Exhibit 10.6
RESELLER AGREEMENT - ONLINE FINANCIAL SERVICES
THIS RESELLER AGREEMENT ("Agreement") is made and entered into as of
this _____ day of December, 2000 ("Effective Date"), by and between
University Bank, a Michigan banking corporation ("UB"); and
Digital Commerce Merchant Services Inc., a Delaware corporation
("DCMS"), D.B.A. as "xxxxxxxx.xxx".
For the purposes of this Agreement, UB and DCMS are sometimes referred
to individually as "Party" and collectively together as "Parties".
RECITALS:
A. Whereas the UB is a Michigan state licensed banking corporation
providing banking and other financially related services by itself or
through affiliates, primarily through its offices in Ann Arbor,
Michigan, with the capability of providing online banking and
financial services.
B. Whereas DCMS has extensive knowledge and experience concerning the
delivery and sale of online payment processing solutions and financial
service products ("Products") and markets financial service products
to businesses and provides support services related to such financial
service products.
C. DCMS wishes to market the Bank's online banking services and other
products offered by the Bank and its affiliates, and wishes to be paid
a referral fee for marketing said services.
D. UB desires to market the Products offered by DCMS and its affiliates,
and wishes to be paid a referral fee for marketing said services.
E. DCMS is an independent contractor, not an employee or agent of UB, and
is entitled to none of the benefits accorded UB employees.
F. UB is an independent contractor, not an employee or agent of DCMS, and
is entitled to none of the benefits accorded DCMS employees.
NOW THEREFORE, in consideration of the mutual promises contained in
this Agreement and of the mutual benefit to be derived under this Agreement, the
Parties agree as follows:
Article I
Definitions
1.01 Products. Products shall mean the individual or bundled services
provided by UB or DCMS, as detailed on Schedule "A" to be attached,
and as listed on UB's web site at xxx.xxxxxxxxxx-xxxx.xxx, for UB, and
Schedule "B" to be attached for DCMS, and as listed on DCMS's web site
at xxx.xxxxxxxx.xxx, and as modified or added to from time to time by
either party.
1.02 Independent Contractor. For the purposes of this Agreement,
Independent Contractor shall mean that the legal entity defined as
DCMS is not an employee of UB and the legal entity known as UB is not
an employee of DCMS.
1.03 Merchant. Merchant shall mean a businessperson or organization engaged
in commercial activities, which use credit card processing service
and/or online banking services.
1.04 Client. Client shall mean a person associated with a Merchant who is
engaged with DCMS or UB who uses the services of either DCMS or UB.
1.05 Processing Bank. The Processing Bank shall be the Acquiring Bank for
credit card transactions.
1.06 Rules and Regulations. The Parties to this Agreement transact business
under Rules and Regulations governing the operation of their
respective businesses. Rules and Regulations means the rules,
regulations, procedures, and guidelines established by VISA and/or
other financial card service organizations and by the licensing and/or
governance bodies regulating the business activities of the bank, and
specifically UB.
1.07 Sales. The term Sales as used in this agreement, shall mean the
provision of the services as detailed in Schedule "A" and Schedule "B"
of this agreement, and as modified from time to time by both parties,
for which charges and/or xxxxxxxx for the provision of those services
are made and payment is received. Sales shall also mean the provision
of reinvestment or management services provided by UB.
1.08 Services. Services shall mean the Services provided to Merchants and
Clients by DCMS or UB, its representatives, and/or the Processing
Bank.
Article II
Relationship
2.01 Resellers - Sharing of Fees. The Parties agree to engage in a reseller
relationship with each other, on a non-exclusive basis, whereby UB
agrees to provide its Services, as detailed in Schedule "A", to DCMS's
Merchants and Clients and DCMS agrees to provide its Services, as
detailed in Schedule "B", to UB's Merchants and Clients, whereupon the
Parties will share in the revenue generated from these mutually
serviced Merchants or Clients on a fifty/fifty basis, net of costs of
the provision of said Services reasonably incurred by the provider.
The Parties shall agree upon a Schedule of Fees to be charged for the
provision of their services, to be determined as a number less than
the published retail or wholesale rates for these services, but
reasonably calibrated to accommodate normal overhead and operations of
the provider of the service provided.
2.02 Representations. DCMS and UB may represent themselves as Service
Representatives or Account Representatives marketing Services for each
other. Consideration for governing laws and licensing regulations must
be given in final determination of the exact manner in which the
Parties may represent themselves, to be agreed between the Parties as
a "policies and procedures" matter governing operation between the
Parties.
