Preview
FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM INDEX NO. E2024003927
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024
MONROE COUNTY CLERK’S OFFICE THIS IS NOT A BILL. THIS IS YOUR RECEIPT.
Receipt # 3765190
Book Page CIVIL
Return To: No. Pages: 15
JEFFREY MICHAEL PARRELLA
14 Wall Street Instrument: EXHIBIT(S)
20th Floor
New York, NY 10005 Control #: 202403011108
Index #: E2024003927
Date: 03/01/2024
FLEXIBILITY CAPITAL, INC Time: 2:27:40 PM
MARISOL SPOON INC.
WEATHERSPOON, JASON BRENT
Total Fees Paid: $0.00
Employee:
State of New York
MONROE COUNTY CLERK’S OFFICE
WARNING – THIS SHEET CONSTITUTES THE CLERKS
ENDORSEMENT, REQUIRED BY SECTION 317-a(5) &
SECTION 319 OF THE REAL PROPERTY LAW OF THE
STATE OF NEW YORK. DO NOT DETACH OR REMOVE.
JAMIE ROMEO
MONROE COUNTY CLERK
202403011108 Index #
INDEX : E2024003927
NO. E2024003927
FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024
FLEXIBILITY CAPITAL INC.
FUTURE RECEIVABLES SALE AND PURCHASE AGREEMENT
This Future Receivables Sale and Purchase Agreement (this “Agreement”) dated as of __________________________________
February 6, 2024
, is made
by and between Flexibility Capital, Inc., a New York corporation (“Flexibility”), and the merchant which name, address and
other pertinent information appear below (the "Merchant”):
Legal Business Name: Marisol
_____________________________________________________________________________________________________________
Spoon INC.
D/B/A: _____________________________________________________________________________________________________________
Marisol Spoon INC.
Type of Entity: _____________________________________________________________________________________________________________
Corporation
Business Physical Address: 821 _______________________________________________________________________________________________________
Joey CirCharleston, SC 29412
Business Mailing Address: 821 ______________________________________________________________________________________________________
Joey CirCharleston, SC 29412
Business Phone Number: (843) ___________________________________________
897-8311
Email: j.marisolspoon@gmail.com
___________________________________________
Banking Information:
Bank Name: Lendingclub
___________________________________________________
Bank
Bank ABA: 211-075-086
_______________________________________________________
Bank Account Holder’s Name: ___________________________________________________________________________________________________
Marisol Spoon INC.
Account # 7160714200
_______________________________________________ EIN: 45-3163325
____________________________________________
WHEREAS, the Merchant is desirous to sell to Flexibility, and Flexibility is desirous to purchase from Merchant, a Specified
Percentage of the Merchant’s Future Receipts, but only on the terms and conditions set forth in this Agreement (all capitalized
terms shall have the meanings ascribed to them below).
NOW, THEREFORE, for good and valuable consideration, the mutual receipts and sufficiency of which is hereby
acknowledged by both parties, Flexibility and Merchant hereby agree to the foregoing and as follows:
1. Basic Terms and Definitions.
a. “Effective Date” shall mean the later of: (i) the date set forth in the preamble to this Agreement, and (ii) the date
when Flexibility paid the Purchase Price to Merchant.
b. “Specified Percentage” shall mean ___________________________________________
ten
PERCENT (_____.00%)
10 of each and every
sum from sale made by Merchant.
c. “Future Receipts” shall mean, collectively, all of Merchant’s receipts of monies paid and delivered to Merchant
by Merchant’s customers’ and/or other vendees after the Effective Date of this Agreement; which payments or
deliveries of monies can be made in the form of cash, check, credit, charge, or debit card, ACH or other electronic
transfer or any other form of monetary payment in the ordinary course of Merchant’s business.
d. “Purchased Amount” shall mean the total amount of the Specified Percentage of the Future Receipts that
Merchant shall be under obligation to deliver to Flexibility pursuant to this Agreement. The parties agree that
the Purchased Amount shall be $_______________________________________.
28,400.00
e. “Purchase Price” shall mean the total amount that Flexibility agrees to pay for the Future Purchased Receipts.
The parties agree that the Purchase Price shall be $_____________________________________________.
20,000.00
f. “Daily Installment” shall mean the fixed amount that Merchant and Flexibility agree to be a good faith
approximation of the Specified Percentage of Merchant’s daily Future Receipts. Merchant and Flexibility further
agree that, based upon the information provided by Merchant to Flexibility concerning Merchant’s most recent
accounts receivables, and subject to Merchant’s right of adjustment/reconciliation set forth in this Agreement,
as of the Effective Date the Daily Installment shall be $____________________________________
193.2
.
g. “Workday” shall mean Monday through Friday except on days when banking institutions are closed for the
holidays and do not process ACH payments.
