0001144204-14-062928.txt : 20141027 0001144204-14-062928.hdr.sgml : 20141027 20141024215104 ACCESSION NUMBER: 0001144204-14-062928 CONFORMED SUBMISSION TYPE: 10-12G PUBLIC DOCUMENT COUNT: 121 FILED AS OF DATE: 20141027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MYECHECK, INC. CENTRAL INDEX KEY: 0001619558 IRS NUMBER: 201884354 STATE OF INCORPORATION: WY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-12G SEC ACT: 1934 Act SEC FILE NUMBER: 000-55296 FILM NUMBER: 141173396 BUSINESS ADDRESS: STREET 1: 2600 E. BIDWELL STREET STREET 2: SUITE 140 CITY: FOLSOM STATE: CA ZIP: 95630 BUSINESS PHONE: 8446932432 MAIL ADDRESS: STREET 1: 2600 E. BIDWELL STREET STREET 2: SUITE 140 CITY: FOLSOM STATE: CA ZIP: 95630 10-12G 1 v392049_1012g.htm 10-12G

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10

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 140
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 comp x

MyECheck, Inc.

FORM 10

		Page

Item 1.	Business.		3

Item 1A.	Risk Factors.		10

Item 2.	Financial Information.		12

Item 3.	Properties.		20

Item 4.	Security Ownership of Certain Beneficial Owners and Management		21

Item 5.	Directors and Executive Officers.		22

Item 6.	Executive Compensation.		24

Item 7.	Certain Relationships and Related Transactions, and Director Independence.		25

Item 8.	Legal Proceedings.		25

Item 9.	Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.		26

Item 10.	Recent Sales of Unregistered Securities.		27

Item 11.	Description of the Registrant’s Securities to be Registered.		29

Item 12.	Indemnification of Directors and Officers.		30

Item 13.	Financial Statements and Supplementary Data.		30

Item 14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.		30

Item 15.	Financial Statements and Exhibits.		31

FORWARD LOOKING STATEMENTS

CERTAIN STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-K, 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 NEVADA 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, Inc. (“MyECheck” or the “Company”) is an early stage company engaged in the payment processing industry; specifically MyECheck provides electronic check (“electronic-check”) services to businesses of all sizes, payment services providers, financial institutions and other government entities. MyECheck was founded and incorporated in Delaware in October 2004 to capitalize on opportunities created by the passing of The Check Clearing for the 21^st Century Act (“Check 21”). On May 25, 2012 the Company was redomiciled in the State of Wyoming. MyECheck has commenced formal business operations and is generating revenue.

MyECheck was created to satisfy the demand for an alternative payment solution to ACH based e-check solutions, and credit and debit cards for remote and mobile commerce. MyECheck has developed and utilizes a proprietary method of creating and clearing fully electronic checks on behalf of its customers, having successfully implemented its proprietary electronic check service that enables companies to accept real-time check payments from consumers and businesses online or over a mobile device.

MyECheck provides additional services to support its electronic check service including fraud loss prevention services. MyECheck also provides a number of services such as mobile payment services and custom software development and licensing.

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. 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.

Revenue is generated from transaction fees charged to companies that contract with MyECheck to utilize the Company’s services.

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 by creating a new negotiable instrument called a substitute check, which permits banks to truncate original checks, to process check information electronically, and to deliver substitute checks to banks that want to continue receiving paper checks. A substitute check is the legal equivalent of the original check and includes all the information contained on the original check. The law does not require banks to accept checks in electronic form nor does it require banks to use the new authority granted by the Act to create substitute checks.

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. We do image cash letter deposits with JP Morgan Chase and Bank of America. There is no direct contractual relationship between MyECheck and Chase. The Company only makes deposits to their customer’s accounts.

Version two of its software platform was launched in September of 2007 and MyECheck has been steadily ramping up transaction volume on the system since then.

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 and 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 patent pending technology 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. Compared to other payment methods, MyECheck works with more consumers, with the ability to guarantee payments at rates lower than non-guaranteed card processing rates.

Check Authorization Service

MyECheck offers Check Authorization Service which 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 Check Guarantee Providers to offer Check Guarantee Service. Some of our providers include Giact, Certegy, FIS and SPS.

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

Successful

Failed

· MyECheck fees and settlement statements

In addition to the above, pertinent information is returned at the end of each transaction to facilitate reporting on the Merchant side.

Mobile Payment Apps

MyECheck will be launching mobile payment applications in early 2015. The applications will enable secure mobile commerce between registered users. There is a User application and a Merchant application, each can be downloaded, registered and used in real time. The merchant application system will facilitate a complete merchant point of sale this is software only based, there are no additional hardware requirements such as NFC (nesr filed communication). The merchant application system will enable point of sale payments from anyone in the US with any smart mobile device at a very low cost without interchange fees or costly equipment.

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 the only fully electronic payment service for Government. 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 saves 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 prospectus, 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

The number of electronic transactions per quarter has continued to boom. General-purpose card-not-present payments, including general-purpose credit, debit and prepaid, rose from $0.9 trillion in 2009 to $1.4 trillion in 2012: an annual growth rate of 16.3 percent. Despite this, about 55% of the 27 million small businesses in the U.S. do not accept credit cards,¹ resulting in $100 billion in missed sales.²Most business owners say the reason they don’t accept cards are the fees that eat into their slim profits.

From 2009 to 2012, the number of ACH payments grew at an annual rate of 5.1 percent. An estimated 18.3 billion checks were paid in 2012, with a value of $26.0 trillion². About 10% of these ACH payments are checks. While cheaper than cards, for those merchants that accept checks or ACH payments, they average $5,140 per month payments not yet received³.

A stream of alternative payment brands are emerging, some of which have experienced tremendous growth. But virtually all of these payment services require consumers to pay using either a payment card or ACH-based e-checks, leaving the customer and many merchants out in the cold. One of the shortcomings of many of these payment brands is that the consumer is redirected off of the merchant’s site in order to complete the transaction.

Because 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.

¹ Why Don’t More Small Businesses Accept Credit Cards. Forbes (August 16, 2013)

² The 2013 Federal Reserve Payments Study (December 19, 2013)

³ GoPayment Survey Estimates $100 Billion in Missed Sales for Small Businesses that Deny Plastic. Intuit.com (May 22, 2012)

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 faster funds clearing than cards or ACH providing same day or next day availability of funds to the merchant’s bank. MyECheck also offers fraud control tools including bank account verification, negative check-writer database queries and payment guarantee at lower rates.

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.

Management believes MyECheck’s product mix to be the optimum offering to engage in the mobile payments industry. The Company’s fully electronic check service offers the fastest, safest and lowest cost method of loading money onto mobile wallets. The Company’s mobile app systems can be adopted by anyone, anywhere, anytime 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 solutions such as PayPal and more recently BillMeLater offer a slight twist to the traditional payment mechanism of credit cards. PayPal for example, whose primary merchant customers are small retailers who typically are not large enough to qualify for their own merchant account at a bank, offers consumer payment options consisting of either credit cards or bank debit through the ACH network.

All 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.

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.

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 hasn’t performed the correct system integration.

Checks in 2012, continue to be the number one non-cash payment method in the US, with the value of checks processed annually around twenty six trillion dollars⁴. In addition, another, approximately, thirty seven trillion in ACH payments were made in 2012⁵. This ACH activity is the primary market focus of MyECheck.

Many online merchants are dissatisfied with credit card and ACH solutions, and many online industries such as travel and brokerage have no check solution at all. Management believes this provides MyECheck with a significant market opening.

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”.

Federal Reserve Proposed New Rule, February 4, 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.

⁴ 2013 Federal Reserve Payment Study

⁵ NACHA Report April 9, 2013

“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.”

“Four commenters, including the group letter and one Reserve Bank commenter, stated that items created by a paying bank’s customer are a potentially useful payment innovation.”

http://www.gpo.gov/fdsys/pkg/FR-2014-02-04/pdf/2013-30024.pdf

US Patent 7389913 Method and apparatus for online check processing

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.

www.google.com/patents/us7389913

The Patent is referenced in 14 follow-on patents by IBM, AT&T, Google, Moneygram, Telesign, and others

www.google.com/patents/us7389913#forward-citations

MyECheck’s Mobile Product Strategy

MyECheck’s strong competitive advantage as an electronic payment platform is its exclusive ability to enable transfers from any checking account. And the transactions are faster, safer and lower cost than ACH 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)s. 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 will be launching new products in the coming weeks and 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:

Merchant downloads, installs and registers MyECheck Merchant App - User downloads and installs MyECheck User App - User selects Merchant in User App Merchant Menu - User enters Registration Data and submits to Merchant App - Merchant App validates Bank Data and Pre-Approves/Declines User Account - User presents ID at Merchant Location, Merchant compares to Registration Data - Merchant App displays QR code to User App containing User Account Token - At POS Merchant App displays QR code to User App containing Invoice User App displays Transaction Detail and prompts authorization - User authorizes payment by sending Token to Merchant App - Merchant App verifies User Bank Account and Approves/Declines Transaction - Merchant App sends receipt to User App 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 September 30, 2014, we employed ten (10) 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 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 $4,866. The rent increases annually by $0.05 per square foot. Both physical and electronic security features are employed at this location.

In addition, MyECheck entered into a secured networking co-location lease with QTS Data Center. The terms of this agreement are three (3) years at $500 per month. 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.

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. 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). Current methods ‘consume’ our web services based upon REST (REpresentational State Transfer). 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 $48,359.

MyECheck owns proprietary software and intellectual property, and licenses patented technology from the Company founder Edward R. Starrs.

Business Partners

In 2007, The Company entered into an agreement with Cardinal Commerce Corporation, a global leader in enabling authenticated payments, secure transactions, and alternative payment brands. Cardinal enables payment brands like Verified by VISA, eBillme, BillMeLater, Google Checkout, and others. They provide access to a network of over 30,000 merchants and thousands of banks. The Cardinal mobile platform promised access to end users’ mobile devices.

The Cardinal mobile platform leverages its merchant network, bank network and payment brands by linking them with end users’ mobile phones through an integrated mobile platform. Cardinal's proprietary and easily deployable technology provides consumers, merchants, card issuers, and processors the ability to conduct authenticated Internet, wireless and mobile transactions safely and securely. Headquartered in Cleveland, Ohio, with facilities in the United States, Europe and Africa, Cardinal Commerce services a global customer base.

During 2008 and 2009, the Company expanded its relationships with larger customers and as a result of their banking requirements, the Company implemented processing of Check 21 files directly to the bank instead of entering into agreements to use their bank’s FedLine account to electronically access the Federal Reserve check clearing system. As more banks have implemented Check 21 clearing processes with the Federal Reserve, the need to use a bank’s FedLine to process transactions directly to the Federal Reserve has diminished.

MyECheck also announced that it had signed an agreement with Regal Entertainment Group, the world’s largest motion picture exhibitor. Regal patrons are able to purchase discount movie tickets and gift cards by securely entering their checking account details on the Regal website. The MyECheck service works with every checking account in the United States, including all business accounts, enabling more Regal patrons to purchase online. This agreement ended in 2010 when the Company’s sponsoring bank, First Regional Bank, was closed by the Federal Deposit Insurance Corporation (FDIC).

On November 17, 2008, the Company announced that it had signed the California State Teachers’ Retirement Fund (CalSTRS) as a customer. CalSTRS primary responsibility is to provide retirement related benefits and services to teachers in public schools and community colleges. It administers retirement, disability and survivor benefits for California's 813,000 public school educators and their families from the state's 1,400 school districts, county offices of education and community college districts. This agreement ended in 2010 when the Company’s sponsoring bank, First Regional Bank, was closed by the Federal Deposit Insurance Corporation (FDIC).

We also entered into agreements with Forever Living Products, Regal Entertainment Group, Simon Property Group, and CalSTRS. In 2009, we partnered with Morse Data Corporation whose InOrder solution is a leading enterprise management system for multi-channel merchants, fulfillment service providers, and publishers. The Company also announced an agreement with Simplifile, the leading provider of electronic recording services, and with several other new merchants during the same year. MyECheck was substantially reliant on these agreements for its business. The agreements with Regal Entertainment Group, Simon Property Group, CalSTRS, Morse Data Corporation ended in 2010 when the Company’s sponsoring bank, First Regional Bank, was closed by the Federal Deposit Insurance Corporation (FDIC).

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.

At 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 26, 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.

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.

In the second quarter of 2014, our longtime customer Simplifile renewed their contract and expanded their use of our payment processing services.

We continue to explore additional banking relationships to support future growth and strategic flexibility.

The Merger Agreement

MyECheck, Inc., a Delaware 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 have been 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.

Item 1A. Risk Factors

MYECHECK IS A HIGH RISK, START-UP COMPANY AND, AS SUCH, THERE IS UNCERTAINTY REGARDING WHETHER IT WILL SUCCESSFULLY EXECUTE OUR 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 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. On January 29, 2010, the Company’s sponsoring 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.

Product Risk

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 service. MyECheck is dependent on a bank relationship and there are assurances that MyECheck will be able to maintain its current bank relationships, or develop new bank relationships.

Market Risk

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.

Reliance on Key Employees

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 Financial Officer Mr. Bruce M. Smith. 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.

Financial Risk

There are no assurances that MyECheck will always have sufficient resources to continue operations.

Competitive Risk

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.

Dependence on 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 proves 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 Technologic Change; Dependence on New Product Development

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

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 would 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.

Flaws and Defects in Products and Services

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 would have a material adverse effect upon MyECheck’s business operations and financial condition.

Management of Potential Growth

MyECheck’s ability to manage its future growth, if any, will require it to continue to implement and improve its operational, financial and management information systems and control and to hire and train new employees, including management and technical personnel, and also to motivate and manage its new employees and to integrate them into its overall operations and culture. Although the management team has successfully grown other companies, there can be no assurance that MyECheck will be able to perform such actions successfully. MyECheck’s failure to manage growth effectively would have a material adverse effect on MyECheck’s results of operations and its ability to execute its business strategy.

Lack of a Public Market

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 trading in “microcap” stocks, including shares of 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.

Competition

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. Notwithstanding, 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.

Reliance on license with affiliated party

On June 28, 2004, the Company entered into a memorandum of understanding 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. No royalties will be due for the patent for one year, and future royalties are subject to negotiation by the Company and Mr. Starrs. 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.

Item 2. Management's Discussion and Analysis or Plan of Operation

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, 2013 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 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 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 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.

Results of Operations

The following tables set forth our results of operations for the years ended December 31, 2013 and 2012 and for the eight-month periods ended August 31, 2014 and 2013.

Year ended December 31, 2013 and 2012

	For the Years Ended December 31,
	2013			2012

Revenues	$	89,496		$	15,487

General and administrative		72,943			42,000
Research and Development		7,000			-
Total Operating Expenses		79,943			42,000

Income or (Loss) from Operations		9,553			(26,513	)

Other Income /(Expense)
Change in fair value of derivative liabilities		24,351			32,164
Interest expense		(26,613	)		(11,736	)
Other income forgiveness of debt		130,167			82,389
Total Other (Income)/Expense		127,905			102,817
Net income or (loss) before income taxes		137,458			76,304
Provision for income taxes		(800	)		(800	)
Net (Loss) or Income	$	136,658		$	75,504

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		4,153,976,849			1,779,777,366
Weighted average number of shares outstanding during the period - fully diluted		4,178,976,849			1,782,457,669

We had revenues from continuing operations of $89,496 in 2013, compared to $15,487 in 2012. Cost of revenue from continuing operations was $0 in 2013 and 2012. The increase in revenue was the result of the Company implementing a licensing business model.

Year ended December 31, 2013 and 2012 (Cont.)

Selling, general and administrative expenses (“S, G & A”) were $79,943 in 2013 compared to $42,000 in 2012, a $37,943 increase, or 133%. S, G & A was comprised of:

	For the Years Ended December 31,
	2013			2012

General and Administrative Expenses

Advertising and marketing expense	$	4,231		$	-
Bank charges		509			-
Contract labor		45,105			30,000
Dues and subscriptions		115			-
Processing and transaction expense		3,018			-
Datacenter expense		13,082			12,000
Legal and professional fees		(70	)		-
Taxes and licenses		177			-
Travel		252			-
Other expenses		4,328			-
Supplies - office		308			-
Depreciation		178			-
Telephone		931			-
Total General and Administrative Expenses		72,943			42,000

Research and Development
Outside programmers		7,000			-
In-house programmers - including CTO		-			-
Total Research and Development		7,000			-

Total Operating Expenses	$	79,943		$	42,000

There is no deferred income tax benefit recorded for the losses for the years ended December 31, 2013 and 2012, since management determined that the realization of the net deferred tax asset is not more likely than not to be realized and we created a valuation allowance for the entire amount of such benefit.

Eight-months ended August 31, 2014 and 2013

We had revenue in the amount of $752,075 and $6,054 from continuing operations in the eight-months ended August 31, 2014 and 2013, respectively.

	For the Eight Months Ended August 31,
	2014			2013
	(Unaudited)			(Unaudited)

Revenues	$	752,075		$	6,054

Cost of revenues		44,527			-
Gross profit		707,548			6,054

Operating expenses
General and administrative		412,262			9,075
Research and Development		146,139			-
Total Operating Expenses		558,401			9,075

Profit or (Loss) from Operations		149,147			(3,021	)

Other Income/(Expense)
Interest expense		(7,824	)		-
Loss on conversion of debt		(63,000	)		-
Other income or (expense) cost recovery		53,164			2,533
Total Other Income/(Expense)		(17,660	)		2,533

Net income or (loss)	$	131,487		$	(488	)

Net profit or Loss Per Share - Basic and Diluted	$	0.00		$	(0.00	)

Weighted average number of shares outstanding during the period - basic		4,235,910,329			3,961,811,564

Weighted average number of shares outstanding during the period - diluted		4,235,910,329			3,986,811,564

Eight-months ended August 31, 2014 and 2013 (Cont.)

The Company continued its process of restructuring itself and incurred $64,621 in professional fees for the eight months ended August 31, 2014. The Company reduced its’ datacenter costs from $1,000 per month to $500 per month after bringing the account current. The correction will be recorded in September of 2014. G & A expenses included $107,778 in employee stock compensation leaving the remaining $228,363 in ordinary operating expenses. In addition, the cost of outside programmers was to facilitate the modifications on the licensing agreements of $90,447 coupled with the cost of In-house programmers of $55,692.

	For the Eight Months Ended August 31,
	2014		2013
	(Unaudited)		(Unaudited)

General and Administrative Expenses

Advertising and marketing expense		17,009	$	-
Automobile expense		3,113		-
Non capitalitzabile website expenses		8,505		-
Amortization website		667
Bank charges		1,860		80
Officers salaries		75,833		-
Sales & administrative salaries		47,416		-
Payroll labor burden		29,816		-
Insurance		2,223		-
Datacenter expense		11,500		8,000
Legal and professional fees		64,621		-
Meals and entertainment - 50%		1,842		-
Travel		5,758		-
Other expenses		395		390
Rent		10,332		-
Repairs and maintenance		3,306		-
Utilities		1,446		-
Security		934		-
Supplies - office		7,804		-
Depreciation		3,306		-
Postage		1,020		130
Telephone		5,778		475
Employee stock compensation		107,778		-
Total General and Administrative Expenses		412,262		9,075

Research and Development
Outside programmers		90,447		-
In-house programmers - including CTO		55,692		-
Total Research and Development		146,139		-

Total Operating Expenses		558,401	$	9,075

Cash Flows

December 31, 2013 and 2012

Cash used in operating activities

At December 31, 2013, the Company generated revenue from licensing and transactional fees in the amount of $89,496, of which $6,000 was accounts receivable. The Company paid operating expenses of $47,129 leaving net cash from operating activities at $36,367.

At December 31, 2012 the Company generated revenues of $15,487 of which $8,000 was used to pay operating expenses, $4,000 in accrued liabilities and the remaining $3,907 comprised accounts payable for a net operating cash of $103. The non-cash consulting fees of $30,000 was paid by the Company as a result of issuing 3,000,000,000 shares of common stock at a par value of $0.00001.

In addition, the Company had forgiveness of debt of $82,389, a decrease in derivative liability of $32,164 and an increase in accrued interest of $11,736 resulting in a net other income and expense of $102,817.

Cash used in investing activities

We had net cash of $3,552 in investing activities for the year ended December 31, 2013 for the acquisition of new computer equipment for the software developers. We had no investing activities in the year ended December 31, 2012.

Cash used in financing activities

Net cash provided by financing activities totaled $32,750 which is comprised of $10,000 paid to settle an outstanding debt with its officer and a repayment of a convertible debt of $22,750 for the year ended December 31, 2013 compared to $103 from the result of a cash over draft for the year ended December 31, 2012.

August 31, 2014 and 2013

Cash used in operating activities

Net cash provided by operating activities totaled $211,545 for the eight-months ended August 31, 2014 compared to $100 used for the eight-months ended August 31, 2013, respectively. The Company collected $722,530 in licensing revenues and transaction fees paying cost of revenues of $44,527, research and development of $146,139 and general and administrative expense of $285,286 for a total cash expense of $475,952. Leaving cash of $247,078 less overpaid expenses of $35,533 for net operating cash of $211,548.

Cash used in investing activities

We used net cash of $85,659 in investing activities for the eight-months ended August 31, 2014 which comprised $66,659 in expenses for the new facility and $9,000 paid to outside contractors for the build out of the Company website. The Company purchased 1,000,000,000 shares of common stock from its major shareholder for $10,000. We had no investing activities in the eight-months ended August 31, 2013.

Cash used in financing activities

Net cash provided by financing activities totaled $101,810 in which the Company received a related party loan from its major shareholder of to bridge the financing of the Company and financing was provided by a third party for the acquisition of GreenPay, LLC for the eight-months ended August 31, 2014 compared to $100 for the eight-months ended August 31, 2013.

Financial condition

December 31, 2013

As of December 31, 2013, we had a working capital deficit of $781,660, an accumulated deficit of $3,885,338 and a total stockholders’ deficit of $778,286.

We do not have a line of credit facility. We do not have any material commitments for capital expenditures during the next twelve months. Any required expenditure will be completed through internally generated funding or from proceeds from the sale of common or preferred stock.

August 31, 2014

As of August 31, 2014, we had working capital deficit of $636,859, an accumulated deficit of $3,753,851 and a total stockholders’ deficit of $546,799.

Liquidity and Capital Resources

December 31, 2013

For the year ended December 31, 2013, we had net income of $136,658, and at December 31, 2013, we had an accumulated deficit of $3,885,338 and a total stockholders' deficit of $778,286. As of December 31, 2013, we had cash and cash equivalents totaling $65 and a working capital deficit of $781,660.

August 31, 2014

For the eight months ending August 31, 2014, we had net income of $131,487, and at August 31, 2014, we had an accumulated deficit of $3,753,851 and a total stockholders’ deficit of $546,799. As of August 31, 2014, we had cash and cash equivalents totaling $227,761 and a working capital deficit of $636,859.

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 it 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 Issuer does not hold title to any real estate properties. Subsequently, the Issuer does not have any mortgages, liens or encumbrances against such properties.

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		1,953,456,970		47.44	%
PO Box 10712
Zephyr Cove, NV 89448

William B. Delgado		-		0.00	%
9477 Greenback Lane
Folsom, CA 95630

Robert S. Blandford		92,314		0.00	%
2624 Alana Court
Cameron Park, CA 95682

Bruce M. Smith		500,000		0.01	%
401 Listowe Drive
Folsom, CA 95630

Rod Zalunardo		-		0.00	%
2795 East Bidwell Street Unit 100-236
Folsom, CA 95630

Seven Miles Securities		275,000,000		6.68	%
724 Britannia Drive
Seven Mile Beach Grand Cayman
KY1 1203 Cayman Islands

Titan International Securities, Inc.		280,000,000		6.80	%
The Matalon Bldg Coney Drive
Ste 403 4th Floor
Belize City, Belize

Cede & Co.		1,102,033,185		26.76	%
PO Box 20
Bowling Green Station
New York, NY 10004

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 plans.

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 of his successor. 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 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	53	President	October 29, 2004
		Chief Executive Officer
		Chairman of the Board
		Director

Rod R. Zalunardo	58	Senior Vice President	April 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	55	Vice President Administration & Finance	March 1, 2014
		Chief Financial Officer
		Controller

W.J. "Bill" Delgado	55	Investor Relations	March 1, 2014
		Board Member
		Director

Biographic Sketches

Ed Starrs, Founder, President and CEO

Ed Starrs has more than 24 years of experience as international business executive and management experience in multiple industries. Starrs has proven experience in team building, sales, marketing, and distribution. He demonstrated expertise as a public corporate officer and private company owner with full P&L responsibility. 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. StarMX was the first Internet processing system certified by a Canadian chartered bank. Key to this success, Starrs created comprehensive solutions for Internet payment processing including successfully developing and implementing systems to control fraud, secure transactions, and increase global distribution for e-commerce merchants.

Starrs has owned and operated several successful companies including ERS Marketing, Inc., where he produced over $20 million in contracts for his clients, and Bay Distributing, Inc. a major distributor of over 800 product categories to Fortune 500 accounts.

In addition, Starrs has also held senior management positions with Fortune 100 companies including McCaw Communications, Inc. (AT&T), and AMF, Inc., the world's largest sporting goods conglomerate.

Rod Zalunardo, Senior Vice President and COO

Rod Zalunardo joined MyECheck in April 2014. He is a veteran C-Level Officer with extensive experience in both the academic and private sectors. He has over 25 years' experience as CEO, COO, CFO and Director of successful technology companies with strong skills in all areas of corporate management. He has particular expertise in operations, systems development, strategic planning, senior management, and business development.

Rod was a pioneer in the field of digital health information. He developed and implemented many new technologies related to medical data, telemedicine, and financial management systems for health care providers and consumers. He held a variety of leadership positions at the University of Southern California over 25 years. His final responsibility at USC was directing the leading telemedicine operation in Southern California. He was responsible for over $10 million in contracts and grants to develop telemedical solutions for healthcare providers and systems.

In this assignment he oversaw development of a web-based image management platform (CIMIS) which processes retina images, as well as industry-leading patient record keeping and billing systems. Zalunardo directed partnerships with private, public, and governmental agencies; national healthcare providers; and with both general hospital and tele-medical equipment suppliers.

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. He is skilled at both business and technology adoption. Blandford has been CTO for several successful companies in the online entertainment and gaming industries. He has extensive expertise as a senior systems analyst, database designer, project leader, and development manager. His professional background includes i2 Corp., MXM Media, Maxim Entertainment Group, Perspective Technologies, Win Streak and others.

Steve has been the project lead on software development operations, designed LAN /WAN integration of streaming media and software, organized and managed technical staff, and has held responsibility for P&L, purchasing and deadlines. Blandford has expertise in the design and implementation of Java streaming media solutions for multiple platforms, using Cold fusion, PHP, & SQL DBs. For more than two decades he has architected systems featuring virtually every emerging technology.

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. He has held key executive and financial positions with merging companies as well as CFO and Controller positions in a number of successful and fast growing technology companies.