2.03 Expenses. DCMS and UB acknowledges that they are exclusively
responsible for their own expenses, insurance, payroll and other dues,
fees and taxes incurred in performing the Services.
Article III
Duties Of The Parties
3.01 Sales. Both DCMS and UB and their representatives shall use reasonable
commercial efforts to market the Services offered by each other, on a
non-exclusive basis, as described in Schedule "A" and "B", and as
modified from time to time, to their Merchants and Clients and their
affiliates. Such Services shall include obtaining applications from
Merchants within the stated credit policies of DCMS and UB, specific
to the individual services offered by the Parties. The Parties shall
work together to develop the full range of online applications
relating to each of the services offered, as soon after execution of
this Agreement as practicable.
3.02 Service. Each Party shall provide training, follow-up, support, and
service reasonably required by Merchants in use of the Services.
Furthermore, the Parties shall provide all merchant e-commerce
services required to give effect and operability to this Agreement,
including the arrangement of transaction server hosting, merchant
monitoring and reporting, technical consulting and programming
assistance.
3.03 Delivery of Documents and Funds. Upon receipt of any applications,
forms, or other documents, or funds, whether in the form of cash,
checks, money orders, or other negotiable instrument received from a
Merchant or Client, DCMS and UB shall promptly deliver such documents
to the appropriate responsible Party and any funds to a segregated
account established at UB designated for the operation of the business
contemplated by this Agreement, unless the Parties, by mutual consent,
shall direct, in writing, that such funds or documents be sent to
another party. All paperwork relating to a Merchant or prospective
Merchant client for UB must be sent to UB for processing and approval.
All paperwork relating to a Merchant or prospective Merchant client
for DCMS must be sent to DCMS for processing and approval.
3.04 Information. Upon receipt of any information regarding any dispute,
claims, or problems relating to any Merchant with respect to the
Services and Products, or a Merchant's business practice, character or
other matters affecting a Merchant's relationship with either Party,
regulatory authorities or Credit Card Companies, or the ability to
comply with the terms of such relationships including any violations
or suspected violations of the Rules and Regulations noted in Section
1.06 above, each Party must immediately notify the other Party or its
designates of such information.
Article 1V
Further Duties Of The Parties
4.01 Support. Each Party has agreed to provide such support services as are
reasonably necessary to the other Party to perform their duties
hereunder; including, but not limited to, providing technical,
marketing, and other similar services, forms, supplies, marketing
materials, price lists and the training reasonably necessary for the
Parties to perform the duties required by Article III, supra.
4.03 Rules and Guidelines. DCMS and UB have agreed to promptly provide each
other with copies of all its Rules and Regulations, guidelines, and
price lists, as amended from time to time, governing the sales and
marketing of the Services and any support services required of the
Parties.
4.04 Underwriting and Risk Assessment. Relative to its services, UB is
responsible to review each application and ensure that each is
complete and meets the underwriting guidelines, rules, and procedures
set by UB. It is clearly understood that the Risk and its Assessment
relative to the provision of its services are the sole responsibility
of the UB. Relative to its services, DCMS is responsible to review
each application and ensure that each is complete and meets the
underwriting guidelines, rules, and procedures set by DCMS, and Credit
Card Companies, for delivery of its services. It is clearly understood
that the Risk and its Assessment relative to the credit card
processing business are the sole responsibility of the Processing
Bank.
4.03 Compliance. UB will review all applications relative to the delivery
of its services to ensure requirements imposed by Rules and
Regulations, have been met by UB and DCMS. DCMS will review all
applications relative to the delivery of its services to ensure
requirements imposed by Rules and Regulations have been met by DCMS
and UB.
4.06 Fulfillment of Intent of Agreement. It is recognized by the Parties
that the provision of services may or does involve outside service
providers. For example, DCMS is a registered Independent Sales
Organization (ISO) for Humboldt Bank, and through Humboldt is
registered with Visa, Mastercard and other card associations to sell
card services and to obtain Merchant Numbers for its Merchant clients.
Humboldt is the acquiring bank through which DCMS currently processes
the transactions of its Merchant Clients. DCMS manages the
relationship between the Merchant and the Acquiring Bank. Proceeds of
the transactions processed for the Merchant are paid, at the direction
of the Merchant, to the Merchant's designated bank account. It is the
objective of this Agreement between the Parties to establish an online
banking facility to which DCMS can direct and service its Merchant
clients, to which the Merchant's transaction proceeds can be directed,
at the Merchant's direction. Once the online Merchant account has been
established through the facilities of UB, the Merchant may direct
funds so deposited to its designated account at another banking
institution or, preferably, leave the funds in the Online Account
established for the Merchant at UB. Accordingly, the Merchant may then
make use of the array of Online Services offered through UB and its
affiliates.