2. The Term. The term of this Agreement shall commence on the Effective Date and expire on the date when the Purchased
Amount is received by Flexibility in full.
3. Sale of Purchased Future Receipts. Merchant hereby sells, assigns, transfers and conveys (hereinafter, the “Sale”) unto
Flexibility all of Merchant’s right, title and interest in to the Specified Percentage of the Future Receipts until the
Purchased Amount shall have been delivered by Merchant to Flexibility (the “Purchased Future Receipts”); to have and
hold the same unto Flexibility, its successors and assigns, forever. This Sale of the Purchased Future Receipts is made
without express or implied warranty to Flexibility of collectability of the Purchased Future Receipts by Flexibility and
without recourse against Merchant except as specifically set forth in this Agreement. By virtue of this Agreement,
Merchant transfers to Flexibility full and complete ownership of the Purchased Future Receipts and Merchant retains no
legal or equitable interest therein.
1
Guarantor #1: [ ] Guarantor #2: [ ]
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Payment
NYSCEF 4.DOC. NO. 2of Purchase Price. In consideration of the sale by Merchant to Flexibility ofRECEIVED the Purchased Future Receipts
NYSCEF: 03/01/2024
pursuant to Flexibility agrees to pay to Merchant the Purchase Price; the Purchase Price shall be turned over and
delivered to Merchant immediately after the Effective Date of this Agreement.
5. Use of Purchase Price. Merchant hereby acknowledges that it fully understands that: (i) Flexibility’s ability to collect the
Purchased Amount (or any portion thereof) is contingent upon Merchant’s continued operation of its business and
successful generation of the Future Receipts until the Purchased Amount is delivered to Flexibility in full; (ii) that in the
event of decreased efficiency or total failure of Merchant’s business Flexibility’s receipt of the full or any portion of the
Purchased Amount may be delayed indefinitely. Based upon the forgoing, Merchant agrees to use the Purchase Price
exclusively for the benefit and advancement of Merchant’s business operations and for no other purpose.
6. Daily Installments of Purchased Amount. The Purchased Amount of the Specified Percentage of Future Receipts shall be
delivered to Flexibility daily on Workdays in Daily Installments.
7. Approved Bank Account and Credit Card Processor.During the term of this Agreement, Merchant shall: (i) deposit all
Future Receipts into one (and only one) bank account which bank account shall be acceptable and preapproved by
Flexibility (the “Approved Bank Account”), (ii) use one (and only one) credit card processor which processor shall be
acceptable and preapproved by Flexibility (the “Approved Processor”) and (iii) deposit all credit card receipts into the
Approved Bank Account. In the event the Approved Bank Account or Approved Processor shall become unavailable or
shall cease providing services to Merchant during the term of this Ag eement, prior to the first date of such unavailability or
cessation of services, Merchant shall arrange for another Approved Bank Account or Approved Processor, as the case may
be.
8. Authorization to Debit Approved Bank Account. c a b a i ibi i i i ia c ic c c
d bi d a cc i a ai a ac da i ibi i c i
c a d c a a ibi i i a acc c d ( ) d a cc b i i
i a i ai c a a b b db ai .
9. Fees Associated with Debiting Approved Bank Account. It shall be Merchant’s exclusive responsibility to pay to its
banking institution and/or Flexibility’s banking institution directly (or to compensate Flexibility, in case it is charged) all
fees, charges and expenses incurred by either Merchant or Flexibility due to rejected electronic checks or ACH debit
attempts, overdrafts or rejections by Merchant’s banking institution of the transactions contemplated by this Agreement.
10. Merchant’s Right for Reconciliation. Merchant and Flexibility each acknowledges and agrees that:
a. If any time during the term of this Agreement Merchant will experience sporadic increase or decrease in its daily
receipts, Merchant shall have the right, at its sole and absolute discretion, but subject to the provisions of Section 11
below, to request retroactive reconciliation of the Merchant’s actual daily receipts for one full calendar month
immediately preceding da such request for reconciliation is received by Flexibility (each such
calendar month, a “Reconciliation Month”).
b. Such reconciliation ( c ci ia i ) of the Merchant’s daily receipts for a Reconciliation Month shall be
performed by Flexibility within five (5) Workdays following its receipt of the Merchant’s request for
reconciliation by either crediting or debiting the difference back to or from the Approved Bank Account so that the
total amount debited by Flexibility from the Approved Bank Account during the Reconciliation Month at issue
equal the Specific Percentage of the Future Receipts that Merchant collected during the Reconciliation Month at
issue.
c. One or more Reconciliation procedures performed by Flexibility may reduce the effective Daily Installment
amount during the Reconciliation Month in comparison to the one set forth in Section 1 of this Agreement, and, as
the result of such reduction, the term of this Agreement during which Flexibility will be debiting the Approved Bank
Account may extend substantially.