Smith started his career at one the largest electrical contractors in the United States where he learned the significance of job-costing, budgeting and the impacts they have on the financial statements. Utilizing his experience of cost-accounting, he designed a cost-accounting system capable of tracking costs for funded research and engineering contracts. Smith rose from Controller to Chief Financial Officer of a fast growing technology company that took him abroad. He added to his CFO responsibilities and become the Company’s Managing Director of the European subsidiaries in Scotland and the Netherlands.

Smith became a Principal of BBRS, LLP, one of the most prestigious accounting firms in the Sacramento region. He provided key input into designing and implementing financial reporting systems and management reports for growing companies. In 2005, Smith became a Capital Partner in the firm. He oversaw the Outsourced CFO and Controller Services, Small Business Consulting, and traditional CPA services for financial statements (Compiled, Reviewed, and Audited), and tax work. This put him in place to assume the responsibilities as the firm’s Managing Attest Partner.

W.J. "Bill" Delgado, Board Member, Investor’s Relations

Bill Delgado has 33 years of technology management experience as CEO, CFO and Director. He was recently instrumental in the success of GDSI, Inc., a digital technology solutions provider to governments. Delgado has extensive experience with strategic planning, feasibility studies, economic analysis, design engineering, and network planning skills. Delgado founded All Star Telecom in 1991 which he sold to International FiberCom in 1999. In 2002, Delgado became President/CEO of Pacific Comtel which was acquired by GDSI, Inc., where he became a Director, President, CEO and CFO. He recently stepped down as CEO of GDSI to work with MyECheck.

Delgado brings a wealth of invaluable experience and contacts to MyECheck. He has practical business experience deploying multiple global digital technologies. While President of GDSI, Delgado closed large high technology contracts with U.S., and foreign governments. Delgado has established relationships with key customers and other valuable strategic relationships.

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 our officers and directors devote time to projects that do not involve us.

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. Rod Zalunardo, MyECheck’s Senior Vice President and Chief Operating Officer, an annual salary of $100,000 and provides 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)

Robert S. Blandford		2014		100,000		-		-		-		-		-
(Chief Technology Officer)

Bruce M. Smith		2014		100,000		-		-		-		-		-
(Chief Financial Officer)

Rod Zalunardo		2014		100,000		-		-		-		-		-
(Chief Financial Officer)

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 non-qualified stock options and warrants 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

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, 2014, the amount owed the shareholder was $29,029. Subsequently, on July 10, 2014 the Company repaid $10,000 of the advance. As of the date of the filing the amount owed the shareholder was $14,933. At December 31, 2014 the Company will finalize a new note payable.

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.

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.

During 2005, a lawsuit was filed against the Company in the State of California, claiming the Company was using the technology created by the plaintiff. On March 31, 2010, the Company settled the case with the plaintiff with a payment of 275,000 shares of the Company’s stock. The stock was valued at $46,750 ($0.17/share), based upon the quoted closing trading price. At December 31, 2009, the Company accrued the settlement as the amount was known prior to the issuance of the financial statements.

On August, 21, 2012, a judgment was filed against the Company in the State of California, awarding the plaintiff $38,182.80 for unpaid legal fees, damages and interest. As of the date of the filing the judgment is still in force and the amount remains unpaid. The Company’s management will open discussions with the law firm to resolve this issue before the end of the fiscal year 2014.

On October 10, 2014, the Company filed a complaint with the United States District Court, Sacramento Division, for damages for breach of contract and patent infringement.

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 September 30, 2014, there were approximately 103 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 10, 2014		0.04		0.01

The last reported sales price of our common stock on the Pink OTC on October 22, 2014 was $0.0335 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.

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.

During the year ended December 31, 2012, the Company issued an aggregate of 260,000,000 shares of its common stock 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.

As of 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.

During the year ended December 31, 2013, the Company issued 250,000,000 shares of its common stock for a subscription receivable of $17,500.

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.

The Company issued 400,000,000 shares of its common stock to an accredited investor for a subscription receivable, having a fair value of $51,600 ($0.000129/share), based upon recent quoted trading price.

Additionally, the Company issued 25,000,000 shares of its common stock to an accredited investor for the settlement of debt, having a fair value of $3,225 ($0.000129/share), based upon recent quoted trading price.

Convertible Debt Payable

June 26, 2009 Convertible Debt – Tangiers Investors, L.P.

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.

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 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, 2013 and 2012, the fair value of the Note Derivative was estimated to be $0.00 and $18,200, resulting in a gain of $12,133 and $18,200 for 2013 and 2012, 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 – 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, than 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.

For the years ended December 31, 2013 and 2012, the note was in default. At December 31, 2012 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 fair market value on the conversion date was $0.0038 per share for 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 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, 2013 and 2012, the fair value of the Note Derivative was estimated to be $0 and $12,218, resulting in a gain of $12,218 and $13,964 for 2013 and 2012, respectively.

Item 11: Description of the 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 August 30, 2014, we have issued and outstanding securities on a fully diluted basis:

●

4,117,970,000 shares of common stock

●

no shares of preferred stock;

●

no stock options;

●

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 New Jersey 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 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 Nevada 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

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 the re-launch of the Company and there have been no disagreements between MyECheck and the Firm.

Item 15: Financial Statements and Exhibits

Financial Statements
(i) For the Years Ended December 31, 2013 and 2012		Page
	Report of PMB Helin Donovan, LLP, Independent Registered Public Accounting Firm	F - 1
	Consolidated Balance Sheets as of December 31, 2013 and 2012	F - 2
	Consolidated Statements of Operations for the years ended December 31, 2013 and 2012	F - 3
	Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012	F - 4
	Consolidated Statements of Stockholders' Equity (Deficit) for the years ended December 31, 2013 and 2012	F - 5
	Notes to the Consolidated Financial Statements	F - 6 - 23

Financial Statements
(ii) For the Eight Months Ended August 31, 2014 and the Year Ended December 31, 2013		Page
	Consolidated Balance Sheets for the Eight Months Ended August 31, 2014 and the Year Ended December 31, 2013	F - 1
	Consolidated Statements of Operations for the Eight Months Ended August 31, 2014 and the Year Ended December 31, 2013	F - 2
	Condolidated Statements of Cash Flows for the Eight Months Ended August 31, 2014 and the Year Ended December 31, 2013	F - 3
	Notes to the Consolidated Financial Statements	F -4 - 16

Exhibit No.		Description
1.1		Software License and Services Agreement, dated September 1, 2013, by and between MyECheck, Inc. and INTERPAY, INC.
1.2		Software License and Services Agreement, dated November 23, 2013, by and between MyECheck, Inc. and Sierra Global, LLC
1.3		MyECheck Services Agreement, dated September 5, 2014, by and between MyECheck, Inc. and VX Gateway, Inc.
1.4		Software License and Services Agreement, dated March 19, 2014, by and between MyECheck, Inc. and ITONIS, INC.
1.5		Software License and Services Agreement, dated February 24, 2014, by and between MyECheck, Inc. And GreenPay, LLC
1.6		MyECheck Services Agreement, dated July 11, 2014, by and between MyECheck, Inc. and Simplifile, LLC
1.7		Agreement and Plan of Merger dated as of February 4, 2008, by and between MyECheck, Inc. and Sekoya Holdings, Ltd.
1.8		Amendment to the Articles of Incorporation of MyECheck, Inc.
1.9		Amendment to the ByLaws of MyECheck, Inc.
1.10		Settlement Agreement and Mutual General Release, dated November 9, 2010, by and between MyECheck, Inc. and Tangiers Investors, LP
1.11		Securities Purchase Agreement, dated as of April 26, 2010, by and between MyECheck, Inc. and Asher Enterprises, Inc.
1.12		Convertible Promissory Note, dated as of April 26, 2010, by and between MyECheck, Inc. and Asher Enterprises, Inc.
1.13		Private Placement Subscription Placement, dated as of March 2008, by and between Anshan Finance, Ltd. and MyECheck, Inc.
1.14		Private Placement Subscription Placement, dated as of March 2008, by and between Youngal Group, Ltd. and MyECheck, Inc.
1.15		Complaint for Damages for Breach of Contract and Patent Infringement, date of filing October 10, 2014, by and between MyECheck, Inc. (Plaintiff) vs. Zipmark, Inc. (Defendant)

MYECHECK, INC.

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013 AND 2012

Contents

	Page

Report of Independent Registered Public Accounting Firm	F - 1

Consolidated Balance Sheets as of December 31, 2013 and 2012	F - 2

Consolidated Statements of Operations for the Years Ended December 31, 2013 and 2012	F - 3

Consolidated Statements of Cash Flows for the Years Ended December 31, 2013 and 2012	F - 4

Consolidated Statement Stockholders’ Deficit for the Years Ended December 31, 2013 and 2012	F - 5

Notes to Consolidated Financial Statements for the Years Ended December 31, 2013 and 2012	F - 6 - 23

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, 2013 and 2012, 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, 2013. 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, 2013 and 2012, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2013 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

October 24, 2014

F-1

MyECheck, Inc.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2013 AND 2012

	December 31, 2013			December 31,2012

ASSETS

Current Assets
Cash	$	65		$	-
Accounts receivable		6,000			-
Total Current Assets		6,065			-

Fixed Assets Net		3,374			-

Total Assets	$	9,439		$	-

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable and accrued expenses	$	442,295		$	400,907
Payroll taxes payble		207,779			207,779
Accrued payroll		82,901			250,113
Loans payable - related party		-			119,658
Loans payable - other		-			8,860
Derivative liabilities		-			24,351
Convertible notes - net		54,750			77,500
Total Current Liabilities		787,725			1,089,168

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, 4,692,470,000 and 3,517,470,000 shares issued and outstanding, respectively		46,925			35,175
Additional paid in capital		3,077,627			2,897,653
Subscription receivable		(17,500	)		-
Accumulated deficit		(3,885,338	)		(4,021,996	)
Total Stockholders' Deficit		(778,286	)		(1,089,168	)

Total Liabilities and Stockholders' Deficit	$	9,439		$	-

The accompanying notes are an integral part of these consolidated financial statements

F-2

MyECheck, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

	For the Years Ended December 31,
	2013			2012

Revenues	$	89,496		$	15,487

General and administrative		72,943			42,000
Research and Development		7,000			-
Total Operating Expenses		79,943			42,000

Income or (Loss) from Operations		9,553			(26,513	)

Other Income /(Expense)
Change in fair value of derivative liabilities		24,351			32,164
Interest expense		(26,613	)		(11,736	)
Other income forgiveness of debt		130,167			82,389
Total Other (Income)/Expense		127,905			102,817
Net income or (loss) before income taxes		137,458			76,304
Provision for income taxes		(800	)		(800	)
Net (Loss) or Income	$	136,658		$	75,504

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		4,153,976,849			1,779,777,366
Weighted average number of shares outstanding during the period - fully diluted		4,178,976,849			1,782,457,669

The accompanying notes are an integral part of these consolidated financial statements

F-3

MyECheck, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

	For the Years Ended December 31,
	2013			2012
Cash Flows from Operating Activities:
Net income	$	136,658		$	75,504
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation expense		178			-
Change in fair value of derivative liabilities		(24,351	)		(32,164	)
Warrants issued for services		390			-
Stock based Compensation		-			30,000
Other income forgiveness of debt		(130,167	)		(2,550	)
Changes in operating assets and liabilities:
(Increase) Decrease in:
Accounts receivable		(6,000	)		-
Increase in:
Accounts payable and accrued expenses		41,388			(70,687	)
Accrued payroll		18,271			-
Net Cash Provided By Operating Activities		36,367			103

Cash Flows from Investing Activities
Purchase of computer equipment		(3,552	)		-
Net Cash Used by Investing Activities		(3,552	)		-

Cash Flows from Financing Activities:
Cash overdraft		-			(103	)
Repayment of convertible debt		(22,750	)		-
Repayment of shareholders		(10,000	)		-
Net Cash Used by Financing Activities		(32,750	)		(103	)

Net Increase or (Decrease) in Cash		65			-

Cash at Beginning of Period		-			-

Cash at End of Period	$	65		$	-

Supplemental Disclosure of Cash Flow Information
Cash Paid for:
Taxes	$	-		$	-
Interest	$	-		$	-

Supplemental Disclosure of Non Cash Investing and Financing Activities
Foregiveness of accrued officers comp	$	84,281		$	-
Foregiveness of N/P R/P	$	62,964		$	-
Foregiveness of N/P R/P	$	17,729		$	-
Issuance for debt	$	8,860		$	5,150
Subscription receivable	$	17,500

The accompanying notes are an integral part of these consolidated financial statements

F-4

MyECheck, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

	Preferred Stock				Common Stock					Treasury Stock				Additional		Subscription			Accumulated
	Shares		Amount		Shares		Amount			Shares		Amount		Paid -in Capital		Recivable			Deficit			Total

Balance, December 31, 2011		-	$	-		2,470,000	$	2,470			-	$	-	$	2,895,208	$	-		$	(4,097,500	)	$	(1,199,822	)

Adjustment for reverse stock split		-		-		-		(2,445	)		-		-		2,445		-			-			-
Common stock for employment agreement		1		-		3,000,000,000		30,000			-		-		-		-			-			30,000
Common stock in exchange of accounts payable		-		-		255,000,000		2,550			-		-		-		-			-			2,550
Conversion of debt into common stock		-		-		260,000,000		2,600			-		-		-		-			-			2,600
Net Income or (loss)		-		-		-		-			-		-		-		-			75,504			75,504
Balance, December 31, 2012		1		-		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
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)		-		-		-		-			-		-		-		-			136,658			136,658
Balance, December 31, 2013		1	$	-		4,692,470,000	$	46,925			-	$	-	$	3,077,627	$	(17,500	)	$	(3,885,338	)	$	(778,286	)

The accompanying notes are an integral part of these consolidated financial statements

F-5

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

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.

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.

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.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

All significant intercompany accounts and balances have been eliminated in consolidation.

F-6

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

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 U.S. generally accepted accounting principles 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, 2013 and 2012, 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, 2013 and 2012, there were no balances that exceeded the federally insured limit.

F-7

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

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 2013 and 2012, the Company recorded no bad debt expense.

Revenue Recognition

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.

F-8

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Concentrations

The following are concentrations associated with the Company’s operations:

(1)	Accounts Receivable	Customer	2013		2012
		A	0	%	0	%
		B	0	%	0	%
		C	33	%	0	%
		D	67	%	0	%
			100	%	0	%

(2)	Revenue	Customer	2013		2012
		A	11	%	71	%
		B	0	%	27	%
		C	84	%	0	%
		D	4	%	0	%
			100	%	98	%

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.

F-9

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Fair Value of Financial Instruments (Cont.)

The following tables set forth our assets and liabilities measured at recurring or non-recurring, at December 31, 2013 and December 31, 2012, 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, 2013

Liabilities:

Derivative Instruments - convertible debt

Total

							Carrying
	Fair Value Measurements Using Inputs						Amount at
Financial Instruments	Level 1		Level 2		Level 3		December 31, 2012

Liabilities:
Derivative Instruments - convertible debt	$	-	$	-	$	24,351	$	24,351

Total	$	-	$	-	$	24,351	$	24,351

Market price and estimated fair value of common stock used to measure the Derivative Instruments-Warrants at December 31, 2013 and December 31, 2012:

	December 31, 2013			December 31, 2012
Market price and estimated fair value of common stock:		0.00001			0.05
Exercise price		0.00006			0.03
Expected term (years)		1			1
Divident yield		-			-
Expected volatility		830	%		830	%
Risk-free interest rate		13	%		16	%

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.

F-10

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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 December 31, 2013 and December 31, 2012 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

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.

F-11

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

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 years ended December 31, 2013 and 2012 the Company reflected net income and a dilutive net income.

F-12

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

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
Convertible Preferred Stock			-
Total common stock equivalents			25,000,000

The Company had the following potential common stock equivalents at December 31, 2012:

Convertible debt - face amount of $50,000, conversion price of $0.05			1,000,000
Convertible Preferred Stock			-
Total common stock equivalents			1,000,000

Advertising

Advertising is expensed as incurred. For 2013 and 2012, advertising expense was $4,231 and $0, 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.

Recently Issued Accounting Pronouncements

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20.

Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.”

F-13

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although “major” is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation.

The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.

The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years.

In May 2014, the FASB has issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The guidance in this update supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition.” In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (for example, assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this Update.

Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU No, 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We do not believe the adoption of this update will have a material impact on our financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

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 loss. 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.

F-14

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 3 – GOING CONCERN (CONT.)

As reflected in the accompanying consolidated financial statements, the Company has net income of $136,658 and $75,504, and net cash provided by operations of $36,367 and $103 for years ended December 31, 2013 and 2012, respectively; a working capital deficit of $781,660 and $1,089,168 and a stockholders’ deficit of $778,286 and $1,089,168 at December 31, 2013 and 2012, respectively. Substantially, all of net income in 2013 and 2012 has been derived from forgiveness of debt.

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

At December 31, 2013 property and equipment is as follows:

Computer equipment	$	3,552
Accumulated depreciation		(178	)
Fixed assets net	$	3,374

For the year ended December 31, 2013, the Company recorded a depreciation expense of $178.

Note 5 - Convertible Debt

June 26, 2009 Convertible Debt in Default – Tangiers Investors, LP

Terms

F-15

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 5 - Convertible Debt (CONT.)

Conversion

On or before the 4^th 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 30^th 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%.

At December 31, 2013 and 2012, the fair value of the Note Derivative was estimated to be $0 and $12,133, resulting in a gain of $12,133 and $18,200 for 2013 and 2012, respectively.

F-16

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 5 - Convertible Debt (CONT.)

April 26, 2010 Convertible Debt in Default– Asher Enterprises, Inc.

Terms

Conversion

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 December 31, 2013 and 2012, the fair value of the Note Derivative was estimated to be $0 and $12,218, resulting in a gain of $12,218 and $13,964 for 2013 and 2012, respectively.

F-17

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 6 - Loans Payable – Related Parties and Other

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.

Note 7 - 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.

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.

Note 8 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.

F-18

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 8 Stockholders’ Deficit (CONT.)

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 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.

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.

During the year ended December 31, 2013, the Company issued 250,000,000 shares of its common stock for a subscription receivable of $17,500.

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.

F-19

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 8 Stockholders’ Deficit (CONT.)

Forgiveness of Debt (Cont.)

The Company reviewed its old accounts payable as part of the restructuring process and determined with legal counsel that $96,921 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. This amount was included in the Cost Recovery as other income.

Note 9 - 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, 2013, the Company has a net operating loss carry-forward of approximately $2,632,609 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 no income tax expense for the years ended December 31, 2013 and 2012 due to the Company’s net income.

We have incurred losses since inception, which have generated net operating loss carryforwards. Taxable income was $206,201 for the year ended December 31, 2013. At December 31, 2013, we had a federal net operating loss carryforward of approximately $2,632,609, after applying taxable income from 2013 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, 2013, 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, 2013. We did not recognize any interest or penalties during 2013 or 2012 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, 2013 and 2012, 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.

F-20

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

Note 9 - Income Taxes (CONT.)

At December 31, 2013 and 2012, the significant components of our deferred tax assets and liabilities was as follows:

	2013			2012
Deferred tax assets:
Net operating loss	$	2,632,609		$	2,838,810
Stock compensation non taxable		-			-
Derivative Liability					(24,351	)
Accrued expenses		(182,100	)		(170,364	)
Gross deferred tax assets		2,450,509			2,644,095
Less: Valuation Allowance		(2,450,509	)		(2,644,095	)
Net deferred tax assets	$	-		$	-

A reconciliation of the Federal statutory rate to the Company’s effective tax rate for the years ended December 31, 2013 and 2012 is as follows:

	2013			2012
Federal statutory rate		34.0	%		34.0	%
State income taxes, net of federal benefit		8.8	%		8.8	%
Decrease in income taxes resulting from:
Change in valuation allowance		-39.8	%		-39.8	%
Effective tax rate		0.0	%		0.0	%

NOTE 10 – SUBSEQUENT EVENTS

The Company has evaluated for subsequent events between the balance sheet date of December 31, 2013, the date the financial statements were available to be issued and concluded that the events or transactions occurring during that period requiring recognition or disclosure have been made.

Using the Company’s employees and outside consultants, the company invested $17,000 in the second quarter ended June 30, 2014 and another $7,000 in quarter three to develop a new website as a critical component of its new marketing plan. In addition, $8,439 in content was expensed. The Company’s website went live on July 25, 2014. The Company is electing to amortize the capitalized costs over a thirty six month period for both financial reporting and for income tax purposes beginning August 1, 2014.

On April 1, 2014, the Company entered into a service agreement with a third party, where the Company will provide payment data processing services, payment acceptance and the services documentation, which includes all the software licenses, prices schedules, specifications, instructions and notices and application for each service.

F-21

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 10 – SUBSEQUENT EVENTS (CONT.)

The fee for the service provided by the Company is $0.15 per transaction.

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.

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.

Additionally, the Company issued 25,000,000 shares of its common stock to an accredited investor for the settlement of debt, having a fair market value of $95,000 and a cost basis of $32,000 ($0.000128/share), based upon recent quoted trading price, resulting in a loss of $63,000.

On June 14, 2014, MyECheck entered into a 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. The premises leased is defined as Suite 140 with a commencement date of July 1, 2014. The lease term is 42 months expiring on December 31, 2017 with an average rent per month of $4,866. MyECheck paid a security deposit in the amount of $32,812. The security deposit is not an advance rental deposit or a measure of damages incurred by Landlord in case of MyECheck’s default.

Any remaining balance of the security deposit shall be returned by Landlord to MyECheck at such time after termination of the lease that all of MyECheck’s obligations under this lease have been fulfilled, reduced by such amounts as may be required by Landlord to remedy defaults on the part of MyECheck or other obligations of MyECheck under this lease, such as repairs and to clean the premises. MyECheck will also receive a move-in allowance in the amount of $9,175.

The minimum rent obligations are approximately as follows:

2014	$	33,000
2015		68,000
2016		89,000
2017		24,000
Total	$	214,000

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 and 2012, the $71,446 was included in both accounts payable and accrued liabilities.

F-22

MyECheck, Inc.

Notes to Consolidated Financial Statements

December 31, 2013 and 2012

NOTE 10 – SUBSEQUENT EVENTS (CONT.)

On November 23^rd, 2013, Sierra Global, LLC agreed to purchase a license from the Company. On February 24^th, 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 20^th, 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^th, 2014 will remain with Sierra Global per the terms and conditions of the merger.

On October 14, 2014, the Company received $45,940 on the subscription receivable.

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 the one (1) share of MyECheck, Inc. Preferred Class Stock, Series A, stock was one dollar ($1.00).

F-23

MyECheck, Inc.

CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2014

AND

DECEMBER 31, 2013

Contents
	Page

Consolidated Balance Sheets for the Eight Months Ended August 31, 2014 and the Year Ended December 31, 2013	F - 1

Consolidated Statements of Operations for the Eight Months Ended August 31, 2014 and 2013	F - 2

Consolidated Statements of Cash Flows for the Eight Months Ended August 31, 2014 and 2013	F - 3

Notes to Consolidated Financial Statements for the Eight Months Ended August 31, 2014 and 2013	F - 4 - 16

MyECheck, Inc.

CONSOLIDATED BALANCE SHEETS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

	August 31, 2014			December 31, 2013
	(Unaudited)			(Audited)

ASSETS
Current Assets
Cash	$	227,761		$	65
Accounts receivable		35,545			6,000
Prepaid expenses		35,533			-
Total Current Assets		298,839			6,065

Fixed Assets Net		33,915			3,374
Intangible Assets-Website Net		23,333			-
Other Assets		32,812			-
Total Other Assets		90,060			3,374

Total Assets	$	388,899		$	9,439

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued expenses	$	401,004		$	442,295
Payroll taxes payable		218,955			207,779
Loans payable - related party		18,510			-
Accrued payroll		82,901			82,901
Deferred revenue		500			-
Convertible note - net		22,750			54,750
Accrued stock compensation		107,778			-
Note payable - Current		83,300			-
Total Current Liabilities		935,698			787,725

Stockholders' Equity (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. 4,117,970,000 and 4,692,470,000 shares issued and outstanding, respectively		51,180			46,925
Treasury stock		(10,000	)		-
Additional paid in capital		3,211,372			3,077,627
Subscription receivable		(45,500	)		(17,500	)
Accumulated deficit		(3,753,851	)		(3,885,338	)
Total Stockholders' Equity (Deficit)		(546,799	)		(778,286	)

Total Liabilities and Stockholders' Equity (Deficit)	$	388,899		$	9,439

See accompanying notes to the consolidated financial statements

F-1

MyECheck, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014 AND AUGUST 31, 2013

	For the Eight Months Ended August 31,
	2014			2013
	(Unaudited)			(Unaudited)

Revenues	$	752,075		$	6,054

Cost of revenues		44,527			-
Gross profit		707,548			6,054

Operating expenses
General and administrative		412,262			9,075
Research and Development		146,139			-
Total Operating Expenses		558,401			9,075

Profit or (Loss) from Operations		149,147			(3,021	)

Other Income/(Expense)
Interest expense		(7,824	)		-
Loss on conversion of debt		(63,000	)		-
Other income or (expense) cost recovery		53,164			2,533
Total Other Income/(Expense)		(17,660	)		2,533

Net income or (loss)	$	131,487		$	(488	)

Net profit or Loss Per Share - Basic and Diluted	$	0.00		$	(0.00	)

Weighted average number of shares outstanding during the period - basic		4,235,910,329			3,961,811,564
Weighted average number of shares outstanding during the period - diluted		4,235,910,329			3,986,811,564

See accompanying notes to the consolidated financial statements

F-2

MyECheck, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014 AND AUGUST 31, 2013

	For the Eight Months ended August 31,
	2014			2013
	(Unaudited)			(Unaudited)

Cash Flows from Operating Activities:
Net Profit or (loss)	$	131,487		$	(488	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense		3,973			-
Loss on conversion of debt		63,000			-
Share based payments		107,778			-
Stock based services		-			390
Gain on accounts payable settlement		(53,095	)		(2,533	)
Changes in operating assets and liabilities:
(Increase) Decrease in:
Accounts receivable		(29,545	)		-
Prepaid expenses		(35,533	)		-
Increase (Decrease) in:
Accounts payable and accrued expenses		11,804			(9,524	)
Accrued compensation		-			12,055
Payroll taxes payble		11,176			-
Deferred revenue		500			-
Net Cash Provided By (Used in) Operating Activities		211,545			(100	)

Cash Flows from Investing Activities
Purchase of treasury stock		(10,000	)		-
Purchase of computer and furniture equipment		(33,847	)		-
Cost incurred capitalized website		(9,000	)		-
Security deposit new lease		(32,812	)		-
Net Cash Provided by Investing Activities		(85,659	)		-

Cash Flows from Financing Activities:
Cash overdraft		-			100
Loan proceeds acquisition of subsidary		83,300			-
Proceeds from loan payable - related parties		18,510			-
Net Cash Provided by Financing Activities		101,810			100

Net Increase or (Decrease) in Cash		227,696			-

Cash at Beginning of Period		65			-

Cash at End of Period	$	227,761		$	-

Supplemental Disclosure of Non Cash Investing and Financing Activities
Stock issued to subscription receivable	$	28,000		$	-
Conversion of convertible note	$	32,000		$	8,860
Issuance of stock for devolment of website	$	15,000		$	-

See accompanying notes to the consolidated financial statements

F-3

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 1 – BASIS OF PRESENTATION AND NATURE OF OPERATIONS

Basis of Presentation

The financial information as of December 31, 2013 is derived from the audited financial statements presented in the Company’s Form 10 dated October 24, 2014. The unaudited condensed interim financial statements should be read in conjunction with the Company’s Form 10, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, dated October 24, 2014.