4.07 Reconciliation and Payment - Accounting. DCMS, through its association
with the Processing Bank, Card Association and accounting resources is
responsible in this Agreement to provide all accounting and reporting
relative to the provision of its services, and to provide to UB, on an
agreed upon schedule, all bank deposit reports from the Processing
Bank and/or Credit Card Companies and a disbursement summary and
profit and loss report relative to the card processing business
operated in conjunction with UB for those Merchants and Clients
referred to DCMS by UB and serviced through the facilities provided by
DCMS. Any Holdback/Security Deposit funds withheld for security
purposes for mutual Merchant clients of DCMS and UB shall be deposited
to an account to be designated by and under the mutual control of DCMS
and UB for the term of the Holdback/Security period proscribed.
UB is responsible in this Agreement to provide all accounting and
reporting relative to the provision of its services. UB shall provide
to DCMS, on an agreed upon schedule, reports on all revenue collected
for services provided by UB as detailed in this Agreement, all bank
deposit reports on Merchant and Client accounts established at UB
through this Agreement and a disbursement summary and profit and loss
report relative to the banking and services business operated in
conjunction with DCMS for those Merchants and Clients referred to UB by
DCMS and serviced through the facilities provided by UB.
The Parties shall form and Audit Committee to be responsible for
overseeing the production of a profit and loss statement, on a monthly
basis, for the business transacted between the Parties in accordance
with this Agreement. The accounting department of UB will be
responsible for preparing the monthly P&L report, to be subsequently
reviewed by the Audit Committee and, subject to the reserve and
operating guideline criteria established by the Audit Committee, shall
determine the distribution of net profits from the operation of this
Agreement on a Fifty/Fifty (50/50) basis to the Parties.
Article V
Sources Of Revenue
5.01 Sums. Revenue shall be determined from the Sales recorded from the
provision of Services by the Parties as detailed in Section 2.01,
above.
5.02 Recording of Sales. Sales shall be defined as transactions completed
in accordance with Rules and Regulations governing the operation of
each of the Parties respective business. For instance, for credit card
transactions, no payment shall be paid on Sales or orders for Services
canceled, or cancellation settlements. Such Rules and Regulations
shall be applied to the standard employed by the Audit Committee in
determining the profit and loss of the operation of this business
conducted between the Parties.
Article VI
Non-Disclosure
6.01 Non-Disclosure Agreement and Proprietary Information.
----------------------------------------------------
A. The Parties recognize and acknowledges that the
information, business practices, business list of the
customers, and any other trade secrets or other
confidential information relating to the Parties respective
businesses as it may exist from time to time are valuable,
special, and unique assets of each Party's business.
Therefore, the Parties agrees as follows:
1. The Parties will hold in strictest confidence and
not disclose, reproduce, publish, or use in any
manner, whether during or subsequent to its
engagement, without the express written
authorization of the other Party, any information,
business customer lists, trade secrets, or
confidential matters leading to any aspect of
either Party's business, except where such
information is generally accepted as "public
information" and generally available from the
public filings required of the Parties by their
governing regulators.
2. That upon request, or at the time of termination of
this Agreement, the Parties will deliver to the
each other, and not keep or deliver to anyone else,
any and all notes, memoranda, documents, and in
general, any and all materials relating to the
other Party's business.
B. The Parties acknowledges and agrees that each Party brings
special pre-existing knowledge and relationships of its own
into this business relationship, and therefore, in the
event that this Agreement is terminated for any reason, the
Parties may take with it that knowledge, documents, and
those relationships that it can clearly demonstrate as it
held prior to this Agreement.
Article VII
Term: Termination: Rights On Termination
7.01 Term. The term ("TERM") of this Agreement shall be for five (5) years
from the date set out in the preamble to this Agreement. Not
withstanding the foregoing, if none of the provisions of this Article
are applicable, then this Agreement shall renew automatically for an
additional one (1) year term on the fifth anniversary date of this
Agreement.
