(l)
The Service Documentation is the entire agreement between MyECheck and Customer and supersedes all prior representations,
conditions, warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right
on one occasion will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(m)
Customer agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information
pertaining to Customer’s financial condition or any previously unprepared financial statements which MyECheck may require
Customer to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
| | |
| | 4 | Page |
MyECheck Services Agreement
(n)
Customer expressly warrants that a Service will not be used in a manner which violates any US federal or state law including
without limitation any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(o)
Sections 4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(p)
Either party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall
use the most recent address for Customer in MyECheck’s records, and any notice from MyECheck will be effective when sent.
Customer shall use the address where Customer’s relationship manager is located and address any notice to the attention
of such manager. Any notice from Customer will be effective when actually received by MyECheck. MyECheck will be entitled to rely
on any notice from Customer that it believes in good faith was authorized by an authorized representative of Customer and, except
as expressly stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature).
Each party will have a reasonable time after receipt of any notice to act on it.
(q)
All uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Customer assumes the
entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(r)
Customer may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s
prior written consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor
by merger, consolidation or corporate reorganization.
(s)
Unless otherwise provided in the Service Documentation, the term “Business Day” means that part of a business
day occurring prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(t)
The parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(u) Customer authorizes MyECheck to
issue a press release, which may contain Customer’s stock ticker symbol; that describes the nature of the relationship between
MyECheck and Customer.
| | |
| | 5 | Page |
MyECheck Services Agreement
(v) This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
(w) This Agreement may be executed
as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | |
| | 6 | Page |
MyECheck
Services Agreement
IN WITNESS WHEREOF, the parties have entered into this
Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyECheck |
| |
|
|
| /s/ Vicent Petrescu |
|
/s/ Ed Starrs |
| Signature |
|
Signature |
| |
|
|
| Company Name: |
|
MyECheck, Inc. |
| |
|
Ed Starrs |
| truCrowd Texas, Inc. |
|
President/CEO |
| |
|
|
| |
|
2600 E. Bidwell Street |
| Individual Name: |
|
Folsom, CA 95630 |
| |
|
|
| Vicent Petrescu - CEO |
|
www.MyECheck.com |
| |
|
(844) MyECheck (844-693-2432) |
| |
|
Support@MyECheck.com |
| Title: |
CEO |
|
|
| Principal Address: |
|
Date of Agreement: |
1/21/2015 |
| |
|
|
|
| 10333 Harwin Dr |
|
Effective Date: |
|
| |
|
|
| |
|
|
| Ste 460G |
|
|
| |
|
|
| |
|
|
| Houston, TX 77036 |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| | |
| | 7 | Page |
MyECheck Services Agreement
Exhibit A
Services and Fees
Basic Services
MyECheck will provide fully electronic
check services to Customer. MyECheck will receive data transmissions from Customer and will use the data to create and process
fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits into Customer
account(s), and for transfers out of Customer accounts.
This basic service enables the Customer
to verify their user provided data, check the status of their bank account, prove the transaction is authorized, and predict the
probability of most problems before the transaction is approved and processed for deposit.
Check 21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.25 | |
| | |
| | |
| 500,001 - 999,999 | |
$ | 0.20 | |
| | |
| | |
| 1,000,000 and more | |
$ | 0.15 | |
Available Supplemental
Services
Scrub Services, like the Basic Check 21 Service,
generates a check image and pushes it to your bank for payment. It offers minimal financial verification. Transactions are immediately
and automatically evaluated and approved or declined based upon the real time results of multiple fraud control tools and database
searches. For example, it will check the payee against a database of known bad check writers and verify that the account is open
and in good standing.
Guarantee Services, like the Basic Check 21
and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating transaction data,
you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the returned item for
its full face value.
These services are available for additional
fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | |
| | 8 | Page |
MyECheck Services Agreement
Exhibit B
Supplemental Consulting
Services
1. STATEMENT
OF WORK. MyECheck may render services, working individually or with the Customer and/or third parties retained
by Customer, (the "Consulting Services") to Customer on a time and materials basis as may be agreed upon in a written
Statement of Work signed by both parties. No Supplemental Consulting Services will be performed until such time as a duly authorized
Statement of Work is prepared and approved by all Parties.
2. PROJECT
ADMINISTRATION. The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide
MyECheck all assistance and guidance reasonably requested by MyECheck for the performance of the Consulting Services. Customer
acknowledges that the timely performance of the Consulting Services is dependent both on reasonable access to and assistance by
Customer, including the Customer Technical Contact. MyECheck acknowledges that the success of Customer's business shall depend
on MyECheck's ability to provide the Consulting Services on a timely basis in accordance with the dates specified by Customer,
and shall use all reasonable efforts to complete all Services efficiently and on or ahead of schedule
3. COMPENSATION.
MyECheck shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties.
Customer shall also reimburse MyECheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing
the Consulting Services. MyECheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense
reimbursements due MyECheck. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice.
The parties agree that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be conducted
on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation of a Statement
of Work.
| |
|
| Hourly (Subject to Scheduling and Availability): |
$125.00/Hour |
4. THIRD
PARTY SOFTWARE. Customer acknowledges that in order for MyECheck to perform the Consulting Services, Customer may need
to obtain additional third party services ("Third Party Services") or third party technology ("Third Party Technology").
Customer agrees that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms
set forth in the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software
or Third Party Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect
to any Third Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such
agreements are the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service
providers.
| | |
| | 9 | Page |
MyECheck
Services Agreement
5. LICENSE
TO Customer MATERIALS. Customer acknowledges that in order to perform the Services, MyECheck may require
access to and use of certain software or other materials of Customer or Customer's suppliers (including access to code relating
to the Software or that may effect the performance of the Software) ("Customer Materials"). Customer grants to MyECheck
a royalty-free, non-exclusive license to access and use the Customer Materials (including through subcontractors) as required
for MyECheck's performance of the Services hereunder.
6. RIGHTS
AND OWNERSHIP. To the extent that any modification, enhancement, extension, interface or derivative work
to any MyECheck Software or any other deliverable that is produced through the Consulting Services, Customer shall have the same
usage rights in such as Customer has currently has. Customer acknowledges and agrees that other than any Third Party Software
or any Customer Materials or Software, MyECheck continues to own all computer programs, utilities and intellectual property which
aid MyECheck in performing the Consulting Services or which are produced as a result of these Services.
7. INDEPENDENT
CONTRACTORS. MyECheck agrees that it shall be considered an independent contractor and that it shall not
be deemed to be an employee of Customer. MyECheck and its employees, agents and contractors performing services hereunder shall
not be entitled to any employee benefits of Customer.
8. PROJECT
PRICING AND EXPENSES. MyECheck shall incur all reasonable expenses in the performance of the services contained
herein including but not limited to contractors and consultants used for software development, testing, quality assurance and
deployment during the term of this agreement.
From time to time
there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained herein, any
single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or it shall not
be deemed a reimbursable expense.
9. BILLING
SCHEDULE. Billing is monthly and payment is due upon receipt of bill for services provided the prior month.
Payments will be processed and collected from the Customer as a Check 21 item (no fee to Customer).
MyECheck reserves
the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue to
make timely payment of fees and expenses due hereunder.
10. NON-SOLICITATION
OF EMPLOYEES. During the term of this Agreement and for a period of one (1) year following completion of
any work hereunder, neither party shall solicit employment of any current or prior employee of the other.
11. ATTACHMENTS.
Any Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | |
| | 10 | Page |
MyECheck Services Agreement
Exhibit C
Attached as Exhibit C, will be a completed
New Merchant Integration Information form. This form must be completed and submitted to MyECheck in a timely manner. Customer
bank integration typically takes between four and six weeks. This process cannot begin until this form has been completed and
delivered. It will be the Customer’s responsibility to direct their bank to work with MyECheck in order to facilitate the
Check 21 deposits. MyECheck will not be responsible for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant
Integration Information Form, MyECheck will provide the Customer with a Customer Service Contact. This individual will work with
the Customer and their bank in order to complete the integration process.
In is understood by all parties that
the contact individuals provide by the Customer and MyECheck are free to exchange any and all needed information in order to execute
the terms and conditions of this Service Agreement.
| | |
| | 11 | Page |
Exhibit 10.45
MyECheck Services Agreement
This Service Agreement,
along with the attached Exhibits (collectively known as the “Agreement”), is made and entered by and between Lucid
Integrated Systems with a place of business within the United States of America (hereinafter referred to as “the Customer”),
and MyECheck, Inc., a Wyoming Corporation, with principal offices within the State of California, (hereinafter referred
to as “MyECheck”), all or each of which shall also hereinafter be referred to as the “party” or “parties”
respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas the Customer is engaged in payment acceptance; |
| C. | The Service Documentation described below contains the terms under which MyECheck has agreed to provide Services to the Customer. |
| D. | MyECheck has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby mutually agree that:
1. Service
Documentation. The “Service Documentation” includes;
(a) This Agreement includes Three Exhibits, and may include additional price schedules, addendums, and/or attachments;
(b) User
guides, which may include software (APIs), and software licenses, if applicable, specifications, instructions, and notices;
(c) Third
party application form(s) for any desired supplemental services.
The Service Documentation
also applies to any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary
of the Customer. “MyECheck” includes each such affiliate, and “Customer” includes each such affiliate and
subsidiary. All terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is
a conflict among the documents that make up the Service Documentation, the documents will govern in the order set forth above.
Customer acknowledges receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change
| | 1 | Page |
MyECheck Services Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyECheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyECheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law, becomes
insolvent or is otherwise unable to make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that
a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyECheck’s rights with respect to transactions which occurred before
termination. MyECheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyECheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyECheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and charges,
or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyECheck may assess finance charges
at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that
are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid
interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not acquire any
interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service Documentation.
Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Customer shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Customer, MyECheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer shall
use and maintain in good wrking order (and at its own expense) software, hardware and other equipment necessary for Customer to
use the Service(s) in accordance with the Service Documentation.
7. NO REPRESENTATIVES
OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS OR IMPLIED REPRESENTATIONS
OR WARRANTIES WITH RESPECT TO THE SERVICS OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING WITHOUT LIMITATION ANY
WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH IN THE SERVICE DOCUMENTATION.
| | 2 | Page |
MyECheck Services Agreement
8. Liability and Indemnification.
(d) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Customer; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(e) Customer
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Customer shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Customer is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Customer.
(f) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(g) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(h) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or (iii) if the Service
includes a license or sublicense of any software to Customer, the use or distribution of the software by Customer or any person
gaining access to the software through Customer that is inconsistent with the license or sublicense.
(i) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL
BREACH OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES
ACTUALLY PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR
DAMAGES WERE INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR
DAMAGES WERE INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL (INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER
ANY CLAIM IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS
OF THE FORM OF THE CLAIM OR ACTION.
9. General
(j) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
| | 3 | Page |
MyECheck Services Agreement
(k) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified
and applied in a manner consistent therewith, and MyECheck will incur no liability to Customer as a result of the inconsistency
or modification and application. If any portion of the Service
Documentation is deemed unenforceable or invalid,
it will not otherwise affect the enforceability or validity of the Service Documentation.
(l) The
Service Documentation is the entire agreement between MyECheck and Customer and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(m) Customer
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which MyECheck may require Customer to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(n) Customer
expressly warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(o) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(p) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Customer in MyECheck’s records, and any notice from MyECheck will be effective when sent. Customer shall
use the address where Customer’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Customer will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice
from Customer that it believes in good faith was authorized by an authorized representative of Customer and, except as expressly
stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each
party will have a reasonable time after receipt of any notice to act on it.
(q) All
uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Customer assumes the
entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(r) Customer
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior
written consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by
merger, consolidation or corporate reorganization.
(s) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(t) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(u) Customer authorizes MyECheck to issue a press release, which
may contain Customer’s stock ticker symbol; that describes the nature of the relationship between MyECheck and Customer.
| | 4 | Page |
MyECheck Services Agreement
(v) This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
(w) This Agreement may be executed as a faxed or
electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyECheck Services Agreement
IN WITNESS WHEREOF, the
parties have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
|
| Customer |
|
MyECheck |
|
| |
|
|
|
/s/ Jeremiah Pierquet
|
|
/s/ Ed Starrs |
|
| Signature |
|
Signature |
|
| |
|
|
|
| Company Name: |
|
MyECheck, Inc. |
|
| |
|
Ed Starrs |
|
| Lucid
Integrated Systems |
|
President & CEO |
|
| |
|
|
|
| Individual Name: |
|
2600 East Bidwell Street,
Suite 140 |
| |
|
Folsom, California 95630 |
Jeremiah
Pierquet |
|
|
|
| |
|
|
www.MyECheck.com |
|
| Title: |
President |
|
844-MyECheck (844-693-2432) |
| |
|
Customer.Support@MyECheck.com |
| |
|
|
|
| Principal Address: |
|
Date of Agreement: |
1/08/15 |
| |
|
|
|
| 760
Riverside Avenue |
|
Effective Date: |
|
| |
|
|
|
| Suamico,
WI 54173 |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| | 6 | Page |
MyECheck Services Agreement
Exhibit A
Services and Fees
Basic Services
MyECheck will provide
fully electronic check services to Customer. MyECheck will receive data transmissions from Customer and will use the data to create
and process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits
into Customer account(s), and for transfers out of Customer accounts.
This basic service enables
the Customer to verify their user provided data, check the status of their bank account, prove the transaction is authorized, and
predict the probability of most problems before the transaction is approved and processed for deposit.
Check 21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.25 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.20 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.15 | |
Available Supplemental
Services
Scrub Services, like the Basic Check 21
Service, generates a check image and pushes it to your bank for payment. It offers minimal financial verification. Transactions
are immediately and automatically evaluated and approved or declined based upon the real time results of multiple fraud control
tools and database searches. For example, it will check the payee against a database of known bad check writers and verify that
the account is open and in good standing.
Guarantee Services, like the Basic Check
21 and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating transaction data,
you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the returned item for
its full face value.
These services are available for additional
fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyECheck Services Agreement
Exhibit B
Supplemental Consulting
Services
1. STATEMENT
OF WORK. MyECheck may render services, working individually or with the Customer and/or third parties retained by
Customer, (the "Consulting Services") to Customer on a time and materials basis as may be agreed upon in a written Statement
of Work, which will become a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as
a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT ADMINISTRATION.
The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyECheck all assistance and guidance
reasonably requested by MyECheck for the performance of the Consulting Services. Customer acknowledges that the timely performance
of the Consulting Services is dependent both on reasonable access to and assistance by Customer, including the Customer Technical
Contact. MyECheck acknowledges that the success of Customer's business shall depend on MyECheck’s ability to provide the
Consulting Services on a timely basis in accordance with the dates specified by Customer, and shall use all reasonable efforts
to complete all Services efficiently and on or ahead of schedule
3. COMPENSATION.
MyECheck shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer
shall also reimburse MyECheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the Consulting
Services. MyECheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements
due MyECheck. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree
that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be conducted
on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation of a Statement
of Work.
| Hourly (Subject to Scheduling and Availability): |
$125.00/Hour |
4. THIRD PARTY SOFTWARE.
Customer acknowledges that in order for MyECheck to perform the Consulting Services, Customer may need to obtain additional third
party services ("Third Party Services") or third party technology ("Third Party Technology"). Customer agrees
that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms set forth in
the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software or Third Party
Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect to any Third
Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such agreements are
the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service providers.
| | 8 | Page |
MyECheck Services Agreement
5. LICENSE TO Customer
MATERIALS. Customer acknowledges that in order to perform the Services, MyECheck may require access to and use of certain
software or other materials of Customer or Customer's suppliers (including access to code relating to the Software or that may
affect the performance of the Software) ("Customer Materials"). Customer grants to MyECheck a royalty-free, non-exclusive
license to access and use the Customer Materials (including through subcontractors) as required for MyECheck’s performance
of the Services hereunder.
6. RIGHTS AND OWNERSHIP.
To the extent that any modification, enhancement, extension, interface or derivative work to any MyECheck Software or any other
deliverable that is produced through the Consulting Services, Customer shall have the same usage rights in such as Customer has
currently has. Customer acknowledges and agrees that other than any Third Party Software or any Customer Materials or Software,
MyECheck continues to own all computer programs, utilities and intellectual property which aid MyECheck in performing the Consulting
Services or which are produced as a result of these Services.
7. Independent
Contractors. MyECheck agrees that it shall be considered an independent contractor and that it shall not be deemed
to be an employee of Customer. MyECheck and its employees, agents and contractors performing services hereunder shall not be entitled
to any employee benefits of Customer.
8.
Project Pricing and Expenses. MyECheck
shall incur all reasonable expenses in the performance of the services contained herein including but not limited to contractors
and consultants used for software development, testing, quality assurance and deployment during the term of this agreement.
From time to time there
may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained herein, any single
expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or it shall not be deemed
a reimbursable expense.
9.
Billing schedule. Billing is monthly
and payment is due upon receipt of bill for services provided the prior month. Payments will be processed and collected from the
Customer as a Check 21 item (no fee to Customer).
MyECheck reserves the right
to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue to make timely
payment of fees and expenses due hereunder.
10.
Non-Solicitation of Employees. During
the term of this Agreement and for a period of one (1) year following completion of any work hereunder, neither party shall solicit
employment of any current or prior employee of the other.
11. ATTACHMENTS. Any Statement of Work(s) will
be attached and will become a part of this Service Agreement.
| | 9 | Page |
MyECheck Services Agreement
Exhibit C
Attached as Exhibit C, will be a completed
New Merchant Integration Information form. This form must be completed and submitted to MyECheck in a timely manner. Customer bank
integration typically takes between four and six weeks. This process cannot begin until this form has been completed and delivered.
It will be the Customer’s responsibility to direct their bank to work with MyECheck in order to facilitate the Check 21 deposits.
MyECheck will not be responsible for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant Integration
Information Form, MyECheck will provide the Customer with a Customer Service Contact. This individual will work with the Customer
and their bank in order to complete the integration process.
In is understood by all parties that the
contact individuals provide by the Customer and MyECheck are free to exchange any and all needed information in order to execute
the terms and conditions of this Service Agreement.
| | 10 | Page |
Exhibit 10.46
MyEcheck Services
Agreement
This Service Agreement,
along with the attached Exhibits (collectively known as the “Agreement”), is made and entered by and between the
company and/or individual listed below, with a place of business within the United States of America (hereinafter referred
to as “the Customer”), and MyECheck, Inc., a Wyoming Corporation, with principal offices within the State of California,
(hereinafter referred to as “MyECheck”), all or each of which shall also hereinafter be referred to as the “party”
or “parties” respectively, and is effectively on the date listed below.
RECITALS
| A. | Whereas
MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas
the Customer is engaged in payment acceptance; |
| C. | The
Service Documentation described below contains the terms under which MyECheck has agreed
to provide Services to the Customer. |
| D. | MyECheck
has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby
mutually agree that:
1. Service
Documentation. The “Service Documentation” includes;
| (a) | This
Agreement includes Three Exhibits, and may include additional price schedules, addendums,
and/or attachments; |
| (b) | User
guides, which may include software (APIs), and software licenses, if applicable, specifications,
instructions, and notices; |
| (c) | Third
party application form(s) for any desired supplemental services. |
The Service Documentation
also applies to any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary
of the Customer. “MyECheck” includes each such affiliate, and “Customer” includes each such affiliate
and subsidiary. All terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there
is a conflict among the documents that make up the Service Documentation, the documents will govern in the order set forth above.
Customer acknowledges receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days
prior written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not
be bound by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change
| | 1 | Page |
MyEcheck Services
Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyECheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyECheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law,
becomes insolvent or is otherwise unable to make its debts when due, or if MyECheck otherwise determines, in its sole discretion,
that a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyECheck’s rights with respect to transactions which occurred
before termination. MyECheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyECheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyECheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and
charges, or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyECheck may assess finance
charges at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees
that are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first
to unpaid interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this
Agreement constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”).
MyECheck or its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not
acquire any interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service
Documentation. Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other
than as specifically contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer,
sublicense or otherwise make any of it available to any person or entity, other than its employees who have a need to use the
Confidential Information in connection with the applicable Service. Customer shall notify MyECheck immediately if it knows or
suspects that there has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”)
of any Confidential Information, and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all
actions, including without limitation initiating court proceedings to recover possession or prevent further Unauthorized Use of
the Confidential Information and obtain redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition,
except as permitted by applicable law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative
works of any software provided pursuant to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Customer, MyECheck may, upon notice to Customer, suspend or discontinue the affected Service. Customer
shall use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Customer
to use the Service(s) in accordance with the Service Documentation.
| | 2 | Page |
MyEcheck Services
Agreement
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET
FORTH IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(d) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Customer; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(e) Customer
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Customer shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Customer is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Customer.
(f) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(g) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(h)
Except in the case of MyECheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyECheck,
its directors, officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service
in accordance with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third
party in connection with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or
(iii) if the Service includes a license or sublicense of any software to Customer, the use or distribution of the software by
Customer or any person gaining access to the software through Customer
that is inconsistent with the license or sublicense.
| | 3 | Page |
MyEcheck Services
Agreement
(i) MYECHECK WILL ONLY BE
LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH OF THIS
AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY PAID
BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE INCURRED
(OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE INCURRED).
IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL (INCLUDING
WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM IS BASED
ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF THE FORM
OF THE CLAIM OR ACTION.
9. General.
(j) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(k) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified
and applied in a manner consistent therewith, and MyECheck will incur no liability to Customer as a result of the inconsistency
or modification and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise
affect the enforceability or validity of the Service Documentation.
(l) The
Service Documentation is the entire agreement between MyECheck and Customer and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(m) Customer
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which MyECheck may require Customer
to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(n) Customer
expressly warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(o) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(p)
Either party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use
the most recent address for Customer in MyECheck’s records, and any notice from MyECheck will be effective when sent. Customer
shall use the address where Customer’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Customer will be effective when actually received by MyECheck.
MyECheck will be entitled to rely on any notice from Customer that it believes in good faith was authorized by an authorized representative
of Customer and, except as expressly stated in the Service Documentation, shall have no obligation to verify the signature (including
an electronic signature). Each party will have a reasonable time after receipt of any notice to act on it.
| | 4 | Page |
MyEcheck Services
Agreement
(q) All
uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Customer assumes the
entire risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(r) Customer
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior
written consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by
merger, consolidation or corporate reorganization.
(s) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(t) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer authorizes
MyECheck to issue a press release, which may contain Customer’s stock ticker symbol; that describes the nature of the relationship
between MyECheck and Customer.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n) This Agreement may
be executed as a faxed or electronically scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyEcheck Services
Agreement
IN WITNESS WHEREOF,
the parties have entered into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
| Customer |
|
MyECheck |
| |
|
|
| /s/ Josee
Brisebois |
|
/s/ Ed Starrs |
| Signature |
|
Signature |
| |
|
|
| Company Name: |
|
MyECheck, Inc. |
| |
|
Ed Starrs |
| Boss
Tech Support, LLC |
|
President/CEO |
| |
|
|
| Individual Name: |
|
2600 East Bidwell Street |
| |
|
Folsom, California 95630 |
| Josee
Brisebois |
|
|
| |
|
www.MyECheck.com |
| Title: |
CEO |
|
844-MyECheck (844-693-2432) |
| |
|
|
Support@MyECheck.com |
| Principal Address: |
|
Date of Agreement:
|
2/13/2015 |
| 4846
N. University Dr. #272 |
|
Effective Date: |
|
| |
|
|
| Lauderhill,
FL 33351 |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| | 6 | Page |
MyEcheck Services
Agreement
Exhibit
A
Services
and Fees
Basic
Services
MyECheck will
provide fully electronic check services to Customer. MyECheck will receive data transmissions from Customer and will use the data
to create and process fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for
deposits into Customer account(s), and for transfers out of Customer accounts.
This basic service
enables the Customer to verify their user provided data, check the status of their bank account, prove the transaction is authorized,
and predict the probability of most problems before the transaction is approved and processed for deposit.
Check 21 Service
Fees
Total
Transactions
per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.65 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.65 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.65 | |
Available
Supplemental Services
Scrub Services, like the Basic Check
21 Service, generates a check image and pushes it to your bank for payment. It offers minimal financial verification. Transactions
are immediately and automatically evaluated and approved or declined based upon the real time results of multiple fraud control
tools and database searches. For example, it will check the payee against a database of known bad check writers and verify that
the account is open and in good standing.
Guarantee Services, like the Basic
Check 21 and Scrub Services, generates a check image and pushes it to your bank for payment. In addition to validating transaction
data, you are insured if the item is returned unpaid. When a payee defaults, the check guarantee provider buys the returned item
for its full face value.
These services are available for
additional fees. For more information, please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyEcheck Services
Agreement
Exhibit
B
Supplemental
Consulting Services
1. STATEMENT
OF WORK. MyECheck may render services, working individually or with the
Customer and/or third parties retained by Customer, (the "Consulting Services") to Customer on a time and materials
basis as may be agreed upon in a written Statement of Work, which will become a part of this Agreement. No Supplemental Consulting
Services will be preformed until such time as a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT
ADMINISTRATION. The Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyECheck
all assistance and guidance reasonably requested by MyECheck for the performance of the Consulting Services. Customer acknowledges
that the timely performance of the Consulting Services is dependent both on reasonable access to and assistance by Customer, including
the Customer Technical Contact. MyECheck acknowledges that the success of Customer's business shall depend on MyECheck’s
ability to provide the Consulting Services on a timely basis in accordance with the dates specified by Customer, and shall use
all reasonable efforts to complete all Services efficiently and on or ahead of schedule
3. COMPENSATION.
MyECheck shall be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer
shall also reimburse MyECheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the
Consulting Services. MyECheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements
due MyECheck. Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree
that Customer shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be
conducted on an hourly fee basis and billed per the rate listed below. Rates are subject to change prior to the preparation of
a Statement of Work.
| Hourly (Subject to Scheduling
and Availability): |
$125.00/Hour |
4. THIRD PARTY
SOFTWARE. Customer acknowledges that in order for MyECheck to perform the Consulting Services, Customer may need to obtain
additional third party services ("Third Party Services") or third party technology ("Third Party Technology").
Customer agrees that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms
set forth in the pertinent purchase, license or services agreements between Customer and the vendors of such Third Party Software
or Third Party Services. Customer shall execute and comply with appropriate purchase, license, or services agreements with respect
to any Third Party Software or Third Party Services. Any amounts payable to third party vendors or service providers under such
agreements are the sole responsibility of Customer and shall be paid directly by Customer to such third party vendors or service
providers.
| | 8 | Page |
MyEcheck Services
Agreement
5. LICENSE
TO Customer MATERIALS. Customer acknowledges that in order to perform the Services, MyECheck may require access to and
use of certain software or other materials of Customer or Customer's suppliers (including access to code relating to the Software
or that may affect the performance of the Software) ("Customer Materials"). Customer grants to MyECheck a royalty-free,
non-exclusive license to access and use the Customer Materials (including through subcontractors) as required for MyECheck’s
performance of the Services hereunder.
6. RIGHTS
AND OWNERSHIP. To the extent that any modification, enhancement, extension, interface or derivative work to any MyECheck
Software or any other deliverable that is produced through the Consulting Services, Customer shall have the same usage rights
in such as Customer has currently has. Customer acknowledges and agrees that other than any Third Party Software or any Customer
Materials or Software, MyECheck continues to own all computer programs, utilities and intellectual property which aid MyECheck
in performing the Consulting Services or which are produced as a result of these Services.
7. Independent
Contractors. MyECheck agrees that it shall be considered an independent contractor and that it shall not be deemed
to be an employee of Customer. MyECheck and its employees, agents and contractors performing services hereunder shall not be entitled
to any employee benefits of Customer.
8. Project
Pricing and Expenses. MyECheck shall incur all reasonable expenses in the performance of the services contained
herein including but not limited to contractors and consultants used for software development, testing, quality assurance and
deployment during the term of this agreement.
From time to time
there may be a need for Customer to incur certain expenses. Notwithstanding anything else to the contrary contained herein, any
single expense in excess of two hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or it shall not
be deemed a reimbursable expense.