Certain information or footnote disclosures normally included in 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 financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of 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 financial statement presentation. The interim results for the period ended August 31, 2014 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.

Sekoya Holdings, Ltd. (“Sekoya”) was incorporated in Nevada on May 19, 2005, and is an inactive company.

Nature of Operations

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

All significant intercompany accounts and balances have been eliminated in consolidation.

F-4

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

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.

See Note 3 regarding going concern matters.

Fiscal Year

The Company has adopted a December 31 fiscal year end.

Use of Estimates and Assumptions

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 August 31, 2014 and December 31, 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 August 31, 2014 and December 31, 2013, there were no balances that exceeded the federally insured limit.

F-5

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Accounts Receivable and Allowance for Doubtful Accounts

At August 31, 2014 and 2013, the Company recorded no bad debt expense.

Revenue Recognition

F-6

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Fair Value of Financial Instruments

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.

F-7

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses, certain notes payable and notes payable – related party, approximate their fair values because of the short maturity of these instruments.

Embedded Conversion Features

Derivative Financial Instruments

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.

F-8

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

Debt Issue Costs and Debt Discount

Original Issue Discount

Extinguishments of Liabilities

Income Taxes

Earnings (Loss) Per Share

F-9

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

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 eight months ended August 31, 2014 and 2013 the Company reflected net income and a dilutive net income.

The Company had the following potential common stock equivalents at August 31, 2013:

Convertible debt - face amount of $50,000, conversion price of $0.002			25,000,000
Convertible Preferred Stock			-
Total common stock equivalents			25,000,000

Advertising

Advertising is expensed as incurred. For 2014 and 2013, advertising expense was $17,009 and $0, respectively.

Stock-Based Compensation - Employees

Recently Issued Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

NOTE 3 – GOING CONCERN

F-10

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 3 – GOING CONCERN (CONT.)

As reflected in the accompanying consolidated financial statements, the Company has a net profit of $131,487 and a net loss of $488, and net cash provided by operations of $211,545 and net cash used of $100 for the eight months ended August 31, 2014 and 2013, respectively; a working capital deficit of $636,859 and $781,660 and a stockholders’ deficit of $546,799 and $778,286 at August 31, 2014 and December 31, 2013, respectively.

NOTE 4 – CONCENTRATIONS

Cash

At August 31, 2014, the Company had $227,761 in two (2) different Banks; all funds were federally insured.

Concentration on Credit Risk

The Company grants credit to its customers under their licensing agreements for additional services for maintenance fees and consulting work. Management believes that its contract acceptance, billing, and collections policies are adequate to minimize potential credit risk.

Customers and Concentration

Collectively, three customers comprised 99.74% and 99.30% of the total revenue for the eight months ended August 31, 2014. The same three customers represented 99.83% of net accounts receivable at August 31, 2014.

F-11

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 5 – CONVERTIBLE NOTE

June 26, 2009 Convertible Debt in Default – Tangiers Investors, LP

Terms

Conversion

F-12

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 5 – CONVERTIBLE NOTE (CONT.)

April 26, 2010 Convertible Debt in Default– Asher Enterprises, Inc.

Terms

Conversion

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.

For the years ended December 31, 2013 and 2012, the note was in default. At December 31, 2012 the balance on the note was $32,000. At December 31, 2013, an additional $18,000 in legal fees and interest was added to the principal balance of $32,000 resulting in a total amount owing of $50,000. 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 fair market value on the conversion date was $0.0038 per share for 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. At August 31, 2014, the activity was fully converted to equity.

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.

F-13

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 6 – RELATED PARTY TRANSACTIONS

NOTE 7 – LEASES AND COMMITMENTS

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:

12/31/2014	$	4,500
12/31/2015		6,000
12/31/2016		4,500
Total	$	15,000

NOTE 8 – FACILITY

For the years ended December 31,
2014	$	10,938
2015		66,564
2016		68,436
2017		58,438
Totals	$	204,376

F-14

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 9 – FIXED ASSETS

Fixed assets are stated at cost. The policy of the Company is to provide for depreciation using straight-line methods based on estimated useful lives. The estimated useful lives range from three to seven years. Depreciation expense for the eight months ended August 31, 2014 was $3,306. A breakdown of the fixed assets are in the table below:

Computer equipment	$	15,382
Furniture and fixtures		22,017
Accumulated depreciation		(3,484	)
Net Fixed Assets	$	33,915

NOTE 10 – WEBSITE

Using the Company’s employees and outside consultants, the company invested $24,000 in the eight months ended August 31, 2014 to develop a new website as a critical component of its new marketing plan. In addition, $8,439 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. As of August 31, 2014, $667 in amortization was included in operating expenses.

Note 11 - Income Taxes

NOTE 12 – STOCKHOLDERS’ EQUITY

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.

F-15

MyECheck, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE EIGHT MONTHS ENDED AUGUST 31, 2014

AND THE YEAR ENDED DECEMBER 31, 2013

NOTE 12 – STOCKHOLDERS’ EQUITY (CONT.)

NOTE 13 – SUBSEQUENT EVENTS

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 $0.00193/share, based upon quoted trading price at the date of the executed agreement. The company accrued $107,778 in stock compensation and the stock will be issued in October, 2014.

On October 14, 2014, the Company received $45,940 on the subscription receivable.

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 the one (1) share of MyECheck, Inc. Preferred Class Stock, Series A, stock was one dollar ($1.00).

F-16

EX-1.1 2 v392049_ex1-1.htm EXHIBIT 1.1

Exhibit 1.1

SOFTWARE LICENSE AND SERVICES AGREEMENT

THIS SOFTWARE LICENSE AND SERVICES AGREEMENT and the Exhibits attached hereto (collectively, the "Agreement") is entered into by and between MYECHECK, INC., a Wyoming corporation ("MYECHECK"), and INTERPAY, a Nevada corporation ("Licensee"), on September 1, 2013 (the "Effective Date"). In consideration of the mutual covenants and conditions contained herein, the parties agree as follows:

1. DEFINITIONS. The following definitions apply throughout this Agreement:

1.1 "Documentation" means MyECheck'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.

1.2 "Error" means any failure of the Software to operate in conformance with the Documentation in any material respect.

1.3 "Maintenance" shall mean the services provided by MyECheck to Licensee as set forth in Section 7 and Exhibit B attached hereto.

1.4 "Modification" means 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.

1.5 "Order" means the form forwarded by MyECheck, substantially equivalent to Exhibit A to this Agreement, to purchase a license to use Software or to purchase Maintenance under this Agreement.

1.6 "Production" means Licensee's use of the Software to provide e-commerce functionality to Licensee's customers (or potential customers) through a live Licensee service or Licensee customer, partner or affiliate service.

1.7 "Professional Services Agreement" means the agreement attached hereto as Exhibit C and all written statements of work signed by Licensee and related thereto.

1.8 "Software" means the software modules listed in Exhibit A and any Major Releases, Modifications, interim releases, bug fixes and patches applicable to such software modules.

1.9 "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.

2. LICENSE GRANT. Subject to the terms and conditions of this Agreement, including Exhibit A hereto, MyECheck hereby grants to Licensee (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 Licensee's business use in accordance with the provisions of Section 3, and to make as many backup (non-use other than for disaster testing and recovery purposes) copies as may be necessary, provided that Licensee shall keep a record of each such backup copy and the location of its storage, and shall provide any and all such records to MyECheck upon request. Licensee 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 Licensee. Licensee may exercise its rights hereunder through third party subcontractors for the sole purpose of assisting Licensee in its permitted use of the Software; provided, however, that each such third party subcontractor must agree in a legally binding writing, to which MyECheck is a named third party beneficiary, to be bound by terms and conditions at least as protective of and beneficial to MyECheck as those set forth herein.

3. RESTRICTIONS ON USE.

3.1 Proprietary Rights. Licensee acknowledges that the Software, its structure, organization and Source Code, and the Documentation are the property and constitute valuable trade secrets of MyECheck and its suppliers. Licensee 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 Licensee for integration with existing or proposed Licensee systems or software shall be provided by MyECheck in accordance with Section 7. All rights in and to the Software and Documentation not expressly granted to Licensee in this Agreement are reserved by MyECheck and its suppliers.

3.2 Restrictions. Licensee shall use the Software only on the operating system specified in Exhibit A; provided, however, that a breach of this sentence by Licensee shall not be considered a material breach.

4. ORDERING AND DELIVERY. An Order will be binding on both parties when signed by authorized representatives of Licensee. Each 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 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 MyECheck providing Licensee with a password to access a web page from which Licensee may download the Software and Documentation. The Software will be deemed accepted upon initial delivery, subject to the warranties in Section 9.

5. LICENSE FEES AND PAYMENT. Licensee shall pay to MyECheck 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 Licensee will be responsible for payment of all such taxes (other than taxes based on MyECheck'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 Licensee. All amounts under this Agreement are in U.S. dollars and payment must be made in such. Licensee will make all payments of amounts due under this Agreement to MyECheck free and clear of, and without reduction for, any withholding taxes. If Licensee is legally required to make any such withholding from any payment due to MyECheck under this Agreement, the sum payable by Licensee upon which such withholding is based shall be increased to the extent necessary to ensure that, after such withholding, MyECheck receives an amount equal to the amount MyECheck would have received in the absence of such withholding. Licensee will provide MyECheck with official receipts issued by the appropriate taxing authority, or such other evidence as MyECheck may reasonably request, to establish that such taxes have been paid. MyECheck reserves the right to charge interest on any overdue amounts at a rate of one and one-half percent (1.5%) per month or the maximum rate permitted by applicable law, whichever is less, from the due date until paid plus reasonable costs incurred in collection (including reasonable attorneys' fees).

6. OWNERSHIP OF DERIVATIVE WORKS.

Derivative Works. Any and all derivative works to the Software which are created pursuant to this Agreement shall be owned by MyECheck, but Licensee shall have the same rights and licenses to such derivative works as Licensee has to the Software.

7. MAINTENANCE.

7.1 Maintenance Terms. Maintenance provided by MyECheck shall be pursuant to MyECheck's standard maintenance terms, a copy of which is attached hereto as Exhibit B. Maintenance shall be provided solely to the Maintenance site set forth in Exhibit A.

7.2 Maintenance Fees and Payment. Licensee shall pay to MyECheck the Maintenance fee set forth in Exhibit A for Maintenance for twelve (12) months from the Effective Date. Additional periods in one year increments and shall be priced at MyECheck's then-current standard license fee; provided, however, that in no event shall Licensee's Maintenance fee relating to the licenses purchased by Licensee on the Effective Date increase by more than ten percent (10%) from year to year after the second consecutive 12 month term of licensing . Licensee's payment of Maintenance fees shall be due in advance, on the first day of each month, (prorated for partial months). In the event that Maintenance is discontinued or suspended, to reinstate or renew Maintenance Licensee must first pay MyECheck Maintenance fees for the interim period during which Maintenance was discontinued or suspended and MyECheck may in its sole discretion elect not to accept such renewal or reinstatement.

8. SERVICES. Services (other than support and maintenance services provided pursuant to Exhibit B), if any, to be provided to Licensee by MyECheck shall be under the terms of Exhibit C attached hereto ("Services Exhibit").

9. WARRANTY.

9.1 Limited Software Warranty. MyECheck represents, warrants, and covenants that:

MyECheck warrants to the original end user (“Customer”), and not to subsequent end users, of the Extreme Networks software product (“Software”) that for ninety (90) days from the date of installation of the Software from MyECheck, the Software shall substantially conform with the specification for the Software at the (“Documentation”). MyECheck 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.”

9.2 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 MYECHECK 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, MYECHECK 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. Licensee ACKNOWLEDGES THAT MYECHECK 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 MYECHECK OR ITS EMPLOYEES, AGENTS OR CONTRACTORS OR FOR NETWORK FAILURE. Licensee FURTHER ACKNOWLEDGES THAT IT HAS RELIED ON NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES SET FORTH IN THIS 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. Licensee 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. MYECHECK INDEMNITY. MyECheck agrees to indemnify, defend and hold harmless Licensee, its officers, directors, employees and agents from and against all damages and costs (including reasonable attorneys' fees) finally awarded against Licensee (or finally settled upon) and arising from or relating to:

(i) any claim brought against Licensee 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 MyECheck's obligations under this item (i) of this Section 11 are conditioned upon Licensee providing MyECheck: (a) prompt written notice of the existence of such claim, suit, action or proceeding (each a "claim"); provided that a failure of the Licensee to promptly notify MyECheck shall not relieve MyECheck of liability hereunder except to the extent that MyECheck '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 MyECheck shall not enter into any settlement imposing any liability or obligation on Licensee without Licensee's prior written consent; and (c) assistance at MyECheck's request and sole expense, to the extent reasonably necessary for the defense or settlement of such claim. If any claim that MyECheck is obligated to defend has occurred or, in MyECheck's opinion, is likely to occur, MyECheck may, at its option and expense either (1) obtain for Licensee 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 Licensee for cause. Notwithstanding the foregoing, MyECheck shall not indemnify, defend or hold harmless Licensee for any claims solely based on: (a) any Licensee 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 MyECheck's discretion; (b) Software which has been altered or modified by Licensee, by any third party or by MyECheck at the request of Licensee (where MyECheck had no discretion as to the implementation of modifications to the Software or Documentation directed by Licensee), 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 MyECheck has made available a non-infringing updated, revised or repaired subsequent version or other applicable update, patch or fix;

(ii) the use of MyECheck's premises by Licensee 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 MyECheck, its employees, subcontractors or agents. Furthermore, MyECheck agrees to maintain commercial general liability insurance of at least $2.5 million, covering MyECheck'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.

12. Licensee INDEMNITY. Licensee agrees to indemnify, defend and hold harmless MyECheck from and against all damages and costs (including reasonable attorneys' fees) finally awarded against MyECheck (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 Licensee, its employees, subcontractors or agents; (ii) any claim brought against MyECheck by a third party alleging that the Licensee 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 MyECheck by a third party arising from or relating to any modification of the Software by Licensee or any use of the Software other than as permitted under this Agreement. The parties acknowledge and agree that Licensee's obligations under this section are conditioned upon MyECheck providing Licensee: (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 Licensee's request to the extent reasonably necessary for the defense of such claim. The foregoing sets forth Licensee's sole and exclusive obligation and MyECheck's sole and exclusive remedy for any claim of intellectual property infringement or misappropriation relating to the Licensee Materials. Notwithstanding the foregoing, Licensee shall not indemnify, defend or hold harmless MyECheck for any claims arising from: (a) any MyECheck intellectual property or software incorporated in or combined with the Licensee Materials where in the absence of such incorporated or combined item, there would not have been infringement; (b) Licensee Materials which have been altered or modified by MyECheck (other than in response to a request by Licensee), where in the absence of such alteration or modification the Licensee Materials would not be infringing; (c) use of an any version of the Licensee Materials for which Licensee has made available an updated, revised or repaired subsequent version; or (d) the gross negligence or willful misconduct of MyECheck 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, Licensee shall have the right, at its option, to: (x) obtain the rights to continued use of the Licensee Materials; (y) substitute other suitable, functionally-equivalent, non-infringing materials; or (z) replace or modify the Licensee Materials or their design so that they are no longer infringing. ~~Furthermore, Licensee agrees to maintain commercial general liability~~ ~~insurance of at least $2.5 million, covering Licensee'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 12 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.

13. Limitation of Liability. EXCEPT FOR ANY BREACH OF SECTION 9 OR WITH REGARD TO ANY DUTY OR OBLIGATION REQUIRED PURSUANT TO SECTION 11 OR 12 OR WITH REGARD TO ANY ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AND TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, NEITHER PARTY HERETO NOR ITS SUPPLIERS SHALL BE LIABLE FOR ANY LOSS OF USE OR GOODWILL, INTERRUPTION OF BUSINESS, LOSS OR INACCURACY OF BUSINESS INFORMATION, LOST PROFITS, COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND REGARDLESS OF THE FORM OF ACTION WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY, OR OTHERWISE, EVEN IF IT OR ITS SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR ANY BREACH OF SECTION 3.1 OR 9 OR WITH REGARD TO ANY DUTY OR OBLIGATION REQUIRED PURSUANT TO SECTION 11 OR 12 OR WITH REGARD TO ANY FEE PAYMENT OBLIGATIONS OR ACT OF GROSS NEGLIGENCE, BAD FAITH OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY'S LIABILITY TO THE OTHER ARISING FROM OR RELATING TO THIS AGREEMENT EXCEED THE AMOUNT OF LICENSE FEES RECEIVED BY MYECHECK UNDER THIS AGREEMENT. THE EXISTENCE OF ONE OR MORE CLAIMS WILL NOT ENLARGE THIS LIMIT. THE PARTIES ACKNOWLEDGE AND AGREE THAT THIS SECTION IS AN ESSENTIAL ELEMENT OF THE AGREEMENT AND THAT IN ITS ABSENCE, THE ECONOMIC TERMS OF THIS AGREEMENT WOULD BE SUBSTANTIALLY DIFFERENT.

14. TERM AND TERMINATION.

14.1 Term. This Agreement shall remain in effect unless and until terminated as provided herein.

14.2 Termination. Licensee may terminate this Agreement at any time for any reason following thirty (30) days notice to MyECheck. Either party may terminate this Agreement if the other party fails to cure any breach of this Agreement within thirty (30) days after receiving notice of the occurrence of such breach (or immediately in the case of a material breach of a material term within Section 3 or Section 9).

14.3 Effects of Termination. Upon termination of this Agreement for any reason, any amounts owed under this Agreement will be immediately due and payable all rights and licenses granted under this Agreement will immediately cease to exist, and Licensee must promptly discontinue all use of the Software and Documentation. Upon termination Licensee shall erase all copies of the Software and Documentation from Licensee's computers, return to MyECheck or destroy all copies of the Software and Documentation on tangible media in Licensee's possession or control and certify in writing to MyECheck that it has fully complied with these requirements.

14.4 Survival. Sections 1, 3, 5, 6, 9, 10, 11, 12, 13, 14 and 15 shall survive any termination hereof.

15. GENERAL.

15.1 Independent Contractors. The relationship of MyECheck and Licensee 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.

15.2 Compliance with Laws. Each party will comply with all applicable export and import control laws and regulations in its use of the Software and will not export or re-export the Software without all required United States and foreign government licenses.

15.3 Press Release. The parties shall issue their respective or mutually agreed press release(s) by each party regarding Licensee's engagement of MyECheck and use of the Software pursuant to this Agreement (excluding any press release regarding any Letter of Intent). MyECheck may develop and, with the Licensee's prior written consent (such consent not to be unreasonably withheld or delayed) publish a case study, highlighting the main benefits provided by MyECheck and the Software, when the first Licensee site goes into Production. MyECheck agrees not to publicly issue any press release without Licensee's prior approval (which approval will not be unreasonably withheld or delayed).

15.4 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.

15.5 Assignment. This Agreement may not be assigned or transferred by Licensee (in whole or in part and whether voluntarily, involuntarily, or by operation of law) without the prior written consent of MyECheck and any attempt to do so shall be null and void and of no effect. Notwithstanding the foregoing, Licensee may assign this Agreement to an entity that acquires or succeeds to all or substantially all of Licensee's business and assets (a “Successor") by providing thirty (30) days prior written notice to MyECheck, and provided that: (i) MyECheck does not reasonably consider such Successor a direct competitor; and (ii) such assignment is in writing and states that such Successor is accepting all obligations of Licensee under this Agreement and agrees to be bound by and discharge each of the Agreement's terms, conditions, and obligations as if it were the original party hereto.

15.6 Governing Law. This Agreement shall be deemed to have been made and performed in, and shall be construed pursuant to the laws of the State of California, excluding application of its conflict of laws principles. In the event MyECheck initiates any legal proceeding with regard to the interpretation or enforcement of this Agreement, the parties hereby agree to submit to the exclusive jurisdiction of the appropriate state and federal courts of the State of California. In the event that Licensee initiates any legal proceeding with regard to the interpretation or enforcement of this Agreement, the parties hereby agree to submit to the exclusive jurisdiction of the appropriate state and federal courts of the State of California, County of El Dorado. Each party irrevocably waives, to the maximum extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue for any such proceeding brought in such courts and any claims that any proceeding brought in any such court has been brought in an inconvenient forum. If either party retains counsel for the purpose of enforcing or preventing the breach or threatened breach of any provision contained herein or otherwise retains counsel to enforce any right or remedy it may have, then the prevailing party will be entitled to be promptly reimbursed by the non-prevailing party for all reasonable costs, fees and expenses, including reasonable attorneys' fees, expended or so incurred by the prevailing party. The United Nations Convention on Contracts for the International Sale of Goods is specifically disclaimed and shall not apply to this Agreement.

15.7 Remedies. Each party recognizes and agrees that there is no adequate remedy at law for a threatened or actual breach of Section 3, Section 6, Section 10 or Section 15.3, 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.

15.8 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.

15.9 Reference. Upon MyECheck's reasonable request (or the reasonable request of a third party directed to Licensee by MyECheck), Licensee may act as a reference for MyECheck, including taking reference calls from prospective MyECheck customers to discuss the merits of the Software and to share Licensee's experience working with MyECheck.

15.10 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. Licensee agrees that Section 13 will remain in effect notwithstanding the enforceability or unenforceability of any provision of Section 9.

15.11 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, Licensee agrees that MyECheck may acknowledge Licensee as a MyECheck customer.

15.12 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". 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 Licensee in this Agreement are reserved by MyECheck and its suppliers.

15.13 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.

15.14 Counterparts. This Agreement may be executed in counterparts, each of which will be considered an original, but all of which together will constitute the same instrument. Execution and delivery of this Agreement may be evidenced by facsimile transmission.

15.15 Inspection Rights. Upon reasonable notice and under the confidentiality terms of Section 10 MyECheck shall have the right once per year to reasonably inspect the Licensee's premises and relevant records to determine compliance with this Agreement.

15.16 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.

15.17 U.S. 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.

15.18 Section 365(n) of Internal Revenue Code. All rights and licenses granted under or pursuant to this Agreement by MyECheck to Licensee 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 Licensee, as licensee 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 MyECheck under the Code, Licensee shall be entitled to retain all of its rights under this Agreement.

15.19 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.

15.20 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.

15.21 Remedies. The rights and remedies of each party as set forth in this Agreement are not exclusive and are in addition to any other rights and remedies available to it in law or in equity.

IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to enter into this Agreement, effective as of the Effective Date.

MYECHECK, INC.		Licensee INTERPAY INC

BY:

PRINT NAME: Ed Starrs		PRINT NAME: Ken Lelek
TITLE: CEO		TITLE: President

ADDRESS FOR NOTICE:		ADDRESS FOR NOTICE:
MyECheck, Inc.		Interpay, Inc.
3941 Park Dr., Suite 20-179		1525 Tynebridge Lane
El Dorado Hills, CA 95762		Whistler, BC V0N 1B1
USA		Canada
Phone: (916) 365-6963		Phone: (604) 628-1726

EXHIBIT A

SOFTWARE MODULES

LICENSE FEES

SOFTWARE LICENSE FEE

$75,000.00 payable
within seven (7) days.

TRANSACTION FEES

Transaction 1 through 200,000 per calendar month $0.25

Transaction 200,001 and over per calendar month $0.20

To run on Linux, Apache, & PGSQL

Patent enabling x9 file creation software (checkEngine) [compiled C code, multi threaded]

Database Schema for payment system [for PGSQL]

Web application for transaction collection and processing

Bank and Merchant reporting engine

Web based merchant reporting

Web based Administration (minimal)

Licensor owns certain 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.

Licensor will deliver the following to Licensee:

(A) A mobile app (“App”) that is accessible and downloadable for devices running Android, Blackberry, iOS, and Windows to be used to make mobile payments to a corresponding terminal, and supported by software developed by Licensor.

(B) The App will be customized with security features designed to help enable users to conform with Federal and State of California laws to process payments for Medical Marijuana, Gambling, and General Retail. This may entail three separate versions of the App.

(C) The App will be fully branded pursuant to Licensee’s specifications, including the App name, color schemes, and logo.

(D) The App will run and operate on Licensor’s MyEcheck software to process payments including transaction fees payable to Licensor.

(E) Licensor shall implement, administer, host, and maintain the App and the software for the corresponding terminal.

EXHIBIT B

MAINTENANCE EXHIBIT

1. SCOPE OF COVERAGE. Upon payment of applicable fees, MyECheck will provide consulting and maintenance services pursuant to this Exhibit ("Maintenance") for a period of twelve (12) months following the date of execution of this agreement.

2. MAINTENANCE SERVICES. Subject to the terms of this Exhibit and Licensee's payment of all Maintenance fees, MyECheck will provide the following:

2.1. Severity Levels. MyECheck 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"). MyECheck 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 Licensee 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. MyECheck 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 Licensee 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 Licensee to perform necessary business functions. MyECheck will acknowledge any such reported error or issue promptly, but in no event longer than within four (4) hours and, if Licensee 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 Licensee's business operation, including but not limited to working continually to address and remedy such error during MyECheck'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. MyECheck will acknowledge any such reported error or issue within one (1) business day and will work during MyECheck's normal Maintenance hours to provide the appropriate resolution.

(d) Resolution. Except as otherwise expressly set forth herein, MyECheck 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 MyECheck 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. Licensee acknowledges that in order to perform Maintenance, MyECheck may require access to and a copy of code in Licensee's possession (or that of Licensee's system integrator or consultants) relating to the Software or which may impact the performance of the Software. Licensee agrees to provide access, assistance and information to MyECheck as required to resolve errors or issues with the Software.

2.2 Available Updates. At no additional cost to Licensee, MyECheck will deliver to Licensee, as made commercially available by MyECheck, bug fixes, Maintenance updates and Major Releases for the Software ("Updates"), which will thereafter be considered "Software" for all purposes except for Section 8.1 of the Agreement. At its expense and as deemed appropriate by MyECheck in its sole discretion, MyECheck will furnish Licensee with revised Documentation (including release notes identifying each change) with each Update.

2.3 Other Errors and Issues. If Licensee reports an error or issue with the Software that is not of Severity 1, 2 or 3, MyECheck shall use commercially reasonable efforts to acknowledge such error or issue. If Licensee reports an error or issue with the Software that is not of Severity 1, 2 or 3 and that is scheduled by MyECheck to be addressed in a later Update, MyECheck may address such error or issue in such Update. Licensee agrees to pay MyECheck at MyECheck'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.

3. SUPPORT LINES.

3.1 First Line Support. Licensee shall establish and maintain the organization and processes to provide first line support directly to any of Licensee's customers. MyECheck shall have no obligation to provide any first line support to Licensee's customers. First line support shall include: (a) a direct response to Licensee's customers 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.

