EXHIBIT 10.6
ADDENDUM 2
This is an addendum to the Agreement entered into by and between Cardservice
International, Inc., hereinafter "CARDSERVICE", and Tehama Bank, hereinafter
"BANK", on July 1, 1994.
The parties mutually desire amend the agreement as follows:
SECTION 2.1:
The August 1, 1996 Addendum to this Section is hereby revoked and is replaced
with the following:
Beginning March 1, 1999, and continuing each month there after the BANK
shall retain for itself that portion of the Merchant Fees for COVERED MERCHANTS
as follows:
Months 1 through 5 $90,000
Months 6 through 12 $80,000
Months 13 through 18 $70,000
Months 19 through 24 $60,000
Months 25 through 60 $50,000
Additionally, BANK shall pay or credit CARDSERVICE monthly with 50% of the
earnings on all non-disbursed funds held in the Operating Account(s), Security
Account(s) and the Bancontrol Account(s). BANK shall provide a report showing
the earnings calculation.
Except for those amounts identified in sections 1.3, 1.4 and 2.3 a), b), c), d),
f), g), AND h), of this Agreement, CARDSERVICE shall be entitled to all
remaining funds.
SECTION 2.5:
This new section is to be added:
Processing Volume: The following are maximum volumes of Net Bankcard Sales to be
permitted each month:
Months 1 through 12 $120,000,000
Months 12 through 24 $140,000,000
Months 25 through 36 $160,000,000
Months 37 through 48 $180,000,000
Months 49 through 60 $200,000,000
SECTION 3.2:
The existing Section 3.2 is hereby revoked and replaced with the following:
BANK agrees that until March 1, 2001, CARDSERVICE shall be the BANK'S exclusive
outside provider of merchant credit card marketing and business development
services.
At the termination of this agreement BANK shall assign, convey, and transfer to
CARDSERVICE any and all of BANK'S rights, titles and interests, including any
security interests, in the Covered Merchants without any additional
consideration and subject to applicable Card Association Rules. Accordingly,
BANK shall permit and authorize CARDSERVICE to transfer the Covered Merchants to
another financial institution selected by CARDSERVICE, and BANK agrees to fully
cooperate with CARDSERVICE and use its best efforts to carry out the transfers
contemplated by this Addendum. Without limiting the foregoing, at termination
BANK agrees, at CARDSERVICE'S request, to immediately transfer BINS, ICA's and
all Bancontrol and Security Deposits to another financial institution selected
by CARDSERVICE.
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BANK hereby agrees that, during the term of this Agreement, including any
renewal or extension thereof, and for a period of three (3) years following the
termination of this Agreement, BANK shall keep confidential and shall not use,
disclose or divulge for any purposes, other than a non-merchant BANK
relationship, any and all information with respect to Covered Merchants which
BANK has obtained, directly or indirectly, as a consequence of this Agreement.
SECTION 10:
This section shall have the following modification:
Unless renewed this Agreement shall terminate on March 1, 2004.
All other terms and conditions of the Agreement remain in force.
Any breach of this addendum shall constitute a breach of the July 1, 1994
Agreement and the August 1, 1996 Addendum.
IN WITNESS WHEREOF, each of the parties has caused this Addendum to be executed
on its behalf by a duly authorized representative on the day written below.
TEHAMA BANK CARDSERVICE INTERNATIONAL, INC.
NAME: /s/ XXXXXXX X. XXXXXXX NAME: /s/ XXX XXXXXXXX
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TITLE: PRESIDENT & CEO TITLE: CHIEF FINANCIAL OFFICER
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DATE: 3/24/99 DATE: 3/24/99
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