9. Billing
schedule. Billing is monthly and payment is due upon receipt of bill for services provided the prior month. Payments
will be processed and collected from the Customer as a Check 21 item (no fee to Customer).
MyECheck reserves
the right to discontinue the provision of services under the Statement of Work in the event that Customer fails to continue to
make timely payment of fees and expenses due hereunder.
10. Non-Solicitation
of Employees. During the term of this Agreement and for a period of one (1) year following completion of any work
hereunder, neither party shall solicit employment of any current or prior employee of the other.
11. ATTACHMENTS. Any
Statement of Work(s) will be attached and will become a part of this Service Agreement.
| | 9 | Page |
MyEcheck Services
Agreement
Exhibit
C
Attached as Exhibit C, will be a
completed New Merchant Integration Information form. This form must be completed and submitted to MyECheck in a timely manner.
Customer bank integration typically takes between four and six weeks. This process cannot begin until this form has been completed
and delivered. It will be the Customer’s responsibility to direct their bank to work with MyECheck in order to facilitate
the Check 21 deposits. MyECheck will not be responsible for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant
Integration Information Form, MyECheck will provide the Customer with a Customer Service Contact. This individual will work with
the Customer and their bank in order to complete the integration process.
In is understood by all parties
that the contact individuals provide by the Customer and MyECheck are free to exchange any and all needed information in order
to execute the terms and conditions of this Service Agreement.
| | 10 | Page |
Exhibit 10.47
MyECheck
Services Agreement
This Services Agreement (this
“Agreement”) dated 2/24 , 2015 is made by and between MyECheck, Inc., a Wyoming corporation whose address
is 2600 East Bidwell Street, Folsom, Suite 190 CA 95630, (“MyECheck”), Vergence Entertainment, LLC whose
address is 655 N. Central Ave., Ste. 1700, Glendale, CA 91203 USA (“Company”).
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas Company is engaged in payment acceptance; and |
| C. | The Service Documentation described below contains the terms under which MyECheck has agreed to provide Services to the Company. |
NOW THEREFORE, MYECHECK AND COMPANY AGREE AS
FOLLOWS:
| 1. | Service Documentation. The “Service
Documentation” includes; |
| (a) | This Agreement and all exhibits, addendums and attachments; |
| (i) | User guides which include software and software licenses if applicable, price schedules,
specifications, instructions, and notices; |
| (b) | The application form(s) for each Service. |
The Service Documentation also applies to any
Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of Company. “MyECheck”
includes each such affiliate, and “Company” includes each such affiliate and subsidiary. All terms defined in this
Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among the documents that make
up the Service Documentation, the documents will govern in the order set forth above. Remaining Service Documents will be delivered,
via e-mail, after receipts of this signed agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Company discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Company continues to use a Service after the change becomes effective, it will be bound by the change.
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party (unless a Service
is terminated sooner in accordance with the Service Documentation). MyECheck may terminate any Service following notice to Company
of a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to Company if
Company is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise unable to
make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change has occurred
in Company’s ability to perform its obligations under the Service Documentation. The termination of a Service will not affect
Companys or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall not be liable
to Company for any losses or damages Company may incur as a result of any termination of any Service.
4. Service
Fees. Company shall pay MyECheck the fees described in Exhibit A of this document. You hereby authorize MyECheck to create
remotely created checks drawn from Company’s checking account(s), and use the checks to collect all fees and charges, or
it may send an invoice to Company for such amounts, which Company shall promptly pay. MyECheck may assess finance charges at a
rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not
paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest
and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Company will not acquire any interest
in or rights to it as a result of Company’s use of any Service except as set forth in the Service Documentation. Company
will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Company shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Company may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Company, MyECheck may, upon notice to Company, suspend or discontinue the affected Service. Company shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Company to
use the Service(s) in accordance with the Service Documentation.
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDOR. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Company’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Company; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Company’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(b) Company
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Company shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Company is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Company.
(c) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(d) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(e) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Company shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Company; or (iii) if the Service
includes a license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining
access to the software through Company that is inconsistent with the license or sublicense.
(f) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
9. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Company as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyECheck and Company and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Company
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Company’s financial condition or any previously unprepared financial statements which MyECheck may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(e) Company
expressly warrants that a Service will not be used in a manner which violates any federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Company in MyECheck’s records, and any notice from MyECheck will be effective when sent. Company shall
use the address where Company’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Company will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice from
Company that it believes in good faith was authorized by an authorized representative of Company and, except as expressly stated
in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each party
will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Company’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Company. Company’s failure to protect Codes may allow an unauthorized party
to (i) use the Services, (ii) access Company’s electronic communications and financial data, and/or (iii) send or receive
information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Company assumes the entire risk
for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Company
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior written
consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Company
authorizes MyECheck to issue a press release, which may contain Company’s stock ticker symbol; that describes the nature
of the relationship between MyECheck and Company.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n)
"Client will not be charged for any test payments sent to our test server. Please note that any payments sent to our production
server will be charged per transaction in real-time."
IN WITNESS WHEREOF, the parties have entered
into this Agreement as of the date first set forth above.
| Agreed: |
|
Accepted: |
| Company |
|
MyECheck |
| |
|
|
|
|
| Signature: |
/s/ B. Wayne Barkley |
|
Signature: |
/s/ Ed Starrs |
| |
|
|
|
| Name: |
B. Wayne Barkley |
|
Ed Starrs |
| |
|
|
|
| Company: |
Vergence Entertainment LLC |
|
MyECheck |
| |
|
|
|
| Title: |
EVP & COO |
|
President/CEO |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
| |
|
|
Signature: |
|
| |
|
|
|
| |
|
|
Jim Fancher |
| |
|
|
|
|
| |
|
|
MyECheck, Inc. |
| |
|
|
|
|
| |
|
|
Executive Vice President/COO |
| |
|
|
|
| |
|
|
Effective Date: |
3/13/15 |
Exhibit A
Levels of Service
1) (Level 1) Basic Electronic Check Service
MyECheck will provide fully electronic
check services to Customer. MyECheck will receive data transmissions from Customer and will use the data to create and process
fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits into Customer
account(s).
Fee
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| 0 – 2,500 | |
$ | 625 per month | |
| 2,501 – 500,000 | |
$ | 0.25 | |
| 500,001 – 999,999 | |
$ | 0.20 | |
| 1,000,000 and more | |
$ | 0.15 | |
2) (Level 2) Check Authorization Service
The MyECheck Check Authorization service is comprised
of 4 unique verification levels that include real time data, negative data, proprietary data, and routing number validation. The
verifications check the transaction data against specific databases that indicate what a paying financial institution is reporting
on the account at the end of the prior day’s processing cycle. The response will tell you if the account is open, valid and
in a positive status, or if the account is not located, and many other responses.’’
| Fee | |
Fee per Transaction |
| Check Authorization Service + Level 1 | |
$0.25 + Level 1 Fee |
3) (Level 3) Basic Electronic Check Service
+ ID
Provides domestic identity verification using
a wide array of reliable consumer data based on a single lookup. Detects discrepancies with an identity to gain better insight
into the risks associated with an ID. It meets compliance regulations for CIP, OFAC, and FFIEC.
| Fees | |
Fee per Transaction |
| +ID + Level 1 | |
$0.49 + Level 1 Fee |
Exhibit 10.48
MyECheck Services Agreement
This Service Agreement, along with the attached
Exhibits (collectively known as the “Agreement”), is made and entered by and between the company and/or individual
listed below, with a place of business within the United States of America (hereinafter referred to as “the Customer”),
and MyECheck, Inc., a Wyoming Corporation, with principal offices within the State of California, (hereinafter referred to as “MyECheck”),
all or each of which shall also hereinafter be referred to as the “party” or “parties” respectively, and
is effectively on the date listed below.
RECITALS
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas the Customer is engaged in payment acceptance; |
| C. | The Service Documentation described below contains the terms under which MyECheck has agreed to provide Services to the Customer. |
| D. | MyECheck has agreed to provide Services to the Customer. |
AGREEMENTS
Now therefore, the parties do hereby mutually agree that:
1. Service
Documentation. The “Service Documentation” includes;
| (a) | This Agreement includes Three Exhibits, and may include additional price
schedules, addendums, and/or attachments; |
| (b) | User guides, which may include software (APIs), and software licenses,
if applicable, specifications, instructions, and notices; |
| (c) | Third party application form(s) for any desired supplemental services. |
The Service Documentation also applies to
any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of the Customer.
“MyECheck” includes each such affiliate, and “Customer” includes each such affiliate and subsidiary. All
terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order set forth above. Customer acknowledges
receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Customer discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Customer continues to use a Service after the change becomes effective, it will be bound by the change
| | 1 | Page |
MyECheck Services Agreement
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party. MyECheck may terminate
any Service following notice to Customer of a breach of any provision of the Service Documentation. MyECheck may also terminate
any Service without notice to Customer if Customer is subject to a petition under applicable state or federal bankruptcy law, becomes
insolvent or is otherwise unable to make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that
a material adverse change has occurred in Customer’s ability to perform its obligations under the Service Documentation.
The termination of a Service will not affect Customers or MyECheck’s rights with respect to transactions which occurred before
termination. MyECheck shall not be liable to Customer for any losses or damages Customer may incur as a result of any termination
of any Service.
4. Service
Fees. Customer shall pay MyECheck the fees described in the attached Exhibits for the specific services selected and/or
used. All transactional fees for the current month will be based on the volumes from the prior month. You hereby authorize MyECheck
to create remotely created checks drawn from Customer’s checking account(s), and use the checks to collect all fees and charges,
or it may send an invoice to Customer for such amounts, which Customer shall promptly pay. MyECheck may assess finance charges
at a rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that
are not paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid
interest and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Customer will not acquire any
interest in or rights to it as a result of Customer’s use of any Service except as set forth in the Service Documentation.
Customer will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Customer shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Customer may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or
| | 2 | Page |
MyECheck Services Agreement
Customer, MyECheck may, upon notice to Customer,
suspend or discontinue the affected Service. Customer shall use and maintain in good working order (and at its own expense) software,
hardware and other equipment necessary for Customer to use the Service(s) in accordance with the Service Documentation.
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDORS. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(d) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Customer’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Customer; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Customer’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(e) Customer
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Customer shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Customer is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Customer.
(f) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(g) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(h)
Except in the case of MyECheck’s gross negligence or intentional misconduct, Customer shall indemnify and hold MyECheck,
its directors, officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service
in accordance with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third
party in connection with a Service; (ii) an act or omission of any agent, courier or authorized representative of Customer; or
(iii) if the Service includes a license or sublicense of any software to Customer, the use or distribution of the software by Customer
or any person gaining access to the software through Customer that is
inconsistent with the license or sublicense.
| | 3 | Page |
MyECheck Services Agreement
(i) MYECHECK WILL ONLY BE LIABLE TO COMPANY FOR ITS
DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH OF THIS AGREEMENT.
MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY PAID BY
COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES
WERE INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL (INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES,
WHETHER ANY CLAIM IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER
PARTY AND REGARDLESS OF THE FORM OF THE CLAIM OR ACTION.
9. General.
(j) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(k) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Customer as a result of the inconsistency or
modification and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise
affect the enforceability or validity of the Service Documentation.
(l) The
Service Documentation is the entire agreement between MyECheck and Customer and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(m) Customer
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Customer’s financial condition or any previously unprepared financial statements which MyECheck may require Customer to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(n) Customer
expressly warrants that a Service will not be used in a manner which violates any US federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(o) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(p) Either party may provide notice to the
other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most recent address for Customer in
MyECheck’s records, and any notice from MyECheck will be effective when sent. Customer shall use the address where Customer’s
relationship manager is located and address any notice to the attention of such manager. Any notice from Customer will be effective
when actually received by MyECheck. MyECheck will be entitled to rely on any notice from Customer that it believes in good faith
was authorized by an authorized representative of Customer and, except as expressly stated in the Service Documentation, shall
have no obligation to verify the signature (including an electronic signature). Each party will have a reasonable time after receipt
of any notice to act on it.
| | 4 | Page |
MyECheck Services Agreement
(q) All
uses of the Services through Customer’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Customer. Customer’s failure to protect Codes may allow an unauthorized
party to (i) use the Services, (ii) access Customer’s electronic communications and financial data, and/or (iii) send or
receive information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Customer assumes the entire
risk for unauthorized use of Codes and any unencrypted electronic transmissions.
(r) Customer
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior written
consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(s) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(t) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Customer authorizes MyECheck to issue a press release, which
may contain Customer’s stock ticker symbol; that describes the nature of the relationship between MyECheck and Customer.
(m) This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(n) This Agreement may be executed as a faxed or electronically
scanned document, with scanned or faxed signatures deemed as original.
| | 5 | Page |
MyECheck Services Agreement
IN WITNESS WHEREOF, the parties have entered
into this Agreement as of the date listed below.
| Agreed: |
|
Accepted: |
|
| Customer |
|
MyECheck |
|
| |
|
|
|
| /s/ Kevin Murphy |
|
/s/ Ed Starrs |
|
| Signature |
|
Signature |
|
| |
|
|
|
| Company Name: |
|
MyECheck, Inc. |
|
| |
|
Ed Starrs |
|
| The Mother of All Survival Kits |
|
President/CEO |
|
| |
|
|
|
| Individual Name: |
|
2600 East Bidwell Street |
| |
|
Folsom, California 95630 |
| Kevin Murphy |
|
|
|
| |
|
|
www.MyECheck.com |
|
| Title: |
Owner |
|
844-MyECheck (844-693-2432) |
| |
|
|
Support@MyECheck.com |
| |
|
|
|
| Principal Address: |
|
Date of Agreement: |
3/2/2015 |
| |
|
|
|
| 721 Herms Hills Rd. |
|
Effective Date: |
3/2/2015 |
| |
|
|
|
| Wheelersburg, OH 45694 |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| | 6 | Page |
MyECheck Services Agreement
Exhibit A
Services and Fees
Basic Services
MyECheck will provide fully electronic check
services to Customer. MyECheck will receive data transmissions from Customer and will use the data to create and process fully
electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits into Customer account(s),
and for transfers out of Customer accounts.
This basic service enables the Customer to
verify their user provided data, check the status of their bank account, prove the transaction is authorized, and predict the probability
of most problems before the transaction is approved and processed for deposit.
Check 21 Service Fees
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.25 | |
| | |
| | |
| 500,001 – 999,999 | |
$ | 0.20 | |
| | |
| | |
| 1,000,000 or more | |
$ | 0.15 | |
Available Supplemental
Services
Scrub Services, like the Basic Check 21 Service, generates a
check image and pushes it to your bank for payment. It offers minimal financial verification. Transactions are immediately and
automatically evaluated and approved or declined based upon the real time results of multiple fraud control tools and database
searches. For example, it will check the payee against a database of known bad check writers and verify that the account is open
and in good standing.
Guarantee Services, like the Basic Check 21 and Scrub Services,
generates a check image and pushes it to your bank for payment. In addition to validating transaction data, you are insured if
the item is returned unpaid. When a payee defaults, the check guarantee provider buys the returned item for its full face value.
These services are available for additional fees. For more information,
please contact MyECheck sales (sales@MyECheck.com).
| | 7 | Page |
MyECheck Services Agreement
Exhibit B
Supplemental Consulting
Services
1. STATEMENT
OF WORK. MyECheck may render services, working individually or with the Customer and/or third parties retained by
Customer, (the "Consulting Services") to Customer on a time and materials basis as may be agreed upon in a written Statement
of Work, which will become a part of this Agreement. No Supplemental Consulting Services will be preformed until such time as
a duly authorized Statement of Work is prepared and approved by all Parties.
2. PROJECT ADMINISTRATION. The
Technical Contact (as set forth in the Statement of Work) for the Customer shall provide MyECheck all assistance and guidance reasonably
requested by MyECheck for the performance of the Consulting Services. Customer acknowledges that the timely performance of the
Consulting Services is dependent both on reasonable access to and assistance by Customer, including the Customer Technical Contact.
MyECheck acknowledges that the success of Customer's business shall depend on MyECheck’s ability to provide the Consulting
Services on a timely basis in accordance with the dates specified by Customer, and shall use all reasonable efforts to complete
all Services efficiently and on or ahead of schedule
3. COMPENSATION. MyECheck shall
be paid fees on a time and materials basis in accordance with the Statement of Work signed by both parties. Customer shall also
reimburse MyECheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the Consulting Services.
MyECheck shall provide Customer with accurate invoices detailing the consulting hours, fees and expense reimbursements due MyECheck.
Customer payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree that Customer
shall not be charged nor shall it be liable for any travel time incurred in connection herewith.
All work will be conducted on an hourly fee
basis and billed per the rate listed below. Rates are subject to change prior to the preparation of a Statement of Work.
| Hourly (Subject to Scheduling and Availability): |
$125.00/Hour |
4. THIRD PARTY SOFTWARE. Customer
acknowledges that in order for MyECheck to perform the Consulting Services, Customer may need to obtain additional third party
services ("Third Party Services") or third party technology ("Third Party Technology"). Customer agrees that
the rights and licenses with respect to Third Party Technology and Third Party Services shall be under terms set forth in the pertinent
purchase, license or services agreements between Customer and the vendors of such Third Party Software or Third Party Services.
Customer shall execute and comply with appropriate purchase, license, or services agreements with respect to any Third Party Software
or Third Party Services. Any amounts payable to third party vendors or service providers under such agreements are the sole responsibility
of Customer and shall be paid directly by Customer to such third party vendors or service providers.
| | 8 | Page |
MyECheck Services Agreement
5. LICENSE TO Customer MATERIALS.
Customer acknowledges that in order to perform the Services, MyECheck may require access to and use of certain software or other
materials of Customer or Customer's suppliers (including access to code relating to the Software or that may affect the performance
of the Software) ("Customer Materials"). Customer grants to MyECheck a royalty-free, non-exclusive license to access
and use the Customer Materials (including through subcontractors) as required for MyECheck’s performance of the Services
hereunder.
6. RIGHTS AND OWNERSHIP. To the
extent that any modification, enhancement, extension, interface or derivative work to any MyECheck Software or any other deliverable
that is produced through the Consulting Services, Customer shall have the same usage rights in such as Customer has currently has.
Customer acknowledges and agrees that other than any Third Party Software or any Customer Materials or Software, MyECheck continues
to own all computer programs, utilities and intellectual property which aid MyECheck in performing the Consulting Services or which
are produced as a result of these Services.
7. Independent
Contractors. MyECheck agrees that it shall be considered an independent contractor and that it shall not be deemed
to be an employee of Customer. MyECheck and its employees, agents and contractors performing services hereunder shall not be entitled
to any employee benefits of Customer.
8. Project
Pricing and Expenses. MyECheck shall incur all reasonable expenses in the performance
of the services contained herein including but not limited to contractors and consultants used for software development, testing,
quality assurance and deployment during the term of this agreement.
From time to time there may be a need for Customer
to incur certain expenses. Notwithstanding anything else to the contrary contained herein, any single expense in excess of two
hundred dollars ($200) must be pre-approved in writing (or by email) by Customer or it shall not be deemed a reimbursable expense.
9. Billing
schedule. Billing is monthly and payment is due upon receipt of bill for services provided
the prior month. Payments will be processed and collected from the Customer as a Check 21 item (no fee to Customer).
MyECheck reserves the right to discontinue the
provision of services under the Statement of Work in the event that Customer fails to continue to make timely payment of fees and
expenses due hereunder.
10. Non-Solicitation
of Employees. During the term of this Agreement and for a period of one (1) year following
completion of any work hereunder, neither party shall solicit employment of any current or prior employee of the other.
11. ATTACHMENTS. Any Statement of Work(s) will
be attached and will become a part of this Service Agreement.
| | 9 | Page |
MyECheck Services Agreement
Exhibit C
Attached as Exhibit C, will be a completed New Merchant Integration
Information form. This form must be completed and submitted to MyECheck in a timely manner. Customer bank integration typically
takes between four and six weeks. This process cannot begin until this form has been completed and delivered. It will be the Customer’s
responsibility to direct their bank to work with MyECheck in order to facilitate the Check 21 deposits. MyECheck will not be responsible
for any delays imposed by the Customer’s bank.
Upon submission of the New Merchant Integration Information
Form, MyECheck will provide the Customer with a Customer Service Contact. This individual will work with the Customer and their
bank in order to complete the integration process.
In is understood by all parties that the contact individuals
provide by the Customer and MyECheck are free to exchange any and all needed information in order to execute the terms and conditions
of this Service Agreement.
| | 10 | Page |
Exhibit 10.49
MyECheck
Services Agreement
This Services Agreement (this “Agreement”)
dated March 18, 2015 is made by and between MyECheck, Inc., a Wyoming corporation whose address is 2600 East Bidwell Street, Folsom,
CA 95630, (“MyECheck”), and Credit Shop, Incorporated, a Delaware corporation whose address is 5926 Balcones Drive,
Suite 215, Austin, Texas 78731 (“Company”).
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas Company is engaged in payment acceptance; and |
| C. | The Service Documentation described below contains the terms under which MyECheck has agreed to provide Services to the Company. |
NOW THEREFORE, MYECHECK AND COMPANY AGREE
AS FOLLOWS:
1. Service Documentation.
The “Service Documentation” includes;
| (a) | This Agreement and all exhibits, addendums and attachments; |
| (i) | User guides which include software and software licenses if applicable, price schedules,
specifications, instructions, and notices; |
| (b) | The application form(s) for each Service. |
The Service Documentation also applies to
any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of Company.
“MyECheck” includes each such affiliate, and “Company” includes each such affiliate and subsidiary. All
terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order set forth above. Remaining Service
Documents will be delivered, via e-mail, after receipts of this signed agreement.
2. Services.
MyECheck will provide Company the Services as described in the Service Documentation, in accordance with the timelines and service
levels described therein, and in full compliance with applicable law. MyECheck represents and warrants to Company that it is in
good standing with any and all applicable regulatory authorities and sponsor banks, and not aware of any issues that could impede
its ability to perform the Services as contemplated hereby. Company’s use of the Services will be non-exclusive, and nothing
herein limits Company’s ability to use third party services comparable to or competitive with the Services.
3. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Company discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Company continues to use a Service after the change becomes effective, it will be bound by the change.
4. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party (unless a Service
is terminated sooner in accordance with the Service Documentation). MyECheck may terminate any Service following notice to Company
of a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to Company if
Company is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise unable to
make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change has occurred
in Company’s ability to perform its obligations under the Service Documentation. The termination of a Service will not affect
Companys or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall not be liable
to Company for any losses or damages Company may incur as a result of any termination of any Service.
5. Service
Fees. Company shall pay MyECheck the fees described in Exhibit A of this document. You hereby authorize MyECheck to create
remotely created checks drawn from Company’s checking account(s), and use the checks to collect all fees and charges, or
it may send an invoice to Company for such amounts, which Company shall promptly pay. MyECheck may assess finance charges at a
rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not
paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest
and then to other fees and charges.
6. Confidential
Information and Data Privacy.
(a)
Unless otherwise provided in the Service Documentation, all user guides and other written materials, source code, object code,
trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement constitute
MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or its vendors,
as applicable, will remain the sole owner of all such Confidential Information, and Company will not acquire any interest in or
rights to it as a result of Company’s use of any Service except as set forth in the Service Documentation. Company will maintain
the confidentiality of the MyECheck Confidential Information and will not use for any purpose (other than as specifically contemplated
by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise make any
of it available to any person or entity, other than its employees who have a need to use the MyECheck Confidential Information
in connection with the applicable Service. Company shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the MyECheck Confidential Information
and obtain redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by
applicable law, Company may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided
pursuant to this Agreement.
(b) Unless
otherwise provided in the Service Documentation, all personally identifiable information of Company’s customers (“Personally
Identifiable Information”) and other information provided by Company to MyECheck hereunder constitutes Company’s or
its customers’ confidential information (“Company Confidential Information”). Company or its customers, as applicable,
will remain the sole owner of all such Company Confidential Information, and MyECheck will not acquire any interest in or rights
to it under this Agreement. Company will maintain the confidentiality of the Confidential Information and will not use for any
purpose (other than as specifically contemplated by this Agreement) or disclose (or permit its employees or agents to disclose),
copy, transfer, sublicense or otherwise make any of it available to any person or entity, other than its employees who have a need
to use the Company Confidential Information in connection with the applicable Service and are contractually obligated to maintain
its confidentiality. MyECheck shall notify Company immediately if it knows or suspects that there has been any Unauthorized Use
of any Company Confidential Information, and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take
all actions, including without limitation initiating court proceedings to recover possession of prevent further Unauthorized Use
of the Confidential Information and obtain redress for any injury caused to Company or its customers as a result of such Unauthorized
Use. In addition to the foregoing obligations, MyECheck will maintain the privacy and security of all Personally Identifiable Information
as required under the Gramm-Leach-Bliley Act, regulations promulgated thereunder, other applicable federal and state law, and any
applicable privacy policy of Company or MyECheck, and cooperate with Company in compliance with the applicable law requiring notification
of data security breach.
7. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Company, MyECheck may, upon notice to Company, suspend or discontinue the affected Service. Company shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Company to
use the Service(s) in accordance with the Service Documentation.
8. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDOR. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
9. Liability
and Indemnification.
(a) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Company’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Company; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Company’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(b) Company
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Company shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Company is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Company.
(c) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(d) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(e) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Company shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Company; or (iii) if the Service
includes a license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining
access to the software through Company that is inconsistent with the license or sublicense.
(f) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
10. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Company as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyECheck and Company and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Company
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Company’s financial condition or any previously unprepared financial statements which MyECheck may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck. All such information
will constitute Company Confidential Information.
(e) Company
expressly warrants it will not use a Service in a manner which violates any federal or state law including without limitation any
sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
1, 4, 6, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Company in MyECheck’s records, and any notice from MyECheck will be effective when sent. Company shall
use the address where Company’s relationship manager is located and address any notice to the attention of such manager.
Any notice from a party will be effective when actually received by the other party. MyECheck will be entitled to rely on any notice
from Company that it believes in good faith was authorized by an authorized representative of Company and, except as expressly
stated in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each
party will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Company’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Company. Company’s failure to protect Codes may allow an unauthorized party
to (i) use the Services, (ii) access Company’s electronic communications and financial data, and/or (iii) send or receive
information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Company assumes the entire risk
for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) A
party may not assign or transfer its rights or obligations with respect to the Service Documentation without the other party’s
prior written consent; provided that Either party may assign its rights and obligations with respect to the Service Documentation
to any successor by merger, consolidation or corporate reorganization with the other party’s consent.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(m)
"Client will not be charged for any test payments sent to our test server. Please note that any payments sent to our production
server will be charged per transaction in real-time."
IN WITNESS WHEREOF, the parties have entered
into this Agreement as of the date first set forth above.
| Agreed: |
|
Accepted: |
|
| Company |
|
MyECheck |
|
| |
|
|
|
| Signature: |
/s/ Daniel N. Duncan |
|
Signature: |
/s/ Ed Starrs |
|
| |
|
|
|
| Name: |
Daniel N. Duncan |
|
Ed Starrs |
|
| |
|
|
|
| Company: |
Credit Shop, Incorporated |
|
MyECheck |
|
| |
|
|
|
| Title: |
CEO |
|
President/CEO |
|
| |
|
|
|
| |
|
Signature: |
|
|
| |
|
|
|
| |
|
Jim Fancher |
|
| |
|
|
|
| |
|
MyECheck, Inc. |
|
| |
|
|
|
| |
|
Executive Vice President/COO |
|
| |
|
|
|
| |
|
Effective Date: |
|
|
Exhibit A
Levels of Service
| 1) | (Level 1) Basic Electronic Check Service |
MyECheck will provide fully electronic
check services to Customer. MyECheck will receive data transmissions from Customer and will use the data to create and process
fully electronic checks, formatted for clearing through the Check 21 electronic check clearing system, for deposits into Customer
account(s). Electronic checks will be deposited the same business day provided the data transmission arrives before MyECheck’s
cut-off window of 3 PM Pacific Time, or if after 3 PM Pacific Time, then the next business day.
| Fees | |
| |
| Total Transactions | |
| |
| per Calendar Month | |
Fee per Transaction | |
| | |
| |
| Less than 500,000 | |
$ | 0.25 | |
| 500,001 – 999,999 | |
$ | 0.20 | |
| 1,000,000 and more | |
$ | 0.15 | |
2) (Level 2) Check Authorization
Service
The MyECheck Check Authorization service is
comprised of 4 unique verification levels that include real time data, negative data, proprietary data, and routing number validation.