3.2 Second Line Support. MyECheck shall maintain the organization and processes necessary to provide second line support for the Software to Licensee. Such second line support shall be provided to Licensee only if, after reasonable commercial effort, Licensee 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 Licensee. MyECheck shall have no obligation to provide second line support directly to any of Licensee's customers. In order to assist MyECheck in providing such second line support, Licensee will provide MyECheck with the ability to access Licensee's site(s) which utilize the Software (including but not limited to configuration information and error logs) and provide assistance to MyECheck in order to facilitate MyECheck's use of remote administration tools relating to the Software.

4. SERVICE LIMITATIONS. The Maintenance does not include, nor will MyECheck be obligated to provide, services required as a result of: (a) any modification, reconfiguration or maintenance of the Software not performed or recommended by MyECheck; (b) any use of the Software on a system that does not meet MyECheck 's minimum standards for such as set forth in the applicable Documentation; (c) any third party hardware or software not supported or embedded by MyECheck; (d) any configuration of the Software (or hardware configurations) other than as recommended by MyECheck; or (e) any error caused by Licensee's or any third party's negligence, abuse, misapplication, or use of Software other than as expressly permitted under the Agreement.

5. 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. Licensee may terminate this Exhibit B if MyECheck materially breaches the terms of this Exhibit B 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.

EXHIBIT C

SERVICES EXHIBIT

1. STATEMENT OF WORK. MyECheck may render services, working individually or with Licensee and/or third parties retained by Licensee, (the "Services") to Licensee on a time and materials basis as may be agreed upon in a written Statement of Work signed by both parties. If Services are to be provided on Licensee premises, Licensee shall provide safe and adequate space, power, network connections and other resources and assistance as requested by MyECheck.

2. PROJECT ADMINISTRATION. The Technical Contact (as set forth in the Agreement) for Licensee shall provide MyECheck all assistance and guidance reasonably requested by MyECheck for the performance of the Services. Licensee acknowledges that the timely performance of the Services is dependent both on reasonable access to and assistance by Licensee, including the Licensee Technical Contact. MyECheck acknowledges that the success of Licensee's business shall depend on MyECheck's ability to provided the Services on a timely basis in accordance with the dates specified by Licensee, 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 Statement of Work signed by both parties. Licensee shall also reimburse MyECheck for reasonable travel, lodging, meal and other expenses reasonably incurred while providing the Services. MyECheck shall provide Licensee with accurate invoices detailing the consulting hours, fees and expense reimbursements due MyECheck. Licensee payment for Services and expenses shall be due thirty (30) days from the date of invoice. The parties agree that Licensee shall not be charged nor shall it be liable for any travel time incurred in connection herewith.

4. THIRD PARTY SOFTWARE. Licensee acknowledges that in order for MyECheck to perform the Services, Licensee may need to obtain additional third party services ("Third Party Services") or third party technology ("Third Party Technology"). Licensee 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 Licensee and the vendors of such Third Party Software or Third Party Services. Licensee 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 Licensee and shall be paid directly by Licensee to such third party vendors or service providers.

5. LICENSE TO Licensee MATERIALS. Licensee acknowledges that in order to perform the Services, MyECheck may require access to and use of certain software or other materials of Licensee or Licensee's suppliers (including access to code relating to the Software or that may effect the performance of the Software) ("Licensee Materials"). Licensee grants to MyECheck a royalty-free, non-exclusive license to access and use the Licensee 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 the Software or any other deliverable is produced through the Services, Licensee shall have the same rights in such (both the source and object code form) as Licensee has in the Software. Licensee acknowledges and agrees that other than the Third Party Software and the Licensee Materials, MyECheck owns all computer programs, utilities and intellectual property which aid MyECheck in performing the Services or which are produced as a result of the 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 Licensee. MyECheck and its employees, agents and contractors performing services hereunder shall not be entitled to any employee benefits of Licensee.

MyECheck Professional Services Statement of Work

PROJECT ASSIGNMENT

This Project Assignment is issued in accordance with, and shall be governed by, the terms herein and the terms and conditions of the Software License and Services Agreement entered into between the parties on September 1, 2013

Client Code:

Project Code:

Client Name: Licensee

Project Name:

MyECheck Consulting Director:

Name: Ed Starrs

Address: 3941 Park Dr. Suite 20-179, El Dorado Hills, CA 95762

Phone: (916) 222-4376

Fax: (866) 419-0363 Mobile Phone:(916) 365-6963

E-mail: ed.starrs@MyECheck.com

MyECheck Project Manager

Name: Steve Blandford

Address: 2624 Alana Ct., Cameron Park, CA 95682

Phone: (916) 222-8555

Fax: ( )

Mobile Phone:(916) 671-4349

Email: steve.blandford@MyECheck.com

Licensee Project Manager:

Name: Ken Lelek

Title: President

Address: 1525 Tynebridge Lane, Whistler, BC Canada

E-mail: ken@cleangoal.com

Fax: _____________________________________________

Mobile: ___________________________________________

Email: ____________________________________________

Licensee Billing Contact:

Name: (same)

Title: ______________________________________________

Address: ____________________________________________

Phone: _____________________________________________

E-mail: _____________________________________________

Fax: ________________________________________________

Mobile: _____________________________________________

Email: _____________________________________________

License:

Licensee ("Licensee") understands that in order to commence the work contemplated in this Project Assignment, Licensee and MyECheck must have negotiated and executed a Software License and Services Agreement.

Project Objective:

MyECheck Consulting Services will provide general and technical consulting services to Licensee on a monthly fee basis to assist with the implementation of MyECheck Software. This Statement of Work covers all work performed by MyECheck Professional Services until September 1, 2014. Rates of MyECheck Professional Services resources will be at the rates described below. The support provided herein will include but not be limited to the following areas:

Oversight

Project management best practices, and reusable interfaces/customizations

CIS/merchandising advisory

Environment architecture advisory

Template design and development advisory

Customization design and development advisory

Interface design and development advisory

Call center design and development advisory

General subject matter expertise

Members from MyECheck Professional Services will be assigned in various rolls to support Licensee in its implementation of the MyECheck system. MyECheck Professional services staff will be assigned to support Licensee in its implementation of the MyECheck system for the Public Launch. The involvement of these consultants will range from part time to full time. MyECheck will direct the extent of the involvement that is necessary, and Licensee agrees to devote such resources as MyECheck shall reasonably direct. However, minimal time from the MyECheck Consulting Director and at least part time involvement from a Consulting Manager will be mandatory. The primary goal of the MyECheck Professional services personnel is the support of Licensee in the successful implementation of the MyECheck system.

MyECheck Software consultants will work at various location including MyECheck offices and on site at Licensee specified offices, and offsite as required.

Mr. Ed Starrs Consulting Director, is assigned as the MyECheck Consulting Director for Licensee and is the main MyECheck contact for the Project. Steve Blandford is the project Manager and will manage the daily operation of the project.

In Scope:

•

implementation of MyECheck system

•

branding for customer

•

bank & merchant integration support

•

custom work for customers industry specific needs [vertical integration with other technologies]

•

ongoing system maintenance and build-out

•

training of staff in operational use

•

consulting with technical staff about systems administration

•

consulting with technical staff about systems engineering

•

consulting with technical staff about systems security and anti-fraud technologies

Out of Scope:

•

Responsibility for any formal deliverables other than those agreed upon by Licensee and MyECheck Software during the course of the project.

•

Responsibility for managing or creating any product data, prices, promotions, and content (graphics, HTML, copy).

Project Requirements:

•

Licensee will provide knowledgeable personnel during the project who are familiar with the project requirements.

•

Licensee will provide network/server administrator assistance when MyECheck installs any software, and provide any needed network linkage to any existing databases.

•

MyECheck technical resources will be provided desktop space, connection to the development environment and network, telephones, and analog line for connection to the MyECheck network while working on site.

•

Licensee will provide as needed roles (creative, data loads, DBA and system admin).

Project Staffing for MyECheck Resources:

Project staffing level will be determined by MyECheck. The staffing level is elastic and may be changed by MyECheck based upon project requirements without notice or penalty. Licensee is engaging MyECheck Professional services roles and not specific staff.

Roles and Responsibilities:

Steve Blandford will serve as the MyECheck Project Director, and will provide guidance to the project based on other past and current MyECheck consulting projects, as well as general project experience. He will serve as the key point of contact for project specific MyECheck resource needs and to serve as the first point of escalation beyond the MyECheck on site project team.

Mr. Blandford will offer best practice design experience in the areas of Licensee system merchandising functionality, site design, back end integration design, Licensee project phase task planning (design, build, test, performance test, go live support), and help provide general project reviews and observations using previous MyECheck project and general project experience. MyECheck will also serve to facilitate Tech Support readiness, Licensee engineer requirements gathering, Licensee release acceptance planning, Licensee implementation issue escalation, and is responsible to Licensee for managing onsite MyECheck consultants.

MyECheck will assign, at the Client's request, consultants and/or senior consultants to assist the Licensee team, to work on gap analysis, architecture, CIS advisory, template development, customization, backend integration design and development, mentoring, and as needed. These resources can work on specific development tasks as assigned by the Licensee project management and the MyECheck Consulting Manager. These resources can also serve as a leveraged resources for other development team members on MyECheck technical issues regarding site development, most specifically questions relating to the use of the MyECheck system API's and template development.

MyECheck may assign a part time Principal Consultant or consulting manager to serve as the Solution Architect, initially working on gap analysis and architecture (for new development), complex development and customization, backend integration design and development, mentoring, and then as needed.

From time to time, MyECheck may provide additional strategic, part time resources with specific expertise for specific, well-defined, reasons, tasks, or advice, in 1 or 2 day efforts. These part time resources would be project & time specific and would be agreed to between MyECheck and Licensee before such resources would be assigned.

Project Organization:

The MyECheck Software project team is organized as follows. All MyECheck Professional Services report to the Project Manager. The Project Manager reports to the Consulting Director.

Consulting Rates:

All work will be on a month fee basis for full time availability, or billed hourly per the following rates. Rates are not subject to change before: September 1, 2014. If the rates change, MyECheck will notify the client prior to the change.

Per Month for 12 Months

$500.00

Hourly (Subject to Scheduling and Availability)

$125.00/Hour

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 Licensee to incur certain expenses. Notwithstanding anything else to the contrary contained herein, any single expense in excess of three hundred dollars ($500) must be pre-approved in writing (or by email) by Licensee or it shall not be deemed a reimbursable expense.

Billing schedule:

Billing is monthly and payment is due on the first day of each month for services to be provided that month, and shall be transferred by wire transfer to the account number provided by the MyECheck Consulting Director.

MyECheck reserves the right to discontinue the provision of services under this Statement of Services in the event that Client fails to continue to make timely payment of fees and expenses due hereunder. A late fee of Prime plus 3% annualized will be assessed for payment beyond 30 days.

Non-Solicitation of Employees:

During the term of this Agreement and for a period of one (1) year following completion of work hereunder, neither party shall solicit employment of any current or prior employee of the other.

Signatures:

EACH PARTY ACKNOWLEDGES THAT IT HAS READ THIS STATEMENT OF WORK, UNDERSTANDS IT AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, EACH PARTY AGREES THAT, ALONG WITH THE APPLICABLE SOFTWARE LICENSE AND SERVICES AGREEMENT, THIS STATEMENT OF WORK AND APPLICABLE CHANGE ORDERS ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES RELATING TO THE SERVICES DESCRIBED HEREIN, WHICH SUPERSEDES ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF.

THE SIGNATURE BELOW ACKNOWLEDGES THAT EACH PARTY HAS AUTHORIZED AND APPROVED THIS ORDER IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE AGREEMENT. WHETHER OR NOT CUSTOMER ISSUES A PURCHASE ORDER, THIS SIGNATURE IS CUSTOMER'S EXPRESS AUTHORIZATION AND COMMITMENT TO PAY MYECHECK FOR THE PRODUCTS AND/OR SERVICES HEREIN IN ACCORDANCE WITH THE PAYMENT SCHEDULE FOR THIS ORDER. IF NO PAYMENT TERMS HAVE BEEN SPECIFIED ELSEWHERE, PAYMENTS ARE DUE NET 30 DAYS FROM INVOICE DATE. CUSTOMER AGREES THAT THESE TERMS WILL CONTROL OVER ANY CONFLICTING TERMS ON ANY CUSTOMER PURCHASE ORDER.

CUSTOMER MAY TERMINATE ANY PROFESSIONAL SERVICES STATEMENT OF WORK HEREUNDER AT ANY TIME BY PROVIDING MYECHECK WITH WRITTEN NOTICE THIRTY (30) WORKING DAYS PRIOR TO TERMINATION. THIS NOTICE IS REQUIRED REGARDLESS OF WHETHER WORK HAS STARTED OR NOT. IN THE EVENT THAT CUSTOMER TERMINATES EITHER A PROFESSIONAL SERVICES STATEMENT OF WORK OR SERVICES TO BE PERFORMED HEREUNDER, CUSTOMER SHALL REMAIN OBLIGATED TO PAY MYECHECK SOFTWARE FOR THE SERVICES PERFORMED, OR TO BE PERFORMED FOR THE REMAINDER OF THE TERM OF THE AGREEMENT.

ACCEPTED BY: Licensee

ACCEPTED BY: MyECheck Inc.

Signed:	/s/ Ken Lelek	By:	/s/ Ed Starrs

Name:	Ken Lelek	Name:	Ed Starrs

Title:	President	Title:	President

Date:	September 1, 2013	Date:	September 1, 2013

EX-1.2 3 v392049_ex1-2.htm EXHIBIT 1.2

Exhibit 1.2

SOFTWARE LICENSE AND SERVICES AGREEMENT

THIS SOFTWARE LICENSE AND SERVICES AGREEMENT and the Exhibits attached hereto (collectively, the "Agreement") is entered into by and between MYECHECK, INC., a Wyoming corporation ("MYECHECK"), and Sierra Global, LLC, Nevis limited liability company ("Licensee"), on November 23, 2013 (the "Effective Date"). In consideration of the mutual covenants and conditions contained herein, the parties agree as follows:

1. DEFINITIONS. The following definitions apply throughout this Agreement:

1.2 "Error" means any failure of the Software to operate in conformance with the Documentation in any material respect.

1.3 "Maintenance" shall mean the services provided by MyECheck to Licensee as set forth in Section 7 and Exhibit B attached hereto.

1.5 "Order" means the form forwarded by MyECheck, substantially equivalent to Exhibit A to this Agreement, to purchase a license to use Software or to purchase Maintenance under this Agreement.

1.7 "Professional Services Agreement" means the agreement attached hereto as Exhibit C and all written statements of work signed by Licensee and related thereto.

1.8 "Software" means the software modules listed in Exhibit A and any Major Releases, Modifications, interim releases, bug fixes and patches applicable to such software modules.

3. RESTRICTIONS ON USE.

6. OWNERSHIP OF DERIVATIVE WORKS.

7. MAINTENANCE.

9. WARRANTY.

9.1 Limited Software Warranty. MyECheck represents, warrants. and covenants that:

MyECheck warrants to the original end user ("Customer"), and not to subsequent end users, of the Extreme Networks software product ("Software") that for ninety (90) days from the date of installation of the Software from MyECheck, the Software shall substantially conform with the specification for the Software at the ("Documentation"). MyECheck 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."

9.2 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 MYECHECK 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, MYECHECK 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 UNIN IERRUPTED 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. Licensee ACKNOWLEDGES THAT MYECHECK 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 MYECHECK OR ITS EMPLOYEES, AGENTS OR CONTRACTORS OR FOR NETWORK FAILURE. Licensee FURTHER ACKNOWLEDGES THAT IT HAS RELIED ON NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT.

(i) any claim brought against Licensee 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 MyECheck's obligations under this item (i) of this Section 11 are conditioned upon Licensee providing MyECheck: (a) prompt written notice of the existence of such claim, suit, action or proceeding (each a "claim"); provided that a failure of the Licensee to promptly notify MyECheck shall not relieve MyECheck of liability hereunder except to the extent that MyECheck '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 MyECheck shall not enter into any settlement imposing any liability or obligation on Licensee without Licensee's prior written consent; and (c) assistance at MyECheck's request and sole expense, to the extent reasonably necessary for the defense or settlement of such claim. If any claim that MyECheck is obligated to defend has occurred or, in MyECheck's opinion, is likely to occur, MyECheck may, at its option and expense either (1) obtain for Licensee 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 Licensee for cause. Notwithstanding the foregoing, MyECheck shall not indemnify, defend or hold harmless Licensee for any claims solely based on: (a) any Licensee 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 MyECheck's discretion; (b) Software which has been altered or modified by Licensee, by any third party or by MyECheck at the request of Licensee (where MyECheck had no discretion as to the implementation of modifications to the Software or Documentation directed by Licensee), 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 MyECheck has made available a non-infringing updated, revised or repaired subsequent version or other applicable update, patch or fix;

(ii) the use of MyECheck's premises by Licensee employees pursuant to this Agreement; or

12. Licensee INDEMNITY. Licensee agrees to indemnify, defend and hold harmless MyECheck from and against all damages and costs (including reasonable attorneys' fees) finally awarded against MyECheck (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 Licensee, its employees, subcontractors or agents; (ii) any claim brought against MyECheck by a third party alleging that the Licensee 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 MyECheck by a third party arising from or relating to any modification of the Software by Licensee or any use of the Software other than as permitted under this Agreement. The parties acknowledge and agree that Licensee's obligations under this section are conditioned upon MyECheck providing Licensee: (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 Licensee's request to the extent reasonably necessary for the defense of such claim. The foregoing sets forth Licensee's sole and exclusive obligation and MyECheck's sole and exclusive remedy for any claim of intellectual property infringement or misappropriation relating to the Licensee Materials. Notwithstanding the foregoing, Licensee shall not indemnify, defend or hold harmless MyECheck for any claims arising from: (a) any MyECheck intellectual property or software incorporated in or combined with the Licensee Materials where in the absence of such incorporated or combined item, there would not have been infringement; (b) Licensee Materials which have been altered or modified by MyECheck (other than in response to a request by Licensee), where in the absence of such alteration or modification the Licensee Materials would not be infringing; (c) use of an any version of the Licensee Materials for which Licensee has made available an updated, revised or repaired subsequent version; or (d) the gross negligence or willful misconduct of MyECheck 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, Licensee shall have the right, at its option, to: (x) obtain the rights to continued use of the Licensee Materials; (y) substitute other suitable, functionally-equivalent, non-infringing materials; or (z) replace or modify the Licensee Materials or their design so that they are no longer infringing. Furthermore, Licensee agrees-to maintain commercial general liability on a claims made basis with coverage for at least one year from the date of .. The provisions of this Section 12 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.

14. ‘TERM AND TERMINATION.

14.1 Term. This Agreement shall remain in effect unless and until terminated as provided herein.

14.4 Survival. Sections 1, 3, 5, 6, 9, 10, 11, 12, 13, 14 and 15 shall survive any termination hereof.

15. GENERAL.

15.5 Assignment. This Agreement may not be assigned or transferred by Licensee (in whole or in part and whether voluntarily, involuntarily, or by operation of law) without the prior written consent of MyECheck and any attempt to do so shall be null and void and of no effect. Notwithstanding the foregoing, Licensee may assign this Agreement to an entity that acquires or succeeds to all or substantially all of Licensee's business and assets (a "Successor") by providing thirty (30) days prior written notice to MyECheck, and provided that: (i) MyECheck does not reasonably consider such Successor a direct competitor; and (ii) such assignment is in writing and states that such Successor is accepting all obligations of Licensee under this Agreement and agrees to be bound by and discharge each of the Agreement's terms, conditions, and obligations as if it were the original party hereto.

15.6 Governing Law. This Agreement shall be deemed to have been made and performed in, and shall be construed pursuant to the laws of the State of California. excluding application of its conflict of laws principles. In the event MyECheck initiates any legal proceeding with regard to the interpretation or enforcement of this Agreement, the parties hereby agree to submit to the exclusive jurisdiction of the appropriate state and federal courts of the State of California. In the event that Licensee initiates any legal proceeding with regard to the interpretation or enforcement of this Agreement, the parties hereby agree to submit to the exclusive jurisdiction of the appropriate state and federal courts of the State of California, County of El Dorado. Each party irrevocably waives, to the maximum extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue for any such proceeding brought in such courts and any claims that any proceeding brought in any such court has been brought in an inconvenient forum. If either party retains counsel for the purpose of enforcing or preventing the breach or threatened breach of any provision contained herein or otherwise retains counsel to enforce any right or remedy it may have, then the prevailing party will be entitled to be promptly reimbursed by the non-prevailing party for all reasonable costs, fees and expenses, including reasonable attorneys' fees, expended or so incurred by the prevailing party. The United Nations Convention on Contracts for the International Sale of Goods is specifically disclaimed and shall not apply to this Agreement.

15.7 Remedies. Each party recognizes and agrees that there is no adequate remedy at law for a threatened or actual breach of Section 3, Section 6. Section 10 or Section 15.3, that such a breach would irreparably haiiii 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.

15.21 Remedies. The rights and remedies of each party as set forth in this Agreement are not exclusive and are in addition to any other rights and remedies available to it in law or in equity.

IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to enter into this Agreement, effective as of the Effective Date.

MYECHECK, INC.		Licensee SIERRA GLOBAL LLC

/s/ Ed Starrs		/s/ Matt Hanson

PRINT NAME: Ed Starrs		PRINT NAME: Matt Hanson
TITLE: CEO		TITLE: Managing Director

ADDRESS FOR NOTICE:		ADDRESS FOR NOTICE:
MyECheck, Inc.		Sierra Global, LLC
3941 Park Dr., Suite 20-179		Hunkins Waterfront Plaza, Suite 556
El Dorado Hills, CA 95762		Main Street, Charlestown
USA		St. Kitts and Nevis
Phone: (916) 365-6963		Phone: US (916) 542-7127

EXHIBIT A

SOFTWARE MODULES

LICENSE FEES

SOFTWARE LICENSE FEE

$350,000.00

TRANSACTION FEES

Transaction 1 through 200,000 per calendar month $0.25

Transaction 200,001 and over per calendar month $0.20

To run on Linux, Apache, & PGSQL

Patent enabling x9 file creation software (checkEngine) [compiled C code, multi threaded]

•

Database Schema for payment system [for PGSQL]

•

Web application for transaction collection and processing

•

Bank and Merchant reporting engine

•

Web based merchant reporting

•

Web based Administration (minimal)

Licensor owns certain 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.

Licensor will deliver the following to Licensee:

(A) A mobile app ("App") that is accessible and downloadable for devices running Android, Blackberry, iOS, and Windows to be used to make mobile payments to a corresponding terminal, and supported by software developed by Licensor.

(C) The App will be fully branded pursuant to Licensee's specifications, including the App name, color schemes, and logo.

(D) The App will run and operate on Licensor's MyEcheck software to process payments including transaction fees payable to Licensor.

(E) Licensor shall implement, administer, host, and maintain the App and the software for the corresponding terminal.

EXHIBIT B

MAINTENANCE EXHIBIT

2. MAINTENANCE SERVICES. Subject to the terms of this Exhibit and Licensee's payment of all Maintenance fees, MyECheck will provide the following:

3. SUPPORT LINES.

EXHIBIT C

SERVICES EXHIBIT

4. THIRD PARTY SOFTWARE. Licensee acknowledges that in order for MyECheck to perform the Services, Licensee may need to obtain additional third party services ("Third Party Services") or third party technology ("Third Party Technology"). Licensee agrees that the rights and licenses with respect to Third Party Technology and Third Party Services shall be under teiins set forth in the pertinent purchase, license or services agreements between Licensee and the vendors of such Third Party Software or Third Party Services. Licensee 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 Licensee and shall be paid directly by Licensee to such third party vendors or service providers.

5. LICENSE TO Licensee MATERIALS. Licensee acknowledges that in order to perform the Services, MyECheck may require access to and use of certain software or other materials of Licensee or Licensee's suppliers (including access to code relating to the Software or that may effect the performance of the Software) ("Licensee Materials"). Licensee grants to MyECheck a royalty-free, nonexclusive license to access and use the Licensee Materials (including through subcontractors) as required for MyECheck's performance of the Services hereunder.

MyECheck Professional Services Statement of Work

PROJECT ASSIGNMENT

Client Code:	Project Code:

Client Name: Licensee	Project Name:

MyECheck Consulting Director:
	Name: Ed Starrs
	Address: 3941 Park Dr. Suite 20-179, El Dorado Hills, CA 95762
	Phone: (916) 222-4376
	Fax: (866) 419-0363	Mobile Phone:(916) 365-6963
	E-mail: ed.starrs@MyECheck.com

MyECheck Project Manager
	Name: Steve Blandford
	Address: 2624 Alana Ct., Cameron Park, CA 95682
	Phone: (916) 222-8555
	Fax: ( )
	Mobile Phone:(916) 671-4349
	Email: steve.blandford@MyECheck.com

Licensee Project Manager:
	Name: Matt Hanson
	Title: Managing Director
	Address: Hunkins Waterfront Plaza, Suite 556, Main St, Charlestown, Nevis
	E-mail: sierragloball1c@yahoo.com
	Fax:
	Mobile:
	Email:

Licensee Billing Contact:
	Name: (same)
	Title:
	Address:
	Phone:
	E-mail:
	Fax:
	Mobile:
	Email:

License:

Licensee ("Licensee') understands that in order to commence the work contemplated in this Project Assignment, Licensee and MyECheck must have negotiated and executed a Software License and Services Agreement.

Project Objective:

Oversight

Project management best practices, and reusable interfaces/customizations

CIS/merchandising advisory

Environment architecture advisory

Template design and development advisory

Customization design and development advisory

Interface design and development advisory

Call center design and development advisory

General subject matter expertise

MyECheck Software consultants will work at various location including MyECheck offices and on site at Licensee specified offices, and offsite as required.

In Scope:

• implementation of MyECheck system

• branding for customer

• bank & merchant integration support

• custom work for customers industry specific needs [vertical integration with other technologies]

• ongoing system maintenance and build-out

• training of staff in operational use

• consulting with technical staff about systems administration

• consulting with technical staff about systems engineering

• consulting with technical staff about systems security and anti-fraud technologies

Out of Scope:

•

Responsibility for any formal deliverables other than those agreed upon by Licensee and MyECheck Software during the course of the project.

•

Responsibility for managing or creating any product data, prices, promotions, and content (graphics, HTML, copy).

Project Requirements:

•

Licensee will provide knowledgeable personnel during the project who are familiar with the project requirements.

•

Licensee will provide network/server administrator assistance when MyECheck installs any software, and provide any needed network linkage to any existing databases.

•

Licensee will provide as needed roles (creative, data loads, DBA and system admin).

Project Staffing for MyECheck Resources:

Roles and Responsibilities:

Project Organization:

The MyECheck Software project team is organized as follows. All MyECheck Professional Services report to the Project Manager. The Project Manager reports to the Consulting Director.

Consulting Rates:

Per Month for 12 Months

$2000.00

Hourly (Subject to Scheduling and Availability)

$125.00/Hour

Project Pricing and Expenses:

Billing schedule:

Non-Solicitation of Employees:

During the term of this Agreement and for a period of one (1) year following completion of work hereunder, neither party shall solicit employment of any current or prior employee of the other.