11. Request for Reconciliation Procedure.
a. It shall be Merchant’s sole responsibility and the right hereunder to initiate Reconciliation of Merchant’s actual
receipts during any Reconciliation Month by sending a request for reconciliation to Flexibility.
b. Any such request for Reconciliation of the Merchant’s daily receipts for a specific Reconciliation Month shall be in
writing, shall include a copy of Merchant’s bank statement and a credit card processing statement for the
Reconciliation Month at issue, and shall be received by Flexibility via email to
ad i @Flexibilitycapital.com, with the subjection line “REQUEST FOR RECONICILIATION,” within five
(5) Workdays after the last day of the Reconciliation Month at issue (time being of the essence as to the last day of
the period during which such demand for reconciliation shall be received by Flexibility).
c. Flexibility’s receipt of Merchant’s request for Reconciliation after the expiration of the 5-Workday period
following the last day of the Reconciliation Month for which such reconciliation is requested nullifies and makes
obsolete Merchant’s request for Reconciliation for that specific Reconciliation Month.
d. Merchant shall have the right to request Reconciliation as many times during the term of this Agreement as it
deems proper, and Flexibility shall comply with such request, provided that:
i. Each such request is made in accordance with the terms of this Section 11.
a c ci ia i i ad a i ai i a d a
c c ci ia i a a ac a d bi d b ibi i d
a cc i b c a c a d a d c i
ii. a a a ica b d d i i a a ac a d bi d
d
Guarantor #1 Initials: [ a a 1 i ia
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Bank Account pursuant to this Agreement shall become equal to the Purchased Amount.
iii. In the event after the last day of the term of this Agreement Merchant will determine in good faith that
the actual amount debited by Flexibility from the Approved Bank Account pursuant to this Agreement
is greater than the Purchased Amount, then and in such event Merchant shall have the right to request
final Reconciliation within five (5) Workdays following the expiration date of the term of this Agreement
(time being of the essence) and Flexibility shall honor such request within five (5) Workdays following
the day of its receipt of such request.
e. Nothing set forth in Sections 10 or 11 of this Agreement shall be deemed to provide Merchant with the right to
interfere with Flexibility’s right and ability to debit the Approved Bank Account while the request for
Reconciliation of Merchant’s receipts is pending or until the Purchased Amount is collected by Flexibility in full.
1 . Adjustment of Daily Installment. Merchant and Flexibility each acknowledge and agree that:
a. If any time during the term of this Agreement Merchant will experience steady increase or decrease in its daily
receipts, Merchant shall have the right, at its sole and absolute discretion, but subject to the provisions of Section
13 below, to request modification (“Adjustment”) of the amount of the Daily Installment that Merchant is
obligated to delivery daily to Flexibility in accordance with the provisions of Section 6 above. Such Adjustment
shall become effective as of the date it is granted and the new adjusted amount of the Daily Installment (the
“Adjusted Daily Installment”) shall replace and supersede the amount of the Daily Installment set forth in Section
1 above.
b. The Adjustment of the Daily Installment shall be performed by Flexibility within five (5) Workdays following its
receipt of the Merchant’s request for Adjustment by modifying daily amounts that shall be are debited from the
Approved Bank Account until the Purchased Amount is paid in full. Notwithstanding anything to the contrary
set forth in Sections 12 and 13 hereof, no Adjustment shall take place until and unless Reconciliation for at least
one (1) Reconciliation Month takes place resulting in reduction of the total amount debited from Merchant’s
Approved Bank Account during the Reconciliation Month by at least 15% in comparison to the amount that
would have been debited during that month without Reconciliation.
c. One or more Adjustments performed by Flexibility may substantially extend the term of this Agreement.