The verifications check the transaction data against specific databases that indicate what a paying financial institution is reporting
on the account at the end of the prior day’s processing cycle. The response will tell you if the account is open, valid and
in a positive status, or if the account is not located, and many other responses. Electronic checks will be deposited the same
business day provided the data transmission arrives before MyECheck’s cut-off window of 3 PM Pacific Time, or if after 3
PM Pacific Time, then the next business day.
| Fee | |
Fee per Transaction |
| Check Authorization Service + Level 1 | |
$0.25 + Level 1 Fee |
3) (Level 3) Basic Electronic Check
Service + ID
Provides domestic identity verification using
a wide array of reliable consumer data based on a single lookup. Detects discrepancies with an identity to gain better insight
into the risks associated with an ID. It meets compliance regulations for CIP, OFAC, and FFIEC. Electronic checks will be deposited
the same business day provided the data transmission arrives before MyECheck’s cut-off window of 3 PM Pacific Time, or if
after 3 PM Pacific Time, then the next business day.
| Fees | |
Fee per Transaction |
| +ID + Level 1 | |
$0.49 + Level 1 Fee |
Exhibit 10.50
MyECheck
Services Agreement
This Services Agreement (this “Agreement”)
dated 3/26 , 2015 is made by and between MyECheck, Inc., a Wyoming corporation whose address is 2600 East Bidwell Street,
Folsom, Suite 190 CA 95630, (“MyECheck”), Nutronix Revolution, Inc. and whose address is 8529 Meadowbridge
Rd Suite 300, Mechanicsville, VA 23116 (“Company”).
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas Company is engaged in payment acceptance; and |
| C. | The Service Documentation described below contains the terms under which MyECheck has agreed to provide Services to the Company. |
NOW THEREFORE, MYECHECK AND COMPANY AGREE
AS FOLLOWS:
1. Service Documentation.
The “Service Documentation” includes;
| (a) | This Agreement and all exhibits, addendums and attachments; |
| (b) | User guides which include software and software licenses if applicable, price schedules, specifications, instructions, and
notices; |
| (c) | The application form(s) for each Service. |
The Service Documentation also applies to
any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of Company.
“MyECheck” includes each such affiliate, and “Company” includes each such affiliate and subsidiary. All
terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order set forth above. Remaining Service
Documents will be delivered, via e-mail, after receipts of this signed agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Company discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Company continues to use a Service after the change becomes effective, it will be bound by the change.
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party (unless a Service
is terminated sooner in accordance with the Service Documentation). MyECheck may terminate any Service following notice to Company
of a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to Company if
Company is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise unable to
make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change has occurred
in Company’s ability to perform its obligations under the Service Documentation. The termination of a Service will not affect
Companys or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall not be liable
to Company for any losses or damages Company may incur as a result of any termination of any Service.
4. Service
Fees. Company shall pay MyECheck the fees described in Exhibit A of this document. You hereby authorize MyECheck to create
remotely created checks drawn from Company’s checking account(s), and use the checks to collect all fees and charges, or
it may send an invoice to Company for such amounts, which Company shall promptly pay. MyECheck may assess finance charges at a
rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not
paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest
and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Company will not acquire any interest
in or rights to it as a result of Company’s use of any Service except as set forth in the Service Documentation. Company
will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Company shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Company may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Company, MyECheck may, upon notice to Company, suspend or discontinue the affected Service. Company shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Company to
use the Service(s) in accordance with the Service Documentation.
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDOR. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Company’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Company; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Company’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(b) Company
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Company shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Company is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Company.
(c) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(d) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(e) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Company shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Company; or (iii) if the Service
includes a license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining
access to the software through Company that is inconsistent with the license or sublicense.
(f) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
9. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Company as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyECheck and Company and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Company
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Company’s financial condition or any previously unprepared financial statements which MyECheck may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(e) Company
expressly warrants that a Service will not be used in a manner which violates any federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Company in MyECheck’s records, and any notice from MyECheck will be effective when sent. Company shall
use the address where Company’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Company will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice from
Company that it believes in good faith was authorized by an authorized representative of Company and, except as expressly stated
in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each party
will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Company’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Company. Company’s failure to protect Codes may allow an unauthorized party
to (i) use the Services, (ii) access Company’s electronic communications and financial data, and/or (iii) send or receive
information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Company assumes the entire risk
for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Company
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior written
consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Company
authorizes MyECheck to issue a press release, which may contain Company’s stock ticker symbol; that describes the nature
of the relationship between MyECheck and Company.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n)
"Client will not be charged for any test payments sent to our test server. Please note that any payments sent to our production
server will be charged per transaction in real-time."
IN WITNESS WHEREOF, the parties have entered
into this Agreement as of the date first set forth above.
| Agreed: |
|
Accepted: |
|
| Company |
|
MyECheck |
|
| |
|
|
|
| Signature: |
/s/ David Bremner |
|
Signature: |
/s/ Ed Starrs |
|
| |
|
|
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| Name: |
David Bremner |
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Ed Starrs |
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| Company: |
NXR Global |
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MyECheck |
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| Title: |
President |
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President/CEO |
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Signature: |
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Jim Fancher |
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MyECheck, Inc. |
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Executive Vice President/COO |
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Effective Date: |
3/26/15 |
|
Exhibit 10.51
MyEcheck
Partnership Agreement
THIS REFERRAL AGREEMENT
(“Agreement”) by and between MyECheck, Inc (“MYEC”), with its principal place of business located at 2600
East Bidwell, Suite 140, Folsom, CA 95630, and Hercules Credit Union (the “Partner”) with offices at UTDA
, in the United States of America, shall become effective on the date executed by a duly authorized representative of MYEC
(the “Effective Date”). MYEC and Partner shall be collectively known hereafter as the “Parties”.
WHEREAS MYEC is engaged in the business
of providing Check21 based Echeck payment services to merchants and consumers (the “Solution”); and
WHEREAS MYEC requires a financial institution
to process Echeck payments related to the Solution; and
WHEREAS, Partner is a credit union of good
standing offering NDUA insured accounts to small businesses and individuals; and
WHEREAS, MYEC and Partner desire to offer
their respective services in tandem as a package to drive net new business for each other; and
NOW THEREFORE, in consideration of the mutual
promises made herein and other valuable consideration, receipt and sufficiency of which are hereby acknowledged, the Parties do
hereby agree as follows:
“Check21”. The Check
Clearing for the 21st Century Act (or Check 21 Act) is a United States federal law, enacted by congress on October 28, 2003
“Prospects”. Shall
mean businesses engaged in selling legal products or services to consumers (B2C) or other businesses (B2B) in which they need to
collect payments for their respective good and services and are not existing Customers of Reseller.
“Customer”. Shall
mean businesses or persons having an existing contract relationship for payment processing services with Reseller.
“Fees”. Shall mean
the price paid to MYEC by Customers for the Solution, as such may change from time to time based on the sole discretion of MYEC.
| 2. | Solution Overview. MYEC desires to develop a partnership
with Partner whereby a) MYEC integrates the Solution into Partners payment processing platform; and b) MYEC refers Prospects to
Partner for share draft account opening to deposit Check21 payments generated through use of the Solution (Net New Business to
Partner) thus becoming a Client; and c) Partner introduces their existing Client base, or new Clients added through other than
MYEC referral, to the Solution (Net New Business to MYEC). |
MyEcheck
Partnership Agreement
| a. | Integrate the Solution into Partner payment processing/core system. |
| b. | Refer Prospects to Partner for share draft account opening. |
| c. | Provide Partner with introduction and sales materials necessary to introduce the Solution to current
Clients. |
| d. | Work with Clients to integrate the Solution into their payment processing |
| e. | Provide Partner with monthly Solution revenue sharing report. |
| f. | Pay agreed upon amounts to Partner on a monthly basis. |
| a. | Refer and introduce their Clients to the Solution. |
| b. | Work with MYEC to integrate the Solution into Partners payment process/core systems. |
| c. | Onboard Prospects referred by MYEC. |
| d. | Work with MYEC on a Daily basis to process Solution ICL files on behalf of Clients using the Solution. |
| 5. | Fees and Revenue Sharing. |
For Net New
Business to MYEC:
| · | Partner shall receive twenty (20) percent of MYEC’s Fees paid by those Clients using the
Solution. MYEC shall pay Partner the revenue share within thirty (30) days of receiving the Fees. |
| · | MYEC shall not be entitled to any share of Partner revenue associated with their monthly account
fees, interest income or cross sell of other Partner products including but not limited to loans, cards, etc. |
For Net New
Business to Partner:
| · | MYEC shall receive only their Fees and no share of Partner revenue associated with their monthly
account fees, interest income or cross sell of other Partner products including but not limited to loans, cards, etc. |
| 6. | Logos, Trademarks, Service Marks, and Graphics Use: MYEC
will grant to Partner a limited access (“Access”) to certain MYEC trademarks, service marks, logos, and other proprietary
graphics (“Marks”) for the duration of the Agreement as described herein, and under the following terms and conditions: |
a. This Access
to Marks is granted for the benefit of MYEC Partners with a legitimate intent to advertise and sell MYEC’s products and services.
The Access to use these Marks will require prior review of their use and MYEC’s written approval of the use.
b. MYEC retains
full ownership rights to its Trademarks, Service Marks, Logos, and Graphics and the Partner does not acquire any rights, title
or interest in or to the Marks beyond that set forth herein.
c. Breach
of this section will be grounds for immediate termination of this Access, and any other legal remedies MYEC may deem appropriate.
| 7. | Confidentiality. It may be necessary from the time to time for either or both parties to
exchange Confidential Information, or information that both parties consider to be proprietary and/or trade secrets, the parties
agree to the following terms on which they disclose such information to each other. |
MyEcheck
Partnership Agreement
| a. | For the purposes of this Agreement “Confidential Information” means any and all information
or material regarding products, services, business processes, business plans, financial information, personnel of either party
and other related information that is provided to either party, including all original documents and any derivatives, portions,
or copies thereof, whether in oral, written, visual, graphic, electronic, machine recognizable, or other form or medium. Both parties
will make all reasonable efforts to ensure that the Confidential Information is clearly identified and marked; provided, however,
that the obligation to protect Confidential Information shall extend to unmarked data known by the Parties to be confidential that
may be disclosed orally or otherwise. |
| b. | When tangible forms of confidential information are disclosed or exchanged by either or both parties,
such information remains the property of the discloser. Upon the written request of either respective party, all such tangible
forms of the Confidential Information shall be returned to requesting party immediately and no later than three business days,
together with the receiving party’s written certification that any other copies or notes or summaries (to the extent including
the Confidential Information) have been destroyed. |
| c. | Confidential Information shall not include information that is (i) shown by either party’s
written dated records to be known to it prior to this Agreement, (ii) in the public domain and generally available to the public,
or (iii) required by law to be disclosed pursuant to judicial or other government order; Either party shall, immediately upon receiving
notice of such impending or effective legal order, notify the respective party prior to releasing the information, and shall assist
the disclosing party, to reasonable extent and upon reimbursement of reasonable expenses, in objecting to such order. In the event
that the receiving party produces the Confidential Information in response to the compulsory process, it will take reasonable steps
to limit the disclosure to the extent legally permissible. |
| d. | Both Parties acknowledge and agree that disclosing or disseminating the Confidential Information
without the prior written approval of the disclosing party to any third party will have a material adverse effect. Parties agree
to, and shall cause their employees and affiliates, (i) to maintain the Confidential Information in the Strictest confidence, and
(ii) to not use, alter, modify, disassemble, reverse engineer or de-compile any software or other materials (in any form) or documents
embodying Confidential Information, or disclose or disseminate to any third party, including any agent or affiliate, all or any
part of the Confidential Information or any analysis, studies, reports or other compilations or documents that may be prepared
by either party that makes use of, or are reflective of, the Confidential Information. |
| 8. | Intellectual Property. Nothing in this Agreement shall grant any Intellectual Property rights
in any of the Solution or technology other than as expressly provided for herein, all of which rights shall remain the sole and
exclusive property of MYEC. Nothing in this Agreement shall grant to Partner the right to use, replicate, or obtain any ownership
right in any business methods or processes utilized by MYEC except as expressly provided for herein. Any future additions, modifications,
versions, upgrades or updates of the Solution shall be deemed to be part of the Solution and benefit from the same protections
as are given to the Solution herein. |
MyEcheck
Partnership Agreement
| 9. | Expenses. The Parties shall be responsible for their respective business expenses, which
are incurred in the course of carrying out their respective Duties hereunder, including but not limited to travel, marketing materials
and phone. Parties shall not incur any debt in the name of the other. |
| 10. | Term: The term of this Agreement shall be for one (1) year from the Effective Date hereof
(the “Initial Term”), unless sooner terminated. Following such Initial Term, this Agreement shall be automatically
renewed for successive one (1) year periods (each a “Renewal Term”). |
| 11. | Termination. Parties shall be able to terminate this Agreement as follows: |
| a. | Termination without Cause. Either Party may terminate this Agreement by giving the other Partner
written notice ninety (90) days in advance of either the Initial term or Renewal Term. |
| b. | Termination for Cause. Either Party may terminate this Agreement upon the occurrence of an Event
of Default, as defined below. |
| c. | Event of Default. Each of the following occurrences will constitute an “Event of Default”
under this Agreement: |
| i) | Goodwill. Either Party engages in any act or omission that damages the reputation, business,
or goodwill of the other Party |
| ii) | False Representation. Any representation or warranty made by the Parties or any of its officers,
or directors proves to have been false or misleading in any material respect; |
| iii) | Breach. Either Party fails to observe any material obligation specified in this Agreement,
and such failure is not cured within thirty (30) days of receipt of written notice thereof from the non-breaching party; or |
| iv) | Bankruptcy. The liquidation, dissolution, or discontinuance of business by a Party in any
manner or the filing of any petition by or against a Party under any federal or state bankruptcy or insolvency laws, which petition
shall not be dismissed within 60 days after filing. |
| 12. | Notice or Communication. Any notice or communication required or permitted hereunder (other than
Administrative Notice) shall be in writing and may be sent by registered mail, return receipt requested, postage prepaid and addressed
to the addresses set forth below, or emailed to such address as any party entitled to notice shall have communicated in writing
to the other party. Notices and communications to MYEC and the Partner are noted on the final page of this Agreement. |
| 13. | Relationship of Parties. The relationship between the parties established by this Agreement shall
be solely that of vendor and vendee and the rights and powers not expressly granted to the Partner are expressly reserved to MYEC.
The Partner shall have no right, power or authority in any way to bind MYEC to the fulfillment of any condition not herein contained,
or to any contract or obligation, expressed or implied. The parties are and will remain as independent contractors. |
MyEcheck
Partnership Agreement
| 14. | Indemnity. The Partner agrees to hold MYEC free and harmless from any and all claims, damages,
and expenses of every kind or nature whatsoever (a) arising from acts of the Partner; (b) as a direct or indirect consequence of
termination of this Agreement in accordance with its terms; or (c) arising from acts of third parties in relation to products sold
to the Partner under this Agreement, including, but not limited to execution of liens and security interests by third parties with
respect to such products. |
| 15. | Applicable Law. This Agreement shall be governed by the laws of the State of California and is
accepted by MYEC at its Corporate Office noted herein. MYEC’s rights granted hereby are cumulative and in addition to any
rights it may have at law or equity. |
| a) | Any portion of the Agreement which is inconsistent with applicable laws, regulations or rules will
be deemed modified and applied in a manner consistent therewith, and the Parties shall not incur any liability to each other as
a result of the inconsistency or modification and application. If any portion of the Agreement is deemed unenforceable or invalid,
it will not otherwise affect the enforceability or validity of the Agreement. |
| b) | The Agreement is the entire agreement between the Parties and supersedes all prior representations,
conditions, warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right
on one occasion will constitute a modification of the Agreement or be a waiver of that right on a subsequent occasion. |
| c) | Any/All sections of this agreement, plus all Exhibits of this Agreement, will survive termination
of this Agreement. |
| d) | Parties may not assign or transfer its rights or obligations with respect to this Agreement without
the other written consent. Each Party may assign its rights and obligations with respect to this Agreement to any successor by
merger, consolidation or corporate reorganization. |
| e) | The Parties agree that either Party may issue press release(s), upon written consent of the other
Party which may contain the Party’s ticker symbol, which describes the nature of the relationship between the Parties and
may include historical information about the respective Parties. |
| f) | This Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed
signatures deemed as original. |
| g) | Construction. Section headings in this Agreement are for convenience only and are not to be used
in interpreting this Agreement. As used in this Agreement, the word “including” means “including but not limited
to”. |
| h) | Confidentiality of Agreement. Neither party will disclose any terms of this Agreement, including
prices or discounts, to anyone other than its attorneys, accountants or other professional advisors or to any investor or potential
investor who agrees to maintain the confidentiality of such information. Notwithstanding the foregoing, either party may make limited
disclosure of the terms of this Agreement to the extent required by law, provided that the disclosing party: (i) provides the non-disclosing
party reasonable prior notice of such disclosure, and (ii) uses its best efforts to protect and limit the disclosure of such information
to the extent possible. Notwithstanding the foregoing, the Parties agree that each may acknowledge the other as a customer. |
MyEcheck
Partnership Agreement
| i) | Parties Advised by Counsel. This Agreement has been negotiated between Parties who are sophisticated
and knowledgeable in the matters contained herein and who have been represented by legal counsel. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intentions of the Parties and any rule of law (including Section 1654
of the California Civil Code and any other authority of any jurisdiction of similar effect) which would require interpretation
of any ambiguities in this Agreement against the drafting Party is not applicable and is hereby waived. |
| j) | Entire Agreement. Both Parties agree that this Agreement, along with the Exhibits hereto, is the
complete and exclusive statement of the mutual understanding of the Parties and supersedes and cancels all previous and contemporaneous
written and oral agreements and communications relating to the subject matter of this Agreement. |
| k) | Force Majeure. Any delay in the performance of any duties or obligations of either Party will not
be considered a breach of this Agreement if such delay is caused by a labor dispute, market shortage of materials, fire, earthquake,
flood or any other event beyond the control of such Party, provided that such Party uses reasonable efforts, under the circumstances,
to resume performance as soon as reasonably practicable. |
| l) | Government Rights. The Solution is a “commercial item,” as that term is defined at
48 C.F.R. 2.101 (Oct. 1995), consisting of “commercial computer software” and “commercial computer software documentation,”
as such terms are used in 48 C.F.R. 12.212 (Sept. 1995). Consistent with 48 C.F.R. 12.212 and C.F.R. 227.7202-1 through 227.7202.4
(June 1995) (or an equivalent provision, e.g. in supplements of various U.S. government agencies, as applicable), all U.S. Government
users acquire the Software with only those rights set forth herein. |
IN WITNESS WHEREOF, the parties have entered
into this Agreement as of the date first set forth above.
| Agreed: |
|
Accepted: |
| Partner |
|
MYEC |
| |
|
|
| /s/ Brett Blackburn |
|
/s/ James T. Fancher |
| Signature |
|
Signature |
| |
|
|
| BRETT BLACKBURN CEO |
|
James Fancher |
| Name/Title |
|
COO |
| |
|
|
| Date |
2/1/15 |
|
Date: |
2/1/15 |
| |
|
|
|
|
Exhibit 10.52
MyECheck™
Authorized Reseller Agreement
THIS RESELLER AGREEMENT (“Agreement”) by and between
MyECheck, Inc (“MYEC”), with its principal place of business located at 2600 East Bidwell, Suite 190, Folsom, CA. 95628,
and Access Payment Systems, Inc. (the "Reseller") with offices at 6464 S. Quebec St. Suite 600, Centennial
CO 80111, in the United States of America, shall become effective on the date executed by a duly authorized representative of MYEC
(the “Effective Date”). MYEC and Reseller shall be collectively known hereafter as the “Parties”.
WHEREAS MYEC is engaged
in the business of providing Check21 based data processing services to merchants and consumers (the “Solution”); and
WHEREAS, MYEC requires
a financial institution to originate payments related to the Solution; and
WHEREAS, Reseller is
a business of good standing offering payment processing products of either their own or third parties to merchants; and
WHEREAS, Reseller desires
to offer the Solution to their customer base;
NOW THEREFORE, in consideration
of the mutual promises made herein and other valuable consideration, receipt and sufficiency of which are hereby acknowledged,
the Parties do hereby agree as follows:
Definitions:
“Check21”. The Check
Clearing for the 21st Century Act (or Check 21 Act) is a United States federal law, enacted by congress on October 28, 2003
“Prospects”. Shall
mean businesses engaged in selling legal products or services to consumers (B2C) or other businesses (B2B) in which they need to
collect payments for their respective good and services and are not existing Customers of Reseller.
“Customer”. Shall
mean businesses or persons having an existing contract relationship for payment processing services with Reseller.
“Fees”. Shall mean
the price paid to MYEC by Customers for the Solution, as such may change from time to time based on the sole discretion of MYEC.
| 1. | Solution Documentation. The “Solution Documentation” includes; |
| a. | This Agreement and all exhibits, addendums and attachments; |
| b. | User guides which include software and software licenses if applicable, price schedules, specifications,
instructions, and notices; |
| c. | The application form(s) for each Service. |
The Solution Documentation also
applies to any service that is provided by an affiliate of MYEC and any service that is used by an affiliate or a subsidiary of
Reseller. All terms defined in this Agreement shall have the same meaning when used in the Solution Documentation. If there is
a conflict among the documents that make up the Solution Documentation, the documents will govern in the order set forth above.
Reseller acknowledges receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
| |
MyEcheck’s Initial: ES |
| |
|
| |
Reseller’s Initial: T.S. |
MyECheck™
Authorized Reseller Agreement
| 2. | Resale Right: MYEC hereby appoints and grants Reseller the non-exclusive and non-assignable right
to sell the Solution to its Customers or Prospects. |
| 3. | Fees and Revenue Sharing: MYEC and the Reseller have mutually negotiated and agree to the product
sales rates and fees, and the revenue sharing schedule as outlined in Exhibit A, hereby incorporated into this Agreement. |
| 4. | Billing. MYEC bills Customers on a daily automated basis for Check21 payments processed by MYEC.
MYEC shall remit Commissions to Reseller within five (5) days of the beginning of the month. |
| 5. | Selling the Solution. Reseller shall do their best to present the Solution in its best light. Reseller
shall use only approved MYEC sales agreements, provided as attachments, such that may change from time to time in the sole discretion.
Reseller shall present MYEC with such signed Solution agreements and MYEC will begin integration tasks with Customer directly. |
| a. | Provide Partner with introduction and sales materials necessary to introduce the Solution to current
Clients. |
| b. | Support Reseller on Customer calls as needed to answer questions. |
| c. | Work with Customers to integrate the Solution into their payment shopping cart, ecommerce site
or other web based site used to purchase products. |
| d. | Provide Solution references. |
| e. | Integrate the Solution as necessary to Customers bank. |
| f. | Provide Reseller with monthly Solution revenue sharing report. |
| g. | Pay agreed upon amounts to Reseller per aforementioned Billing terms. |
| 7. | Duties of the reseller: |
| a. | Educate Resellers sales team on the Solution. |
| b. | Introduce Customers and Prospects to the Solution via direct sales, Reseller website, and social
media as appropriate. |
| c. | Close and sign MYEC agreements with Customer and Prospects. |
| 8. | Other Parties: Reseller acknowledges and understands that there are other parties (“Contractors”)
that may have been contracted by MYEC to provide software, banking, funds management, and/or other solutions that are integrated
with the Solution. These Contractors may benefit from the sales of the Solution. |
| 9. | Trademarks and Logo Use: All uses of MYEC trademarks, service marks, and logos (the "Logos")
must be reviewed and have prior written approval by MYEC for the duration of the Agreement as described herein, and under the following
terms and conditions: |
| a. | The uses are granted for the benefit of MYEC’s Resellers, and others, with a legitimate intent
to advertise and sell MYEC’s products and services, upon review and MYEC’s written approval of the use. |
| b. | The Reseller follows the published guidelines for use of the MYEC Logos, Service Marks, Trademarks,
Styles and Colors. |
| |
MyEcheck’s Initial: ES |
| |
|
| |
Reseller’s Initial: T.S. |
MyECheck™
Authorized Reseller Agreement
| c. | MYEC has full ownership rights to the Trademarks, Service Marks, and Logos and the Reseller does
not acquire any rights, title or interest in or to the marks beyond that set forth herein; |
| d. | If the Reseller uses the Logos in conjunction with logos representing awards or publications of
companies granting such awards, it shall be the responsibility of the Reseller to give appropriate attribution to such companies,
and to correctly identify such logos with their respective companies; and |
| e. | The Reseller may not, under any circumstances, alter the appearance of the Logos, either by alteration,
size, color or combination with any other logo. Breach of this section will be grounds for immediate termination of the use, and
any other legal remedies MYEC may deem appropriate. |
| 10. | MYEC reserves the right to modify or terminate its Reseller Program at any time without notice
or liability. |
| 11. | Non-existent in this contracted agreement is there any implied or hidden impose liability or obligation
on MYEC for any expenditure made or incurred by the Reseller, or for any sale or promotional activity undertaken by the Reseller,
except pursuant to written and explicit request of representatives of MYEC. |
| 12. | Term: The term of this Agreement shall be for one (1) year from the Effective Date, unless sooner
terminated and shall automatically renew for successive one (1) year periods (the “Term”), unless either party notifies
the other in writing of an intention not to renew the Agreement within ninety (90) days of the end of the Term (“Cancellation”). |
| 13. | Termination. Termination shall not relieve either party of obligations incurred prior thereto.
Parties shall be able to terminate this Agreement as follows: |
| a. | Termination without Cause. Either Party may terminate this Agreement by Cancellation. Reseller
may also terminate with thirty (30) days written notice by paying any outstanding fees, invoices or documented and approved amounts
owed to MYEC and six (6) months prior revenues collected by MYEC from Resellers Customers. |
| b. | Termination for Cause. Either Party may terminate this Agreement upon the occurrence of an Event
of Default, as defined below. |
| c. | Event of Default. Each of the following occurrences will constitute an “Event of Default”
under this Agreement: |
| i) | Goodwill. Either Party engages in any act or omission that damages the reputation, business, or goodwill of the other
Party; |
| ii) | False Representation. Any representation or warranty made by the Parties or any of its officers, or directors proves
to have been false or misleading in any material respect; |
| iii) | Breach. Either Party fails to observe any material obligation specified in this Agreement, and such failure is not cured
within thirty (30) days of receipt of written notice thereof from the non-breaching party; or |
| iv) | Bankruptcy. The liquidation, dissolution, or discontinuance of business
by a Party in any manner or the filing of any petition by or against a Party under any federal or state bankruptcy or insolvency
laws, which petition shall not be dismissed within 60 days after filing. |
| |
MyEcheck’s Initial: ES |
| |
|
| |
Reseller’s Initial: T.S. |
MyECheck™
Authorized Reseller Agreement
| 14. | Notice or Communication. Any notice or communication required or permitted hereunder (other than
Administrative Notice) shall be in writing and may be sent by registered mail, return receipt requested, postage prepaid and addressed
to the addresses set forth below, or emailed to such address as any party entitled to notice shall have communicated in writing
to the other party. Notices and communications to MYEC and the Reseller are noted on the final page of this Agreement. |
| 15. | Relationship of Parties. The relationship between the parties established by this Agreement shall
be solely that of vendor and vendee and all rights and powers not expressly granted to the Reseller are expressly reserved to MYEC.