Signatures:

ORDER.

ACCEPTED BY: Licensee		ACCEPTED BY: MyECheck Inc.

Signed:	/s/ Matt Hanson	By:	/s/ Edward R. Starrs

Name:	Matt Hanson	Name:	Edward R. Starrs

Title:	Managing Director	Title:	CEO

Date:	November 23, 2013	Date:	November 23, 2013

EX-1.3 4 v392049_ex1-3.htm EXHIBIT 1.3

Exhibit 1.3

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;

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.

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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.

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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.

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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.

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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.

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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

/s/ Timothy Mackay		/s/ Rod R. Zalunardo
Signature		Signature

Company Name:
		MyEcheck, Inc.
VX Gateway, Inc.		Rod R Zalunardo
		Senior VP, Operations / COO
Individual Name:
		2600 East Bidwell Street, Suite 140
Timothy Mackay		Folsom, California 95630

Title:

President/CEO

www.MyEcheck.com

		844-MyEcheck (844-693-2432)
		Customer.Support@MyEcheck.com
Principal Address:

		Date of Agreement: __________________
17B Edificio Oficinas Obarrio 60
		Effective Date: ____April 02, 2014______

		This is the effective date for the original agreement.
Calle 60 Este, Bella Vista

Republic of Panama

timothy.mackay@vxgateway.com

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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	$	0.15

500,001 - 999,999	$	0.125

1,000,000 and more	$	0.10

Supplemental Services

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.

VX Gateway would use two different levels of Scrub Services for their processing. The rates listed are per transaction.

Basic Scrub Service for each and every Check 21 transaction:	$0.20 (twenty cents)
Enhanced Scrubs for each registration and/or account verification:	$0.49 (forty nine cents)

There are no volume limitations or discounts.

Each type of service would be initiated by VX Gateway by calling/utilizing the appropriate MyEcheck API.

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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 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.

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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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EX-1.4 5 v392049_ex1-4.htm EXHIBIT 1.4

Exhibit 1.4

SOFTWARE LICENSE AND SERVICES AGREEMENT

THIS SOFTWARE LICENSE AND SERVICES AGREEMENT and the Exhibits attached hereto (collectively, the "Agreement") is entered into by and between MYECHECK, INC., a Wyoming corporation ("MYECHECK"), and ITONIS, INC., a Nevada corporation ("Licensee"), on March 19, 2014 (the "Effective Date"). In consideration of the mutual covenants and conditions contained herein, the parties agree as follows:

1. DEFINITIONS. The following definitions apply throughout this Agreement:

1.2 "Error" means any failure of the Software to operate in conformance with the Documentation in any material respect.

1.3 "Maintenance" shall mean the services provided by MyECheck to Licensee as set forth in Section 7 and Exhibit B attached hereto.

1.5 "Order" means the form forwarded by MyECheck, substantially equivalent to Exhibit A to this Agreement, to purchase a license to use Software or to purchase Maintenance under this Agreement.

1.7 "Professional Services Agreement" means the agreement attached hereto as Exhibit C and all written statements of work signed by Licensee and related thereto.

1.8 "Software" means the software modules listed in Exhibit A and any Major Releases, Modifications, interim releases, bug fixes and patches applicable to such software modules.

3. RESTRICTIONS ON USE.

6. OWNERSHIP OF DERIVATIVE WORKS.

7. MAINTENANCE.

9. WARRANTY.

9.1 Limited Software Warranty. MyECheck represents, warrants, and covenants that:

(ii) the use of MyECheck's premises by Licensee employees pursuant to this Agreement; or

12. Licensee INDEMNITY. Licensee agrees to indemnify, defend and hold harmless MyECheck from and against all damages and costs (including reasonable attorneys' fees) finally awarded against MyECheck (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 Licensee, its employees, subcontractors or agents; (ii) any claim brought against MyECheck by a third party alleging that the Licensee 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 MyECheck by a third party arising from or relating to any modification of the Software by Licensee or any use of the Software other than as permitted under this Agreement. The parties acknowledge and agree that Licensee's obligations under this section are conditioned upon MyECheck providing Licensee: (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 Licensee's request to the extent reasonably necessary for the defense of such claim. The foregoing sets forth Licensee's sole and exclusive obligation and MyECheck's sole and exclusive remedy for any claim of intellectual property infringement or misappropriation relating to the Licensee Materials. Notwithstanding the foregoing, Licensee shall not indemnify, defend or hold harmless MyECheck for any claims arising from: (a) any MyECheck intellectual property or software incorporated in or combined with the Licensee Materials where in the absence of such incorporated or combined item, there would not have been infringement; (b) Licensee Materials which have been altered or modified by MyECheck (other than in response to a request by Licensee), where in the absence of such alteration or modification the Licensee Materials would not be infringing; (c) use of an any version of the Licensee Materials for which Licensee has made available an updated, revised or repaired subsequent version; or (d) the gross negligence or willful misconduct of MyECheck 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, Licensee shall have the right, at its option, to: (x) obtain the rights to continued use of the Licensee Materials; (y) substitute other suitable, functionally-equivalent, non-infringing materials; or (z) replace or modify the Licensee Materials or their design so that they are no longer infringing. Furthermore, Licensee agrees to maintain commercial general liability insurance of at least $2.5 million, covering Licensee'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 12 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.

14. TERM AND TERMINATION.

14.1 Term. This Agreement shall remain in effect unless and until terminated as provided herein.

14.4 Survival. Sections 1, 3, 5, 6, 9, 10, 11, 12, 13, 14 and 15 shall survive any termination hereof.

15. GENERAL.

15.21 Remedies. The rights and remedies of each party as set forth in this Agreement are not exclusive and are in addition to any other rights and remedies available to it in law or in equity.

IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to enter into this Agreement, effective as of the Effective Date.

MYECHECK, INC.		Licensee ITONIS, INC.

BY:	/s/ Ed Starrs	BY:	/s/ Mark Cheung
PRINT NAME: Ed Starrs		PRINT NAME: Mark Cheung
TITLE: CEO		TITLE: CEO

ADDRESS FOR NOTICE:		ADDRESS FOR NOTICE:
MyECheck, Inc.		Itonis, Inc.
3941 Park Dr., Suite 20-179		22951 Mill Creek Drive, Suite A
El Dorado Hills, CA 95762		Laguna Hills, CA 92653
Phone: (916) 365-6963		Phone:

EXHIBIT A

SOFTWARE MODULES

LICENSE FEES

SOFTWARE LICENSE FEE	$300,000.00 payable	Payable within sixty (
	within seven (7) days.

TRANSACTION FEES

Transaction 1 through 200,000 per calendar month $0.25

Transaction 200,001 and over per calendar month $0.20

To run on Linux, Apache, & PGSQL

Patent enabling x9 file creation software (checkEngine) [compiled C code, multi threaded]

Database Schema for payment system [for PGSQL]

Web application for transaction collection and processing

Bank and Merchant reporting engine

Web based merchant reporting

Web based Administration (minimal)

Licensor will deliver the following to Licensee:

(A) A mobile app (“App”) that is accessible and downloadable for devices running Android, Blackberry, iOS, and Windows to be used to make mobile payments to a corresponding terminal, and supported by software developed by Licensor.

(C) The App will be fully branded pursuant to Licensee’s specifications, including the App name, color schemes, and logo.

(D) The App will run and operate on Licensor’s MyEcheck software to process payments including transaction fees payable to Licensor.

(E) Licensor shall implement, administer, host, and maintain the App and the software for the corresponding terminal.

EXHIBIT B

MAINTENANCE EXHIBIT

2. MAINTENANCE SERVICES. Subject to the terms of this Exhibit and Licensee's payment of all Maintenance fees, MyECheck will provide the following:

3. SUPPORT LINES.

EXHIBIT C

SERVICES EXHIBIT

MyECheck Professional Services Statement of Work

PROJECT ASSIGNMENT

Client Code:	Project Code:

Client Name: Licensee	Project Name:

MyECheck Consulting Director:
	Name: Ed Starrs
	Address: 3941 Park Dr. Suite 20-179, El Dorado Hills, CA 95762
	Phone: (916) 222-4376
	Fax: (866) 419-0363 Mobile Phone:(916) 365-6963
	E-mail: ed.starrs@MyECheck.com

MyECheck Project Manager
	Name: Steve Blandford
	Address: 2624 Alana Ct., Cameron Park, CA 95682
	Phone: (916) 222-8555
	Fax: ( )
	Mobile Phone:(916) 671-4349
	Email: steve.blandford@MyECheck.com

Licensee Project Manager:
	Name: Mark Cheung
	Title: CEO
	Address: 22951 Mill Creek Drive, Suite A, Laguna Hills, CA 92653.
	E-mail: mark@itonisholdings.com
	Fax:
	Mobile:
	Email:

Licensee Billing Contact:
	Name: (same)
	Title:
	Address:
	Phone:
	E-mail:
	Fax:
	Mobile:
	Email:

License:

Project Objective:

MyECheck Consulting Services will provide general and technical consulting services to Licensee on a monthly fee basis to assist with the implementation of MyECheck Software. This Statement of Work covers all work performed by MyECheck Professional Services until March __, 2013. Rates of MyECheck Professional Services resources will be at the rates described below. The support provided herein will include but not be limited to the following areas:

o	Oversight
o	Project management best practices, and reusable interfaces/customizations
o	CIS/merchandising advisory
o	Environment architecture advisory
o	Template design and development advisory
o	Customization design and development advisory
o	Interface design and development advisory
o	Call center design and development advisory
o	General subject matter expertise

MyECheck Software consultants will work at various location including MyECheck offices and on site at Licensee specified offices, and offsite as required.

In Scope:

•

implementation of MyECheck system

•

branding for customer

•

bank & merchant integration support

•

custom work for customers industry specific needs [vertical integration with other technologies]

•

ongoing system maintenance and build-out

•

training of staff in operational use

•

consulting with technical staff about systems administration

•

consulting with technical staff about systems engineering

•

consulting with technical staff about systems security and anti-fraud technologies

Out of Scope:

•

Responsibility for any formal deliverables other than those agreed upon by Licensee and MyECheck Software during the course of the project.

•

Responsibility for managing or creating any product data, prices, promotions, and content (graphics, HTML, copy).

Project Requirements:

•

Licensee will provide knowledgeable personnel during the project who are familiar with the project requirements.

•

Licensee will provide network/server administrator assistance when MyECheck installs any software, and provide any needed network linkage to any existing databases.

•

Licensee will provide as needed roles (creative, data loads, DBA and system admin).

Project Staffing for MyECheck Resources:

Roles and Responsibilities:

Project Organization:

The MyECheck Software project team is organized as follows. All MyECheck Professional Services report to the Project Manager. The Project Manager reports to the Consulting Director.

Consulting Rates:

All work will be on a month fee basis for full time availability, or billed hourly per the following rates. Rates are not subject to change before: March 30, 2013. If the rates change, MyECheck will notify the client prior to the change.

Per Month for 12 Months

$10,000.00

Hourly (Subject to Scheduling and Availability)

$125.00/Hour

Project Pricing and Expenses:

Billing schedule:

Non-Solicitation of Employees:

During the term of this Agreement and for a period of one (1) year following completion of work hereunder, neither party shall solicit employment of any current or prior employee of the other.

Signatures:

ACCEPTED BY: Licensee		ACCEPTED BY: MyECheck Inc.

Signed:		By:

Name:		Name:

Title:	CEO	Title:	CEO

Date:		Date:

EX-1.5 6 v392049_ex1-5.htm EXHIBIT 1.5

Exhibit 1.5

EX-1.6 7 v392049_ex1-6.htm EXHIBIT 1.6

Exhibit 1.6

MyEcheck Services Agreement

RECITALS

Whereas MyEcheck provides Payment Data Processing Services (“Services”);

Whereas the Customer is engaged in payment acceptance;

The Service Documentation described below contains the terms under which MyEcheck has agreed to provide Services to the Customer.

MyEcheck has agreed to provide Services to the Customer.

AGREEMENTS

Now therefore, the parties do hereby mutually agree that:

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.

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.

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MyEcheck Services Agreement

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MyEcheck Services Agreement

8. Liability and Indemnification.

(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.

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MyEcheck Services Agreement

9. General.

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MyEcheck Services Agreement

(f) Sections 4, 5, 6, 8, 9 and 10 of this Agreement will survive termination of this Agreement.

(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.

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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


/s/ Auri Burnham	/s/ Rod R. Zalunardo
Signature	Signature

Company Name:	MyEcheck, Inc.
	Rod R Zalunardo
Simplifile, LC	Senior VP, Operations / COO

Individual Name:	2600 East Bidwell Street, Suite 140
	Folsom, California 95630
Auri Burnham
	www.MyEcheck.com
Title: Director of Finance	844-MyEcheck (844-693-2432)
	Customer.Support@MyEcheck.com

Principal Address:	Date of Agreement: 7/11/2014

4844 N. 300W., Ste 202	Effective Date: 7/11/2014

Provo, UT 84604

___________________________________

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MyEcheck Services Agreement

Exhibit A

Services and Fees

Basic Services

Check 21 Service Fees

Total Transactions
per Calendar Month	Fee per Transaction

Less than 500,000	$0.25

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.

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

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MyEcheck Services Agreement

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.

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).

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 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.

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EX-1.7 8 v392049_ex1-7.htm EXHIBIT 1.7

Exhibit 1.7

AGREEMENT AND PLAN OF MERGER

This Merger Agreement (this " Agreement ") is entered into as of February 4, 2008 by and between MyECheck, Inc., a Delaware corporation (" Target "), MyECheck, Inc., a Nevada corporation (formerly Sekoya Holdings, Ltd.) (" Buyer "), and Shirley Wong. Shirley Wong, Target and Buyer are referred to collectively herein as the “Parties.”

WHEREAS, the Parties desire to enter into this Agreement to further certain of their business objectives,

WHEREAS, this Agreement contemplates a tax-free merger of Target with and into Buyer in a reorganization pursuant to Code 368 (a)(1)(A) where Target stockholders will receive Buyer stock in exchange for their Target stock;

WHEREAS, upon the effectiveness of the Merger, all issued and outstanding shares of Buyer stock held by Shirley Wong will be contributed to the Surviving Corporation, in consideration of this transaction and without payment of any other consideration;

WHEREAS, the Parties contemplate that a previously contemplated 25:1 stock split (the "Stock Split") by Buyer shall be made effective solely pursuant to this Agreement and the related Securities and Exchange Commission filings relating to the Merger, and that the distribution of shares resulting from the Stock Split ("Split Shares") shall occur subject to the terms of this Agreement; and

NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

1. Definitions

"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.

"Articles of Merger" has the meaning set forth in 2(c) below.

"Buyer" has the meaning set forth in the preface above.

"Buyer Share" means any share of the common stock, $0.001 par value per share, of Buyer.

"Buyer Stockholder" means any Person who or that holds any Buyer Shares.

“Target" has the meaning set forth in the preface above.

"Target-owned Share" means any Buyer Share that Target owns beneficially.

"Target Share" means any share of the common stock, $0.00001 par value per share, of Target.

"Certificate of Merger" has the meaning set forth in 2(c) below.

"Closing" has the meaning set forth in Section 2(b) below.

"Closing Date" has the meaning set forth in Section 2(b) below.

"Confidential Information" means any information concerning the business and affairs of Buyer and its Subsidiaries that is not already generally available to the public.

"Conversion Ratio" has the meaning set forth in Section 2(d)(v) below.

"Delaware Corporations Code" means the General Corporation Law of the State of Delaware, as amended.

"Nevada Revised Statutes" means the General Corporation Law of the State of Nevada, as amended.

"Disclosure Schedule" has the meaning set forth in Section 3 below.

"Effective Time" has the meaning set forth in Section 2(d)(i) below.

"Exchange Agent" has the meaning set forth in Section 2(f) below.

"GAAP" means United States generally accepted accounting principles as in effect from time to time, consistently applied.

"IRS" means the Internal Revenue Service.

"Information Statement" means the Information Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934 to be filed by Buyer.

"Knowledge” means actual knowledge after reasonable investigation.

"Lien " means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (a) liens for Taxes not yet due and payable or for taxes that the taxpayer is contesting in good faith through appropriate proceedings, (b) purchase money liens and liens securing rental payments under capital lease arrangements, and (c) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money.

"Losses" shall mean any and all losses, expenses (including reasonable attorneys' fees and expenses), damages, liabilities, fines, penalties, judgments, actions, claims and costs.

"Material Adverse Effect" or "Material Adverse Change" means any effect or change that would be (or could reasonably be expected to be) materially adverse to the business, assets, condition (financial or otherwise), operating results, operations, or business prospects of Buyer and its Subsidiaries, taken as a whole, or to the ability of Buyer to consummate timely the transactions contemplated hereby (regardless of whether or not such adverse effect or change can be or has been cured at any time or whether Target has knowledge of such effect or change on the date hereof), including any adverse change, event, development, or effect arising from or relating to (a) general business or economic conditions, including such conditions related to the business of Buyer and its Subsidiaries, (b) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (c) financial, banking, or securities markets (including suspension of trading in, or limitation on prices for, securities on the New York Stock Exchange, American Stock Exchange, or Nasdaq National Market for a period in excess of three hours or any decline of either the Dow Jones Industrial Average or the Standard & Poors Index of 500 Industrial Companies by an amount in excess of 15% measured from the close of business on the date hereof), (d) changes in United States generally accepted accounting principles, (e) changes in laws, rules, regulations, orders, or other binding directives issued by any governmental entity, and (f) the taking of any action contemplated by this Agreement and the other agreements contemplated hereby.

"Merger" has the meaning set forth in Section 2(a) below.

"Most Recent Fiscal Quarter End" has the meaning set forth in Section 3(f) below.

"Ordinary Course of Business" means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

"Party" has the meaning set forth in the preface above.

"Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trus, a joint venture, an unincorporated organization, any other business entity, or a governmental entity (or any department, agency, or political subdivision thereof).

"Public Report" has the meaning set forth in Section 3(e) below.

"Requisite Target Stockholder Approval" means the affirmative vote of the holders of a majority of the Target Shares in favor of this Agreement and the Merger.

"Requisite Buyer Stockholder Approval" means the affirmative vote of the holders of a majority of the Buyer Shares in favor of this Agreement and the Merger, with no shareholders exercising dissenters rights.

"SEC" means the Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Special Target Meeting" has the meaning set forth in Section 5(c)(ii) below.

"Special Buyer Meeting" has the meaning set forth in Section 5(c)(ii) below.

"Split Shares" has the meaning set forth in the preamble.

"Stock Split" has the meaning set forth in the preamble.

"Subsidiary" means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity's gains or losses or shall be or control any managing director or general partner of such business entity (other than a corporation). The term "Subsidiary" shall include all Subsidiaries of such Subsidiary.

"Surviving Corporation" has the meaning set forth in Section 2(a) below.

2. Basic Transaction

(a) The Merger. On and subject to the terms and conditions of this Agreement, Target will merge with and into Buyer (the "Merger") at the Effective Time. Buyer shall be the corporation surviving the Merger (the " Surviving Corporation "). Upon the effectiveness of the Merger, all issued and outstanding Buyer Shares held by Shirley Wong will be contributed to the Surviving Corporation and cancelled, in consideration of this transaction and without payment of any other considerations.

(b)The Closing. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Downey Brand, LLP in Sacramento, California, commencing at 11:00 a.m. local time on the second business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective parties will take at the Closing itself) or such other date as the Parties may mutually determine (the “Closing Date”)

(c) Actions at the Closing. At the Closing, (i) Buyer will deliver to Target the various certificates, instruments, and documents referred to in Section 6(a) below, (ii) Target will deliver to Buyer the various certificates, instruments, and documents referred to in Section 6(b)below, (iii) Target and Buyer will file with the Secretary of State of the State of Nevada Articles of Merger in the form attached hereto as Exhibit A (the " Articles of Merger "), (iv) Target and Buyer will file with the Secretary of State of the State of Delaware the Certificate of Merger in the form attached hereto as Exhibit B ("Certificate of Merger "), and (v) Target will deliver to the Exchange Agent in the manner provided below in this Section 2 the certificate evidencing the Buyer Shares issued in the Merger.

(d) Effect of Merger.

(i) General. The Merger shall become effective at the time (the "Effective Time") Target and Buyer file the Articles of Merger with the Secretary of State of the State of Nevada and the Certificate of Merger with the Secretary of State of the State of Delaware. The Merger shall have the effect set forth in the Nevada Revised Statutes and the Delaware Corporations Code. The Surviving Corporation may, at any time after the Effective Time, take any action (including executing and delivering any document) in the name and on behalf of either Target or Buyer in order to carry out and effectuate the transactions contemplated by this Agreement.

(ii) Articles of Incorporation. The articles of incorporation of Buyer in effect at and as of the Effective Time will remain the articles of incorporation of Surviving Corporation without any modification or amendment in the Merger.

(iii) Bylaws. The bylaws attached hereto as Exhibit C will become the bylaws of Surviving Corporation as of the Effective Time (the "Amended and Restated Bylaws ").

(iv) Directors and Officers. The directors and officers of Target in office at and as of the Effective Time will become the directors and officers of Surviving Corporation (retaining their respective positions and terms of office).

(v) Conversion of Target Shares. At and as of the Effective Time, each Target Share shall be converted into the right to receive (a) 49.453119 immediately distributable Buyer Shares and (b) additional 2.5 Buyer Shares that shall be held in escrow and that shall be distributable solely pursuant to the provisions of Section 8(b) hereof (the ratio of 51.953119 Buyer Shares to one (1) Target Share is referred to herein as the " Conversion Ratio "). No Target Share shall be deemed to be outstanding or to have any rights other than those set forth above in this Section 2(d)(v) after the Effective Time.

(vi) Buyer Shares. As a result of the Merger, the Stock Split shall be effected with respect to each Buyer Share issued and outstanding at and as of the Effective Time. Each Buyer Share will remain issued and outstanding. Shirley Wong shall contribute all of her shares to the Surviving Corporation upon effectiveness of the Merger and they shall be immediately cancelled. Any share certificates outstanding prior to the Merger that purport to give effect to the Stock Split shall be deemed to represent only that number of Buyer Shares prior to the Merger.

(e) Escrow of Shares. An aggregate of 2,000,000 of Buyer Shares issuable to Target shareholders shall be held back from distribution in connection with the Merger (the "Share Escrow"), the release of which shares shall be contingent upon the occurrence of certain events and the satisfaction of certain conditions, all as set forth in Section 80) .

(f) Payment Procedure. Immediately after the Effective Time, Target will furnish to the Company's transfer agent (the " Exchange Agent ") stock certificates of its shareholders, and information respecting the number of shares to be withheld from distribution pursuant to the Share Escrow. The Exchange Agent will cause certificates evidencing shares of stock in the Surviving Corporation to be issued to the former Target shareholders in accordance with the Conversion Ratio and the provisions hereof.

(g) Right of Boards to Amend Agreement. The Boards of each of each of Target and Buyer shall have the right to make such changes in this Agreement as may be necessary to effectuate the purposes of this Agreement, including without limitation in order to ensure that the objectives of the remedies and tax-free exchange provisions hereof are effected.

3. Buyer's Representations and Warranties

Buyer represents and warrants to Target that the statements contained in this Section 3 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Section 3), except as set forth in the disclosure schedule accompanying this Agreement (the " Disclosure Schedule "). The Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Section 3.

(a) Organization, Qualification and Corporate Power. Each of Buyer and its Subsidiaries is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation. Each of Buyer and its Subsidiaries is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required. Each of Buyer and its Subsidiaries has full corporate power and authority to carry on the business in which it is engaged and to own and use the properties owned and used by it.

(b) Capitalization. The entire authorized capital stock of Buyer consists of two hundred million (200,000,000) Buyer Shares, of which 151,375,000 Buyer Shares are issued and outstanding and no Buyer Shares are held in treasury. All of the issued and outstanding Buyer Shares have been duly authorized and are validly issued, fully paid, and non-assessable. Other than the with respect to the Stock Split, there are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require Buyer to issue, sell, or otherwise cause to become outstanding any of its capital stock. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to Buyer. All of the Buyer Shares to be issued in the Merger have been duly authorized and, upon, consummation of the Merger, will be validly issued, fully paid, and non-assessable. Any share certificates outstanding prior to the Merger that purport to give effect to the Stock Split shall be deemed to represent only that number of Buyer Shares prior to the Merger.

(c)Authorization of Transaction. Buyer has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder, provided, however, that the Buyer cannot consummate the Merger unless and until it receives the Requisite Buyer Stockholder Approval. This Agreement constitutes the valid and legally binding obligation of Buyer, enforceable in accordance with its terms and conditions.

(d)Non-contravention. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Buyer or any of its Subsidiaries is subject or any provision of the charter or bylaws of Buyer or any of its Subsidiaries or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Buyer or any of its Subsidiaries is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Lien upon any of its assets). Other than in connection with the provisions of the Nevada Revised Statutes, the Delaware Corporations Code, the Securities Exchange Act, the Securities Act, and the state securities laws, neither Buyer nor any of its Subsidiaries needs to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement.

(e) Filings with SEC. Buyer has made all filings with SEC that it has been required to make under the Securities Act and the Securities Exchange Act (collectively the " Public Reports "). Each of the Public Reports has complied with the Securities Act and the Securities Exchange Act in all material respects. None of the Public Reports, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Buyer has delivered to Target a correct and complete copy of each Public Report (together with all exhibits and schedules thereto and as amended to date).

(f) Financial Statements. Buyer has filed quarterly reports on Form 10-Q for the fiscal quarters ended July 31, 2007 (the " Most Recent Fiscal Quarter End "), April 30, 2007, and January 31, 2007 and an Annual Report on Form 10-K for the fiscal year ended October 31, 2007. The financial statements included in or incorporated by reference into these Public Reports (including the related notes and schedules) have been prepared in accordance with GAAP throughout the periods covered thereby, present fairly the financial condition of Buyer and its Subsidiaries as of the indicated dates and the results of operations of Buyer and its Subsidiaries for the indicated periods, and are correct and complete in all respects, and are consistent with the books and records of Buyer and its Subsidiaries; provided, however , that the interim statements are subject to normal year-end adjustments.

(g) Events Subsequent to Most Recent Fiscal Quarter End Since the Most Recent Fiscal Quarter End, there has not been any Material Adverse Change.

(h) Undisclosed Liabilities. Neither Buyer nor any of its Subsidiaries has any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for taxes, except for (i) liabilities set forth on the face of the balance sheet dated as of the Most Recent Fiscal Quarter End (rather than in any notes thereto) and (ii) liabilities that have arisen after the Most Recent Fiscal Quarter End in the Ordinary Course of Business (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement, or violation of law) and disclosed to Target.

(i) Brokers Fees. Neither Buyer nor any of its Subsidiaries has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

(j) Continuity of Business Enterprise. Buyer operates at least one significant historic business line, or owns at least a significant portion of its historic business assets, in each case within the meaning of Reg. 1.368-1(d).