1 . Request for Adjustment Procedure.
a. It shall be Merchant’s sole responsibility and the right to initiate the Adjustment by sending a request for
Adjustment to Flexibility.
b. A request for Adjustment (an “Adjustment Request”) shall be in writing, shall include copies of: (i) Merchant’s
three (3) consecutive bank statements of the Approved Bank Account and credit card processing statements
immediately preceding the date of Flexibility’s receipt of the Adjustment Request, and (ii) Merchant’s bank
statements and credit card processing statements previously provided by Merchant to Flexibility based upon
which statements the amount of Daily Installment set forth in Section 1 above (or the then current Adjusted
Daily Installment, as the case may be) was determined, and shall be received by Flexibility by email at
ad i @Flexibilitycapital.com, with the subject line “REQUEST FOR ADJUSTMENT,” within five (5)
Workdays after the date that is the latest of the last day of the latest bank statement enclosed with the
Adjustment Request and the last date of the latest card processing statement enclosed with the Adjustment
Request (time being of the essence as to the last day of the period during which an Adjustment Request shall be
received by Flexibility).
c. Flexibility’s receipt of a Merchant’s Adjustment Request after the expiration of the above referenced 5-Workday
period nullifies and makes obsolete such Adjustment Request.
d. Merchant shall have the right to request Adjustment of the Daily Installments as many times during the term of
this Agreement as it seems proper, and Flexibility shall comply with such request, provided that:
i. Each such request for Adjustment is made in accordance with the terms of this Section 13.
ii. A request for Adjustment shall not be made after the expiration of the term of this Agreement.
. Nothing set forth in Sections 12 or 13 of this Agreement shall be deemed to provide Merchant with the right to
interfere with Flexibility’s right and ability to debit the Approved Bank Account while the request for Adjustment
is pending or until the Purchased Amount is collected by Flexibility in full.
14. Risk Sharing Acknowledgments and Arrangements.
a. Merchant and Flexibility each hereby acknowledges and agrees that:
i. The Purchased Future Receipts represent a portion of Merchant’s Future Receipts.
ii. This Agreement consummates the sale of the Purchased Future Receipts at a discount, not borrowing
funds by Merchant from Flexibility. Flexibility does not charge Merchant and will not collect from
Merchant any interest on the monies spent on the purchase of the Purchased Future Receipts. The
period of time that it will take Flexibility to collect the Purchased Amount is not fixed, is unknown to
both parties as of the Effective Date of this Agreement and will depend on the how well or not well
Merchant’s business will be performing following the Effective Date. As an extreme example, in the
event Merchant’s business ceases to exist after Flexibility’s purchase of the Purchased Future Receipts
for reason outside Merchant’s control, Flexibility may never recover any moneys spent on such
purchase.
Guarantor #1 Initials: [ ] Guarantor #2 Initials: [ ]
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iii. The amount of the Daily Installment set forth in Section 1 of this Agreement is calculated based upon
the information concerning an average amount of daily receipts collected by Merchant’s business
immediately prior to the Effective Date of this Agreement which information was provided by Merchant
to Flexibility.
iv. The amounts of Merchant’s future daily receipts may increase or decrease over time.
v. If, based upon the Reconciliation and/or the Adjustment procedures described above, it will be
determined that the actual daily amounts of the Specified Percentage of the Future Receipts get reduced
in comparison to the amount of the Daily Installment as of the Effective Date set forth in Section 1 of
this Agreement, and in comparison to the amount that both Merchant and Flexibility may have
anticipated or projected because Seller’s business has slowed down, or if the full Purchased Amount is
not remitted because Merchant’s business went bankrupt or otherwise ceased operations in the
ordinary course of business (but not due to Merchant’s willful or negligent mishandling of its business),
and Merchant shall have not breached this Agreement, Merchant would not owe anything to Flexibility
and would not be in breach of or in default under this Agreement.
b. Flexibility’s Risk Acknowledgments. Flexibility agrees to purchase the Purchased Future Receipts knowing
the risks that Merchant’s business may slow down or fail, and Flexibility assumes these risks based exclusively
upon the information provided to it by Merchant and related to the business operations of Merchant’ business
prior to the date hereof and upon Merchant’s representations, warranties and covenants in this Agreement that
are designed to give Flexibility a reasonable and fair opportunity to receive the benefit of its bargain.