The Reseller shall have no right, power or authority in any way to bind MYEC to the fulfillment of any condition not herein contained,
or to any contract or obligation, expressed or implied |
| 16. | Indemnity. The Reseller agrees to hold MYEC free and harmless from any and all claims, damages,
and expenses of every kind or nature whatsoever (a) arising from acts of the Reseller; (b) as a direct or indirect consequence
of termination of this Agreement in accordance with its terms; or (c) arising from acts of third parties in relation to products
sold to the Reseller under this Agreement, including, but not limited to execution of liens and security interests by third parties
with respect to any such products. |
| 17. | Assignment. This Agreement constitutes a professional contract and Reseller shall not transfer
or assign same or any part thereof without the advance written consent of MYEC. |
| 18. | The Reseller expressly warrants that the MYEC Solution, and any service(s), will not be used
or sold in states in which its use may violate state law. |
| 19. | Applicable Law. This Agreement shall be governed by the laws of the State of California and is
accepted by MYEC at its Corporate Office noted above. All payments hereunder shall be made at MYEC's Corporate Office address.
MYEC's rights granted hereby are cumulative and in addition to any rights it may have at law or equity. |
| a) | Any portion of the Agreement which is inconsistent with applicable laws, regulations or rules will
be deemed modified and applied in a manner consistent therewith, and the Parties shall not incur any liability to each other as
a result of the inconsistency or modification and application. If any portion of the Agreement is deemed unenforceable or invalid,
it will not otherwise affect the enforceability or validity of the Agreement. |
| b) | The Agreement is the entire agreement between the Parties and supersedes all prior representations,
conditions, warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right
on one occasion will constitute a modification of the Agreement or be a waiver of that right on a subsequent occasion. |
| c) | Any/All sections of this agreement, plus all Exhibits of this Agreement, will survive termination
of this Agreement. |
| |
MyEcheck’s Initial: ES |
| |
|
| |
Reseller’s Initial: T.S. |
MyECheck™
Authorized Reseller Agreement
| d) | Parties may not assign or transfer its rights or obligations with respect to this Agreement without
the other written consent. Each Party may assign its rights and obligations with respect to this Agreement to any successor by
merger, consolidation or corporate reorganization. |
| e) | The parties do not intend that any agency or partnership relationship be created between them by
this Agreement. The parties are and will remain as independent contractors. |
| f) | The Parties agree that either Party may issue press release(s), which may contain the Party’s
ticker symbol; that describes the nature of the relationship between the Parties and may historical information about the respective
Parties. |
| g) | This Agreement may be executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. |
| h) | This Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed
signatures deemed as original. |
| i) | Construction. Section headings in this Agreement are for convenience only and are not to be used
in interpreting this Agreement. As used in this Agreement, the word "including" means "including but not limited
to". |
| j) | Confidentiality of Agreement. Neither party will disclose any terms of this Agreement, including
prices or discounts, to anyone other than its attorneys, accountants or other professional advisors or to any investor or potential
investor who agrees to maintain the confidentiality of such information. Notwithstanding the foregoing, either party may make limited
disclosure of the terms of this Agreement to the extent required by law, provided that the disclosing party: (i) provides the non-disclosing
party reasonable prior notice of such disclosure, and (ii) uses its best efforts to protect and limit the disclosure of such information
to the extent possible. Notwithstanding the foregoing, the Parties agree that each may acknowledge the other as a customer. |
| k) | Parties Advised by Counsel. This Agreement has been negotiated between Parties who are sophisticated
and knowledgeable in the matters contained herein and who have been represented by legal counsel. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intentions of the Parties and any rule of law (including Section 1654
of the California Civil Code and any other authority of any jurisdiction of similar effect) which would require interpretation
of any ambiguities in this Agreement against the drafting Party is not applicable and is hereby waived. |
| l) | Entire Agreement. Both Parties agree that this Agreement, along with the Exhibits hereto, is the
complete and exclusive statement of the mutual understanding of the Parties and supersedes and cancels all previous and contemporaneous
written and oral agreements and communications relating to the subject matter of this Agreement. |
| m) | Force Majeure. Any delay in the performance of any duties or obligations of either Party will not
be considered a breach of this Agreement if such delay is caused by a labor dispute, market shortage of materials, fire, earthquake,
flood or any other event beyond the control of such Party, provided that such Party uses reasonable efforts, under the circumstances,
to resume performance as soon as reasonably practicable. |
| |
MyEcheck’s Initial: ES |
| |
|
| |
Reseller’s Initial: T.S. |
MyECheck™
Authorized Reseller Agreement
| n) | Government Rights. The Software is a "commercial item," as that term is defined at 48
C.F.R. 2.101 (Oct. 1995), consisting of "commercial computer software" and "commercial computer software documentation,"
as such terms are used in 48 C.F.R. 12.212 (Sept. 1995). Consistent with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4
(June 1995) (or an equivalent provision, e.g., in supplements of various U.S. government agencies, as applicable), all U.S. Government
users acquire the Software with only those rights set forth herein. |
IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed by their duly authorized officers as of the date indicated below.
| Accepted: |
|
Accepted: |
|
| Access Payment Systems, Inc. |
|
MYEC |
|
| |
|
|
|
| /s/ Todd Scholl |
|
/s/ Ed Starrs |
|
| Signature |
|
Signature |
|
| Todd Scholl |
|
EDWARD STARRS |
|
| Name |
|
Name |
|
| President |
|
CEO |
|
| Title |
|
Title |
|
| |
|
3-5-2015 |
|
| Date |
|
Date |
|
| |
MyEcheck’s Initial: ES |
| |
|
| |
Reseller’s Initial: T.S. |
MyECheck™
Authorized Reseller Agreement
Exhibit A
Fees and Revenue Sharing
In accordance with the terms and conditions set forth above
in the MyECheck Reseller Agreement, MyECheck and Reseller shall share revenue on the accounts MyECheck brings to Reseller at the
rate of 75% (paid to MyECheck) of the gross commissioned revenue retained by Reseller. In addition, MyECheck and Reseller shall
share revenue on the accounts Reseller brings to MyECheck at the rate of 75% (paid to Reseller) of the gross commissioned revenue
retained by MyECheck.
MyECheck shall bill and collect the gross merchant transaction
fees from Reseller accounts, shall pay Reseller 75% the Commissions by the third week each month on the preceding months transaction
revenue. Reseller will pay 75% of commissions received to MyECheck no laterthan the end of the 1st week of the month
after receiving commission payments by the processors.
| |
MyEcheck’s Initial: ES |
| |
|
| |
Reseller’s Initial: T.S. |
Exhibit 10.53
MyECheck
Services Agreement
This Services Agreement (this “Agreement”)
dated April 8 , 2015 is made by and between MyECheck, Inc., a Wyoming corporation whose address is 2600 East Bidwell Street,
Folsom, Suite 190 CA 95630, (“MyECheck”), Fantasy Grudge, LLC. and whose address is 3395 N. Dixie Hwy Bay
4, Boca Raton, FL 33431 (“Company”).
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas Company is engaged in payment acceptance; and |
| C. | The Service Documentation described below contains the terms under which MyECheck has agreed to provide Services to the Company. |
NOW THEREFORE, MYECHECK AND COMPANY AGREE
AS FOLLOWS:
1. Service Documentation.
The “Service Documentation” includes;
| (a) | This Agreement and all exhibits, addendums and attachments; |
| (b) | User guides which include software and software licenses if applicable, price schedules, specifications, instructions, and
notices; |
| (c) | The application form(s) for each Service. |
The Service Documentation also applies to
any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of Company.
“MyECheck” includes each such affiliate, and “Company” includes each such affiliate and subsidiary. All
terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order set forth above. Remaining Service
Documents will be delivered, via e-mail, after receipts of this signed agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Company discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Company continues to use a Service after the change becomes effective, it will be bound by the change.
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party (unless a Service
is terminated sooner in accordance with the Service Documentation). MyECheck may terminate any Service following notice to Company
of a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to Company if
Company is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise unable to
make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change has occurred
in Company’s ability to perform its obligations under the Service Documentation. The termination of a Service will not affect
Companys or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall not be liable
to Company for any losses or damages Company may incur as a result of any termination of any Service.
4. Service
Fees. Company shall pay MyECheck the fees described in Exhibit A of this document. You hereby authorize MyECheck to create
remotely created checks drawn from Company’s checking account(s), and use the checks to collect all fees and charges, or
it may send an invoice to Company for such amounts, which Company shall promptly pay. MyECheck may assess finance charges at a
rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not
paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest
and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Company will not acquire any interest
in or rights to it as a result of Company’s use of any Service except as set forth in the Service Documentation. Company
will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Company shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Company may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Company, MyECheck may, upon notice to Company, suspend or discontinue the affected Service. Company shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Company to
use the Service(s) in accordance with the Service Documentation.
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDOR. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Company’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Company; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Company’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(b) Company
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Company shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Company is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Company.
(c) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(d) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(e) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Company shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Company; or (iii) if the Service
includes a license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining
access to the software through Company that is inconsistent with the license or sublicense.
(f) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
9. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Company as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyECheck and Company and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Company
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Company’s financial condition or any previously unprepared financial statements which MyECheck may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(e) Company
expressly warrants that a Service will not be used in a manner which violates any federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Company in MyECheck’s records, and any notice from MyECheck will be effective when sent. Company shall
use the address where Company’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Company will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice from
Company that it believes in good faith was authorized by an authorized representative of Company and, except as expressly stated
in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each party
will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Company’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Company. Company’s failure to protect Codes may allow an unauthorized party
to (i) use the Services, (ii) access Company’s electronic communications and financial data, and/or (iii) send or receive
information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Company assumes the entire risk
for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Company
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior written
consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Company
authorizes MyECheck to issue a press release, which may contain Company’s stock ticker symbol; that describes the nature
of the relationship between MyECheck and Company.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n)
"Client will not be charged for any test payments sent to our test server. Please note that any payments sent to our production
server will be charged per transaction in real-time."
(o) IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date first set forth above.
| Agreed: Fantasy Grudge, LLC |
|
Accepted: |
|
| Company |
|
MyECheck |
|
| |
|
|
|
| Signature: |
/s/ Wesley DeSouza |
|
Signature: |
/s/ Ed Starrs |
|
| |
|
|
|
| Name: |
Wesley DeSouza |
|
Ed Starrs |
|
| |
|
|
|
| Company: |
Fantasy Grudge, LLC |
|
MyECheck |
|
| |
|
|
|
| Title: |
MGM |
|
President/CEO |
|
| |
|
|
|
| |
|
Signature: |
|
|
| |
|
|
|
| |
|
Jim Fancher |
|
| |
|
|
|
| |
|
MyECheck, Inc. |
|
| |
|
|
|
| |
|
Executive Vice President/COO |
|
| |
|
|
|
| |
|
Effective Date: |
|
|
Exhibit 10.54
MyECheck
Services Agreement
This Services Agreement (this “Agreement”)
dated April 13 , 2015 is made by and between MyECheck, Inc., a Wyoming corporation whose address is 2600 East Bidwell Street,
Folsom, Suite 190 CA 95630, (“MyECheck”), Elite Tech Help, LLC and whose address is 2950 W. Cypress Creek
Rd. STE 200 Ft. Laud. FL, 33309 (“Company”).
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas Company is engaged in payment acceptance; and |
| C. | The Service Documentation described below contains the terms under which MyECheck has agreed to provide Services to the Company. |
NOW THEREFORE, MYECHECK AND COMPANY AGREE
AS FOLLOWS:
1. Service Documentation.
The “Service Documentation” includes;
| (a) | This Agreement and all exhibits, addendums and attachments; |
| (b) | User guides which include software and software licenses if applicable, price schedules, specifications, instructions, and
notices; |
| (c) | The application form(s) for each Service. |
The Service Documentation also applies to
any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of Company.
“MyECheck” includes each such affiliate, and “Company” includes each such affiliate and subsidiary. All
terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order set forth above. Remaining Service
Documents will be delivered, via e-mail, after receipts of this signed agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Company discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Company continues to use a Service after the change becomes effective, it will be bound by the change.
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party (unless a Service
is terminated sooner in accordance with the Service Documentation). MyECheck may terminate any Service following notice to Company
of a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to Company if
Company is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise unable to
make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change has occurred
in Company’s ability to perform its obligations under the Service Documentation. The termination of a Service will not affect
Companys or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall not be liable
to Company for any losses or damages Company may incur as a result of any termination of any Service.
4. Service
Fees. Company shall pay MyECheck the fees described in Exhibit A of this document. You hereby authorize MyECheck to create
remotely created checks drawn from Company’s checking account(s), and use the checks to collect all fees and charges, or
it may send an invoice to Company for such amounts, which Company shall promptly pay. MyECheck may assess finance charges at a
rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not
paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest
and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Company will not acquire any interest
in or rights to it as a result of Company’s use of any Service except as set forth in the Service Documentation. Company
will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Company shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Company may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Company, MyECheck may, upon notice to Company, suspend or discontinue the affected Service. Company shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Company to
use the Service(s) in accordance with the Service Documentation.
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDOR. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Company’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Company; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Company’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(b) Company
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Company shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Company is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Company.
(c) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(d) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(e) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Company shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Company; or (iii) if the Service
includes a license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining
access to the software through Company that is inconsistent with the license or sublicense.
(f) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
9. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Company as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyECheck and Company and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Company
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Company’s financial condition or any previously unprepared financial statements which MyECheck may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(e) Company
expressly warrants that a Service will not be used in a manner which violates any federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Company in MyECheck’s records, and any notice from MyECheck will be effective when sent. Company shall
use the address where Company’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Company will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice from
Company that it believes in good faith was authorized by an authorized representative of Company and, except as expressly stated
in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each party
will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Company’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Company. Company’s failure to protect Codes may allow an unauthorized party
to (i) use the Services, (ii) access Company’s electronic communications and financial data, and/or (iii) send or receive
information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Company assumes the entire risk
for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Company
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior written
consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Company
authorizes MyECheck to issue a press release, which may contain Company’s stock ticker symbol; that describes the nature
of the relationship between MyECheck and Company.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n)
"Client will not be charged for any test payments sent to our test server. Please note that any payments sent to our production
server will be charged per transaction in real-time."
(o) IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date first set forth above.
| Agreed: |
|
Accepted: |
|
| Company |
|
MyECheck |
|
| |
|
|
|
| Signature: |
/s/ Andrew Derch |
|
Signature: |
|
|
| |
|
|
|
| Name: |
Andrew Derch |
|
Ed Starrs |
|
| |
|
|
|
| Company: |
Elite Tech Help, LLC |
|
MyECheck |
|
| |
|
|
|
| Title: |
Partner |
|
President/CEO |
|
| |
|
|
|
| |
|
Signature: |
/s/ James T. Fancher |
|
| |
|
|
|
| |
|
Jim Fancher |
|
| |
|
|
|
| |
|
MyECheck, Inc. |
|
| |
|
|
|
| |
|
Executive Vice President/COO |
|
| |
|
|
|
| |
|
Effective Date: |
4/13/15 |
|
Exhibit
A – Fees
Electronic Check Service
| Transactions per Month | |
Fee |
| 0 – 2,500 | |
$625 flat fee per month |
| 2,501 – 500,000 | |
$0.25 per transaction |
| 500,001 – 999,999 | |
$0.25 per transaction |
| 1,000,000 + | |
$0.25 per transaction |
Optional Services
Account Verification Service
Determines whether an account is open, valid
and in a positive status. Looks for stop payments, overdrafts and balance when available. MyECheck returns an Accept or Decline
code based on Merchant configured settings in the Merchant portal.
| Service Description | |
Fee per Transaction | |
| Account Verification Service | |
$ | 0.25 | |
Identity Verification Service
Verifies that the person conducting the
transaction is who they claim to be. MyECheck returns an Accept or Decline code based on Merchant configured settings in the Merchant
portal.
| Service Description | |
Fee per Transaction | |
| Identity Verification Service | |
$ | 0.49 | |
Account Ownership Verification Service – Requires
Account and Identity Service Provides key bank account owner and status information used to authenticate if the customer is an
authorized signer on the bank account. MyECheck returns an Accept and Decline code based on Merchant configured settings in the
Merchant portal.
| Service Description | |
Fee per Transaction | |
| Account Authorization Service | |
$ | 0.49 | |
Exhibit 10.55
MyECheck
Services Agreement
This Services Agreement (this “Agreement”)
dated April 27 , 2015 is made by and between MyECheck, Inc., a Wyoming corporation whose address is 2600 East Bidwell Street,
Folsom, Suite 190 CA 95630, (“MyECheck”), and Kokopay, Inc., whose address is Baxter Town Center, 1122 Market
Street, Fort Mill SC 29708 (“Company”).
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas Company is engaged in payment acceptance; and |
| C. | The Service Documentation described below contains the terms under which MyECheck has agreed to provide Services to the Company. |
NOW THEREFORE, MYECHECK AND COMPANY AGREE
AS FOLLOWS:
| 1. | Service Documentation. The “Service Documentation” includes; |
| (a) | This Agreement and all exhibits, addendums and attachments; |
| (b) | User guides which include software and software licenses if applicable, price schedules, specifications, instructions, and
notices; |
| (c) | The application form(s) for each Service. |
The Service Documentation also applies to
any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of Company.
“MyECheck” includes each such affiliate, and “Company” includes each such affiliate and subsidiary. All
terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order set forth above. Remaining Service
Documents will be delivered, via e-mail, after receipts of this signed agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Company discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Company continues to use a Service after the change becomes effective, it will be bound by the change.
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party (unless a Service
is terminated sooner in accordance with the Service Documentation). MyECheck may terminate any Service following notice to Company
of a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to Company if
Company is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise unable to
make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change has occurred
in Company’s ability to perform its obligations under the Service Documentation. The termination of a Service will not affect
Companys or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall not be liable
to Company for any losses or damages Company may incur as a result of any termination of any Service.
4. Service
Fees. Company shall pay MyECheck the fees described in Exhibit A of this document. You hereby authorize MyECheck to create
remotely created checks drawn from Company’s checking account(s), and use the checks to collect all fees and charges, or
it may send an invoice to Company for such amounts, which Company shall promptly pay. MyECheck may assess finance charges at a
rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not
paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest
and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Company will not acquire any interest
in or rights to it as a result of Company’s use of any Service except as set forth in the Service Documentation. Company
will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Company shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Company may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Company, MyECheck may, upon notice to Company, suspend or discontinue the affected Service. Company shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Company to
use the Service(s) in accordance with the Service Documentation.
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDOR. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Company’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Company; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Company’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(b) Company
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Company shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Company is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Company.
(c) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(d) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(e) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Company shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Company; or (iii) if the Service
includes a license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining
access to the software through Company that is inconsistent with the license or sublicense.
(f) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
9. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Company as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyECheck and Company and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Company
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Company’s financial condition or any previously unprepared financial statements which MyECheck may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(e) Company
expressly warrants that a Service will not be used in a manner which violates any federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Company in MyECheck’s records, and any notice from MyECheck will be effective when sent. Company shall
use the address where Company’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Company will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice from
Company that it believes in good faith was authorized by an authorized representative of Company and, except as expressly stated
in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each party
will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Company’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Company. Company’s failure to protect Codes may allow an unauthorized party
to (i) use the Services, (ii) access Company’s electronic communications and financial data, and/or (iii) send or receive
information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Company assumes the entire risk
for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Company
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior written
consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Company
authorizes MyECheck to issue a press release, which may contain Company’s stock ticker symbol; that describes the nature
of the relationship between MyECheck and Company.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n)
"Client will not be charged for any test payments sent to our test server. Please note that any payments sent to our production
server will be charged per transaction in real-time."
(o) IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date first set forth above.
| Agreed: |
|
Accepted: |
|
| Company |
|
MyECheck |
|
| |
|
|
|
| Signature: |
/s/ Glen Fossella |
|
Signature: |
/s/ Ed Starrs |
|
| |
|
|
|
| Name: |
Glen Fossella |
|
Ed Starrs |
|
| |
|
|
|
| Company: |
Kokopay, Inc. |
|
MyECheck |
|
| |
|
|
|
| Title: |
President and CEO |
|
President/CEO |
|
| |
|
|
|
| |
|
Signature: |
|
|
| |
|
|
|
| |
|
Jim Fancher |
|
| |
|
|
|
| |
|
MyECheck, Inc. |
|
| |
|
|
|
| |
|
Executive Vice President/COO |
|
| |
|
|
|
| |
|
Effective Date: |
4/28/15 |
|
Exhibit
A – Fees
Electronic Check Service
| Transactions per Month | |
Fee |
| 0 – 2,500 | |
$0.25 per transaction |
| 2,501 – 500,000 | |
$0.25 per transaction |
| 500,001 – 999,999 | |
$0.20 per transaction |
| 1,000,000 + | |
$0.15 per transaction |
ACH Credits
| Service Description | |
Fee per Transaction | |
| ACH Credit Fee | |
$ | 0.10 | |
Optional Services
Account Verification Service
Determines whether an account is open, valid
and in a positive status. Looks for stop payments, overdrafts and balance when available. MyECheck returns an Accept or Decline
code based on Merchant configured settings in the Merchant portal.
| Service Description | |
Fee per Transaction | |
| Account Verification Service | |
$ | 0.25 | |
Identity Verification Service
Verifies that the person conducting the
transaction is who they claim to be. MyECheck returns an Accept or Decline code based on Merchant configured settings in the Merchant
portal.
| Service Description | |
Fee per Transaction | |
| Identity Verification Service | |
$ | 0.49 | |
Account Ownership Verification Service – Requires
Account and Identity Service Provides key bank account owner and status information used to authenticate if the customer is an
authorized signer on the bank account. MyECheck returns an Accept and Decline code based on Merchant configured settings in the
Merchant portal.
| Service Description | |
Fee per Transaction | |
| Account Authorization Service | |
$ | 0.49 | |
Exhibit 10.56
MyECheck
Services Agreement
This Services Agreement (this “Agreement”)
dated 17 June , 2015 is made by and between MyECheck, Inc., a Wyoming corporation whose address is 2600 East Bidwell Street,
Folsom, Suite 190 CA 95630, (“MyECheck”), PacNet Services, Ltd. and whose address is 595 Howe Street, Suite
405, Vancouver, BC, Canada, V6C 2T5 (“Company”).
| A. | Whereas MyECheck provides Payment Data Processing Services (“Services”); |
| B. | Whereas Company is engaged in payment acceptance; and |
| C. | The Service Documentation described below contains the terms under which MyECheck has agreed to provide Services to the Company. |
NOW THEREFORE, MYECHECK AND COMPANY AGREE
AS FOLLOWS:
1. Service
Documentation. The “Service Documentation” includes;
| (a) | This Agreement and all exhibits, addendums and attachments; |
| (b) | User guides which include software and software licenses if applicable, price schedules, specifications, instructions, and
notices; |
| (c) | The application form(s) for each Service. |
The Service Documentation also applies to
any Service that is provided by an affiliate of MyECheck and any Service that is used by an affiliate or a subsidiary of Company.
“MyECheck” includes each such affiliate, and “Company” includes each such affiliate and subsidiary. All
terms defined in this Agreement shall have the same meaning when used in the Service Documentation. If there is a conflict among
the documents that make up the Service Documentation, the documents will govern in the order set forth above. Remaining Service
Documents will be delivered, via e-mail, after receipts of this signed agreement.
2. Changes
to Services. MyECheck may change (or add to) the terms and fees in the Service Documentation at any time upon 30 days prior
written notification. If Company discontinues using the affected Service before the change becomes effective, it will not be bound
by the change. If Company continues to use a Service after the change becomes effective, it will be bound by the change.
3. Term
and Termination. Unless terminated sooner in accordance with the Service Documentation, this Agreement and all Services
will continue in effect until terminated by either party upon 30 days prior written notice to the other party (unless a Service
is terminated sooner in accordance with the Service Documentation). MyECheck may terminate any Service following notice to Company
of a breach of any provision of the Service Documentation. MyECheck may also terminate any Service without notice to Company if
Company is subject to a petition under applicable state or federal bankruptcy law, becomes insolvent or is otherwise unable to
make its debts when due, or if MyECheck otherwise determines, in its sole discretion, that a material adverse change has occurred
in Company’s ability to perform its obligations under the Service Documentation. The termination of a Service will not affect
Companys or MyECheck’s rights with respect to transactions which occurred before termination. MyECheck shall not be liable
to Company for any losses or damages Company may incur as a result of any termination of any Service.
4. Service
Fees. Company shall pay MyECheck the fees described in Exhibit A of this document. You hereby authorize MyECheck to create
remotely created checks drawn from Company’s checking account(s), and use the checks to collect all fees and charges, or
it may send an invoice to Company for such amounts, which Company shall promptly pay. MyECheck may assess finance charges at a
rate of 1.5% per month (18% per annum) or the highest rate permitted by law, whichever is less, on any invoiced fees that are not
paid within thirty (30) days of the due date and shall apply payments and other reductions of amounts owed first to unpaid interest
and then to other fees and charges.
5. Confidential
Information. Unless otherwise provided in the Service Documentation, all user guides and other written materials, source
code, object code, trademarks and other intellectual property included in the Service Documentation provided pursuant to this Agreement
constitute MyECheck’s or its vendors’ confidential information (“Confidential Information”). MyECheck or
its vendors, as applicable, will remain the sole owner of all such Confidential Information, and Company will not acquire any interest
in or rights to it as a result of Company’s use of any Service except as set forth in the Service Documentation. Company
will maintain the confidentiality of the Confidential Information and will not use for any purpose (other than as specifically
contemplated by this Agreement) or disclose (or permit its employees or agents to disclose), copy, transfer, sublicense or otherwise
make any of it available to any person or entity, other than its employees who have a need to use the Confidential Information
in connection with the applicable Service. Company shall notify MyECheck immediately if it knows or suspects that there has been
any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized Use”) of any Confidential Information,
and if it is responsible for the Unauthorized Use, it will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further Unauthorized Use of the Confidential Information and obtain
redress for any injury caused to MyECheck as a result of such Unauthorized Use. In addition, except as permitted by applicable
law, Company may not decompile, reverse engineer, disassemble, modify, or create derivative works of any software provided pursuant
to this Agreement.
6. Third
Party Networks; Use of Required Software. If MyECheck determines that any funds transfer or communications network, Internet
service provider, or other system(s) it has selected to provide a Service is unavailable, inaccessible or otherwise unsuitable
for use by MyECheck or Company, MyECheck may, upon notice to Company, suspend or discontinue the affected Service. Company shall
use and maintain in good working order (and at its own expense) software, hardware and other equipment necessary for Company to
use the Service(s) in accordance with the Service Documentation.
7. NO
REPRESENTATIONS OR WARRANTIES OF MYECHECK OR SOFTWARE VENDOR. NEITHER MYECHECK NOR ANY SOFTWARE VENDOR MAKES ANY EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OR ANY SOFTWARE USED IN CONNECTION WITH THE SERVICES INCLUDING
WITHOUT LIMITATION ANY WARRANTY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE EXPRESSLY SET FORTH
IN THE SERVICE DOCUMENTATION.
8. Liability
and Indemnification.
(a) MyECheck
is under no obligation to honor, in whole or in part, any entry, file, batch release, payment order, transaction or instruction
(each, an “Order”), which (i) exceeds Company’s available funds on deposit in an account with MyECheck related
to the Order, unless otherwise provided in the Service Documentation; (ii) is not in accordance with the Service Documentation
or MyECheck’s applicable policies, procedures or practices as MyECheck may from time to time establish and make available
to Company; (iii) MyECheck has reason to believe may not have been duly authorized, should not be honored for its or Company’s
protection, or involves funds subject to a hold, dispute, restriction or legal process that prevents their withdrawal; or (iv)
could result, in MyECheck’s sole discretion, in a violation of any law, rule or regulation of any federal or state regulatory
authority, including without limitation any Federal Reserve risk control program or guidelines such as the limitations on MyECheck’s
intra-day net funds position.
(b) Company
shall promptly furnish written proof of loss to MyECheck and notify MyECheck if it becomes aware of any third party claim related
to a Service. Company shall cooperate fully (and at its own expense) with MyECheck in recovering a loss. If Company is reimbursed
by or on behalf of MyECheck, MyECheck or its designee will be subrogated to all rights of Company.