(k) Disclosure. The Information Statement will comply with the Securities Exchange Act in all material respects. The Information Statement will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they will be made, not misleading; provided, however, that Buyer makes no representation or warranty with respect to any information that Target will supply specifically for use in the Information Statement.

4. Target's Representations and Warranties

Target represents and warrants to Buyer that the statements contained in this Section 4 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Section 4), except as set forth in the Disclosure Schedule. The Disclosure Schedule will be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Section 4.

(a) Organization. Target is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

(b) Capitalization. The entire authorized capital stock of Target consists of one million (1,000,000) Target Shares, of which 800,000 Target Shares are issued and outstanding and no Target Shares are held in treasury.

(c) Authorization of Transaction. Target has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder; provided, however, that Target cannot consummate the Merger unless and until it receives the Requisite Target Stockholder Approval. This Agreement constitutes the valid and legally binding obligation of Target, enforceable in accordance with its terms and conditions.

(d) Non-contravention. To the knowledge of any director or officer of Target, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Target is subject or any provision of the charter, bylaws, or other governing documents of Target or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Target is a party or by which it is bound or to which any of its assets is subject, except where the violation, conflict, breach, default, acceleration, termination, modification, cancellation, or failure to give notice would not have a Material Adverse Effect. To the knowledge of any director or officer of Target, and other than in connection with the provisions of the Nevada Revised Statutes, the Delaware Corporations Code, the Securities Exchange Act, the Securities Act, and the state securities laws, Target does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement, except where the failure to give notice, to file, or to obtain any authorization, consent, or approval would not have a Material Adverse Effect.

(e) Brokers Fees. Target does not have any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Buyer or any of its Subsidiaries could become liable or obligated.

(f) Disclosure. None of the information that Target will supply specifically for use in the Information Statement will contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they will be made, not misleading.

5. Covenants

The Parties agree as follows with respect to the period from and after the execution of this Agreement.

(a) General .. Each of the Parties will use its reasonable best efforts to take all actions and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the Closing conditions set forth in Section 6 below).

(b) Notices and Consents. Buyer will give any notices (and will cause each of its Subsidiaries to give any notices) to third parties, and will use its reasonable best efforts to obtain (and will cause each of its Subsidiaries to use its reasonable best efforts to obtain) any third party consents referred to in Section 3(d) above.

(c) Regulatory Matters and Approvals. Each of the Parties will (and Buyer will cause each of its Subsidiaries to) give any notices to, make any filings with, and use its reasonable best efforts to obtain any authorizations, consents, and approvals of governments and governmental agencies in connection with the matters referred to in Section 3(d) and Section 4(d) above. Without limiting the generality of the foregoing:

(i) Securities Act, Securities Exchange Act, and State Securities Laws. Buyer will prepare and file with the SEC the Information Statement. The Parties will use their reasonable best efforts to respond to the comments of the SEC thereon and will make any further filings (including amendments and supplements) in connection therewith that may be necessary, proper, or advisable. Target will provide Buyer, and Buyer will provide Target, with whatever information and assistance in connection with the foregoing filings the other Party may reasonably request. Buyer will take all actions that may be necessary, proper, or advisable under state securities laws in connection with the offering and issuance of the Buyer Shares.

(d) Operation of Business Buyer will not (and will not cause or permit any of its Subsidiaries to) engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of Business. Without limiting the generality of the foregoing:

(i) neither Buyer nor any of its Subsidiaries will authorize or effect any change in its charter or bylaws, other than the approval of the Amended and Restated Bylaws;

(ii) neither Buyer nor any of its Subsidiaries will grant any options, warrants, or other rights to purchase or obtain any of its capital stock or issue, sell, or otherwise dispose of any of its stock (except upon the conversion or exercise of options, warrants, and other rights currently outstanding);

(iii) neither Buyer nor any of its Subsidiaries will declare, set aside, or pay any dividend or distribution with respect to its stock (whether in cash or in kind), or redeem, repurchase, or otherwise acquire any of its capital stock, in either case outside the Ordinary Course of Business;

(iv) neither Buyer nor any of its Subsidiaries will issue any note, bond, or other debt security or create, incur, assume, or guarantee any indebtedness for borrowed money or capitalized lease obligation outside the Ordinary Course of Business;

(v) neither Buyer nor any of its Subsidiaries will impose any Lien upon any of its assets outside the Ordinary Course of Business;

(vi) neither Buyer nor any of its Subsidiaries will make any capital investment in, make any loan to, or acquire the securities or assets of any other Person outside the Ordinary Course of Business;

(vii) neither Buyer nor any of its Subsidiaries will make any change in employment terms for any of its directors, officers, and employees outside the Ordinary Course of Business; and

(viii) neither Buyer nor any of its Subsidiaries will commit to any of the foregoing.

(e) Full Access. Buyer will (and will cause each of its Subsidiaries to) permit representatives of Target (including legal counsel and accountants) to have full access to all premises, properties, personnel, books, records (including tax records), contracts, and documents of or pertaining to Buyer and each of its Subsidiaries. Target will treat and hold as such any Confidential Information it receives from Buyer or any of its Subsidiaries in the course of the reviews contemplated by this Section 5 (e), will not use any of the Confidential Information except in connection with this Agreement, and, if this Agreement is terminated for any reason whatsoever, agrees to return to Buyer all tangible embodiments (and all copies) thereof that are in its possession.

(f) Notice of Developments Each Party will give prompt written notice to the other of any material adverse development causing a breach of any of its own representations and warranties in Section 3 and Section 4 above. No disclosure by any Party pursuant to this Section 5 (f), however, shall be deemed to amend or supplement the Disclosure Schedule or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant.

(g) Exclusivity. Buyer will not (and will not cause or permit any of its Subsidiaries to) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of all or substantially all of the capital stock or assets of Buyer or any of its Subsidiaries (including any acquisition structured as a merger, consolidation, or share exchange); provided, however , that Buyer, its Subsidiaries, and their directors and officers will remain free to participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing to the extent their fiduciary duties may require. Buyer shall notify Target immediately if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.

6. Conditions to Obligation to Close

(a) Conditions to Target's Obligation. The obligation of Target to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

(i) this Agreement, the Merger and the Amended and Restated Bylaws shall have received the Requisite Buyer Stockholder Approval and there shall be no dissenting shares;

(ii) Buyer and its Subsidiaries shall have procured all of the third-party consents specified in Section 5(b) above;

(iii) the representations and warranties set forth in Section 3 above shall be true and correct in all material respects at and as of the Closing Date, except to the extent that such representations and warranties are qualified by the term "material," or contain terms such as "Material Adverse Effect" or "Material Adverse Change," in which case such representations and warranties (as so written, including the term "material" or "Material") shall be true and correct in all respects at and as of the Closing Date;

(iv) Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the Closing, except to the extent that such covenants are qualified by the term "material," or contain terms such as "Material Adverse Effect" or "Material Adverse Change," in which case Buyer shall have performed and complied with all of such covenants (as so written, including the term "material" or "Material") in all respects through the Closing;

(v) no action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (C) adversely affect the right of Surviving Corporation to own the former assets, to operate the former business, and to control the former Subsidiaries of Buyer, or (D) adversely affect the right of any of the former Subsidiaries of Buyer to own its assets and to operate its business (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

(vi) Buyer shall have delivered to Target a certificate to the effect that each of the conditions specified above in 6(a)(i)-(v) is satisfied in all respects;

(vii) this Agreement and the Merger shall have received the Requisite Target Stockholder Approval;

(viii) all actions to be taken by Buyer in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to Target.

(ix) Shirley Wong shall have provided to Target a power of attorney and all share certificates respecting her ownership of Buyer Shares to permit the contribution of her Buyer Shares to the Surviving Corporation upon effectiveness of the Merger.

Target may waive any condition specified in this Section 6(a) if it executes a writing so stating at or prior to the Closing.

(b) Conditions to Buyer's Obligation. The obligation of Buyer to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

(i) this Agreement and the Merger shall have received the Requisite Target Stockholder Approval;

(ii) the representations and warranties set forth in Section 4 above shall be true and correct in all material respects at and as of the Closing Date, except to the extent that such representations and warranties are qualified by the term "material," or contain terms such as "Material Adverse Effect" or "Material Adverse Change," in which case such representations and warranties (as so written, including the term material or Material) shall be true and correct in all respects at and as of the Closing Date;

(iii) Target shall have performed and complied with all of its covenants hereunder in all material respects through the Closing, except to the extent that such covenants are qualified by the term "material," or contain terms such as "Material Adverse Effect" or "Material Adverse Change," in which case Target shall have performed and complied with all of such covenants (as so written, including the term "material" or "Material") in all respects through the Closing;

(iv) no action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (C) adversely affect the right of Surviving Corporation to own the former assets, to operate the former business, and to control the former Subsidiaries of Buyer, or (D) adversely affect the right of any of the former Subsidiaries of Buyer to own its assets and to operate its business (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

(v) Target shall have delivered to Buyer a certificate to the effect that each of the conditions specified above in 6(b)(i)-(iv) is satisfied in all respects;

(vi) this Agreement and the Merger shall have received the Requisite Buyer Stockholder Approval;

(vii) all actions to be taken by Target in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to Buyer.

Buyer may waive any condition specified in this Section 6(b) if it executes a writing so stating at or prior to the Closing.

7. Termination

(a) Termination of Agreement. Either Buyer or Target may terminate this Agreement with the prior authorization of its board of directors (whether before or after stockholder approval) as provided below:

(i) the Parties may terminate this Agreement by mutual written consent at any time prior to the Effective Time;

(ii) Target may terminate this Agreement by giving written notice to Buyer at any time prior to the Effective Time (A) in the event Buyer has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, Target has notified Buyer of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (B) if the Closing shall not have occurred on or before April 1, 2008, by reason of the failure of any condition precedent under Section 6 (a) hereof (unless the failure results primarily from Target breaching any representation, warranty, or covenant contained in this Agreement);

(iii) Buyer may terminate this Agreement by giving written notice to Target at any time prior to the Effective Time (A) in the event Target has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, Buyer has notified Target of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (B) if the Closing shall not have occurred on or before April 1, 2008, by reason of the failure of any condition precedent under Section 6 (b) hereof (unless the failure results primarily from Buyer breaching any representation, warranty, or covenant contained in this Agreement);

(iv) Either Buyer or Target may terminate this Agreement by giving written notice to the other Party at any time in the event this Agreement and the Merger fail to receive the Requisite Target Stockholder Approval or the Requisite Buyer Stockholder Approval respectively.

(b)Effect of Termination. If any Party terminates this Agreement pursuant to Section 7(a) above, all rights and obligations of the Parties hereunder shall terminate without any liability of any Party to any other Party (except for any liability of any Party then in breach); provided, however , that the confidentiality provisions contained in Section 5(e) above shall survive any such termination.

8. Miscellaneous

(a) Survival. None of the representations, warranties, and covenants of the Parties (other than as required by the provisions respecting the Share Escrow set forth in Section 8(b)) will survive the Effective Time.

(b) Recourse to the Share Escrow. The Share Escrow shall be available to compensate Target, and its respective officers, directors, employees, agents and affiliates, for any and all Losses (whether or not involving a Third Party Claim), incurred or sustained by Target, its respective officers, directors, employees, agents or Affiliates, directly or indirectly, as a result of any inaccuracy or breach of any representation, warranty, covenant or agreement of Buyer contained herein or in any instrument delivered by Buyer to Target at the Effective Time. For purposes of compensating Target in the event of a Loss arising from such breach, the Surviving Corporation shall be entitled, upon its determination that it has sustained such a Loss, to direct the Exchange Agent to distribute to Target shareholders pro rata that number of shares equal to the amount of such Loss, based on the fair market value of the Buyer Shares at the time of such determination. On the one year anniversary of the Effective Date, any Buyer Shares remaining in the Share Escrow shall be contributed to the Surviving Corporation and cancelled.

(c) Press Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the other Party; provided however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly traded securities (in which case the disclosing Party will use its reasonable best efforts to advise the other Party prior to making the disclosure).

(d) No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

(e) Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement between the Parties and supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.

(f) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party.

(g) Counterparts. This Agreement may be executed in one or more counterparts (including by means of facsimile), each of which shall be deemed an original but all of which together will constitute one and the same instrument.

(h) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

(i) Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) one (1) business day after being sent to the recipient by reputable overnight courier service (charges pre-paid), (iii) one (I) business day after being sent to the recipient by facsimile transmission or electronic mail, or (iv) four (4) business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient as set forth below:

If to Buyer or Shirley Wong: Copy to:

MyECheck, Inc, a Nevada corporation

If to Target: Copy to:

MyECheck, Inc., a Delaware Corporation

Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.

(j) Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California.

(k) Amendments and Waivers. The Parties may mutually amend any provision of this Agreement at any time prior to the Effective Time with the prior authorization of their respective boards of directors; provided, however, that any amendment effected subsequent to stockholder approval will be subject to the restrictions contained in the Nevada Revised Statutes and Delaware Corporations Code. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by both of the Parties. No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such default, misrepresentation, or breach of warranty or covenant.

(1) Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

(m) Expenses. Each of the Parties will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

(n) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context otherwise requires. The term "including" shall mean "including without limitation."

(o) Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.

(p) Tax Disclosure Authorization. Notwithstanding anything herein to the contrary, the Parties (and each Affiliate and Person acting on behalf of any Party) agree that each Party (and each employee, representative, and other agent of such Party) may disclose to any and all Persons, without limitation of any kind, the transaction's tax treatment and tax structure (as such terms are used in Code 6011 and 6112 and regulations thereunder) contemplated by this agreement and all materials of any kind (including opinions or other tax analyses) provided to such Party or such Person relating to such tax treatment and tax structure, except to the extent necessary to comply with any applicable federal or state securities laws; provided , however , that such disclosure many not be made until the earlier of date of (A) public announcement of discussions relating to the transaction, (B) public announcement of the transaction, or (C) execution of an agreement to enter into the transaction. This authorization is not intended to permit disclosure of any other information including (without limitation) (A) any portion of any materials to the extent not related to the transaction's tax treatment or tax structure, (B) the identities of participants or potential participants, (C) the existence or status of any negotiations, (D) any pricing or financial information (except to the extent such pricing or financial information is related to the transaction's tax treatment or tax structure), or (E) any other term or detail not relevant to the transaction's tax treatment or the tax structure.

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

TARGET:	MYECHECK, INC. a Delaware corporation

	By: /s/Ed Starrs
	Name: Ed Starrs Title: President

BUYER:	MYECHECK, INC. a Nevada corporation

	By: /s/Shirley Wong
	Name: Shirley Wong Title: President

	SHIRLEY WONG:

	/s/Shirley Wong

Exhibit A

Articles of Merger

Exhibit B

Certificate of Merger

Exhibit C

Amended and Restated Bylaws

EX-1.8 9 v392049_ex1-8.htm EXHIBIT 1.8

Exhibit 1.8

EX-1.9 10 v392049_ex1-9.htm EXHIBIT 1.9

Exhibit 1.9

EX-1.10 11 v392049_ex1-10.htm EXHIBIT 1.10

Exhibit 1.10

SETTLEMENT AGREEMENT

AND MUTUAL GENERAL RELEASE

This Settlement Agreement and Mutual General Release ("Settlement Agreement") is entered into as of the date of signature below by and between MyEcheck. Inc., a Nevada Corp. (hereinafter "MYEC"), and Edward R. Starrs, an individual, (hereinafter "STARRS") on the one hand (hereinafter collectively "Defendants"), Tangiers Investors, LP., a Delaware Limited Partnership (hereinafter "Tangiers") on the other hand.

WHEREAS, MYEC and Tangiers executed a prior settlement agreement thereinafter "Prior Settlement Agreement") on November 9, 2010, settling all claims in US District Court Case number 10-CV-816-JAI (BGS)(the —Action") in a principal amount of $45,500;

WHEREAS, MYEC and STARRS breached the Prior Settlement Agreement in December 2010:

WHEREAS, Magistrate Judge Bernard Skomal issued an order on September 13, 2011, compelling STARRS and MYEC to turn over to Tangiers the shares of stock pledged as security for the monies owed under the Prior Settlement Agreement and STARRS and MYEC failed to comply with that order:

WHEREAS, STARRS and MYEC have arranged for Sierra Global, LLC to purchase the convertible debenture held by Tangiers the breach of which was the subject of the Action;

THEREFORE, in consideration of the foregoing, the terms and conditions set forth below and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Promises:

(a) Upon execution of this Settlement Agreement in exchange for and in consideration of the promises of Tangiers and its release of claims as set forth herein below, Defendants promise the following:

Sierra Global, I.LC shall pay to Tangiers a total of $45,500 ("Settlement Amount"). The first payment in the amount of $22,750.00 shall be tendered to 'Tangiers upon execution of this Settlement Agreement, with the balance to be paid no later than thirty (30) days from the date of execution of this Settlement Agreement. Payments shall be made by wire transfer or cashier’s check made payable to Tangiers Investors. L.P. Payments shall be tendered to Tangiers at 402 W. Broadway, Suite 400, San Diego, California 92101.

(b) Pursuant to the Prior Settlement Agreement, STARRS and MYEC are liable jointly and severally for payment of the entire $45,500 due thereunder. If Sierra Global. LLC fails to pay the entire Settlement Amount in consideration for the convertible debenture the unpaid balance shall be owed by SLUMS and MYEC jointly and severally.

(c) Upon execution of this Settlement Agreement, in exchange for and in consideration of these promises of STARRS and MYEC and their release of claims as set forth herein below, Tangiers promises the following:

No later than three business days from the date that funds clear in Tangiers's account for the total amount of the Settlement Amount ($45,500), Tangiers shall tender to Sierra Global, LLC the convertible debenture that was the subject of the Action at the address for notice listed herein.

(d) Tangiers's release of claims set forth below shall only become effective upon the date that funds for the ball Settlement Amount ($45,500) clear in Tangiers's bank account.

(e) If Sierra Global. LLC fails to tender payment of the full Settlement Amount ($45.500) to Tangiers within thirty days of the execution of this Settlement Agreement. MYEC and STARRS stipulate to the entry of judgment in El Dorado County Superior Court for any unpaid balance of the Settlement Amount. Said stipulated judgment shall be entered against STARRS and MYEC jointly and severally.

2. Settlement of Contested Matters

This Settlement Agreement represents a compromise and settlement of all contested matters between the parties hereto in connection with the Action and the prior settlement of the Action any claims they may have in connection thereto and nothing herein shall be construed as an admission of any liability by any party hereto.

3. Release

(a) In consideration for their promises set forth in paragraph 1 of this Settlement Agreement and other good and valuable consideration set forth herein, STARRS and MYEC hereby release Tangiers, its successors, assigns, representatives, employees, agents, attorneys and each of them from all claims, demands contracts, obligations. controversies, expenses, liabilities and any causes of action whatsoever which STARRS or MYEC may now possess, which may have arisen prior to the date hereof or which may hereafter be claimed to arise, whether known or unknown, including, but not limited to, any claim which relates to the subject matter of the Action or which was or might have been alleged as a claim or demand in an action on the Debenture by STARRS or MYEC or relating to, or arising out of or otherwise concerning the Debenture (hereinafter collectively "Defendants' Released Claims"), save and except that neither STARRS nor MYEC release any rights created or reserved in this Settlement Agreement.

(b) In consideration for their promises set forth in paragraph 1 of this Settlement Agreement, and other good and valuable consideration set forth herein, Tangiers hereby releases STARRS and MVEC, their successors, assigns, representatives, employees, agents, attorneys and each of them from all claims, demands contracts, obligations, controversies, expenses, liabilities and any causes of action whatsoever which Tangiers may now possess, which may have arisen prior to the date hereof or which may hereafter be claimed to arise whether known or unknown, including, but not limited to. any claim which relates to the subject matter of the Action or which was or might have been alleged as a claim or demand in an action on the Debenture by Tangiers or relating to, or arising out of or otherwise concerning the Debenture thereinafter collectively "Tangiers's Released Claims"), save and except that Tangiers does not release any rights created or reserved in this Settlement Agreement.

(b) In entering into this Settlement Agreement, each of the parties hereto is aware of California Civil Code Section 1542, which provides as follows:

1542. A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release. Which if known by him must have materially affected his settlement with the debtor.

Having had the legal effect of California Civil Code Section 1542 explained to them by their own counsel. Tangiers and the Defendants knowingly and intentionally waive and relinquish all rights thereunder.

4. Assignment

(a) STARRS and MYEC represent and warrant that the) have not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity any of the Defendants' Released Claims they have released herein.

(b) Tangiers represents and warrants that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity any of the
Tangiers's Released Claims it has released herein.

5. General Provisions

(a) Further Documents.

Each party shall execute and deliver all such further instruments, documents and papers, and shall perform any and all acts necessary. to give full force and effect to all of the terms and provisions of this Settlement Agreement.

(b) Successors and Assigns.

Except where expressly provided to the contrary, this Settlement Agreement and all provisions of it shall inure to the benefit of and be binding upon the parties hereto, their successors in interest, assigns, administrators, executors, heirs and devisees.

If any provision of this Settlement Agreement, as applied to any pany or to any circumstance, shall be found by a court to be void, invalid or unenforceable, the same shall in no way affect any other provision of this Settlement Agreement, the application of any such provision in any other circumstance or the validity or enforceability of this Settlement Agreement.

(d) Notices.

With the exception of the notices described in paragraph 1 (d) of this Settlement Agreement, all notices or demands shall be in writing and shall be sent by United States certified mail, return receipt requested or private, express overnight delivery to the addresses listed below. Delivery shall be deemed conclusively made twenty-four (24) hours after deposit thereof in the US mail or with the private.

If to Tangiers Investors, L.P.:

Mr. Robert Papiri

Tangiers Investors, L.P.

402 W. Broadway. Suite 400

San Diego, California 92101

If to Starrs:

Mr. Edward Starrs

If to MyEcheck, Inc.:

If to Sierra Global, LLC:

Any party may, by virtue of written notice in compliance with this paragraph, alter or change the address or the identity of the person to whom any notice or copy thereof, is to be delivered.

(e) Waiver.

A waiver by any party of any of the terms and conditions of this Settlement Agreement in any one instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof Subject to sub-section (g) of this paragraph any party may waive any term, provision or condition included for the benefit of such party.

(t) Construction.

This Settlement Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts entered into and fully to be performed therein in all matters of interpretation, whenever necessary to give effect to any provision of this Settlement Agreement, each gender shall include the others, the singular shall include the plural, and the plural shall include the singular. The titles of the paragraphs of this Settlement Agreement are for convenience only and shall not affect the interpretation of any provision or condition of this Settlement Agreement.

All remedies, rights, undertakings, obligations and agreements contained in this Settlement Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking obligation or agreement of any party. Each party and its counsel have reviewed and revised this Settlement Agreement. As a result the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Settlement Agreement or any amendments or exhibits to it.

(g) Entire Understanding.

This Settlement Agreement constitutes the entire agreement and understanding between the parties hereto relating to the subject matter contained herein and supersedes all prior and collateral agreements, understandings, statements and negotiations of the parties. Each party acknowledges that no representations, inducements promises, or agreements, oral or written, with reference to the subject matter hereof have been made other than as expressly set forth herein. Any amendment, modification, rescission, waiver or termination of this Settlement Agreement must be in writing and signed by all of the parties hereto.

(h) Survival of Representations.

All representations, warranties and covenants contained herein shall survive the effective date of this Settlement Agreement and shall fully inure to the benefit of all parties to this Settlement Agreement.

(i) Third Party Rights.

Except as may be expressly set forth herein, the parties hereto do not intend to confer any rights or remedies upon any person other than the parties hereto.

(j) Attorney’s Fees.

In the event of any litigation or arbitration between the parties hereto respecting or arising out of this Settlement Agreement, the prevailing party whether or not such litigation or arbitration proceeds to final judgment or determination shall be entitled to recover all of the attorney's fees incurred with respect to such legal efforts, As used herein, the term “attorney's fees" shall mean the full and actual cost of any legal services performed in connection with the matters involved calculated on the basis of usual fees charged by the attorneys performing such services, and shall not be limited to “reasonable attorney's fees" as defined in any statute or rule of Court.

(k) Place of Litigation.

The parties hereto agree that any action between them shall be heard in the State of California, and they expressly consent to the courts sitting in California and/or the United States District Court of California as the exclusive jurisdiction and venue for the adjudication of any litigation arising out of or in connection with this Settlement Agreement.

(1) Counterparts.

This Settlement Agreement may be executed in counter-parts which taken together, shall constitute the whole of the agreement as between the parties.

(m) Time.

Time is of the essence.

(n) Recitals.

The recitals set forth above preceding paragraph 1 of this Settlement Agreement are true and accurate and are incorporated herein at length.

(o) Effective Date.

The term "effective date" as set forth herein shall for all purposes be the latest date set forth upon the signature page of this Settlement Agreement.

(p) Computation of Period.

All periods of time referred to in this Settlement Agreement shall include Saturdays, Sundays, and state and national holidays, unless business days are specified. If the last date to perform any act or deliver any notice falls on a Saturday. Sunday or state or national holiday, such act may be timely performed on the next succeeding day which is not a Saturday, Sunday or state national holiday.

(q) Costs and Fees.

The parties shall bear all of their own court costs and attorneys fees incurred in connection with the Action and the drafting and execution of this Settlement Agreement.

In the event of any litigation, arbitration or other proceeding by which one party either seeks to enforce its rights under this Settlement Agreement (whether in contract, tort or both) or seeks declaration of any rights or obligations under this Settlement Agreement, the prevailing party shall be awarded its attorneys' fees, court costs and expenses incurred with respect to such legal efforts.

(r) Non-Disparagement.

All parties hereto mutually promise and agree in perpetuity to refrain from making any disparaging remarks to any person(s) about any of the other parties to this Settlement Agreement, their officers, directors, agents, attorneys, heirs, executors, administrators, successors and assigns and any and all companies, partnerships and individuals, associated or affiliated or otherwise connected therewith, and individually and collectively their agents, servants, attorneys, successors, heirs, executors associations or partnerships.

(s) Capacity.

The parties hereto warrant and represent that they have the legal capacity to enter into this Settlement Agreement. MyEcheck, Inc. and Tangiers Investors, L.F. are currently in good standing with the jurisdictions in which they are respectively organized.

(t) Further Documents.

Each party shall execute and deliver all such further instruments documents and papers and shall perform any and all acts necessary, to give full force and effect to all of the terms and provisions of this Settlement Agreement and the purchase of the convertible debenture by Sierra Global, LLC.

IN WITNESS WHEREOF, each party has executed this Settlement Agreement on the date hereinafter set forth.

MyEcheck, Inc.

By: /s/ Edward R. Starrs	October 11, 2013
Edward R. Starrs - President

Edward R. Starrs

By: /s/ Edward R. Starrs	October 11, 2013
Edward R. Starrs — individually

Tangiers, L.P.

By: /s/ Robert Papiri	October 16, 2013
Robert Papiri
Managing Member of Tangiers Capital, LLC
The General Partner of Tangiers, L.P.