7.02 Termination. This Agreement may be terminated prior to completion of
the Term in any one of the following ways: -----------
A. Upon DCMS or UB's going out of business.
B. By either Party, after one hundred and eighty-one (181) days
written notice to the other Party for good cause, including,
but without limitation to:
i. violation by either Party of the terms of this
Agreement;
ii. the material default of either Party in performing its
obligation under contracts with other persons or
business entities if such default has been directly
caused by that Party;
iii. fraud with respect to the business affairs of either
Party or their mutual client;
C. Upon mutual agreement of the parties hereto;
D. By either Party upon one hundred and eighty-one (181) days
written notice in the event of changes in the rules and
regulations of the Acquiring Bank or Credit Card Companies
or FDIC or the OTS, which in the opinion of either Party are
adverse to continuing this Agreement.
7.03 Effect of Termination. Upon termination of this Agreement, each Party
shall be entitled to receive all compensation earned under this
Agreement to the date of termination.
Article VIII
Representations made by the Parties
8.01 Representations. The Parties have represented and warranted to each
other as follows:
A. Except as previously disclosed to the other Party in
writing, neither Party is not subject to any restriction or
non-competition covenant in favor of a former employer/
contractor or any other entity.
B. The signatory hereto for each Party has the legal right to
sign on behalf of that Party and enter into this Agreement.
Entry into this Agreement does not constitute violation or
breach of the terms of any agreement to which either Party
is a party.
C. All information provided by the Parties at, prior to, or
following the date of this Agreement is true, correct,and
complete.
Article lX
Indemnification
9.01 The Parties. Each Party has agreed to indemnify and hold harmless the
other Party from and against any loss, cost, or damage, including
reasonable attorneys' fees and court costs incurred by the other Party
as a result of or arising from either Party's misrepresentations,
failure to comply with the terms of this Agreement, or willful
misconduct or negligent performance of its obligation hereunder. Such
indemnification obligations shall continue subsequent to the
termination of this Agreement for actions arising from events
occurring during the Term of this Agreement.
Article X
MISCELLANEOUS
10.01 Notice. All notices required hereunder shall be in writing and
delivered in person or by certified or registered mail, return receipt
requested postage prepaid. Such notice shall be addressed as follows:
To the UB: University Bank
000 Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
000-000-0000 - 000-000-0000 (fax)
Attention: Xxxxxxx Xxxxx Xxxxxxx
To the DCMS: Digital Commerce Merchant Services Inc.
000-0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
000-000-0000 - 000-000-0000 (fax)
Attention: Xxxxxxx Xxxx
10.02 Amendment. Except as otherwise provided herein, this Agreement and
the Exhibits hereto may not be amended, altered, or modified except by
written authorization executed by all signatories hereto.
10.03Arbitration. Any controversy or claim arising out of or related to
this Agreement shall be resolved by binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon any award may be entered in any court
having jurisdiction thereof. The prevailing party shall be entitled to
recover reasonable attorney's fees and other costs incurred in any
arbitration proceeding. Notwithstanding the provisions of this
paragraph.
10.04 Benefit and Assignment. This Agreement shall inure to the benefit of
the parties and their respective heirs, successors, and
representatives. owever, the rights and obligations hereunder may
not be assigned without the prior written consent of the other.
10.05 Governing Law. This Agreement shall be governed by, construed and
interpreted under the laws of the State of Delaware.
10.06 Severability. The illegality or unenforceability of any provisions of
this Agreement shall not affect the remainder of this Agreement.
10.07 Entire Agreement. This Agreement and the Exhibits hereto contain the
entire understanding of the parties hereto and supercede all prior
agreements with respect to the subject of this Agreement.
10.08 Headings. Headings used herein are for convenience only and shall not
affect the construction or interpretation of this Agreement.
10.09 Online Bank - Web Name. DCMS will offer the link to UB through its
web address at xxx.xxxxxxxx.xxx.
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RESELLER AGREEMENT
EXHIBIT A
TERRITORY
SIGNATURE, DATE SEAL, ACKNOWLEDGEMENTS
IN WITNESS HEREOF, the Parties have executed this agreement the day and
date herein first above written. Agreed and accepted by:
UNIVERSITY BANK DIGITAL COMMERCE
MERCHANT SERVICES INC.
Per: _____________________________ Per: ____________________________
Xxxxxxx Xxxx Ranzini Xxxxxxx Xxxx
END
RESELLER AGREEMENT
EXHIBIT B
FEE PAYMENT SCHEDULE
For all contracts signed as a result of efforts, referrals, or
introductions by the Parties or any of its representatives or
associated companies:
1. The Parties will mutually determine the risk level of the
Merchant and, accordingly, determine an appropriate Merchant Rate
on a merchant by merchant basis;
2. The Net difference of Merchant Rate and Total Costs will be
divided between the parties as follows:
UB:
DCMS:
END