(c) Any
claim, action or proceeding against MyECheck for losses or damages arising from a Service, including MyECheck’s honoring
or dishonoring a check covered by a Service, must be brought within one year from the date of the act or omission or in the case
of a check from the date the check was first paid or returned by MyECheck.
(d) MyECheck
will have no liability for failure to perform or delay in performing a Service if the failure or delay is due to circumstances
beyond MyECheck’s reasonable control.
(e) Except
in the case of MyECheck’s gross negligence or intentional misconduct, Company shall indemnify and hold MyECheck, its directors,
officers, employees and agents harmless from all losses or damages that arise out of (i) the performance of a Service in accordance
with the Service Documentation, including without limitation any warranty MyECheck is required to make to a third party in connection
with a Service; (ii) an act or omission of any agent, courier or authorized representative of Company; or (iii) if the Service
includes a license or sublicense of any software to Company, the use or distribution of the software by Company or any person gaining
access to the software through Company that is inconsistent with the license or sublicense.
(f) MYECHECK
WILL ONLY BE LIABLE TO COMPANY FOR ITS DIRECT MONETARY LOSSES OR DAMAGES DUE TO MYECHECK’S GROSS NEGLIGENCE OR MATERIAL BREACH
OF THIS AGREEMENT. MYECHECK’S LIABILITY TO COMPANY WILL BE LIMITED TO AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE FEES ACTUALLY
PAID BY COMPANY TO MYECHECK DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING THE CALENDAR MONTH IN WHICH SUCH LOSS OR DAMAGES WERE
INCURRED (OR, IF NO MYECHECK FEES WERE PAID IN SUCH MONTH, MYECHECK FEES PAID IN THE MONTH IN WHICH THE LOSSES OR DAMAGES WERE
INCURRED). IN NO EVENT WILL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
(INCLUDING WITHOUT LIMITATION COURT COSTS AND ATTORNEYS’ FEES), INDIRECT, OR PUNITIVE LOSSES OR DAMAGES, WHETHER ANY CLAIM
IS BASED ON CONTRACT OR TORT, OR WHETHER THE LIKELIHOOD OF SUCH LOSSES OR DAMAGES WAS KNOWN TO THE OTHER PARTY AND REGARDLESS OF
THE FORM OF THE CLAIM OR ACTION.
9. General.
(a) The
Service Documentation will be governed by the laws of the state of California, without regard to conflicts of laws principles.
In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such
action will be brought in the U.S. District Court of the Northern District of California, Sacramento County, and that the parties
hereby submit to the jurisdiction and venue of said court.
(b) Any
portion of the Service Documentation which is inconsistent with applicable laws, regulations or rules will be deemed modified and
applied in a manner consistent therewith, and MyECheck will incur no liability to Company as a result of the inconsistency or modification
and application. If any portion of the Service Documentation is deemed unenforceable or invalid, it will not otherwise affect the
enforceability or validity of the Service Documentation.
(c) The
Service Documentation is the entire agreement between MyECheck and Company and supersedes all prior representations, conditions,
warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right on one occasion
will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion.
(d) Company
agrees to provide MyECheck promptly upon MyECheck’s request any existing financial statements or other information pertaining
to Company’s financial condition or any previously unprepared financial statements which MyECheck may require Company to
prepare and/or to be audited or reviewed by independent certified public accountants acceptable to MyECheck.
(e) Company
expressly warrants that a Service will not be used in a manner which violates any federal or state law including without limitation
any sanction or control administered by the Office of Foreign Assets Control or Bureau of Export Administration.
(f) Sections
4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.
(g) Either
party may provide notice to the other party by mail, personal delivery, or electronic transmission. MyECheck shall use the most
recent address for Company in MyECheck’s records, and any notice from MyECheck will be effective when sent. Company shall
use the address where Company’s relationship manager is located and address any notice to the attention of such manager.
Any notice from Company will be effective when actually received by MyECheck. MyECheck will be entitled to rely on any notice from
Company that it believes in good faith was authorized by an authorized representative of Company and, except as expressly stated
in the Service Documentation, shall have no obligation to verify the signature (including an electronic signature). Each party
will have a reasonable time after receipt of any notice to act on it.
(h) All
uses of the Services through Company’s ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Company. Company’s failure to protect Codes may allow an unauthorized party
to (i) use the Services, (ii) access Company’s electronic communications and financial data, and/or (iii) send or receive
information and communications to MyECheck. Unencrypted electronic transmissions are not secure. Company assumes the entire risk
for unauthorized use of Codes and any unencrypted electronic transmissions.
(i) Company
may not assign or transfer its rights or obligations with respect to the Service Documentation without MyECheck’s prior written
consent. MyECheck may assign its rights and obligations with respect to the Service Documentation to any successor by merger, consolidation
or corporate reorganization.
(j) Unless
otherwise provided in the Service Documentation, the term “Business Day” means that part of a business day occurring
prior to the cutoff time determined in accordance with MyECheck’s applicable funds availability policy.
(k) The
parties do not intend that any agency or partnership relationship be created between them by this Agreement.
(l) Company
authorizes MyECheck to issue a press release, which may contain Company’s stock ticker symbol; that describes the nature
of the relationship between MyECheck and Company.
(m) This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n)
"Client will not be charged for any test payments sent to our test server. Please note that any payments sent to our production
server will be charged per transaction in real-time."
(o) IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date first set forth above.
| Agreed: |
|
Accepted: |
|
| Company |
|
MyECheck |
|
| |
|
|
|
| Signature: |
/s/ Rosanne Day |
|
Signature: |
/s/ Ed Starrs |
|
| |
|
|
|
| Name: |
ROSANNE DAY |
|
Ed Starrs |
|
| |
|
|
|
| Company: |
PACNET SERVICES LTD. |
|
MyECheck |
|
| |
|
|
|
| Title: |
CEO |
|
President/CEO |
|
| |
|
|
|
| |
|
Signature: |
/s/ Jim Fancher |
|
| |
|
|
|
| |
|
Jim Fancher |
|
| |
|
|
|
| |
|
MyECheck, Inc. |
|
| |
|
|
|
| |
|
Executive Vice President/COO |
|
| |
|
|
|
| |
|
Effective Date: |
6/17/15 |
|
Exhibit A –
Fees
MyECheck Electronic Check Service
| Transactions per Month | |
Fee |
| N/A | |
$0.25 per transaction |
Optional Services
Account Verification Service
Determines whether an account is
open, valid and in a positive status. Looks for stop payments, overdrafts and balance when available. MyECheck returns an Accept
or Decline code based on Merchant configured settings in the Merchant portal.
| Service Description | |
Fee per Transaction | |
| Account Verification Service | |
$ | 0.74 | |
Identity Verification Service (Includes Account Verification
Service)
Verifies that the person conducting the transaction
is who they claim to be. MyECheck returns an Accept or Decline code based on Merchant configured settings in the Merchant portal.
| Service Description | |
Fee per Transaction | |
| Identity Verification Service | |
$ | 1.24 | |
Account Ownership Verification Service (Includes Account
Verification Service + Identity Verification Service)
Provides key bank account owner and status information
used to authenticate if the customer is an authorized signer on the bank account. MyECheck returns an Accept and Decline code based
on Merchant configured settings in the Merchant portal.
| Service Description | |
Fee per Transaction | |
| Account Authorization Service | |
$ | 1.24 | |
Payment Guarantee Service
Provides key bank account owner and status information used
to authenticate if the customer is an authorized signer on the bank account. MyECheck returns an Accept or Decline code based on
Merchant configured settings in the Merchant portal.
| Service Description | |
Fee per Transaction |
| Payment Guarantee Servive | |
Quote Only |
Exhibit 10.57
MyECheck™ Authorized Reseller Agreement
THIS RESELLER AGREEMENT (“Agreement”)
by and between MyECheck, Inc (“MYEC”), with its principal place of business located at 2600 East Bidwell, Suite 190,
Folsom, CA. 95628, and Peter Farinas DBA PK and Maverick, Inc. (the "Reseller") with offices at 16560 Royal
Poinciana Dr. Weston, Fl 33326 , in the United States of America, shall become effective on the date executed by a duly authorized
representative of MYEC (the “Effective Date”). MYEC and Reseller shall be collectively known hereafter as the “Parties”.
WHEREAS MYEC is engaged
in the business of providing Check21 based data processing services to merchants and consumers (the “Solution”); and
WHEREAS, MYEC requires
a financial institution to originate payments related to the Solution; and
WHEREAS, Reseller is
a business of good standing offering payment processing products of either their own or third parties to merchants; and
WHEREAS, Reseller desires
to offer the Solution to their customer base;
NOW THEREFORE, in consideration
of the mutual promises made herein and other valuable consideration, receipt and sufficiency of which are hereby acknowledged,
the Parties do hereby agree as follows:
Definitions:
“Check21”. The Check
Clearing for the 21st Century Act (or Check 21 Act) is a United States federal law, enacted by congress on October 28, 2003
“Prospects”. Shall
mean businesses engaged in selling legal products or services to consumers (B2C) or other businesses (B2B) in which they need to
collect payments for their respective good and services and are not existing Customers of Reseller.
“Customer”. Shall
mean businesses or persons having an existing contract relationship for payment processing services with Reseller.
“Fees”. Shall mean
the price paid to MYEC by Customers for the Solution, as such may change from time to time based on the sole discretion of MYEC.
| 1. | Solution Documentation. The “Solution Documentation” includes; |
| a. | This Agreement and all exhibits, addendums and attachments; |
| b. | User guides which include software and software licenses if applicable, price schedules, specifications,
instructions, and notices; |
| |
|
MyEcheck’s Initial: JTF |
| |
|
|
| |
Proprietary and Confidential |
Reseller’s Initial: PF |
| c. | The application form(s) for each Service. |
The Solution Documentation also
applies to any service that is provided by an affiliate of MYEC and any service that is used by an affiliate or a subsidiary of
Reseller. All terms defined in this Agreement shall have the same meaning when used in the Solution Documentation. If there is
a conflict among the documents that make up the Solution Documentation, the documents will govern in the order set forth above.
Reseller acknowledges receiving a copy of the Service Documentation for each Service it requested when it entered into this Agreement.
| 2. | Resale Right: MYEC hereby appoints and grants Reseller the non-exclusive and non-assignable right
to sell the Solution to its Customers or Prospects. |
| 3. | Fees and Revenue Sharing: MYEC and the Reseller have mutually negotiated and agree to the product
sales rates and fees, and the revenue sharing schedule as outlined in Exhibit A, hereby incorporated into this Agreement. |
| 4. | Billing. MYEC bills Customers on a daily automated basis for Check21 payments processed by MYEC.
MYEC shall remit Commissions to Reseller per Exhibit A. |
| 5. | Selling the Solution. Reseller shall do their best to present the Solution in its best light. Reseller
shall use only approved MYEC sales agreements, provided as attachments, such that may change from time to time in the sole discretion.
Reseller shall present MYEC with such signed Solution agreements and MYEC will begin integration tasks with Customer directly. |
| a. | Provide Partner with introduction and sales materials necessary to introduce the Solution to current
Clients. |
| b. | Support Reseller on Customer calls as needed to answer questions. |
| c. | Work with Customers to integrate the Solution into their payment shopping cart, ecommerce site
or other web based site used to purchase products. |
| d. | Provide Solution references. |
| e. | Integrate the Solution as necessary to Customers bank. |
| f. | Provide Reseller with monthly Solution revenue sharing report. |
| g. | Pay agreed upon amounts to Reseller per aforementioned Billing terms. |
| 7. | Duties of the reseller: |
| a. | Educate Resellers sales team on the Solution. |
| b. | Introduce Customers and Prospects to the Solution via direct sales, Reseller website, and social
media as appropriate. |
| c. | Close and sign MYEC agreements with Customer and Prospects. |
| |
|
MyEcheck’s Initial: JTF |
| |
|
|
| |
Proprietary and Confidential |
Reseller’s Initial: PF |
| 8. | Other Parties: Reseller acknowledges and understands that there are other parties (“Contractors”)
that may have been contracted by MYEC to provide software, banking, funds management, and/or other solutions that are integrated
with the Solution. These Contractors may benefit from the sales of the Solution. |
| 9. | Trademarks and Logo Use: All uses of MYEC trademarks, service marks, and logos (the "Logos")
must be reviewed and have prior written approval by MYEC for the duration of the Agreement as described herein, and under the following
terms and conditions: |
| a. | The uses are granted for the benefit of MYEC’s Resellers, and others, with a legitimate intent
to advertise and sell MYEC’s products and services, upon review and MYEC’s written approval of the use. |
| b. | The Reseller follows the published guidelines for use of the MYEC Logos, Service Marks, Trademarks,
Styles and Colors. |
| c. | MYEC has full ownership rights to the Trademarks, Service Marks, and Logos and the Reseller does
not acquire any rights, title or interest in or to the marks beyond that set forth herein; |
| d. | If the Reseller uses the Logos in conjunction with logos representing awards or publications of
companies granting such awards, it shall be the responsibility of the Reseller to give appropriate attribution to such companies,
and to correctly identify such logos with their respective companies; and |
| e. | The Reseller may not, under any circumstances, alter the appearance of the Logos, either by alteration,
size, color or combination with any other logo. Breach of this section will be grounds for immediate termination of the use, and
any other legal remedies MYEC may deem appropriate. |
| 10. | MYEC reserves the right to modify or terminate its Reseller Program at any time without notice
or liability. |
| 11. | Non-existent in this contracted agreement is there any implied or hidden impose liability or obligation
on MYEC for any expenditure made or incurred by the Reseller, or for any sale or promotional activity undertaken by the Reseller,
except pursuant to written and explicit request of representatives of MYEC. |
| 12. | Term: The term of this Agreement shall be for one (1) year from the Effective Date, unless sooner
terminated and shall automatically renew for successive one (1) year periods (the “Term”), unless either party notifies
the other in writing of an intention not to renew the Agreement within ninety (90) days of the end of the Term (“Cancellation”). |
| 13. | Termination. Termination shall not relieve either party of obligations incurred prior thereto.
Parties shall be able to terminate this Agreement as follows: |
| a. | Termination without Cause. Either Party may terminate this Agreement by Cancellation. Reseller
may also terminate with thirty (30) days written notice by paying any outstanding fees, invoices or documented and approved amounts
owed to MYEC and six (6) months prior revenues collected by MYEC from Resellers Customers. |
| |
|
MyEcheck’s Initial: JTF |
| |
|
|
| |
Proprietary and Confidential |
Reseller’s Initial: PF |
| b. | Termination for Cause. Either Party may terminate this Agreement upon the occurrence of an Event
of Default, as defined below. |
| c. | Event of Default. Each of the following occurrences will constitute an “Event of Default”
under this Agreement: |
| i) | Goodwill. Either Party engages in any act or omission that damages the reputation, business, or goodwill of the other
Party; |
| ii) | False Representation. Any representation or warranty made by the Parties or any of its officers, or directors proves
to have been false or misleading in any material respect; |
| iii) | Breach. Either Party fails to observe any material obligation specified in this Agreement, and such failure is not cured
within thirty (30) days of receipt of written notice thereof from the non-breaching party; or |
| iv) | Bankruptcy. The liquidation, dissolution, or
discontinuance of business by a Party in any manner or the filing of any petition by or against a Party under any federal or state
bankruptcy or insolvency laws, which petition shall not be dismissed within 60 days after filing. |
| 14. | Notice or Communication. Any notice or communication required or permitted hereunder (other than
Administrative Notice) shall be in writing and may be sent by registered mail, return receipt requested, postage prepaid and addressed
to the addresses set forth below, or emailed to such address as any party entitled to notice shall have communicated in writing
to the other party. Notices and communications to MYEC and the Reseller are noted on the final page of this Agreement. |
| 15. | Relationship of Parties. The relationship between the parties established by this Agreement shall
be solely that of vendor and vendee and all rights and powers not expressly granted to the Reseller are expressly reserved to MYEC.
The Reseller shall have no right, power or authority in any way to bind MYEC to the fulfillment of any condition not herein contained,
or to any contract or obligation, expressed or implied |
| 16. | Indemnity. The Reseller agrees to hold MYEC free and harmless from any and all claims, damages,
and expenses of every kind or nature whatsoever (a) arising from acts of the Reseller; (b) as a direct or indirect consequence
of termination of this Agreement in accordance with its terms; or (c) arising from acts of third parties in relation to products
sold to the Reseller under this Agreement, including, but not limited to execution of liens and security interests by third parties
with respect to any such products. |
| 17. | Assignment. This Agreement constitutes a professional contract and Reseller shall not transfer
or assign same or any part thereof without the advance written consent of MYEC. |
| 18. | The Reseller expressly warrants that the MYEC Solution, and any service(s), will not be used
or sold in states in which its use may violate state law. |
| |
|
MyEcheck’s Initial: JTF |
| |
|
|
| |
Proprietary and Confidential |
Reseller’s Initial: PF |
| 19. | Applicable Law. This Agreement shall be governed by the laws of the State of California and is
accepted by MYEC at its Corporate Office noted above. All payments hereunder shall be made at MYEC's Corporate Office address.
MYEC's rights granted hereby are cumulative and in addition to any rights it may have at law or equity. |
| a) | Any portion of the Agreement which is inconsistent with applicable laws, regulations or rules will
be deemed modified and applied in a manner consistent therewith, and the Parties shall not incur any liability to each other as
a result of the inconsistency or modification and application. If any portion of the Agreement is deemed unenforceable or invalid,
it will not otherwise affect the enforceability or validity of the Agreement. |
| b) | The Agreement is the entire agreement between the Parties and supersedes all prior representations,
conditions, warranties, understandings, proposals or agreements regarding a Service. No course of dealing or waiver of any right
on one occasion will constitute a modification of the Agreement or be a waiver of that right on a subsequent occasion. |
| c) | Any/All sections of this agreement, plus all Exhibits of this Agreement, will survive termination
of this Agreement. |
| d) | Parties may not assign or transfer its rights or obligations with respect to this Agreement without
the other written consent. Each Party may assign its rights and obligations with respect to this Agreement to any successor by
merger, consolidation or corporate reorganization. |
| e) | The parties do not intend that any agency or partnership relationship be created between them by
this Agreement. The parties are and will remain as independent contractors. |
| f) | The Parties agree that either Party may issue press release(s), which may contain the Party’s
ticker symbol; that describes the nature of the relationship between the Parties and may historical information about the respective
Parties. |
| g) | This Agreement may be executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. |
| h) | This Agreement may be executed as a faxed or electronically scanned document, with scanned or faxed
signatures deemed as original. |
| i) | Construction. Section headings in this Agreement are for convenience only and are not to be used
in interpreting this Agreement. As used in this Agreement, the word "including" means "including but not limited
to". |
| |
|
MyEcheck’s Initial: JTF |
| |
|
|
| |
Proprietary and Confidential |
Reseller’s Initial: PF |
| j) | Confidentiality of Agreement. Neither party will disclose any terms of this Agreement, including
prices or discounts, to anyone other than its attorneys, accountants or other professional advisors or to any investor or potential
investor who agrees to maintain the confidentiality of such information. Notwithstanding the foregoing, either party may make limited
disclosure of the terms of this Agreement to the extent required by law, provided that the disclosing party: (i) provides the non-disclosing
party reasonable prior notice of such disclosure, and (ii) uses its best efforts to protect and limit the disclosure of such information
to the extent possible. Notwithstanding the foregoing, the Parties agree that each may acknowledge the other as a customer. |
| k) | Parties Advised by Counsel. This Agreement has been negotiated between Parties who are sophisticated
and knowledgeable in the matters contained herein and who have been represented by legal counsel. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intentions of the Parties and any rule of law (including Section 1654
of the California Civil Code and any other authority of any jurisdiction of similar effect) which would require interpretation
of any ambiguities in this Agreement against the drafting Party is not applicable and is hereby waived. |
| l) | Reseller authorizes MyECheck to issue a press release, which may contain Reseller’s stock
ticker symbol; that describes the nature of the relationship between MyECheck and Reseller. |
| m) | Entire Agreement. Both Parties agree that this Agreement, along with the Exhibits hereto, is the
complete and exclusive statement of the mutual understanding of the Parties and supersedes and cancels all previous and contemporaneous
written and oral agreements and communications relating to the subject matter of this Agreement. |
| n) | Force Majeure. Any delay in the performance of any duties or obligations of either Party will not
be considered a breach of this Agreement if such delay is caused by a labor dispute, market shortage of materials, fire, earthquake,
flood or any other event beyond the control of such Party, provided that such Party uses reasonable efforts, under the circumstances,
to resume performance as soon as reasonably practicable. |
| o) | Government Rights. The Software is a "commercial item," as that term is defined at 48
C.F.R. 2.101 (Oct. 1995), consisting of "commercial computer software" and "commercial computer software documentation,"
as such terms are used in 48 C.F.R. 12.212 (Sept. 1995). Consistent with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4
(June 1995) (or an equivalent provision, e.g., in supplements of various U.S. government agencies, as applicable), all U.S. Government
users acquire the Software with only those rights set forth herein. |
| |
|
MyEcheck’s Initial: JTF |
| |
|
|
| |
Proprietary and Confidential |
Reseller’s Initial: PF |
| p) | Notices. All notices and other communications required or permitted by this Agreement to be delivered
to the other party shall be delivered in writing to the address shown below, either personally or by registered, certified or express
mail, return receipt requested, postage prepaid, to the address for such party specified below or to such other address as the
party may from time to time advise the other party, and shall be deemed given and received as of actual personal delivery, on the
first business day after the date of delivery shown on any return receipt if registered, certified or express mail is used, as
the case may be: |
| |
For the Company: |
For Reseller |
| |
| |
President, MyECheck, Inc. |
PK & MAVERICK |
| |
2600 E. Bidwell St. Suite 190 |
16560 ROYAL POINCIANA DR |
| |
Folsom, CA 95630 |
WESTON, FL 33326 |
IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed by their duly authorized officers as of the date indicated below.
| Accepted: |
|
Accepted: |
|
| Reseller |
|
MYEC |
|
| |
|
|
|
| /s/ Pedro Farinas |
|
/s/ James T. Fancher |
|
| Signature |
|
Signature |
|
| PEDRO FARINAS |
|
JAMES T. FANCHER |
|
| Name |
|
Name |
|
| MANAGING MEMBER |
|
C.O.O. |
|
| Title |
|
Title |
|
| 4-17-15 |
|
4/17/15 |
|
| Date |
|
Date |
|
| |
|
MyEcheck’s Initial: JTF |
| |
|
|
| |
Proprietary and Confidential |
Reseller’s Initial: PF |
Exhibit A
Fees and Revenue Sharing
In accordance with the terms and conditions set forth above
in the MyECheck Reseller Agreement, MyECheck and Reseller shall share transactional gross revenue collected by MyEcheck on all
approved Reseller accounts at the following rates (“Commissions”):
| For gross collections from $0 - $1,000,000 per calendar year |
3% to Reseller |
| For gross collections from $1,000,001 - $5,000,000 per calendar year |
5% to Reseller |
| For gross collections from $5,000,001 - $10,000,000 per calendar year |
7% to Reseller |
MyECheck shall bill and collect the gross merchant transaction
fees from Reseller’s Customer accounts, shall pay Reseller the Commissions by the third week each month on the preceding
months transaction revenue.
| |
|
MyEcheck’s Initial: JTF |
| |
|
|
| |
Proprietary and Confidential |
Reseller’s Initial: PF |
Exhibit 10.58
MEMORANDUM OF UNDERSTANDING
BETWEEN
CENTRIC
GATEWAY LIMITED
AND
UNITED
BANK FOR AFRICA PLC
THIS MEMORANDUM OF UNDERSTANDING is
made the 25th day of February 2015 Between CENTRIC GATEWAY LIMITED
a limited liability company incorporated under the Laws of the Federal Republic of Nigeria
of _______________________________________________________ (hereinafter referred to as "Centric
Gateway") of the one part and UNITED BANK FOR AFRICA PLC
a bank licensed in Nigeria and having its
registered office at 57 Marina, Lagos (hereinafter referred to as "UBA") of the other part.
Centric
Gateway and UBA shall be referred to herein, collectively, as the "Parties"
WHEREAS:
| a. | UBA carries on business as a bank and financial services
institution with a wide network of branches across Nigeria and its head office at UBA House,
57, Marina, Lagos and having subsidiaries across other African countries. |
| b. | Centric Gateway is a an Application Service Provider
that authorizes and processes business solutions; providing range of payment integration and Value-Added Services (VAS) for financial
businesses on web and mobile channels and its office at 15, Olusesan Adetula Street, Surulere,
Lagos |
| c. | Centric Gateway has sent a proposal to UBA
for proposing to provide access to SeerGate's e-mail payment platform known as SeerGate, by UBA's
customers for use of the platform for their various transactions through different communication platforms. |
| d. | Based on the representation made by Centric Gateway,
UBA has decided to engage Centric Gateway
to provide access to SeerGate and Centric Gateway has agreed to provide the required
access on the terms and conditions set out herein. |
NOW IT IS HEREBY AGREED as follows:
In this MOU, the following words
shall have the meanings indicated hereunder:
| "SeerGate" |
means the email payment platform owned and licensed by SeerGate Inc |
| "the Project" |
means the deployment of SeerGate across different communication channels for UBA Nigeria and in 18 other subsidiaries of UBA in African countries |
| "the Customers" |
means account holders who maintain accounts with UBA or any of UBA's African Subsidiaries |
| 2. | The License/Access Rights: |
Centric
Gateway hereby grants to UBA the license for use of SeerGate by UBA
customers in Nigeria and the customers of UBA's
subsidiaries in 18 African countries to effect payment for goods and services on various communication channels used by the customers
| 3.1 | Centric Gateway shall deploy the Platform and make
the Platform accessible to the Customers on all of the following communication channels: |
| • | such other channels (i.e. Yahoo, Google etc) as SeerGate may partner with in future |
| 3.2 | The Platform shall be enabled to carry out both transactions between different UBA
accounts and also transactions between UBA accounts and accounts of other banks. |
| 3.3 | The platform will also provide for international remittance (subject to regulatory guidelines) |
UBA shall:
| 4.1 | Provide hard ware and interface, requirements for the deployment of email money platform |
| 4.2 | Undertake product awareness and marketing campaign to drive adoption and penetration |
| 5. | CENTRIC GATEWAY's Obligation |
Centric
Gateway shall:
| 5.1 | ensure that the services are provided in accordance with the terms and conditions agreed by the
parties and by qualified, experienced and well equipped personnel who understand the requirements of the Project. |
| 5.2 | ensure that the Project is satisfactorily completed within the time lines agreed by the parties |
| 5.3 | Hand-over platform management to IT team in UBA (after
full deployment) but provide continuous technical support upon escalations at no extra cost to the Bank |
| 6.1 | In consideration of the services to be rendered under this MOU, the parties hereby agree that Centric
Gateway shall be paid a total sum of N22,942,500.00 (twenty-two million, nine
hundred and forty- two thousand, five hundred Naira) only, VAT inclusive (Contract Sum) in accordance with the terms of
this Agreement |
| 6.2 | The Contract sum shall be paid to Centric Gateway
in the following manner: |
| • | 50% of the contract sum shall be paid upfront upon production of an Advanced Payment Bond of Guarantee
issued in form and substances satisfactory to UBA either by an insurance company acceptable
to UBA or by a bank acceptable to UBA |
| • | 30% of the Contract sum shall be paid upon go-live for the last UBA
Africa Subsidiary that SeerGate is deployed to |
| • | 20% shall be paid after 3 months from the effective date of the Go-Live Support |
| 6.3 | Centric Gateway shall deliver an invoice on payments
due, but payment shall not be made until UBA has ascertained that the relevant milestone
for the payment has been satisfactorily achieved. Upon confirmation of satisfactory performance, payment shall be made within 30
day |
| 6.4 | All payments shall be made into Centric Gateway's
current account domiciled in any business office of UBA. Centric
gateway shall also ensure payment to all its suppliers is done through its account with UBA |
| 6.5 | All payments due under this Agreement shall be subject to the relevant tax laws applicable |
| 6.6 | The parties hereby agree that in arriving at the contract sum, all associated expenses have been
properly considered and provision made therefore. Consequently, UBA shall not be responsible
for any expenses whatsoever, which may be incurred by Centric Gateway in the course
of providing the services contemplated under this agreement. |
The parties hereby agree that
the Net Revenue generated from transactions carried out using the SeerGate would be split between
UBA and Centric Gateway at the ratio of 70:30, respectively. Before being split between the Parties, UBA
shall deduct from the Gross Revenue, direct fees, third party fees and settlement/clearing/network fees directly attributable to
each transaction that generated the Revenue, to produce the Net Revenue.