Sierra Global, LLC

By: /s/ Mathew A. Hanson	October 15, 2013
Mathew A. Hanson
Managing Director

EX-1.11 12 v392049_ex1-11.htm EXHIBIT 1.11

Exhibit 1.11

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of April 26, 2010, by and between MyECheck, Inc., a Nevada corporation, with headquarters located at 1190 Suncast Lane, Suite 5, El Dorado Hills, CA 95762 (the “Company”), and ASHER ENTERPRISES, INC., a Delaware corporation, with its address at 1 Linden Place, Suite 207, Great Neck, NY 11021 (the “Buyer”).

WHEREAS:

A. The Company and the Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);

B. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement an 8% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $50,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

C. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

1. Purchase and Sale of Note.

a. Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

b. Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly executed on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

c. Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on April 28, 2010, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

2. Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

a. Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable (i) on account of interest on the Note, (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

b. Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

c. Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

d. Information. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein.

e. Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

f. Transfer or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. In the event that the Company does not reasonably accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, within three (3) business days of delivery of the opinion to the Company, the Company shall pay to the Buyer liquidated damages of five percent (5%) of the outstanding amount of the Note per day plus accrued and unpaid interest on the Note, prorated for partial months, in cash or shares at the option of the Buyer (“Standard Liquidated Damages Amount”). If the Buyer elects to be pay the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price (as defined in the Note) at the time of payment.

g. Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

“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.”

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (c) such holder provides the Company with reasonable assurances that such Security can be sold pursuant to Rule 144 or Regulation S. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.

h. Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

i. Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.

3. Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

a. Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

b. Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

c. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: (i) 200,000,000 shares of Common Stock, $0.001 par value per share, of which 70,864,772 shares are issued and outstanding; no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 4,545,455 shares are reserved for issuance upon conversion of the Note (subject to adjustment pursuant to the Company’s covenant set forth in Section 4(g) below). All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as disclosed in the SEC Documents and in Schedule 3(c), as of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has filed in its SEC Documents true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

d. Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

e. Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

f. No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect).

Neither the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as a Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”) and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

g. SEC Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). The Company has delivered to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, 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 light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to December 31, 2009, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act. For the avoidance of doubt, filing of the documents required in this Section 3(g) via the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) shall satisfy all delivery requirements of this Section 3(g).

h. Absence of Certain Changes. Since December 31, 2009, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

i. Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

j. Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); Except as disclosed in the SEC Documents, there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

k. No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

l. Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and 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, except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all 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 know of no basis for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxing authority.

m. Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (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, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

n. Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

o. Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that no Buyer is 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 statement made by any Buyer or any of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

p. No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

q. No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

r. Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Since December 31, 2009, neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

s. Environmental Matters.

(i) There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

(ii) Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s or any of its Subsidiaries’ business.

(iii) There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.

t. Title to Property. Except as disclosed in the SEC Documents the Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects or such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

u. Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such 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 at a cost that would not have a Material Adverse Effect. The Company has provided to Buyer true and correct copies of all policies relating to directors’ and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage.

v. Internal Accounting Controls. Except as disclosed in the SEC Documents the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company’s board of directors, 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 generally accepted accounting principles 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.

w. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

x. Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year. For the avoidance of doubt any disclosure of the Borrower’s ability to continue as a “going concern” shall not, by itself, be a violation of this Section 3(x).

y. No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment Company.

4. COVENANTS.

a. Best Efforts. The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

b. Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.

c. Use of Proceeds. The Company shall use the proceeds from the sale of the Note for working capital and other general corporate purposes and shall not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership, enterprise or other person (except in connection with its currently existing direct or indirect Subsidiaries).

d. Right of First Refusal. Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering, including the terms and conditions, and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”) (and subject to the exceptions described below), the Company will not conduct any equity financing (including debt with an equity component) (“Future Offerings”) during the period beginning on the Closing Date and ending nine (9) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply to successive amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act), (ii) issuances to employees, officers, directors, contractors, consultants or other advisors approved by the Board, (iii) issuances to strategic partners or other parties in connection with a commercial relationship, or providing the Company with equipment leases, real property leases or similar transactions approved by the Board (iv) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company. The Right of First Refusal also shall not apply to the issuance of securities upon exercise or conversion of the Company’s options, warrants or other convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or restricted stock plan approved by the shareholders of the Company.

e. Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer Notwithstanding anything herein to the contrary, the Company’s obligation to reimburse Buyer’ expenses shall be $3,000.

f. Financial Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders. For the avoidance of doubt, filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above via a recognized wire service shall satisfy the delivery requirements of this Section 4(f).

g. Authorization and Reservation of Shares. The Company shall at all times have authorized, and reserved for the purpose of issuance, a sufficient number of shares of Common Stock to provide for the full conversion or exercise of the outstanding Note and issuance of the Conversion Shares in connection therewith (based on the Conversion Price of the Note in effect from time to time) and as otherwise required by the Note. The Company shall not reduce the number of shares of Common Stock reserved for issuance upon conversion of Note without the consent of the Buyer. The Company shall at all times maintain the number of shares of Common Stock so reserved for issuance at an amount (“Reserved Amount”) equal to three times the number that is then actually issuable upon full conversion of the Note and Additional Note (based on the Conversion Price of the Note in effect from time to time). If at any time the number of shares of Common Stock authorized and reserved for issuance (“Authorized and Reserved Shares”) is below the Reserved Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of shareholders to authorize additional shares to meet the Company’s obligations under this Section 4(g), in the case of an insufficient number of authorized shares, obtain shareholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Reserved Amount. If the Company fails to obtain such shareholder approval within forty five (45) days following the date on which the number of Reserved Amount exceeds the Authorized and Reserved Shares, the Company shall pay to the Buyer the Standard Liquidated Damages Amount, in cash or in shares of Common Stock at the option of the Buyer. If the Buyer elects to be paid the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price at the time of payment. In order to ensure that the Company has authorized a sufficient amount of shares to meet the Reserved Amount at all times, the Company must deliver to the Buyer at the end of every month a list detailing (1) the current amount of shares authorized by the Company and reserved for the Buyer; and (2) amount of shares issuable upon conversion of the Note and as payment of interest accrued on the Note for one year. If the Company fails to provide such list within fifteen (15) business days of the end of each month, the Company shall pay the Standard Liquidated Damages Amount, in cash or in shares of Common Stock at the option of the Buyer, until the list is delivered. If the Buyer elects to be paid the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price at the time of payment.

h. Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as any Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as any Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the NYSE Alternext and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any material notices it receives from the OTCBB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.

i. Corporate Existence. So long as a Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or NYSE Alternex.

j. No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

k. Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

l. Trading Activities. Neither the Buyer nor their affiliates has an open short position (or other hedging or similar transaction) in the common stock of the Company and the Buyer agree that they shall not, and that they will cause their affiliates not to, directly or indirectly, engage in any short sales of or hedging (or similar) transactions with respect to the common stock of the Company.

5. Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If a Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

6. Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to a Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, 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:

a. The Buyer shall have executed this Agreement and delivered the same to the Company.

b. The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

c. The representations and warranties of the applicable Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the applicable Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the applicable Buyer at or prior to the Closing Date.

d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

7. Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

a. The Company shall have executed this Agreement and delivered the same to the Buyer.

b. The Company shall have delivered to the Buyer duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

c. The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

d. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions relating to the transactions contemplated hereby.

e. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

f. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

g. The Conversion Shares shall have been authorized for quotation on the OTCBB and trading in the Common Stock on the OTCBB shall not have been suspended by the SEC or the OTCBB.

h. The Buyer shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.

8. Governing Law; Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document 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 Agreement 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 law.

b. Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

c. Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e. Entire Agreement; Amendments. 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 Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

f. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Company, to:

MyECheck, Inc.

1190 Suncast Lane, Suite 5

El Dorado Hills, CA 95762

Attn: Edward R. Starrs, President

facsimile: 916-939-2003

With a copy by fax only to (which copy shall not constitute notice):

Anslow & Jaclin LLP

Attn: Joseph Lucoksy, Esq.
195 Route 9 South, Suite 207
Manalapan, NJ 07726

facsimile: 732-577-1188

If to the Buyer:

ASHER ENTERPRISES, INC.

1 Linden Pl., Suite 207

Great Neck, NY. 11021

Attn: Curt Kramer, President
facsimile: 516-498-9894

With a copy by fax only to (which copy shall not constitute notice):

Naidich Wurman Birnbaum & Mayday LLP

80 Cuttermill Road, Suite 410

Great Neck, NY 11021

Attn: Bernard S. Feldman, Esq.

facsimile: 516-466-3555

Each party shall provide notice to the other party of any change in address.

g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor any Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from a Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

h. 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.

i. Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder. The Company agrees to indemnify and hold harmless each of the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

j. Publicity. The Company, and the Buyer shall have the right within a reasonable period of time to review before issuance of any press releases, SEC, OTCBB or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, OTCBB(or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy therof and be given an opportunity to comment thereon).

k. 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 the 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.

l. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

m. Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

MyECheck, Inc.

By: /s/ Edward R. Starrs
Edward R. Starrs
President

ASHER ENTERPRISES, INC.

By: /s/ Curt Kramer
Name: Curt Kramer
Title: President

1 Linden Pl., Suite 207
Great Neck, NY. 11021

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Principal Amount of Note:	$50,000.00

Aggregate Purchase Price:	$50,000.00

EX-1.12 13 v392049_ex1-12.htm EXHIBIT 1.12

Exhibit 1.12

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE 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.

Principal Amount: $50,000.00	Issue Date: April 26, 2010
Purchase Price: $50,000.00

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, MyECheck, Inc., a Nevada corporation (hereinafter called the "Borrower"), hereby promises to pay to the order of ASHER ENTERPRISES, INC., a Delaware corporation, or registered assigns (the "Holder") the sum of $50,000.00 together with any interest as set forth herein, on January 28, 2011 (the "Maturity Date"), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the "Interest Rate") per annum from the date hereof (the "Issue Date") until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein with the written consent of the Holder which may be withheld for any reason or for no reason. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid ("Default Interest"). Interest shall commence accruing on the Issue Date, shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the "Common Stock") in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term "business day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the "Purchase Agreement").

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1 Conversion Right. The Holder shall have the right from time to time, and at any time on or prior to the later of (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion"); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13 (d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations I 3D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days' prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver).. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the "Notice of Conversion"), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted

(2) at the Borrower's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, provided, however, that the Company shall have the right to pay any or all interest in cash plus (3) at the Borrower's option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder's option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

1.2 Conversion Price.

(a) Calculation of Conversion Price. The conversion price (the "Conversion Price") shall equal the Variable Conversion Price (as defined herein)(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean the Applicable Percentage (as defined herein) multiplied by the Market Price (as defined herein). "Market Price" means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Borrower via facsimile (the "Conversion Date"). "Trading Price" means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market (the "OTCBB") as reported by a reliable reporting service ("Reporting Service") mutually acceptable to Borrower and Holder and hereafter designated by Holders of a majority in interest of the Notes and the Borrower or, if the OTCBB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. "Trading Day" shall mean any day on which the Common Stock is traded for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. "Applicable Percentage" shall mean 55%.

(b) Conversion Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower's Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section 1.2(a). For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

1.3 Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Borrower's obligations pursuant to Section 4(g) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

If, at any time a Holder of this Note submits a Notice of Conversion, and the Borrower does not have sufficient authorized but unissued shares of Common Stock available to effect such conversion in accordance with the provisions of this Article I (a "Conversion Default"), the Borrower shall issue to the Holder all of the shares of Common Stock which are then available to effect such conversion. The portion of this Note which the Holder included in its Conversion Notice and which exceeds the amount which is then convertible into available shares of Common Stock (the "Excess Amount") shall, notwithstanding anything to the contrary contained herein, not be convertible into Common Stock in accordance with the terms hereof until (and at the Holder's option at any time after) the date additional shares of Common Stock are authorized by the Borrower to permit such conversion, at which time the Conversion Price in respect thereof shall be the lesser of (i) the Conversion Price on the Conversion Default Date (as defined below) and (ii) the Conversion Price on the Conversion Date thereafter elected by the Holder in respect thereof. In addition, the Borrower shall pay to the Holder payments ("Conversion Default Payments") for a Conversion Default in the amount of (x) the sum of (1) the then outstanding principal amount of this Note plus (2) accrued and unpaid interest on the unpaid principal amount of this Note through the Authorization Date (as defined below) plus (3) Default Interest, if any, on the amounts referred to in clauses (1) and/or (2), multiplied by (y) .24, multiplied by (z) (N/365), where N = the number of days from the day the holder submits a Notice of Conversion giving rise to a Conversion Default (the "Conversion Default Date") to the date (the "Authorization Date") that the Borrower authorizes a sufficient number of shares of Common Stock to effect conversion of the full outstanding principal balance of this Note. The Borrower shall use its commercially reasonable best efforts to authorize a sufficient number of shares of Common Stock as soon as practicable following the earlier of (i) such time that the Holder notifies the Borrower or that the Borrower otherwise becomes aware that there are or likely will be insufficient authorized and unissued shares to allow full conversion thereof and (ii) a Conversion Default. The Borrower shall send notice to the Holder of the authorization of additional shares of Common Stock, the Authorization Date and the amount of Holder's accrued Conversion Default Payments. The accrued Conversion Default Payments for each calendar month shall be paid in cash or shall be convertible into Common Stock (at such time as there are sufficient authorized shares of Common Stock) at the applicable Conversion Price, at the Borrower's option, as follows:

(a) In the event Holder elects to take such payment in cash, cash payment shall be made to Holder by the fifth (5th) day of the month following the month in which it has accrued; and

(b) In the event Holder elects to take such payment in Common Stock, the Holder may convert such payment amount into Common Stock at the Conversion Price (as in effect at the time of conversion) at any time after the fifth day of the month following the month in which it has accrued in accordance with the terms of this Article I (so long as there is then a sufficient number of authorized shares of Common Stock).

The Holder's election shall be made in writing to the Borrower at any time prior to 6:00 p.m., New York, New York time, on the third day of the month following the month in which Conversion Default payments have accrued. If no election is made, the Holder shall be deemed to have elected to receive cash. Nothing herein shall limit the Holder's right to pursue actual damages (to the extent in excess of the Conversion Default Payments) for the Borrower's failure to maintain a sufficient number of authorized shares of Common Stock, and each holder shall have the right to pursue all remedies available at law or in equity (including degree of specific performance and/or injunctive relief).

1.4 Method of Conversion.

(a) Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile or other reasonable means of communication dispatched on the Conversion Date prior to 5:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. 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 represented by this Note may be less than the amount stated on the face hereof.

(c) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder's account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) (such second business day being hereinafter referred to as the "Deadline") in accordance with the terms hereof and the Purchase Agreement (including, without limitation, in accordance with the requirements of Section 2(g) of the Purchase Agreement.

(e) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower's obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 5:00 p.m., New York, New York time, on such date.

(f) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its commercially reasonable best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system.

(g) Failure to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is more than three (3) business days after the Deadline (the Delivery Deadline") (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Delivery Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note.

1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are transferred to an "affiliate" (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially 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."

The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act and the shares are so sold or transferred, (ii) such Holder provides the Borrower or its transfer agent with reasonable assurances that the Common Stock issuable upon conversion of this Note (to the extent such securities are deemed to have been acquired on the same date) can be sold pursuant to Rule 144 or (iii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold.

1.6 Effect of Certain Events.

(a) Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall be treated pursuant to Section 1.6(b) hereof.

"Person" shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

(c) Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower's shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

(d) Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock issued directly to vendors or suppliers of the Company in satisfaction of amounts owed to such vendors or suppliers (provided, however, that such vendors or suppliers shall not have an arrangement to transfer, sell or assign such shares of Common Stock prior to the issuance of such shares), any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.

The Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock ("Convertible Securities") (such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as "Options") and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon the exercise of such Options" is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

Additionally, the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon such conversion or exchange" is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

(e) Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants, securities or other property (the "Purchase Rights") pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) 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 Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder of a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

1.7 Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the "Maximum Share Amount"), which shall be 4.99% of the total shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued (the date of which is hereinafter referred to as the "Maximum Conversion Date"), if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or any of its securities on the Borrower's ability to issue shares of Common Stock in excess of the Maximum Share Amount (a "Trading Market Prepayment Event"), in lieu of any further right to convert this Note, and in full satisfaction of the Borrower's obligations under this Note, the Borrower shall pay to the Holder, within fifteen (15) business days of the Maximum Conversion Date (the "Trading Market Prepayment Date"), an amount equal to 150% times the sum of (a) the then outstanding principal amount of this Note immediately following the Maximum Conversion Date, plus (b) accrued and unpaid interest on the unpaid principal amount of this Note to the Trading Market Prepayment Date, plus(c) Default Interest, if any, on the amounts referred to in clause (a) and/or (b) above, plus (d) any optional amounts that may be added thereto at the Maximum Conversion Date by the Holder in accordance with the terms hereof (the then outstanding principal amount of this Note immediately following the Maximum Conversion Date, plus the amounts referred to in clauses (b), (c) and (d) above shall collectively be referred to as the "Remaining Convertible Amount"). In the event that the sum of (x) the aggregate number of shares of Common Stock issued upon conversion of this Note and the other Notes issued pursuant to the Purchase Agreement plus (y) the aggregate number of shares of Common Stock that remain issuable upon conversion of this Note and the other Notes issued pursuant to the Purchase Agreement, represents at least one hundred percent (100%) of the Maximum Share Amount (the "Triggering Event"), the Borrower will use its commercially reasonable best efforts to seek and obtain Shareholder Approval (or obtain such other relief as will allow conversions hereunder in excess of the Maximum Share Amount) as soon as practicable following the Triggering Event and before the Maximum Conversion Date. As used herein, "Shareholder Approval" means approval by the shareholders of the Borrower to authorize the issuance of the full number of shares of Common Stock which would be issuable upon full conversion of the then outstanding Notes but for the Maximum Share Amount.

1.8 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder's allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder's rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower's failure to convert this Note.

ARTICLE II. CERTAIN COVENANTS

2.1 Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders' rights plan which is approved by a majority of the Borrower's disinterested directors.

2.2 Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

2.3 Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, create, incur, assume or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors, financial institutions or other lenders incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.

2.4 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

2.5 Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.

2.6 Contingent Liabilities. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, which shall not be unreasonably withheld, assume, guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection and except assumptions, guarantees, endorsements and contingencies (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, and (b) similar transactions in the ordinary course of business.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an "Event of Default") shall occur:

3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon within three business days of when due on this Note, whether at maturity, upon a Trading Market Prepayment Event pursuant to Section 1.7, upon acceleration or otherwise;

3.2 Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Borrower shall have been notified thereof in writing by the Holder;

3.3 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder;

3.4 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, written statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement;

3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed;

3.6 Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) business days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld;

3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower;

3.8 Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the NYSE AMEX;

3.9 Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or immediately upon the Borrower ceasing to be subject to the reporting requirements of the Exchange Act; provided, however, that the Borrower shall have fifteen (15) days to cure any failure of the Borrower's obligation pursuant to the Exchange Act to file a current report on Form 8-K;

3.10 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business;

3.11 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower's ability to continue as a "going concern" shall not be an admission that the Borrower cannot pay its debts as they become due;

3.12 Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future);

3.13 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement. For the avoidance of doubt, any restatement related to new accounting pronouncements, including without limitation, for derivative accounting shall not constitute a default under this Section 3.13;

3.14 Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.2, 3.3, 3.4, 3.6, 3.8, or 3.9, 3.12 or 3.13 exercisable through the delivery of written notice to the Borrower by such Holders (the "Default Notice"), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus(x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the "Default Sum") or (ii) the "parity value" of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the "Default Amount") and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

ARTICLE IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

MyECheck, Inc.

1190 Suncast Lane, Suite 5

El Dorado Hills, CA 95762

Attn: Edward R. Starrs, President

facsimile: 916-939-2003

With a copy by fax only to (which copy shall not constitute notice):

Anslow & Jaclin, L.L.P.

Attn: Joseph Lucosky, Esq.

195 Route 9 South- Suite 204

Manalapan, NJ 07726

facsimile: 732-577-1188

If to the Holder:

ASHER ENTERPRISES, INC.

1 Linden Pl., Suite 207

Great Neck, NY. 11021

Attn: Curt Kramer, President

facsimile: 516-498-9894

With a copy by fax only to (which copy shall not constitute notice):

Naidich Wurman Birnbaum & Mayday LLP

80 Cuttermill Road, Suite 410

Great Neck, NY 11021

Attn: Bernard S. Feldman, Esq.

facsimile: 516-466-3555

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an "accredited investor" (as defined in Rule 501(a) of the 1933 Act) and must agree in writing to be bound by the same provisions of the original Holder under the Purchase Agreement. Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

4.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys' fees.

4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document 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 Agreement 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 law.

4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

4.8 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower's shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

4.10 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this April 26, 2010.

	MyECheck Inc.

	By:	/s/ Edward R. Starrs
		Edward R. Starrs
		President

EXHIBIT A

NOTICE OF CONVERSION

(To be Executed by the Registered Holder
in order to Convert the Notes)

The undersigned hereby irrevocably elects to convert $ ________ principal amount of the Note (defined below) into shares of common stock, $0.001 par value per share ("Common Stock"), of MyECheck, Inc., a Nevada corporation (the "Borrower") according to the conditions of the convertible note of the Borrower dated as of (the "Notes"), as of the date written below. If securities 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. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any. A copy of each Note is attached hereto (or evidence of loss, theft or destruction thereof).

The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").

Name of DTC Prime Broker:

Account Number:

In lieu of receiving shares of Common Stock issuable pursuant to this Notice of Conversion by way of a DWAC Transfer, the undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder's calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

Name:

Address:

The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable to the undersigned upon conversion of the Notes shall be made pursuant to registration of the securities under the Securities Act of 1933, as amended (the "Act"), or pursuant to an exemption from registration under the Act.

Date of Conversion:

Applicable Conversion Price:

Number of Shares of Common Stock to be Issued Pursuant to Conversion of the Notes:

Signature:

Name:

Address:

The Borrower shall issue and deliver shares of Common Stock to an overnight courier not later than three business days following receipt of the original Note(s) to be converted, and shall make payments pursuant to the Notes for the number of business days such issuance and delivery is late.

EX-1.13 14 v392049_ex1-13.htm EXHIBIT 1.13

Exhibit 1.13

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

(for completion by non-United States residents)

MYECHECK, INC.

THIS AGREEMENT MADE EFFECTIVE as of the ___ day of _______________, 2008 (the "Effective Date").

BETWEEN:

MYECHECK, INC., a private Delaware corporation with offices at Suite 5, 1190 Suncast Lane, El Dorado Hills, CA 95762;

(the “Company”)

AND:

THE PURCHASER NAMED AND SIGNING

AS PURCHASER ON SCHEDULE “A” HERETO.

(the “Purchaser”)

WHEREAS:

A. The Purchaser wishes to and hereby subscribes for and agrees to purchase the 2,000,000 units (the “Securities”) of the Company (based on its capitalization following effectiveness of the merger contemplated by the Merger Agreement, as defined below), each Security consisting of one common share in the capital of the Company and one full share purchase warrant (the “Warrant”), for aggregate proceeds of USD $1,000,000 (the “Funds”), all on the terms and subject to the conditions set forth in this Agreement, as defined herein. Each Warrant entitles the Subscriber to purchase one additional common share (the “Warrant Share”) in the capital of the Company for a period of two years from the issuance of the Securities, at a price of USD $2.00 ;

B. The Company desires to accept the Purchaser’s subscription for the Securities;

C. The Company intends to enter into that certain merger agreement, as amended and restated, with Sekoya Holdings, Ltd., a Nevada Corporation (the “Merger Agreement”);

D. It is the intention of the parties to this Agreement that the Securities shall not be issued or exercisable until after the effectiveness of the merger contemplated by the Merger Agreement;

E. It is the intention of the parties to this Agreement that this subscription will be made pursuant to appropriate exemptions (the "Exemptions") from the registration and prospectus or equivalent requirements of all rules, policies, notices, orders and legislation of any kind whatsoever (collectively the “Securities Rules”) of all jurisdictions applicable to this subscription; and

F. This investment involves risk and the parties hereto acknowledge that the Purchaser may be restricted from selling the Securities at any time in the future, except as otherwise provided herein.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements herein contained (the “Agreement”), the receipt of which is hereby acknowledged, the parties covenant and agree with each other as follows:

1. Subscription. The Purchaser hereby irrevocably subscribes for and agrees to purchase 2,000,000 units (the “Securities”) of the Company, each Security consisting of one common share in the capital of the Company and one full share purchase warrant (the “Warrant”), for aggregate proceeds of USD $1,000,000 (the “Funds”), all on the terms and subject to the conditions set forth in this Agreement, and as further set out on Schedule “A” hereto. Each Warrant entitles the Subscriber to purchase one additional common share (the “Warrant Share”) in the capital of the Company for a period of two years from the issuance of the Securities, at a price of USD $2.00 , as further set out on Schedule “B” hereto . Together with this Agreement, the Purchaser is delivering to the Company the full amount of the purchase price for the Securities in respect of which it is subscribing. The offering of Securities by the Company to the Purchaser (the “Offering”) is being conducted in reliance upon the exemption from registration requirements of the Securities Act of 1933 (the “Act”) set forth in Regulation S promulgated under the Act. The amounts paid by Purchaser hereunder shall be a non-interest bearing subscription advanced by Purchaser for which the Company’s only obligation is to issue the Securities.

A. The Securities shall not be issued, and the Warrants shall not be exercisable, until after the effectiveness of the merger contemplated by the Merger Agreement. The number of Securities issuable hereunder shall be calculable in accordance with the post-merger capitalization of the Company.

2. Representations and Warranties of the Purchaser. In order to induce the Company to enter into this Agreement, the Purchaser hereby represents and warrants to, and covenants with, the Company as follows:

A. The Purchaser is purchasing the Securities for the Purchaser’s own account (not as a nominee or agent) for investment purposes and not with a view towards resale or distribution of any part thereof. The Purchaser has no present arrangement or intention to sell or distribute the Securities, or to grant participation in the Securities. The Purchaser does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person, or to any third person, with respect to any of the Securities sold hereby;

B. The Purchaser acknowledges and agrees that the United States Securities & Exchange Commission has not reviewed the Offering and that the Securities have not been registered under the Act and may not be offered or sold in the United States or to U.S. persons unless the Securities are registered under the Act, sold in accordance with the provisions of Regulation S of the Act or pursuant to an available exemption from registration. The certificate representing the Securities or any shares issued upon exercise of the Warrants will bear the following legend and the Purchaser agrees to abide by the terms thereof:

The Securities (and any shares issuable upon exercise of warrants) represented hereby have not been registered under the Securities Act of 1933 (the “Act”), and have been issued in reliance upon an exemption from the registration requirements of the Act provided by Regulation S promulgated under the Act. Such Securities (and any shares issuable upon exercise of warrants) may not be re-offered for sale or resold or otherwise transferred except 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. Hedging transactions involving the Securities (and any shares issuable upon exercise of warrants) may not be conducted unless in compliance with the Act.