This Agreement shall come into
effect on the 27 day of February 2015 and shall remain in force for a term of one (1) year, except it is terminated
in accordance with the provisions of this Agreement.
| 9. | Warranties & Indemnity |
| 9.1 | Centric Gateway warrants that it has the authority
to enter into this Agreement and has obtained all requisite permits and licenses from SeerGate Inc to perform the obligations contemplated
under this Agreement. |
| 9.2 | Centric Gateway warrants that SeerGate does not infringe
the intellectual property right of any third party and its use by the Bank and its customers shall not result in any such infringement.
Centric Gateway hereby agrees to indemnify and keep UBA
full indemnified against any loss, damage, expense or liability that may arise or may be incurred in the event of any claim of
infringement. |
Centric
Gateway hereby agrees that UBA shall have the exclusive right to use the platform
for a term of one year with effect from the Commencement Date. Centric Gateway shall
not grant anyone access to use the Platform during the period of exclusivity as stated herein.
| 11.1 | UBA shall be entitled to terminate this agreement
if Centric Gateway: |
| • | commits a material breach of any of the terms of this agreement, which has not been remedied within
5 (five) days of receipt of notice of breach |
| • | If in the Bank's reasonable opinion, the services rendered by your Company are unsatisfactory and
your Company fail to remedy the defects within 5 (five) business days of the receipt of the notice |
| • | If your Company enters into a composition with its creditors, is declared bankrupt, goes into liquidation
or a Receiver/Manager is appointed in respect of the Company. |
| 11.2 | Termination for Cause. Either Party may terminate this Agreement upon the occurrence of an Event
of Default, as defined below. |
| 11.3 | Termination without Cause. Either Party may terminate this Agreement upon giving to the other ninety
(90) days written notice. |
Each of the following occurrences
will constitute an "Event of Default" under this Agreement:
| 11.4.1 | Goodwill: Either Party engages in any act or omission that damage the reputation, business,
or goodwill of the other Party or the Services; |
| 11.4.2 | False Representation: Any representation or warranty made by the Parties or any of its ICs, officers,
or directors proves to have been false or misleading in any material respect; |
| 11.4.3 | Breach: Without prejudice to UBA's rights as set out
in Clause 11.1, either party fails to observe any material obligation specified in this Agreement, and such failure is not cured
within thirty (30) days of receipt of written notice thereof from the non-breaching party; or |
| 11.4.4 | Insolvency & Liquidation: The liquidation, dissolution, or discontinuance of business
by a Party in any manner or the filing of any petition by or against a Party under any federal or state bankruptcy or insolvency
laws, which petition shall not be dismissed within 60 days after filing. |
| 11.5 | In the event of the termination of this contract, Centric
Gateway agrees to refund to the Bank any unearned fees already paid by the Bank for services not rendered by Centric
Gateway and paid for by the Bank, and Centric Gateway shall also have the right
to recover any amount owed to it by the Bank for services rendered in respect of which the Bank has not paid within the specified
time. |
| 12.1 | Neither Party shall disclose or permit to be disclosed to any third party, or use or permit to
use for any purpose other than a purpose contemplated by this MOU, any information that may be acquired by such Party under this
MOU, except where publicly available other than breach of this MOU or where required by law. Such confidential information shall
be restricted to employees, agents and advisors on a need-to-know basis only for the purposes and implementation of the relationship
contemplated under this MOU. |
| 12.2 | Notwithstanding the provisions of Clause 12.1, UBA
hereby confirms that access by SeerGate Inc to its confidential information shall not be considered a breach of this Agreement,
provided that Centric Gateway shall ensure that SeerGate Inc undertakes to keep the
said information confidential and use them only for the purpose of the services contemplated under this Agreement, Centric
Gateway shall be libel for any breach of confidentiality by SeerGate Inc. |
Each party (the Indemnifying
Party) shall indemnify the other (the Indemnified Party) and shall keep the Indemnified party indemnified against any loss, damage
or cost incurred by the Indemnified party in the course of the Indemnifying Party executing its obligations under this MOU.
Neither party hereto shall be
liable for any breach of its obligations hereunder resulting from the causes beyond its reasonable control including but not limited
to strikes, riot, acts of war or revolution, acts of God, civil commotion, fires, floods, destructive lightening, epidemic, system
downtime, system malfunction or other circumstances which they could not have foreseen or guarded against.
If any provision is or becomes
illegal, invalid or unenforceable for whatsoever reason, such a provision shall be deemed severed from this agreement and the remaining
provisions shall have effect as if the severed provision never formed part of the agreement.
Any dispute arising out of or
in connection with this MOU may be resolved in accordance with the Arbitration and Conciliation Act, Cap A18, Laws of the Federation
of Nigeria 2004.
| 17. | Nature of Relationship |
The parties understand that this
Memorandum of Understanding does not create a partnership, agency, joint venture or such other relationships between the parties.
This Memorandum of Understand
shall be governed by Nigerian Law.
| 19.1 | The Parties shall not, except by mutual consent assign or transfer any part or the whole of their
rights under this MOU to or in favour of a third party. |
| 19.2 | The provisions of this MOU shall not be modified, amended or waived, except by the mutual consent
of both parties in writing. |
| 19.3 | Any notice or other information required or authorised by this MOU to be given by either Party
to the other may be given by hand, facsimile transmission or other comparable means of communication at the registered office address
of the Party as given in the Parties clause hereto. |
IN WITNESS WHEREOF the parties have
caused this Memorandum of Understanding to be executed in the manner hereinafter appearing.
Signed for and on behalf of:
CENTRIC GATEWAY LIMITED
Name: ________________________________
Designation: ___________________________
Signature: _____________________________
Name: ________________________________
Designation: ___________________________
Signature: _____________________________
Signed for and on behalf of:
UNITED BANK FOR AFRICA
PLC
Name: ________________________________
Designation: ___________________________
Signature: _____________________________
Name: ________________________________
Designation: ___________________________
Signature: _____________________________
Exhibit 10.59
UBA
GP&VM/UBA/2013/VAL0000089
Date: 25/7/2013
The Managing Director,
CENTRIC
GATEWAY LIMITED
15 OLUSESAN
ADETULA SURULERE LAGOS
Dear Sir,
RE: AWARD OF CONTRACT TO IMPLEMENT THE SOCIAL
BANKING SOLUTION SOFTWARE FOR UBA PLC
Your proposal in respect of the
above captioned and the subsequent negotiation meeting with you refer. We are pleased to inform you that our Management has approved
the award of contract to implement the Social Banking Solution Software For UBA Plc,
to your Company subject to the following terms and conditions:
| Contract Sum |
The contract is awarded for the sum of N5,640,210.00 (five million, six hundred and forty thousand, two hundred and ten Noire) only VAT exclusive. |
| |
|
| Contract Duration |
The contract shall be accomplished within 10 (ten) weeks, with effect from the date of receipt of this letter of award. |
| |
|
| Scope of Works |
The scope of works includes but not limited to the following: |
| |
• |
Supply, Installation, Configuration, Development, Testing and Roll Out of All Core modules of Pay & Go Switch Platform in UBA Infrastructure |
| |
• |
Supply, Installation, Configuration, Development, Testing and Roll Out of Mobile App of the Pay & Go Switch Platform in UBA Infrastructure |
| |
• |
Customization and White Labeling of the Pay & Go system for UBA Plc |
| |
• |
The execution of the Pilot Phase of the Pay & Go System for a Two Week Period Before Go Live |
| |
• |
Development, testing and deployment of The Face book and Microsoft Outlook Extensions of the Pay & Go System |
| |
• |
Integration of the Pay & Go platform with 3rd Party Interbank, Bill Payment, Airtime Topup, and Aggregation Platforms |
| |
• |
It also includes the scopes as detailed in your proposal and as agreed by both parties. |
| Terms of Payment |
You shall receive 40% of the total contract sum in advance as mobilisation fee for the execution of the project up to the Pilot Phase subject to the production of an Advance Payment Bond/Guarantee (APB/G) covering the amount being mobilized. Your Company must liaise with UBA Insurance Brokers (12th floor UBA House; Josephine Ayuba 08027060993) to facilitate the issuance of the APB from any of the approved Insurance Companies. |
| |
• |
You may also procure the Advance Payment Guarantee from the approved Banks attached herein using the attached APG format. |
| |
• |
You shall subsequently be paid the balance 60% upon satisfactory delivery of the Pay & Go Platform. |
| |
• |
All payments shall also be subject to the production of your invoice and confirmation to effect payment into your account by the Divisional Head, Electronic Banking, UBA Plc. |
| |
• |
All payments shall be credited to your Company's current account with the Bank. Payments to your backward suppliers must also be through your Company's current account with the Bank. |
| |
• |
Please note that Income derived from this platform shall be shared by both parties in the ratio of 80% to UBA and 20% to Centric Gateway after deployment. |
| |
• |
Your Company shall be paid the sum of $7,000 for any additional social media module requested by the Bank. |
| Variations/Fluctuation |
The Bank shall not entertain any variation nor fluctuation claims as these have been taken into consideration in determining the contract sum |
| |
|
| Liability |
You shall be liable for any expenses, loss, claims, or proceedings arising out of or in the course of carrying out this services, in respect of any injuries or damages whatsoever to any property, real or personal, in so far as such injury or damage is due to negligence, omission, commission or default of your company. You shall also guarantee the works against defects in materials and workmanship for a period of one (1) year; effective from the date of completion of the project. Any such defects arising from poor quality materials and or workmanship within the aforementioned period shall be replaced at your own expense. |
| |
|
| Confidentiality |
Your Company undertakes: |
| |
• |
To treat as strictly confidential all Confidential Information; |
| |
• |
Not to use Confidential Information for any purpose other than the performance of its obligations under this engagement; |
| |
• |
Not to disclose Confidential Information to any person whomsoever, other than its staff and then only on a need-to-know basis; |
| |
• |
To procure that its staff are made aware of the confidential nature of the Confidential Information prior to revealing any Confidential Information to any of its Staff; |
| |
• |
To procure that its staff observe and comply with their obligations in respect of Confidential Information, whether or not they are still part of its workforce or not; |
| |
• |
To use the same standard of care (which may not be less than a reasonable standard of care) in protecting the Confidential Information, as it uses to protect its own Confidential Information; and |
| |
• |
To return to the Bank at any time upon request or upon termination or expiration of this contract, unless the Bank otherwise agrees in writing, all copies and partial copies of all Confidential Information (whether in paper of electronic format) which your Company may have obtained from the Bank as well as all notes (whether in paper or electronic format) which your Company may have prepared or may obtain as a result of the Confidential Information being made available to your Company. |
| |
• |
This paragraph shall survive termination of this Letter of Award. |
| Liquidated Damages |
Failure to comply with all the terms and conditions in this Letter of Award within the specified duration as stated in paragraph (b) will attract liquidated and ascertained damages of the deduction of 1% per day from the contract sum in so far as the reasons for such delays are attributable to your company |
| Warranty |
• |
Your Company warrants that it is capable of carrying out its obligations under this contract with all due skill and care; |
| |
• |
That it shall perform its obligations under this agreement in a professional manner; and |
| |
• |
It shall comply with all the terms and conditions as stated in contract. |
| Termination |
The Bank shall terminate this contract; |
| |
|
| |
a) If your Company shall make default in any of the following respects namely: |
| |
• |
If your Company commits a material breach of any of the terms of this contract, which has not been remedied within 5(five) business days of the Bank's notifying your Company that a breach has occurred; |
| |
|
|
| |
• |
If in the Bank's reasonable opinion, the services rendered by your Company are unsatisfactory and your Company fail to remedy the defects within 5 (five) business days of the receipt of the notice and; |
| |
|
|
| |
• |
If your Company enters into a composition with its creditors, is declared bankrupt, goes into liquidation or a Receiver/Manager is appointed in respect of the Company. |
| |
b) In the event of the termination of this contract, your Company agrees to refund to the Bank any unearned fees already paid by the Bank for services not rendered by your Company and paid for by the Bank, and your Company shall also have the right to recover any amount owed to it by the Bank for services rendered in respect of which the Bank has not paid within the specified time |
If the above
terms and conditions are acceptable to your Company, kindly endorse the attached copy and return to
'The Head, Group Procurement and Vendor Management Division, USA House, 57, Marina, Lagos" upon receipt of this letter.
Your faithfully,
Per pro: UNITED
BANK FOR AFRICA PLC
| Abimbola Awolumate |
Kennedy Uzoka |
| GH, Procurement & Vendor Management |
Deputy Managing Directo |
Above terms and conditions are acceptable by me/us:
Signature: ………………………………………
Name: ………………………………………
Designation: ………………
Date: ____________________
Exhibit 10.60
DEBT PURCHASE AGREEMENT
THIS DEBT
PURCHASE AGREEMENT (this "Agreement"), is made and entered into as of the 15th day
of July, 2015, by and among TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership, with an address of
3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169 ("Assignor" or "Lender"),
REDWOOD MANAGEMENT, LLC, a Florida limited liability company, with an address of 16850 Collins Ave., Suite 112-341, Sunny
Isles, Florida 33160 ("Assignee"), and MYECHECK, INC., a Wyoming corporation (the "Borrower").
WITNESSETH
WHEREAS,
the Borrower and Lender entered into a Securities Purchase Agreement dated as of August 31, 2014, but made effective as of October
29, 2014 (such Securities Purchase Agreement, together with any other amendments, renewals, substitutions, replacements or modifications
from time to time, collectively referred to as the "Purchase Agreement"); and
WHEREAS, pursuant
to the Purchase Agreement, the Borrower executed and delivered to Lender that certain Senior Secured, Convertible, Redeemable Debenture
dated as of August 31, 2014, but made effective as of October 29, 2014 (such Debenture, together with any other amendments, renewals,
substitutions, replacements or modifications from time to time, collectively referred to as the "Debenture");
and
WHEREAS,
pursuant to Section 4 (a)(1) of the Securities Act of 1933, as amended (the "Securities Act"), Assignee
desires to purchase from Lender, and Lender is amenable to selling and assigning to Assignee, Assignor's right, title and interest
in and to the monetary obligations evidenced by the Debenture (the "Assigned Debt"), which Assigned Debt
shall be purchased by Assignee in tranches as more specifically hereinafter set forth; and
WHEREAS,
on or prior to each "Purchase Tranche Closing" (as hereinafter defined), as directed by Lender, the Borrower agrees to
sever, split, divide and apportion the Debenture, as applicable (or any replacement debentures issued in replacement thereof as
hereby contemplated, as applicable) into two separate and distinct replacement debentures, each in substantially the form as set
forth on Exhibit "A" attached hereto (the "Debenture Form"), one for the amount
of the portion of the Assigned Debt being sold and assigned at such Purchase Tranche Closing (the portion of the Assigned Debt
being sold and assigned at each separate Purchase Tranche Closing, as applicable, being referred to as the "Applicable
Assigned Debt"), and one for the remaining amount of the overall debt evidenced by the Debenture (or any replacement
debentures issued in replacement thereof as hereby contemplated, as applicable);
NOW, THEREFORE,
in consideration of the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and agreed, Assignor, Assignee, and Borrowers hereby covenant and agree as follows:
1. Recitals.
The recitations set forth in the preamble of this Agreement are true and correct and incorporated herein by this reference.
2. Agreement
to Assign Assigned Debt.
(a) Purchase
Tranche Closings. Provided there is no default or breach under this Agreement, and that no event has occurred that, with the
passage of time, the giving of notice, or both, would constitute a default or breach under this Agreement, and subject to all the
terms and provisions of this Agreement, the Assignor hereby agrees to sell and assign to Assignee, and Assignee hereby agrees to
purchase from Assignor, the Assigned Debt, which Assigned Debt shall be sold in four (4) separate tranches (each of such tranches
hereinafter referred to as a "Purchase Tranche"), each of such separate Purchase Tranches to be
sold and assigned on the respective dates and for the respective amounts set forth in the schedule attached hereto as Exhibit
"B" (each closing of a Purchase Tranche referred to as a "Purchase Tranche Closing"
and the purchase price to be paid for each Applicable Assigned Debt at each Purchase Tranche Closing, as shown on such attached
schedule, referred to as the "Applicable Purchase Price"); provided, however, Assignee may
elect to purchase a greater portion of the Assigned Debt than that set forth in the attached schedule for any given Purchase Tranche
Closing, up to the aggregate amount of the Assigned Debt, by written notice to Assignor and Borrower delivered prior to the applicable
Purchase Tranche Closing.
(b) Deliveries
at Each Purchase Tranche Closing. Subject to the terms of this Agreement, at each Purchase Tranche Closing: (i) Lender shall
execute and deliver to Assignee, an assignment of the Applicable Assigned Debt being sold and assigned at such Purchase Tranche
Closing, substantially in the form attached hereto as Exhibit "C" (each, an "Assignment");
(ii) Lender shall deliver to Assignee the original replacement debenture for the Applicable Assigned Debt being sold and assigned
at such Purchase Tranche Closing (subject to receipt of same by Lender from Borrower as provided in Section 2(c) below); and (iii)
Assignee shall pay to Lender the Applicable Purchase Price for the Applicable Assigned Debt being sold and assigned at such Purchase
Tranche Closing, by wire transfer of good and cleared U.S. currency to an account designated by Lender.
(c) Borrower's
Obligation to Sever Debenture. On or prior to each Purchase Tranche Closing, and within no later than three (3) business days
after request therefor is made by Lender to Borrower, the Borrower agrees to sever, split, divide and apportion the Debenture,
as applicable (or any replacement debentures issued in replacement thereof as hereby contemplated, as applicable) into two separate
and distinct and newly issued replacement debentures, each substantially in the Debenture Form. One of such replacement debentures
shall be for a principal amount equal to the Applicable Purchase Price corresponding to the Applicable Assigned Debt for the applicable
Purchase Tranche Closing, and the second replacement debenture shall be for a principal amount equal to the remaining amount of
the overall debt then existing and evidenced by the Debenture (or any replacement debentures issued in replacement thereof as hereby
contemplated, as applicable). In order to clarify the foregoing, as an example, on or prior to the first Purchase Tranche Closing
contemplated hereby, upon request by Lender, the Borrower shall provide to Lender two replacement debentures in replacement of
the Debenture, one for $50,000.00, which is the Applicable Purchase Price for the Applicable Assigned Debt being sold and assigned
at the first Purchase Tranche Closing, and the second for $601,731.84 (as of July 3,2015), which is the amount of the overall debt
evidenced by the Debenture, less the Applicable Purchase Price for the first replacement debenture being sold and assigned at the
first Purchase Tranche Closing. This second replacement debenture shall then be severed in the same manner for the second Purchase
Tranche Closing, and this foregoing process of severing and issuing replacement debentures shall be repeated for each Purchase
Tranche Closing, until the Assigned Debt is sold and assigned in full, or this Agreement is otherwise earlier terminated in accordance
with its terms. Assignee acknowledges and understands that Lender's obligation to sell, assign and deliver each original replacement
debenture representing the Applicable Assigned Debt at each Purchase Tranche Closing is subject to and conditioned upon Borrower
executing and delivering such replacement debentures to Lender in accordance with this Agreement.
(d) Remaining
Debt. Assignee and Borrower acknowledge that at each Purchase Tranche Closing, and subject to Lender's receipt of the Applicable
Purchase Price, only the Applicable Assigned Debt represented by the specific replacement debenture representing the applicable
Purchase Tranche shall be deemed sold and assigned hereunder, it being acknowledged by Assignee and by Borrower that the remaining
portion of the debt evidenced by the Debenture (or any replacement debentures issued in replacement thereof as hereby contemplated,
as applicable) for which the Applicable Purchase Price has not been paid and received by Lender (the "Remaining Debt")
shall not be sold or assigned thereby unless and until additional replacement debentures for additional Purchase Tranches are thereafter
sold in accordance with this Agreement and the Applicable Purchase Price therefor is received by Lender.
(e) No Security
Rights. Assignee hereby agrees and acknowledges that the sale, transfer and assignment of the Assigned Debt, or any portion
thereof, shall be a sale, transfer and assignment of the monetary obligations evidenced by such Assigned Debt (or portion thereof)
only, and shall not include, and such sale, transfer and assignment expressly excludes, the Remaining Debt, as well as excluding
any and all security rights, rights to any collateral, or any other security interests or rights of Assignor of any nature or kind
related to, arising under, or pursuant to, the Purchase Agreement, any other "Transaction Documents" (as defined in the
Purchase Agreement) related thereto, or any other security agreements, UCC financing statements, or any other documents or instruments
relating to the obligations of the Borrower, or any "Guarantor" (as defined in the Purchase Agreement) to Assignor (collectively,
the "Security Rights"), it being agreed and acknowledged that all Security Rights shall remain with Assignor,
as security for any portion of the Assigned Debt not assigned at any Purchase Tranche Closing, the Remaining Debt, or any other
obligations of Borrower or any Guarantors to Assignor.
3. Conditions
to Purchases.
(a) Initial Purchase. The initial
Purchase Tranche contemplated hereunder shall be closed and funded simultaneous with the execution of this Agreement by Lender,
Assignee and Borrower.
(b) Additional Purchases. If the first Purchase Tranche Closing is consummated hereunder, and the Applicable Purchase Price
therefor is paid and received by Lender as contemplated under this Agreement, then Assignee's obligation to purchase any additional
Purchase Tranches as hereby contemplated is a binding and continuing obligation of Assignee; provided, however, Assignee shall
have the right to terminate such obligation at any time during the term of this Agreement upon the occurrence of any of the following
events (each a "Trigger Event"): (i) the Borrower fails to stay current in its filing obligations with
the SEC; (ii) trading of the Borrower's Common Stock on the "Principal Trading Market" (as defined in the Purchase Agreement)
is stopped or halted for any reason; (iii) any suspension of electronic trading or settlement services by the Depository Trust
Company ("DTC") with respect to the Common Stock occurs and is continuing, or any receipt by the Borrower
of any notice from DTC to the effect that a suspension of electronic trading or settlement services by DTC with respect to the
Common Stock is being imposed or is contemplated (unless, prior to such suspension, DTC shall have notified the Borrower in writing
that DTC has determined not to impose any such suspension); (iv) the Borrower is in default with its transfer agent (the "Transfer
Agent"), or the Transfer Agent fails to issue to Assignee any shares of the Borrower's Common Stock which may be
due to Assignee in connection with any conversion rights exercised by Assignee under any debentures purchased by Assignee hereunder,
or debentures issued in replacement thereof; (v) the Borrower fails to maintain its active status with the State of Wyoming; (vi)
Borrower shall default (beyond any applicable notice and cure periods) in any of its obligations to Assignee under the debentures
purchased by Assignee hereunder, or debentures issued in replacement thereof, or any other obligations of Borrower to Assignee;
(vii) the average daily dollar volume of the Borrower's Common Stock for the previous twenty (20) trading days is less than $50,000;
or (viii) the Borrower fails to reserve and keep available out of its authorized and unissued shares of Common Stock a number
of shares of Common Stock at least equal to 250% of the number of shares of Common Stock issuable upon conversion of the Assigned
Debt for the sole purpose of issuance upon conversion of the Assigned Debt. Upon the occurrence of a Trigger Event, in the event
Assignee desires to terminate its obligation to purchase Purchase Tranches as hereby contemplated, Assignee shall deliver to Lender
written notice of such termination delivered within five (5) days of the occurrence of the Trigger Event (which notice shall include
a statement of the Trigger Event that has occurred and reasonable evidence of the occurrence thereof), whereupon Assignee's obligation
to purchase any additional Purchase Tranches thereafter shall immediately terminate and be of no further force or effect.
4. Representations
and Warranties of Assignor. Assignor makes the following representations and warranties to Assignee, each of which shall be
deemed made as of the Effective Date, and re-made as of each Purchase Tranche Closing:
(a) Assignor is
the legal and equitable owner of Assignor's right, title and interest in and to the Assigned Debt, except for any portion of the
Assigned Debt previously sold and assigned to Assignee pursuant to this Agreement; and
(b)
Assignor has not sold, transferred, assigned, pledged, hypothecated, or otherwise encumbered the Assigned Debt, or any portion
thereof, except for any portion of the Assigned Debt previously sold and assigned to Assignee pursuant to this Agreement; and
(c) The Assignor
is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with
full right, corporate, partnership or other applicable power and authority to enter into and to consummate the transactions contemplated
by this Agreement and otherwise to carry out its obligations hereunder, and the execution, delivery and performance by the Assignor
of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, or similar
action on the part of the Assignor.
(d) The Assignor is not, and for a
period of at least ninety (90) days prior to the date hereof has not been, an "Affiliate" of the Borrower, as said term
is defined in Rule 144 ("Rule 144") of the Rules and Regulations promulgated under the Securities
Act.
(e) This Agreement, when executed and
delivered by the Assignor, will constitute a valid and legally binding obligation of the Assignor, enforceable against the Assignor
in accordance with its terms, except: (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement of creditors' rights generally; or (ii) as limited
by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
(f) To the best knowledge of the Assignor,
neither the execution and delivery of this Agreement, or any Assignment, nor the consummation of the transactions contemplated
hereby, does or will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any government, governmental agency, or court to which the Assignor is subject or any provision of its
organizational documents or other similar governing instruments, or conflict with, violate or constitute a default under any agreement,
credit facility, debt or other instrument or understanding to which the Assignor is a party. The Assignor has consulted such legal,
tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with this Agreement
and the assignment of the Assigned Debt, any portion thereof, or any instruments evidencing same as contemplated hereby.
(g) There is no
action, suit, proceeding, judgment, claim or investigation pending, or to the knowledge of the Assignor, threatened against the
Assignor which could reasonably be expected in any manner to challenge or seek to prevent, enjoin, alter or materially delay any
of the transactions contemplated hereby, except that Assignor has filed suit against the Borrower and others seeking repayment
of the sums due under the Purchase Agreement and related Transaction Documents.
(h) No authorization,
consent, approval or other order of, or declaration to or filing with, any governmental agency or body or other Person is required
for the valid authorization, execution, delivery and performance by the Assignor of this Agreement and the consummation of the
transactions contemplated hereby, except for authorizations, consents, and approvals obtained prior to the date hereof.
(i) Except for the foregoing representations
and warranties, this Agreement and each Assignment is made by Assignor without recourse, representation or warranty of any nature
or kind, express or implied, and Assignor specifically disclaims any warranty, guaranty or representation, oral or written, past,
present or future with respect to the Assigned Debt, any portion thereof, or any instruments evidencing same, including, without
limitation: (i) the validity, effectiveness or enforceability of the Assigned Debt, any portion thereof, or any instruments evidencing
same; (ii) the validity, existence, or priority of any lien or security interest securing the obligations of Borrower or any other
Credit Parties evidenced by the Assigned Debt, any portion thereof, or any instruments evidencing same; (iii) the existence of,
or basis for, any claim, counterclaim, defense or offset relating to the Assigned Debt, any portion thereof, or any instruments
evidencing same; (iv) the financial condition of the Borrower, or any other Credit Parties or guarantor or obligor liable under
the Assigned Debt, any portion thereof, or any instruments evidencing same, or the ability of any such parties to pay or perform
their respective obligations under the Assigned Debt, any portion thereof, or any instruments evidencing same; (v) the compliance
of the Assigned Debt, any portion thereof, or any instruments evidencing same with any laws, ordinances or regulations of any
governmental agency or other body; (vi) the value or condition of any collateral securing the obligations under the Assigned Debt,
any portion thereof, or any instruments evidencing same; and (vii) the future performance of the Borrower or any other Credit
Parties or guarantor or obligor liable under the Assigned Debt, any portion thereof, or any instruments evidencing same. Assignee
acknowledges and represents to Assignor that Assignee has been given the opportunity to undertake its own investigations of the
Borrower, the Assigned Debt, any portion thereof, or any instruments evidencing same, and having undertaken and performed all
such investigations as Assignee deemed necessary or desirable, Assignee represents, warrants and agrees that it is relying solely
on its own investigation of the Borrower, the Assigned Debt, any portion thereof, or any instruments evidencing same, and not
any information whatsoever provided or to be provided by Assignor, or any representation or warranty of Assignor. This Agreement,
and each Assignment of the Assigned Debt, or portion thereof, as provided for herein is made on an "AS IS,"
"WHERE IS" basis, with all faults, and Assignee, by acceptance of this Agreement and each Assignment,
shall be deemed to have agreed and acknowledged that Assignor has fully performed, discharged and complied with all of Assignor's
obligations, representations, warranties, covenants and agreements hereunder, that Assignor is discharged therefrom, and that
Assignor shall have no further liability with respect thereto, except only for those express warranties contained in this Agreement,
and Assignee, by such acceptance, expressly acknowledges that ASSIGNOR MAKES NO WARRANTY OR REPRESENTATIONS, EXPRESS OR IMPLIED,
OR ARISING BY OPERATION OF LAW, RELATING TO THE ASSIGNED DEBT, ANY PORTION THEREOF, OR ANY INSTRUMENTS EVIDENCING SAME, EXCEPT
AS SPECIFICALLY SET FORTH HEREIN.
5. Representations
and Warranties of Assignee. Assignee makes the following representations and warranties to Assignor, each of which shall be
deemed made as of the Effective Date, and re-made as of each Purchase Tranche Closing:
(a) The Assignee
is a legally recognized entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate, partnership or other applicable power and authority to enter into and to consummate the
transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder, and the execution, delivery and
performance by the Assignee of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate
or similar action on the part of the Assignee.
(b) This Agreement, when executed and
delivered by the Assignee, will constitute a valid and legally binding obligation of the Assignee, enforceable against the Assignee
in accordance with its terms, except: (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement of creditors' rights generally; or (ii) as limited
by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
(c) The Assignee:
(i) either alone or together with its representatives, has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of this investment and make an informed decision to so invest, and has so evaluated
the risks and merits of such investment; (ii) has the ability to bear the economic risks of this investment and can afford a complete
loss of such investment; (iii) understands the terms of and risks associated with the acquisition of the Assigned Debt, or any
portion thereof, or any instruments evidencing same, including, without limitation, a lack of liquidity, price transparency or
pricing availability and risks associated with the industry in which the Borrower operates; (iv) has had the opportunity to review
the Borrowers, its business, its financial condition, its prospects, the Purchase Agreement, the Assigned Debt, any portion thereof,
or any instruments evidencing same, all as the Assignee has determined to be necessary in connection with this Agreement and the
assignments contemplated hereby.
(d)
The Assignee understands that: (i) the Assigned Debt, any portion
thereof, or any instruments evidencing same, have not been registered under the Securities Act or the securities laws of any
state; (ii) the Assigned Debt, any portion thereof, or any instruments evidencing same, is and will be "restricted
securities" as said term is defined in Rule 144; (iii) the Assigned Debt, any portion thereof, or any instruments
evidencing same, may not be sold, pledged or otherwise transferred unless a registration statement for such transaction is
effective under the Securities Act and any applicable state securities laws, or unless an exemption from such registration is
available with respect to such transaction; and (iv) the Assigned Debt, any portion thereof, or any instruments evidencing
same, will contain restrictive legends as to the foregoing in customary form.
(e) The Assignee
is not accepting this Agreement or any Assignment as a result of any advertisement, article, notice or other communication regarding
the Assigned Debt, any portion thereof, or any instruments evidencing same published in any newspaper, magazine, internet or social
media, broadcast over television or radio, presented at any seminary, or under any other media generally circulated or available
to the public or any other general solicitation or general advertisement.
(f)
Neither the execution and delivery of this Agreement, or any Assignment, nor the consummation of the transactions contemplated
hereby, does or will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any government, governmental agency, or court to which the Assignee is subject or any provision of its
organizational documents or other similar governing instruments, or conflict with, violate or constitute a default under any agreement,
credit facility, debt or other instrument or understanding to which the Assignee is a party. The Assignee has consulted such legal,
tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with this Agreement
and the assignment of the Assigned Debt, any portion thereof, or any instruments evidencing same as contemplated hereby.
(g) There is no action, suit, proceeding,
judgment, claim or investigation pending, or to the knowledge of the Assignee, threatened against the Assignee which could reasonably
be expected in any manner to challenge or seek to prevent, enjoin, alter or materially delay any of the transactions contemplated
hereby.
(h) No authorization, consent, approval
or other order of, or declaration to or filing with, any governmental agency or body or other Person is required for the valid
authorization, execution, delivery and performance by the Assignee of this Agreement and the consummation of the transactions contemplated
hereby.
(i) The Assignee hereby acknowledges
that the Assigned Debt, any portion thereof, or any instruments evidencing same may only be disposed of in compliance with state
and federal securities laws. The Assignee further acknowledges that in connection with any transfer of the Assigned Debt, any portion
thereof, or any instruments evidencing same subsequent to the date hereof and other than pursuant to an effective registration
statement, or an applicable exemption to such registration requirements, the Borrower and/or the Borrower's transfer agent may
require an opinion of counsel, the form and substance of which opinion shall be reasonably satisfactory to the Borrower and/or
the Borrower's transfer agent, as applicable.
6.
Borrower Acknowledgments. Borrower hereby represents and warrants
that the obligations evidenced by the Debenture, including, without limitation, all obligations for the Assigned Debt, are valid
and enforceable obligations of the Borrower subject to no defenses, setoffs, counterclaims, cross-actions or equities in favor
of the Borrower, and to the extent the Borrower has any defenses, setoffs, counterclaims, cross-actions or equities against Assignor
and/or against the enforceability of any such obligations, the Borrower acknowledges and agrees that same are hereby fully and
unconditionally waived by the Borrower. The Borrower further acknowledges its obligations under Section 2(c) above, and agrees
to timely and promptly deliver replacement debentures to Lender as required by this Agreement. The Borrower further acknowledges
that the Assigned Debt is only being assigned hereunder in Purchase Tranches as contemplated above. In that regard, the Borrower
further acknowledges that the Remaining Debt is and remains valid and enforceable obligations of the Borrower. Borrower agrees
and acknowledges that it is and shall remain liable to pay the Remaining Debt, as same becomes due in accordance with the terms
of the Purchase Agreement and the Debenture, or any replacement debentures issued in replacement thereof as hereby contemplated,
and nothing contained herein shall be deemed or construed as any waiver or to otherwise excuse performance by Borrower under their
obligations to Lender.
7. RELEASE.
AS A MATERIAL INDUCEMENT FOR LENDER TO AGREE TO ENTER INTO THIS AGREEMENT, BORROWER AND ASSIGNEE HEREBY RELEASE LENDER, TOGETHER
WITH ALL OF ITS PARTNERS AND AFFILIATES, AND THE OFFICERS, MEMBERS, DIRECTORS, PARTNERS, EMPLOYEES, AGENTS AND ATTORNEYS OF EACH
OF THE FOREGOING, FROM ALL CLAIMS, CAUSES OF ACTION AND LIABILITIES OF ANY NATURE OR KIND IN ANY WAY RELATING, DIRECTLY OR INDIRECTLY,
TO THE ASSIGNED DEBT, ANY COLLATERAL SECURING ANY OBLIGATIONS THEREUNDER, THIS AGREEMENT, OR ANY OTHER DEBTS OR OBLIGATIONS IN
ANY WAY RELATING TO THE PURCHASE AGREEMENT, TO THE EXTENT ARISING ON OR PRIOR TO THE DATE HEREOF, INCLUDING, WITHOUT LIMITATION,
ANY AND ALL CLAIMS ARISING FROM OR RELATING TO NEGOTIATIONS, DEMANDS, REQUESTS OR EXERCISE OF REMEDIES IN CONNECTION WITH THE ASSIGNED
DEBT, THIS AGREEMENT, ANY OTHER DEBTS OR OBLIGATIONS IN ANY WAY RELATING TO THE PURCHASE AGREEMENT, AND ANY AND ALL FEES OR CHARGES
COLLECTED IN CONNECTION WITH THE ASSIGNED DEBT, THIS AGREEMENT, OR ANY OTHER DEBTS OR OBLIGATIONS IN ANY WAY RELATING TO THE PURCHASE
AGREEMENT. MOREOVER UPON DELIVERY OF EACH ASSIGNMENT HEREUNDER, THE FOREGOING RELEASE SHALL BE DEEMED AUTOMATICALLY RE-MADE AND
EFFECTIVE FOR ALL CLAIMS, CAUSES OF ACTION AND LIABILITIES OF ANY NATURE OR KIND COVERED HEREBY TO THE EXTENT ARISING ON OR PRIOR
TO THE DATE OF SUCH ASSIGNMENT.
8. Default
and Termination.
(a)
Breach By Assignor. In the event Assignor shall breach any of its covenants or agreements hereunder, and such breach
is not cured within twenty (20) days after Assignor's receipt of written notice of such breach from Assignee, which notice shall
specify the breach with specificity, then Assignee's sole and exclusive remedy hereunder shall be to terminate this Agreement
upon written notice to Assignor, whereupon this Agreement shall terminate and Assignor and Assignee shall have no further obligation,
each to the other, under this Agreement. Assignor and Assignee agree that the foregoing exclusive remedy will be adequate and
each of them agrees that Assignee shall not have any other remedies, at law or in equity, for any breach by Assignor not cured
within any applicable notice and cure period, other than termination of this Agreement as hereby provided.
(b) Breach By Assignee. In the
event Assignee shall breach any of its covenants or agreements hereunder, and such breach is not cured within twenty (20) days
after Assignee's receipt of written notice of such breach from Assignor, which notice shall specify the breach with specificity,
then Assignor's sole and exclusive remedy hereunder shall be to terminate this Agreement upon written notice to Assignee, whereupon
this Agreement shall terminate and Assignor and Assignee shall have no further obligation, each to the other, under this Agreement.
Assignor and Assignee agree that the foregoing exclusive remedy will be adequate and each of them agrees that Assignor shall not
have any other remedies, at law or in equity, for any breach by Assignee not cured within any applicable notice and cure period,
other than termination of this Agreement as hereby provided. Notwithstanding the foregoing to the contrary, the foregoing notice
and cure period shall not be applicable with respect to Assignee's failure to pay the Applicable Purchase Price at a Purchase
Tranche Closing, and any such failure shall be deemed an immediate breach hereunder, entitling Assignor to avail itself of the
exclusive termination remedy hereby provided immediately upon such failure to pay the Applicable Purchase Price at a Purchase
Tranche Closing.
(c) Breach by Borrower. Any breach
by Borrower under this Agreement shall be deemed an event of default by Borrower under the Purchase Agreement, and any such breach
may be enforced by Assignor through any remedies available to Assignor, at law or in equity, or under the Purchase Agreement. Borrower
shall have no rights to enforce this Agreement as against Assignor or Assignee, nor shall any breach or default by Assignor or
Assignee hereunder in any way abrogate, limit, or otherwise affect Borrower's obligations under the Purchase Agreement and related
Loan Documents.
9. No Waiver.
The parties recognize and acknowledge that by entering into this Agreement, the Lender is not waiving any rights or remedies it
may have under the Purchase Agreement or any of the Transaction Documents, any defaults or Events of Default arising thereunder,
or any judgments previously obtained by Lender in connection therewith, if any. In addition, notwithstanding anything contained
in this Agreement to the contrary, the Lender shall have the right, at any time, to accept payment in full of the then outstanding
Remaining Debt (from Borrower, Assignee, or any other Person), and in such event, Lender shall have the absolute right to terminate
this Agreement, without liability to Assignee or any other Person, with respect to any portion of the Assigned Debt not yet sold
and assigned to Assignee as of such date.
10. Governing
Law. This Agreement shall be governed by and construed in accordance with the laws governing the Debenture.
11. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns.
12. Headings.
The headings of the paragraphs of this Agreement have been included only for convenience, and shall not be deemed in any manner
to modify or limit any of the provisions of this Agreement or used in any manner in the interpretation of this Agreement.
13. Interpretation.
Whenever the context so requires in this Agreement, all words used in the singular shall be construed to have been used in the
plural (and vice versa), each gender shall be construed to include any other genders, and the word "Person"
shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or
any other entity.
14. Partial
Invalidity. Each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. If any
provision of this Agreement or the application of such provision to any person or circumstances shall, to any extent, be invalid
or unenforceable, then the remainder of this Agreement, or the application of such provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability.
15. Execution.
This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and
the same Agreement, and same shall become effective when counterparts have been signed by each party and each party has delivered
its signed counterpart to the other party. In the event that any signature is delivered by facsimile transmission or by e-mail
delivery of a ".pdf' format file or other similar format file, such signature shall be deemed an original for all purposes
and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile
or ".pdf" signature page was an original thereof.
16. Effective
Date. For purposes of this Agreement, the "Effective Date" shall mean the date when this Agreement
becomes fully executed by all parties hereto.
[Signatures on the following page]
IN WITNESS
WHEREOF, Assignor. Assignee. and Borrower have executed this Agreement as of the date above first written.
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Assignor: |
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TCA GLOBAL CREDIT MASTER FUND, LP |
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By: |
TCA Global Credit Fund GP. Ltd. |
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Its: |
General Partner |
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By: |
/s/ Robert Press |
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Robert Press, Director |
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Date: |
15-July, 2015 |
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Assignee: |
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REDWOOD MANAGEMENT, LLC. a Florida limited liability company |
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By: |
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Name: |
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Title: |
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Date: |
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IN WITNESS
WHEREOF. Assignor. Assignee. and Borrower have executed this Agreement as of the date above first written.
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Assignor: |
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TCA GLOBAL CREDIT MASTER FUND, LP |
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By: |
TCA Global Credit Fund GP, Ltd. |
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Its: |
General Partner |
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By: |
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Robert Press, Director |
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Date: |
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Assignee: |
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REDWOOD MANAGEMENT, LLC. a Florida limited liability company |
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By: |
/s/ John DeNobile |
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Name: |
John DeNobile |
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Title: |
Manager |
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Date: |
7/15/15 |
IN WITNESS
WHEREOF. Assignor. Assignee. and Borrower have executed this Agreement as of the date above first written.
| Borrower: |
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| MYECHECK, INC.. a Wyoming corporation |
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| By: |
/s/ Ed Starrs |
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| Name: |
Ed Starrs |
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| Title: |
CEO |
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| Date: |
7-14-2015 |
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EXHIBIT "A"
FORM DEBENTURE
EXHIBIT "B"
PURCHASE TRANCHES
| Purchase
Tranche Number | |
Available
Purchase Price | | |
Date
for Purchase Tranche
Closing |
| 1 | |
$ | 50,000 | | |
On the Effective Date |
| 2 | |
$ | 200,000 | | |
90 days after Company becomes a full reporting Company with the SEC |
| 3 | |
$ | 200,000 | | |
120 days after Company becomes a full reporting Company with the SEC |
| 4 | |
$ | 250,000 | | |
150 days after Company becomes a full reporting Company with the SEC |
EXHIBIT "C"
FORM OF ASSIGNMENT
Exhibit 10.61
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT
(the “Agreement”) is dated this 16th day of July, 2015 (the “Effective Date”), by and
among MyECheck, Inc. (the “Company”), and Redwood Management, LLC (the “Holder”).
WHEREAS, the Holder
beneficially owns and holds certain Senior Secured Convertible Redeemable Debentures issued by the Company as set forth on Exhibit
A hereto (the “Securities”); and
WHEREAS, the Holder
desires to exchange the Securities for the securities of the Company as set forth on Exhibit B (the “Exchange Securities”),
and the Company desires to issue the Exchange Securities in exchange for the Securities, all on the terms and conditions set forth
in this Agreement; and
WHEREAS, the reliance
upon the representations made by each of the Holder and the Company in this Agreement, the transactions contemplated by this Agreement
are such that the offer and exchange of securities by the Company under this Agreement will be exempt from registration under applicable
United States securities laws as a result of this exchange offer being undertaken pursuant to Section 4(a)(2) of the Securities
Act of 1933, as amended (the “Securities Act”).
NOW, THEREFORE, in
consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Company and the Holder hereby agree as follows:
Section 1. Exchange.
Subject to and upon the terms and conditions set forth in this Agreement, the Holder agrees to surrender to the Company the Securities
and, in exchange therefore, the Company shall issue to the Holder the Exchange Securities (each, an “Exchange”).
1.1 Closing.
On each Closing Date (as defined below), the Company will issue and deliver (or cause to be issued and delivered) the amount of
Exchange Securities set forth on Schedule 1 hereto to the Holder, or in the name of a custodian or nominee of the Holder,
or as otherwise requested by the Holder in writing, and the Holder will surrender to the Company an equal amount of the Securities.
The closing of each Exchange shall occur on the dates set forth on Schedule 1 hereto to, or as soon thereafter as the parties
may mutually agree in writing (each, a “Closing Date”), subject to the provisions of Section 4 and Section
5 herein.
1.2 Section
4(a)(2). Assuming the accuracy of the representations and warranties of each of the Company and the Holder set forth in Sections
2 and 3 of this Agreement, the parties acknowledge and agree that the purpose of such representations and warranties is, among
other things, to ensure that the Exchange qualifies as an exchange of securities under Section 4(a)(2) of the Securities Act.
Section 2. Representations
and Warranties of the Company. The Company represents and warrants to the Holder that:
2.1 Organization
and Qualification. The Company and each of the subsidiaries of the Company (the “Subsidiaries”) is an entity duly
incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation
or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as
currently conducted. Neither the Company, nor any Subsidiary is in violation or default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries
is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure
to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material
adverse effect on the legality, validity or enforceability of this Agreement or any documents executed in connection herewith (the
“Transaction Documents”), (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
2.2 Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith
or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which
it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.
2.3 Issuance
of Exchange Securities. The issuance of the Exchange Securities is duly authorized and, upon issuance in accordance with the
terms hereof, the shares of common stock of the Company (the “Underlying Shares”) issuable upon conversion of the Exchange
Securities shall be validly issued, fully paid and non-assessable shares of the Common Stock of the Company. Assuming the truth
and accuracy of each of the representations and warranties of the Holder contained in Section 3 of this Agreement, the issuance
by the Company of the Exchange Securities is exempt from registration under the Securities Act.
2.4 No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance of the Exchange Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any options, contracts,
agreements, liens, security interests, or other encumbrances (“Liens”) upon any of the properties or assets of the
Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to
which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.
2.5 Acknowledgment
Regarding the Exchange. The Company acknowledges and agrees that the Holder are acting solely in the capacity of an arm’s
length third party with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges the
Holder are not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement
and the transactions contemplated hereby, and any advice given by the Holder or any of their representatives or agents in connection
with this Agreement is merely incidental to the Exchange.
2.6 SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
of the Exchange Act, for the two years preceding the date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply
in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto
as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
2.7 Subsidiaries. All
of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly
or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the
issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other
references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
2.8 Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than:
(i) the notice and/or application(s) to each applicable Trading Market for the issuance and the listing of the Exchange Securities
for trading thereon in the time and manner required thereby, and (ii) the filing of Form D with the Commission and such filings
as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
2.9 Capitalization. The
capitalization of the Company is as set forth in the SEC Reports. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. There
are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to,
or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe
for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or securities entitling the holder thereof to acquire
shares of Common Stock (“Common Stock Equivalents”). The issuance of the Exchange Securities will not obligate the
Company to issue shares of Common Stock or other securities to any Person (other than the Holder) and will not result in a right
of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All
of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization
of any stockholder, the Board of Directors or others is required for the issuance of the Exchange Securities. There
are no stockholders agreements or other similar agreements with respect to the Company’s capital stock to which the Company
is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
2.10 Shell
Company Status. The Company is not currently an issuer identified in Rule 144(i)(1) under the Securities Act.
2.11 DTC
Eligibility. The Company, through the Transfer Agent, currently participates in the DTC Fast Automated Securities Transfer
(FAST) Program and the Common Stock can be transferred electronically to third parties via the DTC Fast Automated Securities Transfer
(FAST) Program.
2.12 Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has
been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except
for the issuance of the Exchange Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries
or their respective businesses, properties, operations, assets or financial condition, that would be required to be disclosed by
the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly
disclosed at least 1 Trading Day prior to the date that this representation is made.
2.13 Litigation. There
is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Exchange
Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under
the Exchange Act or the Securities Act.
2.14 Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s
or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the
Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term
of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any
other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such
executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing
matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
2.15 Compliance. Neither
the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company
or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether
or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.
2.16 Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
2.17 Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries
and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance
with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which
the Company and the Subsidiaries are in compliance.
2.18 Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective
businesses and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received,
since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise
has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not
have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
2.19 Insurance. The
Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but
not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither
the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without
a significant increase in cost.
2.20 Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the
Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently
a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan
of the Company.
2.21 Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets
is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying
officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the
end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “ Evaluation
Date ”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions
of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting
(as such term is defined in the Exchange Act) that have materially affected, or is reasonably likely to materially affect, the
internal control over financial reporting of the Company and its Subsidiaries.
2.22 Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries to any broker,
financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents.
2.23 Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Exchange Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940,
as amended. The Company shall conduct its business in a manner so that it will not become an “investment company”
subject to registration under the Investment Company Act of 1940, as amended.
2.24 Registration
Rights. Other than as disclosed in the SEC Reports, no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company or any Subsidiaries.
2.25 Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date
hereof, received notice from OTCQB any other exchange or quotation service on which the Company’s securities are traded (the
“Trading Market”) on which the Common Stock is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Company
is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing
and maintenance requirements.
2.26 Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become applicable to the Holder as a result of the Holder
and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Exchange Securities pursuant to the Exchange.
2.27 Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided the Holder or its agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the
Holder will rely on the foregoing representation in effecting transactions in securities of the Company. All of the
disclosure furnished by or on behalf of the Company to the Holder regarding the Company and its Subsidiaries, their respective
businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct
and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated
by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees
that the Holder makes no nor has made any representations or warranties with respect to the transactions contemplated hereby other
than those specifically set forth in Section 3 hereof.
2.28 No
Integrated Offering. Assuming the accuracy of the Holder’s representations and warranties set forth in Section 3, neither
the Company, nor any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under circumstances that would cause the Exchange to be integrated
with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities
under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities
of the Company are listed or designated.
2.29 Solvency.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing
and amounts of cash to be payable on or in respect of its debt). Except as set forth in the SEC Reports, the Company
has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under
the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports set forth as of
the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or
any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same,
are, or should be, reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Except as
set forth in the SEC Reports, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
2.30 Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local
income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of
all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or
of any Subsidiary know of no basis for any such claim.
2.31 Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect
any provision of FCPA.
2.32 No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.
2.33 Acknowledgment
Regarding Holder’s Exchange of Securities. The Company acknowledges and agrees that the Holder are acting solely in the
capacity of an arm’s length party with respect to the Transaction Documents and the transactions contemplated thereby.
2.34
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the
Company to facilitate the issuance or resale of any of the Exchange Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Exchange Securities, or (iii) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of the Company.
2.35 Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
2.36 Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System
(the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
2.37 Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened.
Section 3. Representations
and Warranties of the Holder. Each Holder represents and warrants, severally and not jointly, to the Company that:
3.1 Ownership
of the Securities. The Holder is the legal and beneficial owner of the Securities. The Holder paid for the Securities, and
has continuously held the Securities since its issuance or purchase. The Holder, individually or through an affiliate, owns the
Securities outright and free and clear of any options, contracts, agreements, liens, security interests, or other encumbrances.
3.2 No
Public Sale or Distribution. The Holder is acquiring the Exchange Securities in the ordinary course of business for its own
account and not with a view toward, or for resale in connection with, the public sale or distribution thereof; provided, however,
that by making the representations herein, the Holder does not agree to hold any of the Exchange Securities for any minimum or
other specific term and reserves the right to dispose of the Exchange Securities at any time in accordance with an exemption from
the registration requirements of the Securities Act and applicable state securities laws. The Holder does not presently have any
agreement or understanding, directly or indirectly, with any person to distribute, or transfer any interest or grant participation
rights in, the Securities or the Exchange Securities.
3.3 Accredited
Investor and Affiliate Status. The Holder is an “accredited investor” as that term is defined in Rule 501 of Regulation
D under the Securities Act. The Holder is not, and has not been, for a period of at least three months prior to the date of this
Agreement (a) an officer or director of the Company, (b) an “affiliate” of the Company (as defined in Rule 144) (an
“Affiliate”) or (c) a “beneficial owner” of more than 10% of the common stock (as defined for purposes
of Rule 13d-3 of the Exchange Act).
3.4 Reliance
on Exemptions. The Holder understands that the Exchange is being made in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy
of, and each Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of
the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of each Holder to complete
the Exchange and to acquire the Exchange Securities.
3.5 Information.
The Holder has been furnished with all materials relating to the business, finances and operations of the Company and materials
relating to the Exchange which have been requested by the Holder. The Holder has been afforded the opportunity to ask questions
of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Holder or its representatives
shall modify, amend or affect the Holder’s right to rely on the Company’s representations and warranties contained
herein. The Holder acknowledges that all of the documents filed by the Company with the SEC under Sections 13(a), 14(a) or 15(d)
of the Exchange Act that have been posted on the SEC’s EDGAR site are available to the Holder, and the Holder has not relied
on any statement of the Company not contained in such documents in connection with the Holder’s decision to enter into this
Agreement and the Exchange.
3.6 Risk.
The Holder understands that its investment in the Exchange Securities involves a high degree of risk. The Holder is able to bear
the risk of an investment in the Exchange Securities including, without limitation, the risk of total loss of its investment. The
Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision
with respect to the Exchange. There is no assurance that the Exchange Securities will continue to be quoted, traded or listed for
trading or quotation on the Nasdaq Capital Market or on any other organized market or quotation system.
3.7 No
Governmental Review. The Holder understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement in connection with the Exchange or the fairness or suitability of
the investment in the Exchange Securities nor have such authorities passed upon or endorsed the merits of the Exchange Securities.
3.8 Organization;
Authorization. The Holder is duly organized, validly existing and in good standing under the laws of its state of formation
and has the requisite organizational power and authority to enter into and perform its obligations under this Agreement.
3.9 Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Holder and shall
constitute the legal, valid and binding obligations of the Holder enforceable against the Holder in accordance with its terms.
The execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions
contemplated hereby (including, without limitation, the irrevocable surrender of the Securities) will not result in a violation
of the organizational documents of the Holder.
3.10 Prior
Investment Experience. The Holder acknowledges that it has prior investment experience, including investment in securities
of the type being exchange, including the Securities or the Exchange Securities, and has read all of the documents furnished or
made available by the Company to it and is able to evaluate the merits and risks of such an investment on its behalf, and that
it recognizes the highly speculative nature of this investment.
3.11 Tax
Consequences. The Holder acknowledges that the Company has made no representation regarding the potential or actual tax consequences
for the Holder which will result from entering into the Agreement and from consummation of the Exchange. The Holder acknowledges
that it bears complete responsibility for obtaining adequate tax advice regarding the Agreement and the Exchange.
3.12 No
Registration, Review or Approval. The Holder acknowledges, understands and agrees that the Exchange Securities are being exchanged
hereunder pursuant to an exchange offer exemption under Section 4(a)(2) of the Securities Act.
Section 4. Conditions
Precedent to Obligations of the Company. The obligation of the Company to consummate the transactions contemplated by this
Agreement is subject to the satisfaction on each Closing Date of each of the following conditions, provided that these conditions
are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder
with prior written notice thereof:
4.1 Delivery.
The Holder shall have delivered to the Company the Securities.
4.2 No
Prohibition. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to
enjoin or restrain any of the transactions contemplated by this Agreement.
4.3 Representations.
The accuracy in all material respects when made and on the applicable Closing Date of the representations and warranties of the
Holder contained herein (unless as of a specific date therein).