C. The Purchaser has had the opportunity to ask and receive answers to any and all questions the Purchaser has had with respect to the Company, its business plan, management, current financial condition and the Offering. The Purchaser acknowledges that the Company will likely require additional capital to complete its business plan and that there is no assurance that the Company can obtain additional capital or successfully complete its business objectives

D. The Purchaser is an accredited investor and has such knowledge and expertise in financial and business matters that the Purchaser is capable of evaluating the merits and risks involved in an investment in the Securities and acknowledges that an investment in the Securities entails a number of very significant risks and the Purchaser is able to withstand the total loss of its investment. The Purchaser acknowledges that the Company has recommended that each Purchaser obtain independent legal and financial advice prior to subscribing, including but not limited to advice as to the legality of any resale of the Securities, as well as the suitability of the investment for the Purchaser;

E. Except as set forth in this Agreement, no representations or warranties have been made to the Purchaser by the Company or any agent, employee or affiliate of the Company and in entering into this transaction the Purchaser is not relying upon any information, other than that contained in this Agreement and the result of independent investigation by the Purchaser;

F. The Purchaser understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of the United States Federal and State securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the applicability of such exemptions and the suitability of the Purchaser to acquire the Securities;

G. The Purchaser has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and this Agreement is a legally binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms;

H. The Purchaser is not purchasing the Securities as a result of any advertisement of the Offering or any other advertising conducted by or on behalf of the Company;

I. This subscription for the Securities has not been induced by any representations or warranties by any person whatsoever with regard to the future value of the Company's securities;

J. The Purchaser is not a “U.S. Person” as defined by Regulation S of the Act and is not acquiring the Securities for the account or benefit of a U.S. Person. A “U. S. Person” is defined by Regulation S of the Act to be any person who is:

(i)

any natural person resident in the United States;

(ii)

any partnership or corporation organized or incorporated under the laws of the United States;

(iii)

any estate of which any executor or administrator is a U.S. person;

(iv)

any trust of which any trustee is a U.S. person;

(v)

any agency or branch of a foreign entity located in the United States;

(vi)

any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) a resident of the United States; and

(vii)

any partnership or corporation if:

1. organized or incorporated under the laws of any foreign jurisdiction; and

2. formed by a U.S. person principally for the purpose of investing in securities not registered under the Act, unless it is organized or incorporated, and owned, by accredited investors [as defined in Section 230.501 (a) of the Act] who are not natural persons, estates or trusts.

K. The Purchaser agrees not to engage in hedging transactions with regard to the Securities unless in compliance with the Act; and

L. The Purchaser agrees to execute an agreement imposing restrictions on transfer of the Securities in the form the Company requires.

3. Representations of the Company. The Company represents and warrants to the Purchaser that:

A. The Company is duly incorporated under the laws of the State of Delaware and is in good standing in accordance with all applicable federal and state laws;

B. The execution, delivery and performance of this Agreement by the Company and the performance of its obligations hereunder do not and will not constitute a breach or violation of any of the terms and provisions of, or constitute a default under or conflict with or violate any provisions of (i) the Company’s Articles of Incorporation or By-laws, (ii) any indenture, mortgage, deed of trust, agreement or any instrument to which the Company is a party or by which it or any of its property is bound, (iii) any applicable statute or regulation, or (iv) any judgment, decree or order of any court or government body having jurisdiction over the Company or any of its property;

C. The execution, delivery and performance of this Agreement and the consummation of the issuance of the Securities and the transactions contemplated by this Agreement are within the Company’s corporate powers and have been duly authorized by all necessary corporate and stockholder action on behalf of the Company;

D. There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its properties, which might result in any material adverse change in the condition (financial or otherwise) or in the earnings, business affairs or business prospects of the Company, or which might materially or adversely affect the properties or assets thereof;

E. The Company is not in default in the performance or observance of any material obligation agreement, covenant or condition contained in any material indenture, mortgage, deed of trust or other material instrument or agreement to which it is a party or by which it or its property may be bound; and neither the execution, nor the delivery by the Company, nor the performance by the Company of its obligations under this Agreement will conflict with or result in the breach or violation of any of the terms or provisions of, or constitute a default or result in the creation or imposition of a lien or charge on any assets or properties of the Company under any material deed of trust or other material agreement or instrument to which the Company is party or by which it is bound or any statute or the Articles of Incorporation or By-laws of the Company, or any decree, judgment, order, ruling or regulation of any court or government agency or body having jurisdiction over the Company or its properties;

F. There is no fact known to the Company (other than general economic conditions known to the public generally) that has not been disclosed in writing to the Purchaser that (i) could reasonably be expected to have a material adverse effect on the condition (financial or otherwise) or on the earnings, business affairs, business prospects, properties or assets of the Company, or (ii) could reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations pursuant to this Agreement.

4. Registration of Securities and Conversion. If the Company files a registration statement with the SEC in the United States in respect of securities of the same type and class as those held by or to be issued to the Purchaser at the time of such filing, the Company will to the fullest extent permitted by applicable securities laws, include the registration of the Securities held by and to be issued to the Purchaser under such securities registration. Further, should the Company enter into a definitive agreement with a publicly traded company other than Sekoya Holdings, Ltd. (“Pubco”), the Securities held by or to be issued to the Purchaser under this Agreement shall be converted on a one toone basis for the securities of the same type and class as those held by or to be issued to the Purchaser, in capital of Pubco, irrespective of any other exchange ratio set out in that definitive agreement.

5. Non-Binding Until Accepted. The Purchaser understands that this subscription is not binding upon the Company until the Company
accepts it, which acceptance is at the sole discretion of the Company and is to be evidenced by the Company’s execution of this Agreement
where indicated. .

6. Non-Assignability. Neither this Agreement nor any of the rights of the Purchaser hereunder may be transferred or assigned by the Purchaser, with the exception of the transferability of the Warrants, subject to certain securities restrictions, as further set out on Schedule “B.” Moreover, the Company shall refuse to register any transfer of the common stock not made in accordance with the provisions of Regulation S, pursuant to registration under the Act, or pursuant to an available exemption from registration.

7. Modification/Entire Agreement. This Agreement: (i) may only be modified by a written amendment executed by the Purchaser and the Company: (ii) sets forth the entire agreement and understanding between the Purchaser and the Company with respect to the subject matter hereof; and (iii) shall enure to the heirs, legal representatives, successors and permitted assigns or each party hereto.

8. Governing Law. This Agreement will be construed and enforced in accordance with and governed by the laws of the State of
Delaware.

9. Notices. All Notices or other communication hereunder shall be in writing and shall be deemed to have been duly given if delivered personally (including courier service) or mailed by certified or registered mail, return receipt requested, postage prepaid.

10. Time. For the purposes of this Agreement, time is of the essence.

11. Delivery. The parties hereto shall execute and deliver all such further documents and instruments and do all such acts and things as may, either before or after the execution of this Agreement, be reasonably required to carry out the full intent and meaning of this Agreement.

11. Minor Omissions. The Purchaser hereby authorizes the Company to correct any minor errors in, or complete any minor information missing from, any document which has been executed by the Purchaser and delivered to the Company with respect to this subscription.

13. Counterpart Execution. This Agreement may be signed by the parties in counterpart and by fax.

IN WITNESS WHEREOF the parties have executed this written Agreement effective as of the Effective Date.

SIGNED, SEALED AND DELIVERED BY:

MYECHECK, INC.

Per:

__________________________
Authorized Signatory

SCHEDULE “A”

TO BE COMPLETED BY THE PURCHASER:

Subscription Amount.

Subscription:		2,000,000 UNITS
Subscription Price Per Unit:		USD$0.50
Subscription Funds:		USD$1,000,000

Name and Address. The name and address (to establish the Purchaser's jurisdiction of residence for the purpose of determining the applicable Securities Rules) of the Purchaser is as follows:

	Anshan Finance Ltd.
	Name

	Jasmine Court
	Street Address

	35A Regent Street


	Belize City, Belize
	City, State, Country, Zip Code

Registration Instructions. The name and address of the person in whose name the Purchaser's securities are to be registered is as follows (if the name and address is the same as was inserted in paragraph B above, then insert "see B above"):

	“See B above”
	Name


	Street Address





	City, State, Country, Zip Code

Delivery Instructions. The name and address of the person to whom the certificates representing the Purchaser's securities referred to in paragraph B above are to be delivered is as follows (if the name and address is the same as was inserted in paragraph B or C above, then insert "see B above" or "see C above", as the case may be):

	St. Peter Law
	Name

	St Peterstrausse 1
	Street Address

	CH - 8022 Zurich


	Switzerland
	City, State, Country, Zip Code

The Purchaser further acknowledges and agrees that:

(a)

purchasing, holding and disposing of the Securities may have tax consequences under the laws of both the Purchaser’s country and the United States, and the Purchaser is solely responsible for determining the tax consequences applicable to Purchaser’s particular circumstances and Purchaser should consult Purchaser’s tax advisors concerning investment in the Securities; and

(b)

the Securities (and any underlying securities which those securities are convertible into) are "restricted securities" within the meaning of the U.S. Securities Act (and applicable state securities laws) and may not be sold or transferred unless they are subsequently registered under the U.S. Securities Act or any exemption from such registration is available and the certificates representing the securities will bear a legend to reflect these restrictions.

TO BE COMPLETED AND SIGNED BY THE PURCHASER:

SIGNED, SEALED AND DELIVERED BY:

__________________________________________________
Name of the "Purchaser" - use the name inserted in
paragraph B above.

Per:

_________________________________

PURCHASER

SCHEDULE “B”

2,000,000 Common Shares		Void after
Without Par Value		, 2010.

SHARE PURCHASE WARRANT

MYECHECK, INC.

(the "Company")

This is to certify that, for value received, Anshan Finance Ltd. (the "Warrant Holder") of Jasmine Court, 35A Regent Street, Belize City, Belizehas the right to purchase from the Company, upon and subject to the terms and conditions hereinafter referred to, 2,000,000 common shares without par value (the "Shares") in the capital of the Company based on its capitalization following effectiveness of the merger contemplated by the Merger Agreement, as defined in that certain subscription agreement between the Company and Warrant Holder (the “Subscription Agreement”). The Shares may be purchased at a price of USD $2.00 (the "Exercise Price") per Share after the effectiveness of the merger contemplated by the Merger Agreement and up to 5:00 p.m. local time in Vancouver, B.C. on , 2010. The right to purchase the Shares may be exercised in whole or in part, by the Warrant Holder only, at the Exercise Price within the times set forth above by:

(a)

completing and executing the form (the "Subscription Form") attached hereto for the number of the Shares which the Warrant Holder wishes to purchase, in the manner therein indicated;

(b)

surrendering this Warrant Certificate, together with the complete Subscription Form, to [Full Name of Transfer Agent] (the "Transfer Agent") at [Address]; and

(c)

paying the appropriate Exercise Price, in United States funds, for the number of the Shares of the Company subscribed for, either by certified cheque or bank draft (drawn on a United States or International Chartered Bank) or money order payable to the Company at its address of record.

Upon surrender and payment, the Company shall issue to the Warrant Holder or to such other person or persons as the Warrant Holder may direct, the number of the Shares subscribed for and will deliver to the Warrant Holder, at the address set forth on the subscription form, a certificate or certificates evidencing the number of the Shares subscribed for. If the Warrant Holder subscribes for a number of Shares which is less than the number of Shares permitted by this Warrant, the Company shall forthwith cause to be delivered to the Warrant Holder a further Warrant Certificate in respect of the balance of Shares referred to in this Warrant Certificate not then being subscribed for.

After the Effective Date, as defined in the Subscription Agreement, and after giving effect to the merger contemplated by the Merger Agreement, in the event of any subdivision of the common shares of the Company (as such common shares are constituted on the date hereof) into a greater number of common shares while this Warrant is outstanding, the number of Shares represented by this Warrant shall thereafter be deemed to be subdivided in like manner and the Exercise Price adjusted accordingly, and any subscription by the Warrant Holder for Shares hereunder shall be deemed to be a subscription for common shares of the Company as subdivided.

After the Effective Date and after giving effect to the merger contemplated by the Merger Agreement, in the event of any consolidation of the common shares of the Company (as such common shares are constituted on the date hereof) into a lesser number of common shares while this Warrant is outstanding, the number of Shares represented by this Warrant shall thereafter be deemed to be consolidated in like manner and the Exercise Price adjusted accordingly, and any subscription by the Warrant Holder for Shares hereunder shall be deemed to be a subscription for common shares of the Company as consolidated.

After the Effective Date and after giving effect to the merger contemplated by the Merger Agreement, in the event of any capital reorganization or reclassification of the common shares of the Company or the merger or amalgamation of the Company with another corporation at any time while this Warrant is outstanding, the Company shall thereafter deliver at the time of purchase of the Shares hereunder the number of common shares the Warrant Holder would have been entitled to receive in respect of the number of the Shares so purchased had the right to purchase been exercised before such capital reorganization or reclassification of the common shares of the Company or the merger or amalgamation of the Company with another corporation.

If at any time after the Effective Date and after giving effect to the merger contemplated by the Merger Agreement, while this, or any replacement, Warrant is outstanding:

(a)

the Company proposes to pay any dividend of any kind upon its common shares or make any distribution to the holders of its common shares;

(b)

the Company proposes to offer for subscription pro rata to the holders of its common shares any additional shares of stock of any class or other rights;

(c)

the Company proposes any capital reorganization or classification of its common shares or the merger or amalgamation of the Company with another corporation; or

(d)

there is a voluntary or involuntary dissolution, liquidation or winding-up of the Company;

the Company shall give to the Warrant Holder at least seven days prior written notice (the "Notice") of the date on which the books of the Company are to close or a record is to be taken for such dividend, distribution or subscription rights, or for determining rights to vote with respect to such reorganization, reclassification, consolidation, merger, amalgamation, dissolution, liquidation or winding-up. The Notice shall specify, in the case of any such dividend, distribution or subscription rights, the date on which holders of common shares of the Company will be entitled to exchange their common shares for securities or other property deliverable upon any reorganization, reclassification, consolidation, merger, amalgamation, sale, dissolution, liquidation or winding-up, as the case may be. Each Notice shall be delivered by hand, addressed to the Warrant Holder at the address of the Warrant Holder set forth above or at such other address as the Warrant Holder may from time to time specify to the Company in writing.

The holding of this Warrant Certificate or the Warrants represented hereby does not constitute the Warrant Holder a member of the Company.

Nothing contained herein confers any right upon the Warrant Holder or any other person to subscribe for or purchase any Shares of the Company at any time subsequent to 5:00 p.m. local time in , California on [Date] and from and after such time, this Warrant and all rights hereunder will be void.

The Warrants represented by this Warrant Certificate are not transferable unless the transfer is made in accordance with the provisions of Regulation S, pursuant to registration under the Act, or pursuant to an available exemption from registration. This Warrant Certificate and any Shares issued upon exercise of this Warrant will bear the following legend:

Time will be of the essence hereof.

This Warrant Certificate is not valid for any purpose until it has been signed by the Company.

IN WITNESS WHEREOF, the Company has caused its common seal to be hereto affixed and this Warrant Certificate to be signed by any one of

the directors of the Company as of the day of , 2008.

MYECHECK, INC.

Per:

_________________________
ED STARRS

President/CEO, Director

SUBSCRIPTION FORM

To: MYECHECK, INC. (the "Company")

And to: The Directors Thereof.

Pursuant to the Share Purchase Warrant made the day of , 2008 the undersigned hereby subscribes for and agrees to take up _______________ common shares without par value (the "Shares") in the capital of the Company, at a price of $ 2.00 (USD) per Share for the aggregate sum of $_______________ (the "Subscription Funds"), and encloses herewith a certified cheque, bank draft or money order payable to the Company in full payment of the Shares.

The undersigned (the "Subscriber") hereby requests that upon receipt of the Subscription Funds by the Company:

(a)

the Shares be allotted to the person set out under the registration directions shown below;

(b)

the name and address of the person set out under the registration directions shown below be entered in the registers of members and allotments of the Company;

(c)

the Shares be issued to the person set out under the registration directions shown as fully paid and non-assessable common shares of the Company; and

(d)

a share certificate representing the Shares be registered in accordance with the registration directions shown below. Dated this _______ day of ______________, 200__.

DIRECTION AS TO REGISTRATION:

(Name and address exactly as you wish them to appear on the share certificate representing the Shares and in the register of members.)

Full Name :_______________________________________________________________________

Full Address:_____________________________________________________________________

Signature of Subscriber:_____________________________________________________________

If the name above differs from the name of the Subscriber, then

please complete the following guarantee:

Signature of Subscriber guaranteed by:

_______________________________

Authorized Signature Number

NOTE: The signature to this Subscription Form must correspond with the name as recorded on the Warrant Certificate accompanying this Subscription Form in every particular without alteration or enlargement or any change whatever. If not, the signature of the person executing this power must be guaranteed by a Bank or Trust Company or by a Member of a Professional Bar or Law Association or other entity acceptable to the Company’s Transfer Agent.

EX-1.14 15 v392049_ex1-14.htm EXHIBIT 1.14

Exhibit 1.14

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

(for completion by non-United States residents)

MYECHECK, INC.

THIS AGREEMENT MADE EFFECTIVE as of the ___ day of _______________, 2008 (the "Effective Date").

BETWEEN:

MYECHECK, INC., a private Delaware corporation with offices at Suite 5, 1190 Suncast Lane, El Dorado Hills, CA 95762;

(the “Company”)

AND:

THE PURCHASER NAMED AND SIGNING

AS PURCHASER ON SCHEDULE “A” HERETO.

(the “Purchaser”)

WHEREAS:

A. The Purchaser wishes to and hereby subscribes for and agrees to purchase the 2,000,000 units (the “Securities”) of the Company (based on its capitalization following effectiveness of the merger contemplated by the Merger Agreement, as defined below), each Security consisting of one common share in the capital of the Company and one full share purchase warrant (the “Warrant”), for aggregate proceeds of USD $1,000,000 (the “Funds”), all on the terms and subject to the conditions set forth in this Agreement, as defined herein. Each Warrant entitles the Subscriber to purchase one additional common share (the “Warrant Share”) in the capital of the Company for a period of three years from the issuance of the Securities, at a price of USD $4.00 ;

B. The payment for the Securities shall be carried out pursuant to the payment schedule (the “Payment Schedule”) as set out on Schedule “C”, hereto, and the Company, at all times will reserve and keep available such number of shares of Securities as shall be sufficient to satisfy the requirements of this Agreement.

C. The Company desires to accept the Purchaser’s subscription for the Securities;

D. The Company intends to enter into that certain merger agreement, as amended and restated, with Sekoya Holdings, Ltd., a Nevada Corporation (the “Merger Agreement”);

E. It is the intention of the parties to this Agreement that the Securities shall not be issued or exercisable until after the effectiveness of the merger contemplated by the Merger Agreement;

F. It is the intention of the parties to this Agreement that this subscription will be made pursuant to appropriate exemptions (the "Exemptions") from the registration and prospectus or equivalent requirements of all rules, policies, notices, orders and legislation of any kind whatsoever (collectively the “Securities Rules”) of all jurisdictions applicable to this subscription; and

G. This investment involves risk and the parties hereto acknowledge that the Purchaser may be restricted from selling the Securities at any time in the future, except as otherwise provided herein.

1. Subscription. The Purchaser hereby irrevocably subscribes for and agrees to purchase 2,000,000 units (the “Securities”) of the Company, each Security consisting of one common share in the capital of the Company and one full share purchase warrant (the “Warrant”), for aggregate proceeds of USD $1,000,000 (the “Funds”), all on the terms and subject to the conditions set forth in this Agreement, and as further set out on Schedule “A” hereto. Each Warrant entitles the Subscriber to purchase one additional common share (the “Warrant Share”) in the capital of the Company for a period of three years from the issuance of the Securities, at a price of USD $4.00 , as further set out on Schedule “B” hereto . Together with this Agreement, the Purchaser is delivering to the Company the full amount of the purchase price for the Securities in respect of which it is subscribing. The offering of Securities by the Company to the Purchaser (the “Offering”) is being conducted in reliance upon the exemption from registration requirements of the Securities Act of 1933 (the “Act”) set forth in Regulation S promulgated under the Act. The amounts paid by Purchaser hereunder shall be a non-interest bearing subscription advanced by Purchaser for which the Company’s only obligation is to issue the Securities.

H. The Purchaser is not purchasing the Securities as a result of any advertisement of the Offering or any other advertising conducted by or on behalf of the Company;

I. This subscription for the Securities has not been induced by any representations or warranties by any person whatsoever with regard to the future value of the Company's securities;

(i)

any natural person resident in the United States;

(ii)

any partnership or corporation organized or incorporated under the laws of the United States;

(iii)

any estate of which any executor or administrator is a U.S. person;

(iv)

any trust of which any trustee is a U.S. person;

(v)

any agency or branch of a foreign entity located in the United States;

(vi)

(vii)

any partnership or corporation if:

1. organized or incorporated under the laws of any foreign jurisdiction; and

K. The Purchaser agrees not to engage in hedging transactions with regard to the Securities unless in compliance with the Act; and

L. The Purchaser agrees to execute an agreement imposing restrictions on transfer of the Securities in the form the Company requires.

3. Representations of the Company. The Company represents and warrants to the Purchaser that:

A. The Company is duly incorporated under the laws of the State of Delaware and is in good standing in accordance with all applicable federal and state laws;

5. Non-Binding Until Accepted. The Purchaser understands that this subscription is not binding upon the Company until the Company accepts it, which acceptance is at the sole discretion of the Company and is to be evidenced by the Company’s execution of this Agreement where indicated.

8. Governing Law. This Agreement will be construed and enforced in accordance with and governed by the laws of the State of
Delaware.

10. Time. For the purposes of this Agreement, time is of the essence.

11. Delivery. The parties hereto shall execute and deliver all such further documents and instruments and do all such acts and things as
may, either before or after the execution of this Agreement, be reasonably required to carry out the full intent and meaning of this Agreement.

13. Counterpart Execution . This Agreement may be signed by the parties in counterpart and by fax.

IN WITNESS WHEREOF the parties have executed this written Agreement effective as of the Effective Date.

SIGNED, SEALED AND DELIVERED BY:

MYECHECK, INC.

Per:

___________________________

Authorized Signatory

SCHEDULE “A”

TO BE COMPLETED BY THE PURCHASER:

Subscription Amount.

Subscription:		2,000,000 UNITS
Subscription Price Per Unit:		USD$0.50
Subscription Funds:		USD$1,000,000

Name and Address. The name and address (to establish the Purchaser's jurisdiction of residence for the purpose of determining the applicable Securities Rules) of the Purchaser is as follows:

	Youngal Group Ltd .
	Name

	Jasmine Court
	Street Address

	35A Regent Street

	Belize City, Belize
	City, State, Country, Zip Code

	“See B above”
	Name


	Street Address




	City, State, Country, Zip Code

	St. Peter Law
	Name

	St Peterstrausse 1
	Street Address

	CH - 8022 Zurich

	Switzerland
	City, State, Country, Zip Code

The Purchaser further acknowledges and agrees that:

(a)

(b)

TO BE COMPLETED AND SIGNED BY THE PURCHASER:

SIGNED, SEALED AND DELIVERED BY:

__________________________________________________

Name of the "Purchaser" - use the name inserted
in paragraph B above.

Per:

______________________________________

PURCHASER

SCHEDULE “B”

2,000,000 Common Shares		Void after
Without Par Value		, 2010.

SHARE PURCHASE WARRANT

MYECHECK, INC.

(the "Company")

This is to certify that, for value received, Youngal Group Ltd. (the “Warrant Holder”) of Jasmine Court, 35A Regent Street, Belize City, Belizehas the right to purchase from the Company, upon and subject to the terms and conditions hereinafter referred to, 2,000,000 common shares without par value (the "Shares") in the capital of the Company based on its capitalization following effectiveness of the merger contemplated by the Merger Agreement, as defined in that certain subscription agreement between the Company and Warrant Holder (the “Subscription Agreement”). The Shares may be purchased at a price of USD $4.00 (the “Exercise Price”) per Share after the effectiveness of the merger contemplated by the Merger Agreement and up to 5:00 p.m. local time in Vancouver, B.C. on , 2011. The right to purchase the Shares may be exercised in whole or in part, by the Warrant Holder only, at the Exercise Price within the times set forth above by:

(a)

completing and executing the form (the "Subscription Form") attached hereto for the number of the Shares which the Warrant Holder wishes to purchase, in the manner therein indicated;

(b)

surrendering this Warrant Certificate, together with the complete Subscription Form, to [Full Name of Transfer Agent] (the "Transfer Agent") at [Address]; and

(c)

If at any time after the Effective Date and after giving effect to the merger contemplated by the Merger Agreement, while this, or any replacement, Warrant is outstanding:

(a)

the Company proposes to pay any dividend of any kind upon its common shares or make any distribution to the holders of its common shares;

(b)

the Company proposes to offer for subscription pro rata to the holders of its common shares any additional shares of stock of any class or other rights;

(c)

the Company proposes any capital reorganization or classification of its common shares or the merger or amalgamation of the Company with another corporation; or

(d)

there is a voluntary or involuntary dissolution, liquidation or winding-up of the Company;

The holding of this Warrant Certificate or the Warrants represented hereby does not constitute the Warrant Holder a member of the Company.

Time will be of the essence hereof.

This Warrant Certificate is not valid for any purpose until it has been signed by the Company.

IN WITNESS WHEREOF, the Company has caused its common seal to be hereto affixed and this Warrant Certificate to be signed by any one of the directors of the Company as of the day of , 2008.

MYECHECK, INC.

Per:

_________________________________
ED STARRS

President/CEO, Director

SUBSCRIPTION FORM

To: MYECHECK, INC. (the "Company")

And to: The Directors Thereof.

Pursuant to the Share Purchase Warrant made the day of , 2008 the undersigned hereby subscribes for and agrees to take up _______________ common shares without par value (the "Shares") in the capital of the Company, at a price of $ 4.00 (USD) per Share for the aggregate sum of $_______________ (the "Subscription Funds"), and encloses herewith a certified cheque, bank draft or money order payable to the Company in full payment of the Shares.

The undersigned (the "Subscriber") hereby requests that upon receipt of the Subscription Funds by the Company:

(a)

the Shares be allotted to the person set out under the registration directions shown below;

(b)

the name and address of the person set out under the registration directions shown below be entered in the registers of members and allotments of the Company;

(c)

the Shares be issued to the person set out under the registration directions shown as fully paid and non-assessable common shares of the Company; and

(d)

a share certificate representing the Shares be registered in accordance with the registration directions shown below.

Dated this _______ day of ______________, 200__.

DIRECTION AS TO REGISTRATION:

(Name and address exactly as you wish them to appear on the share certificate representing the Shares and in the register of members.)

Full Name :________________________________________________________________________

Full Address:______________________________________________________________________

Signature of Subscriber:______________________________________________________________

If the name above differs from the name of the Subscriber, then

please complete the following guarantee:

Signature of Subscriber guaranteed by:

_______________________________

Authorized Signature Number

SCHEDULE “C”

PAYMENT SCHEDULE

The Purchaser hereby agrees to pay and deliver to the Company payment for the Securities in the amounts and at such times as set out below. The Company hereby agrees to the terms as set out below.

Payment for the Securities of USD$1,000,000 as to:

1) $200,000 on or before December 31, 2007

2) $200,000 on or before January 31, 2008

3) $200,000 on or before March 31, 2008

4) $200,000 on or before May 31, 2008

5) $200,000 on or before July 31, 2008