Section 5. Conditions
Precedent to Obligations of the Holder. The obligation of each Holder to consummate the transactions contemplated by this Agreement
is subject to the satisfaction on each Closing Date of each of the following conditions, provided that these conditions are for
each Holder’s sole benefit and may be waived by the applicable Holder at any time in its sole discretion by providing the
Company with prior written notice thereof:
5.1 No order
of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain any of
the transactions contemplated by this Agreement;
5.2 the accuracy
in all material respects when made and on the applicable Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein);
5.3 all obligations,
covenants and agreements of the Company required to be performed at or prior to the applicable Closing Date shall have been performed;
5.4 there
is no event of default then existing on any Exchange Securities and the Equity Conditions (as defined in the Exchange Securities)
are satisfied on such date; and
5.5 from
the date hereof to the relevant Closing Date, trading in the Company’s common stock shall not have been suspended by the
SEC or any trading market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are
reported by such service, or on any trading market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national
or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of the Holder makes it impracticable or inadvisable to purchase the Exchange Securities at
the closing.
Section 6. Governing
Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be construed under the laws of the state of New York, without
regard to principles of conflicts of law or choice of law that would permit or require the application of the laws of another jurisdiction.
The Company and the Holder each hereby agrees that all actions or proceedings arising directly or indirectly from or in connection
with this Agreement shall be litigated only in the Supreme Court of the State of New York or the United States District Court for
the Southern District of New York located in New York County, New York. The Company and the Holder each consents to the exclusive
jurisdiction and venue of the foregoing courts and consents that any process or notice of motion or other application to either
of said courts or a judge thereof may be served inside or outside the State of New York or the Southern District of New York by
generally recognized overnight courier or certified or registered mail, return receipt requested, directed to such party at its
or his address set forth below (and service so made shall be deemed “personal service”) or by personal service or in
such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE HOLDER EACH HEREBY WAIVES ANY RIGHT
TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.
Section 7. Indemnification
of Holder. Subject to the provisions of this Section 7, the Company will indemnify and hold each Holder and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Holder (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Holder Party”) harmless
from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Holder Party
may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements
made by the Company in this Agreement or in the other document related to this exchange or (b) any action instituted against Holder
Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Holder Party, with respect to any of the transactions contemplated by this exchange (unless such action is based upon a
breach of such Holder Party’s representations, warranties or covenants under the exchange or any agreements or understandings
such Holder Party may have with any such stockholder or any violations by such Holder Party of state or federal securities laws
or any conduct by such Holder Party which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action
shall be brought against any Holder Party in respect of which indemnity may be sought pursuant to this Agreement, such Holder Party
shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of
its own choosing reasonably acceptable to the Holder Party. Any Holder Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such
Holder Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii)
the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there
is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the
position of such Holder Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than
one such separate counsel. The Company will not be liable to any Holder Party under this Agreement (y) for any settlement by a
Holder Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or
(z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Holder Party’s breach
of its representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Holder
Party may have with any such stockholder or any violations by such Holder Party of state or federal securities laws or any conduct
by such Holder Party which constitutes fraud, gross negligence, willful misconduct or malfeasance. The indemnification required
by this Section 7 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as
and when bills are received or are incurred however, each Holder Party who receives such interim payment agrees to reimburse the
Company for any such payment made by the Company to such Holder Party if it is finally determined in such action or proceeding
that such Holder Party is not entitled to indemnification pursuant to this Section 7. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any Holder Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.
Section 8. Fees
and Expenses. Except as expressly set forth below, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. At each Closing, the Company shall pay the Holder
$2,500 for its legal fees. The Company shall pay all transfer agent fees (including,
without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any conversion
or exercise notice delivered by the Holder), stamp taxes and other taxes and duties levied in connection with the delivery of any
Exchange Securities to the Holder.
Section 9. Certain
Transactions. The Holder covenants that neither it, nor any affiliate acting on its behalf
or pursuant to any understanding with it will execute any “short sales” as defined in Rule 200 of Regulation SHO under
the Exchange Act of any of the Company’s securities during the period commencing with the execution of this Agreement and
ending on the later of (i) the Maturity Date (as defined in the Exchange Securities) or (ii) the date that the Exchange Securities
are no longer outstanding (provided that this provision shall not prohibit any sales made where a corresponding Notice of Conversion
(as defined in the Exchange Securities) is tendered to the Company and the shares received upon such conversion or exercise are
used to close out such sale).
Section 10. Certificates.
Certificates evidencing the Underlying Shares shall not contain any legend: (i) while a registration
statement covering the resale of such security is effective under the Securities Act; (ii) following any sale of such Underlying
Shares pursuant to Rule 144; or (iii) if such legend is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel
to issue a legal opinion to the Transfer Agent promptly after any of the events described in (i)-(iii) in the preceding sentence
if required by the Transfer Agent to effect the removal of the legend hereunder (with a copy to the Holder
and its broker). If all or any portion of an Exchange Security is converted at a time when
there is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be
sold under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the Commission) then such Underlying Shares shall be issued
free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer
required under this Section, it will, no later than two Trading Days following the delivery by the Holder to the Company or the
Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend, deliver or cause
to be delivered to the Holder a certificate representing such shares that is free from all restrictive and other legends. The
Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer
set forth in this Section. Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted
by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company
System as directed by the Holder.
Section 11. Right
of First Refusal.
11.1
From the date hereof until the date that is the 12-month anniversary of the last Closing, upon any issuance by the Company
of Common Stock, Common Stock Equivalents or debt for cash consideration, indebtedness or a combination of units thereof (a “Subsequent
Financing”), the Holder shall have the right to participate in up to an amount
of the Subsequent Financing equal to 100% of the Subsequent Financing on the same terms, conditions and price provided for in the
Subsequent Financing.
11.2 At
least four (4) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to the Holder
a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask the Holder
if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon
the request of the Holder, and only upon a request by the Holder,
for a Subsequent Financing Notice, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver
a Subsequent Financing Notice to the Holder. The Subsequent Financing Notice shall
describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder
and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet
or similar document relating thereto as an attachment.
11.3 If
the Holder desires to participate in such Subsequent Financing, the Holder
must provide written notice to the Company that the Holder is willing to participate
in the Subsequent Financing, the amount of the Holder’s participation, and representing
and warranting that the Holder has such funds ready, willing, and available for investment
on the terms set forth in the Subsequent Financing Notice.
11.4
If notifications by the Holder of its willingness to participate in the Subsequent
Financing (or to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing,
then the Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice.
11.5
The Company must provide the Holder with a second Subsequent Financing Notice,
and the Holder will again have the right of participation set forth above in this
Section, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the
terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the initial Subsequent Financing
Notice.
11.6
The Company and the Holder agree
that if the Holder elects to participate in the Subsequent Financing, the transaction
documents related to the Subsequent Financing shall not include any term or provision whereby the Holder
shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required
to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement,
without the prior written consent of the Holder.
11.7
Notwithstanding anything to the contrary in this Section and unless otherwise
agreed to by the Holder, the Company shall either confirm in writing to the Holder
that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention
to issue the securities in the Subsequent Financing, in either case in such a manner such that the Holder
will not be in possession of any material, non-public information, by the tenth (10th) Trading Day following
delivery of the Subsequent Financing Notice. If by such tenth (10th) Trading Day, no public disclosure regarding a
transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction
has been received by the Holder, such transaction shall be deemed to have been abandoned
and the Holder shall not be deemed to be in possession of any material, non-public
information with respect to the Company or any of its subsidiaries.
11.8
Notwithstanding the foregoing, this Section shall not apply in respect of an Exempt Issuance. “Exempt
Issuance” means the issuance of (i) securities issued under the Company’s equity incentive plan existing on
the date of this Agreement and any amendments thereto approved by the Board of Directors, including securities issuable upon conversion
or exercise of such securities, (ii) securities issued for consideration other than cash pursuant to a strategic arrangement, joint
venture, merger, consolidation, acquisition, or similar business combination approved by the Board of Directors and (iii) securities
issued upon the exercise or exchange of or conversion of any Exchange Securities issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities.
Section 12. Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.
Section 13. Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.
Section 14. Severability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.
Section 15. Entire
Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Holder, the Company,
their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor the Holder makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing
signed by the Company and the Holder. No provision hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought.
Section 16. Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); or (c) one calendar day (excluding Saturdays, Sundays, and national banking holidays) after deposit with an overnight courier
service, in each case properly addressed to the party to receive the same.
The addresses and facsimile numbers for
such communications shall be:
If to the Company:
MyECheck, Inc.
2600 E. Bidwell Street #190
Folsom, CA 95630
Attn: CEO
If to the Holder:
Redwood Management, LLC
16850 Collins Avenue, Suite 112-341
Sunny Isles, FL 33160
Attn: Gary Rogers
With a copy (which shall not constitute notice) to:
Robinson Brog Leinwand Greene Genovese & Gluck P.C.
875 Third Avenue, 9th Floor
New York, NY 10022
Attn: David E. Danovitch, Esq.
or to such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has specified by written notice given to each other
party five (5) days prior to the effectiveness of such change.
Section 17. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Exchange Securities. The Holder may assign some or all of their rights hereunder without
the consent of the Company, in which event such assignee shall be deemed to be the Holder hereunder with respect to such assigned
rights.
Section 18. No Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
Section 19. Survival
of Representations. The representations and warranties of the Company and the Holder contained in Sections 2 and 3, respectively,
will survive the closing of the transactions contemplated by this Agreement.
Section 20. Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed
this Exchange Agreement as of the date first written above.
| MyECheck, Inc. |
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| By: |
/s/ Ed Starrs |
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| Name: |
ED STARRS |
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| Title: |
CEO |
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| REDWOOD MANAGEMENT, LLC |
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| By: |
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| Name: |
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| Title: |
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IN WITNESS WHEREOF, the parties have executed
this Exchange Agreement as of the date first written above.
| MyECheck, Inc. |
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| By: |
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| Name: |
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| Title: |
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| REDWOOD MANAGEMENT, LLC |
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| By: |
/s/ John DeNobile |
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| Name: |
John DeNobile |
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| Title: |
Manager |
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SCHEDULE
1
| Closing | |
Amount of Securities | | |
Closing
Date |
| 1 | |
$ | 50,000 | | |
On the Effective Date
|
| 2 | |
$ | 200,000 | | |
90 days after Company becomes a full reporting Company with the SEC |
| 3 | |
$ | 200,000 | | |
120 days after Company becomes a full reporting Company with the SEC |
| 4 | |
$ | 250,000 | | |
150 days after Company becomes a full reporting Company with the SEC |
Exhibit
A
Exhibit
B
Exhibit 10.62
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
Original Issue
Date: July 15, 2015
$50,000
10%
CONVERTIBLE NOTE
DUE
JULY 15, 2016
THIS
10% CONVERTIBLE NOTE is one of a series of duly authorized and validly issued 10% Convertible Notes of MyECheck, Inc. (the “Company”),
having its principal place of business at 2600 E. Bidwell Street #190, Folsom, CA 95630, designated as its 10% Convertible Notes
due July 15, 2016 (this Note, the “Note” and, collectively with the other Notes of such series, the “Notes”).
FOR
VALUE RECEIVED, the Company promises to pay to Redwood Management, LLC or its registered assigns (the “Holder”),
or shall have paid pursuant to the terms hereunder, the principal sum of $50,000 on July 15, 2016 (the “Maturity Date”)
or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder
on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. This
Note is subject to the following additional provisions:
Section
1. Definitions. For the purposes hereof, in addition to
the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth
in the Exchange Agreement and (b) the following terms shall have the following meanings:
“Alternate
Consideration” shall have the meaning set forth in Section 5(e).
“Alternative
Conversion Price” means 55% of the lowest traded price of the Common Stock in the twenty (20) Trading Days prior to
the Conversion Date.
“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered,
(d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant
Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company
or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence
in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
“Base
Conversion Price” shall have the meaning set forth in Section 5(b).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).
“Buy-In”
shall have the meaning set forth in Section 4(b)(v).
“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of 33% of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the
Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges
into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately
prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company
immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after
the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board
of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the
execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events
set forth in clauses (a) through (d) above.
“Conversion”
shall have the meaning ascribed to such term in Section 4.
“Conversion
Date” shall have the meaning set forth in Section 4(a).
“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.
“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.
“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).
“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).
“DTC”
means the Depository Trust Company.
“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.
“DWAC
Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements,
(b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved
as an agent in the DTC/FAST Program, and (d) the Transfer Agent does not have a policy prohibiting or limiting delivery of the
Conversion Shares via DWAC.
“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and redemptions
scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company shall have
paid all liquidated damages and other amounts owing to the Holder in respect of this Note, (c)(i) there is an effective Registration
Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common
Stock issuable pursuant to the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue
uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents
(and shares issuable in lieu of cash payments of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale
restrictions as determined by the counsel to the Company as set forth in a written opinion letter to such effect, addressed and
acceptable to the Transfer Agent and the Holder, (d) the Common Stock is trading on a Trading Market and all of the shares issuable
pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market (and the Company believes, in good
faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable future), (e) there
is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the
shares then issuable pursuant to the Transaction Documents, (f) there is no existing Event of Default and no existing event which,
with the passage of time or the giving of notice, would constitute an Event of Default, (g) the issuance of the shares in question
to the Holder would not violate the limitations set forth in Section 4(d) herein, (h) there has been no public announcement of
a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated, (i) the applicable
Holder is not in possession of any information provided by the Company that constitutes, or may constitute, material non-public
information, (j) the Company has timely filed (or obtained extensions in respect thereof and filed within the applicable grace
period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act, (k) on any date that
the Company desires to make a payment of interest and/or principal, the average daily dollar volume of the Company’s common
stock for the previous twenty (20) trading days must be greater than $50,000, (l) the Company shares of common stock must be DWAC
Eligible and not subject to a “DTC chill” and (m) the Conversion Shares must be delivered via an “Automatic
Conversion” of principal and/or interest.
“Event
of Default” shall have the meaning set forth in Section 6(a).
“Exchange
Agreement” means the Exchange Agreement, dated as of July 15, 2015 between the Company and the original Holder, as amended,
modified or supplemented from time to time in accordance with its terms.
“Fixed
Conversion Price” shall have the meaning set forth in Section 4(b).
“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).
“Late
Fees” shall have the meaning set forth in Section 2(c).
“Mandatory
Default Amount” means the payment of 130% of the outstanding principal amount of this Note and accrued and unpaid interest
hereon, in addition to the payment of all other amounts, costs, expenses and liquidated damages due in respect of this Note.
“New
York Courts” shall have the meaning set forth in Section 7(d).
“Note
Register” shall have the meaning set forth in Section 2(b).
“Notice
of Conversion” shall have the meaning set forth in Section 4(a).
“Original
Issue Date” means the date of the first issuance of this Note, regardless of any transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Notes.
“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Exchange Agreement, including shares issuable upon conversion in full of all Notes (including shares
issuable as payment of interest on the Notes), ignoring any conversion or exercise limits set forth therein.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).
“Successor
Entity” shall have the meaning set forth in Section 5(e).
Section
2. Interest.
a) Payment
of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Note at the rate of 10% per annum, which interest shall be guaranteed. All interest payments hereunder
will be payable in cash, or subject to the Equity Conditions being satisfied, in cash or Common Stock in the Holder’s discretion.
Accrued and unpaid interest shall be due and payable on each Conversion Date and on the Maturity Date, or as otherwise set forth
herein.
b) Interest
Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and
shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all
accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder
will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers
of this Note (the “Note Register”).
c) Late
Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue
daily from the date such interest is due hereunder through and including the date of actual payment in full.
d) Prepayment.
At any time upon ten (10) days written notice to the Holder, the Company may prepay any portion of the principal amount of this
Note and any accrued and unpaid interest. If the Company exercises its right to prepay the Note, the Company shall make payment
to the Holder of an amount in cash equal to the sum of the then outstanding principal amount of this Note and interest multiplied
by 130%. The Holder may continue to convert the Note from the date notice of the prepayment is given until the date of the prepayment.
Section
3. Registration of Transfers and Exchanges.
a) Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.
b) Investment
Representations. This Note has been issued subject to certain investment representations of the original Holder set forth
in the Exchange Agreement and may be transferred or exchanged only in compliance with the Exchange Agreement and applicable federal
and state securities laws and regulations.
c) Reliance
on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company
may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.
Section
4. Conversion.
a) Voluntary
Conversion. This Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder,
at any time and from time to time (subject to the conversion limitations set forth in Section 4(d) hereof). The Holder shall
effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A
(each, a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted and
the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date
is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered
hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be
required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and
unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal
amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain a Conversion Schedule
showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice
of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy,
the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee
by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of
a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face
hereof.
b) Conversion
Price. The conversion price in effect on any Conversion Date shall be equal to 55% of the lowest traded price of the Common
Stock in the twenty (20) Trading Days prior to the Conversion Date (the “Fixed Conversion Price”). Notwithstanding
anything herein to the contrary, at any time after the occurrence of any Event of Default the Holder may require the Company to,
at such Holder’s option and otherwise in accordance with the provisions for conversion herein, convert all or any part of
this Note into Common Stock at the Alternative Conversion Price. All such foregoing determinations will be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases
or increases the Common Stock during such measuring period. Nothing herein shall limit a Holder’s right to pursue actual
damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section
hereof or under applicable law.
c) Mechanics
of Conversion.
i. Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted and
any accrued and unpaid interest to be converted by (y) the Fixed Conversion Price.
ii. Delivery
of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing
the Conversion Shares which, on or after the date on which such Conversion Shares are eligible to be sold under Rule 144 without
the need for current public information and the Company has received an opinion of counsel to such effect reasonably acceptable
to the Company (which opinion the Company will be responsible for obtaining) shall be free of restrictive legends and trading
restrictions (other than those which may then be required by the Exchange Agreement) representing the number of Conversion Shares
being acquired upon the conversion of this Note, and (B) a bank check in the amount of accrued and unpaid interest (if the Company
has elected or is required to pay accrued interest in cash). All certificate or certificates required to be delivered by the Company
under this Section 4(d) shall be delivered electronically through the Depository Trust Company or another established clearing
corporation performing similar functions. If the Conversion Date is prior to the date on which such Conversion Shares are eligible
to be sold under Rule 144 without the need for current public information the Conversion Shares shall bear a restrictive legend
in the following form, as appropriate:
“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE
HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE
144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
Notwithstanding
the foregoing, commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public
information requirements, the Company, upon request of the Holder, shall obtain a legal opinion to allow for such sales under
Rule 144.
iii. Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to
the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event
the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return
to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.
iv. Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion
of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law
by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder
of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Company may not refuse
conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation
of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining
conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit
of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which
bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which
shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion
Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder
such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after such Share Delivery Date
until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to
pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s failure to deliver Conversion
Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of
any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable
law.
v. Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder,
if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant
to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open
market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion
relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in
addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total
purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate
number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual
sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions)
and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount
of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares
of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii).
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence,
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.
vi. Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to 250% of the Required Minimum
for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free
from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders
of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions
set forth in the Exchange Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the
conversion of the then outstanding principal amount of this Note and payment of interest hereunder. The Company covenants that
all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.
vii. Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at
its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Fixed Conversion Price or round up to the next whole share.
viii. Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without
charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this
Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of
any Notice of Conversion.
d) Holder’s
Conversion Limitations. The Company shall not effect any conversion of principal and/or interest of this Note, and a Holder
shall not have the right to convert any principal and/or interest of this Note, to the extent that after giving effect to the
conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any
Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon
conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common
Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by
the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities
of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without
limitation, any other Notes or the Warrants) beneficially owned by the Holder or any of its Affiliates. Except as set forth
in the preceding sentence, for purposes of this Section 4(e), beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in
this Section 4(d) applies, the determination of whether this Note is convertible (in relation to other securities owned by the
Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion
of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether
this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal
amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this
restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice
of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify
or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 4(e), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding
shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written
notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder
or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not
less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 4(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note
held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(e) shall continue to apply. Any such increase
or decrease will not be effective until the 61st day after such notice is delivered to the Company.
The Beneficial Ownership Limitation provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained
herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of this Note.
Section
5. Certain Adjustments.
a) Stock
Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents
(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment
of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues,
in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Fixed Conversion
Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury
shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent
Equity Sales. If, at any time while this Note is outstanding, the Company or any Subsidiary, as applicable, sells or grants
any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant
or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire
shares of Common Stock at an effective price per share that is lower than the then Fixed Conversion Price (such lower price, the
“Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if the
holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share
which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share
that is lower than the Fixed Conversion Price, such issuance shall be deemed to have occurred for less than the Fixed Conversion
Price on such date of the Dilutive Issuance), then the Fixed Conversion Price shall be reduced to equal the Base Conversion Price.
Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing,
no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing,
no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b),
indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing
terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company
provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is
entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance,
regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to
any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the
Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right
to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and
such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would
not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Intentionally
Omitted.
e) Fundamental
Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making
or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or
other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this
Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(e) on the conversion
of this Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result
of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Note). For purposes
of any such conversion, the determination of the Fixed Conversion Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Fixed Conversion Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given
the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Note and the Exchange Agreement in accordance
with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder
and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the
holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Note which is convertible for a corresponding number of shares
of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable
upon conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction,
and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account
the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value
of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form
and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other
Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein.
f) Calculations.
All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
g) Notice
to the Holder.
i. Adjustment
to Fixed Conversion Price. Whenever the Fixed Conversion Price is adjusted pursuant to any provision of this Section 5, the
Company shall promptly deliver to each Holder a notice setting forth the Fixed Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)
the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address
as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.
Section
6. Events of Default.
a) “Event
of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether
such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental body):
i. any
default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other amounts owing to
a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or
by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above,
is not cured within 3 Trading Days;
ii. the
Company shall materially fail to observe or perform any other material covenant or material agreement contained in the Notes (other
than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach
is addressed in clause (xi) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading
Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company
has become or should have become aware of such failure;
iii. a
default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by clause (vi) below);
iv. any
representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;
v. the
Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;
vi. the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $100,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;
vii. the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five Trading Days or the transfer of shares of Common Stock through the Depository
Trust Company System is no longer available or “chilled”;
viii. the
Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of
all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute
a Change of Control Transaction);
ix. the
Company shall fail for any reason to deliver certificates to a Holder on or prior to the third Trading Day after a Conversion
Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof;
x. the
Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not
in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);
xi. if
the Company or any Significant Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian
or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make
a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be the subject of an order for
relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or
a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of
a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance
of or for the purpose of effecting any of the foregoing;
xii. if
any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Significant
Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company
or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any
substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty
(60) days;
xiii. the
occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or
any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in the
aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after
the date thereof;
xiv. the
Company shall fail to maintain sufficient reserved shares pursuant to Section 4(c)(vi); or
xv. any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days;
b) Remedies
Upon Event of Default. Subject to the Beneficial Ownership Limitation as set forth in Section 4(d), if any Event of Default
occurs, then the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts
owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable
in cash at the Mandatory Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration
of this Note, the interest rate on this Note shall accrue at an additional interest rate equal to the lesser of 2% per month (24%
per annum) or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder
shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the
Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the
Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and
all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time
prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder
receives full payment pursuant to this Section 6(b). No such rescission or annulment shall affect any subsequent Event of Default
or impair any right consequent thereon.
Section
7. Miscellaneous.
a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation,
any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service, addressed to the Company, at the address set forth above, or such other facsimile number or address as the Company
may specify for such purposes by notice to the Holder delivered in accordance with this Section 7(a). Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile,
or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the
Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at
the principal place of business of such Holder, as set forth in the Exchange Agreement. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 12:00 p.m. (New York
City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later
than 12:00 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required
to be given.
b) Absolute
Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this
Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the
Company. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein.
c) Lost
or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of
this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees
and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
e) Waiver.
Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any
other occasion. Any waiver by the Company or the Holder must be in writing.
f) Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such as though no such law has been enacted.
g) Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof)
shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other
obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available
remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic
loss and without any bond or other security being required. The Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions
of this Note.
h) Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.
i) Headings.
The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit
or affect any of the provisions hereof.
*********************
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.
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MyECheck, Inc. |
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By: |
/s/ EDWARD R. STARRS |
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Name: EDWARD R. STARRS |
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Title: CEO |
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Facsimile No. for delivery of Notices: 775-454-5105 |
ANNEX
A
NOTICE
OF CONVERSION
The
undersigned hereby elects to convert principal under the 10% Convertible Note due July 15, 2016 of MyECheck, Inc. (the “Company”),
into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of
the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably
requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer
taxes, if any.
By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the
Exchange Act.
The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.
| Conversion calculations: |
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Date to Effect Conversion: |
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Principal Amount of Note to be Converted: |
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Payment of Interest in Common Stock __ yes __ no |
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If yes, $_____ of Interest Accrued on Account of Conversion at Issue. |
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Number of shares of Common Stock to be issued: |
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Signature: |
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Name: |
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Delivery Instructions: |
Schedule
1
CONVERSION
SCHEDULE
This 10% Convertible
Note due on July 15, 2016 in the original principal amount of $50,000 is issued by MyECheck, Inc. This Conversion Schedule reflects
conversions made under Section 4 of the above referenced Note.
Dated:
Date of Conversion
(or for first entry,
Original Issue Date) | |
Amount of
Conversion | | |
Aggregate
Principal
Amount
Remaining
Subsequent to
Conversion
(or original
Principal
Amount) | | |
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Exhibit 31.1
RULE 13a-14(a) [SECTION 302] CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER
I, Edward R. Starrs, certify that:
1. I have reviewed this report on Form 10 Amendment No. 2 dated September 23, 2015, of MYECHECK, INC.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I
are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and have:
| a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant , including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | [Paragraph reserved pursuant to SEC Release 33-8618]; |
| c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such
evaluation; and |
| d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and; |
5. The registrant’s other certifying officer(s) and I
have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
| a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and |
| b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting. |
/s/ Edward R. Starrs
EDWARD R. STARRS
President and Chief Executive Officer
Exhibit 31.2
RULE 13a-14(a) [SECTION 302] CERTIFICATION
OF PRINCIPAL FINANCIAL OFFICER
I, Bruce M. Smith, certify that:
1. I have reviewed this report on Form 10 Amendment No. 2, dated September 23, 2015 of MYECHECK, INC.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I
are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and have:
| e. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant , including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared; |
| f. | [Paragraph reserved pursuant to SEC Release 33-8618]; |
| g. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such
evaluation; and |
| h. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and; |
5. The registrant’s other certifying officer(s) and I
have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
| c. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and |
| d. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting. |
/s/ Bruce M. Smith
BRUCE M. SMITH
Chief Financial Officer
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE
OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
The following certification accompanies the issuer’s Report
on Form 10, and is not filed, as provided in Release 33-8212, 34-47551 dated June 30, 2003.
In connection with the accompanying Report of MyECheck, Inc. (“MYECHECK”) on Form 10 Amendment
No. 2, dated September 23, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”),
I, Edward R. Starrs, President and Chief Executive Officer of MYECHECK, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
| (1) | the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
MYECHECK. |
A signed original of this written statement required by Section
906 has been provided to MyECheck, Inc. and will be retained by MyECheck, Inc. and furnished to the Securities and Exchange Commission
or its staff upon request.
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Dated: September 23, 2015 |
/s/ Edward R. Starrs
EDWARD R. STARRS
President and Chief Executive Officer
Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL
OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
The following certification accompanies the issuer’s Report
on Form 10, and is not filed, as provided in Release 33-8212, 34-47551 dated June 30, 2003.
In connection with the accompanying Report of MyECheck, Inc. (“MYECHECK”) on Form 10 Amendment
No. 2, dated September 23, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”),
I, Bruce M. Smith, Chief Financial Officer of MYECHECK, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 that:
| (1) | the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
MYECHECK. |
A signed original of this written statement required by Section
906 has been provided to MyECheck, Inc. and will be retained by MyECheck, Inc. and furnished to the Securities and Exchange Commission
or its staff upon request.
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Dated: September 23, 2015 |
/s/ Bruce M. Smith
BRUCE M. SMITH
Chief Financial Officer