Furthermore, Flexibility hereby acknowledges and agrees that Merchant shall be excused from performing its
obligations under this Agreement in the event Merchant’s business ceases its operations exclusively due to the
following reasons (collectively, the “Valid Excuses”):
i. adverse business conditions that occurred for reasons outside Merchant’s control and not due to
Merchant’s willful or negligent mishandling of its business;
ii. loss of the premises where the business operates (but not due to Merchant’s violation of its
obligations to its landlord);
iii. bankruptcy of Merchant;
iv. natural disasters or similar occurrences beyond Merchant’s control.
c. Not a Loan. Merchant and Flexibility agree that the Purchase Price is paid to Merchant in consideration for the
ownership of the Purchased Future Receipts and that payment of the Purchase Price by Flexibility is not
intended to be, nor shall it be construed as a loan from Flexibility to Merchant that requires absolute and
unconditional repayment on a maturity date. To the contrary, Flexibility’s ability to receive the Purchased
Amount pursuant to this Agreement, and the date when the Purchased Amount is paid in full (if ever) are subject
to and conditioned upon performance of Merchant’s business. If, nevertheless, a court having jurisdiction over
this Agreement and the parties hereto shall have determined that Merchant received a loan from Flexibility, and
Flexibility has charged or received interest hereunder in excess of the highest rate allowed by law, then the rate
in effect hereunder shall automatically be reduced to the maximum rate permitted by applicable law and
Flexibility shall promptly refund to Merchant any interest received by Flexibility in excess of the maximum
lawful rate.
REPRESENTATIONS, WARRANTIES AND COVENANTS
15. Merchant represents, warrants and covenants that as of this date and during the term of this Agreement:
a. Financial Condition and Financial Information. Merchant’s bank and financial statements, copies of which
have been furnished to Flexibility, and future statements which may be furnished hereafter pursuant to this
Agreement or upon Flexibility’s request, fairly represent the financial condition of Merchant as of the dates such
statements are issues, and prior to execution of the Agreement there has been no material adverse changes,
financial or otherwise, in such condition, operation or ownership of Merchant. Merchant has a continuing,
affirmative obligation to advise Flexibility of any material adverse change in its financial condition, operation or
ownership. Flexibility may request statements at any time during the term of this Agreement and Merchant
shall provide them to Flexibility within 5 business days. Merchant’s failure to do so is a material breach of this
Agreement.
b. Governmental Approvals. Merchant is in compliance and, during the term of this Agreement, shall be in
compliance with all laws and has valid permits, authorizations and licenses to own, operate and lease its
properties and to conduct the business in which it is presently engaged.
c. Good Standing. Merchant is a corporation/limited liability company/limited partnership/other type of entity
that is in good standing and duly incorporated or otherwise organized and validly existing under the laws of its
jurisdiction of incorporation or organization, and has full power and authority necessary to carry its business as
it is now being conducted.
d. Authorization. Merchant has all requisite power to execute, deliver and perform this Agreement and
consummate the transactions contemplated hereunder; entering into this Agreement will not result in breach
Guarantor #1 Initials: [ ] Guarantor #2 Initials: [ ]
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or violation of, or default under, any agreement or instrument by which Merchant is bound or any statute, rule,
regulation, order or other law to which Merchant is subject, nor require the obtaining of any consent, approval,
permit or license from any governmental authority having jurisdiction over Merchant. All organizational and
other proceedings required to be taken by Merchant to authorize the execution, delivery and performance of
this Agreement have been taken. The person signing this Agreement on behalf of Merchant has full power and
authority to bind Merchant to perform its obligations under this Agreement.
e. Accounting Records and Tax Returns. Merchant will treat receipt of the Purchase Price and payment of the
Purchased Amount in a manner evidencing sale of its future receipts in its accounting records and tax returns
and further agrees that Flexibility is entitled to audit Merchant’s accounting records upon reasonable Notice in
order to verify compliance. Merchant hereby waives any rights of privacy, confidentiality or taxpayer privilege
in any litigation or arbitration arising out of this Agreement in which Merchant asserts that this transaction is
anything other than a sale of future receipts.
f. Taxes; Workers Compensation Insurance. Merchant will promptly pay, when due, all taxes, including without
limitation, income, employment, sales and use taxes, imposed upon Merchant’s business by law, and will
maintain workers compensation insurance required by applicable governmental authorities.
g. Business Insurance. Merchant will maintain general liability and business-interruption insurance naming
Flexibility as loss payee and additional insured in the amounts and against risks as are satisfactory to Flexibility
and shall provide Flexibility proof of such insurance upon request.
h. Electronic Check Processing Agreement. Merchant shall not change its processor, add terminals, change its
financial institution or bank account(s) or take any other action that could have any adverse effect upon
Merchant’s obligations or impede Flexibility’s rights under this Agreement, without Flexibility’s prior written
consent.
i. No Diversion of Future Receipts. Merchant shall not allow any event to occur that would cause a diversion of
any portion of Merchant’s Future receipts from the Approved Bank Account without first notifying Flexibility of
such diversion.
j. Change of Name or Location. Merchant shall not conduct Merchant’s businesses under any name other than as
disclosed to the Processor and Flexibility and will not change any of its places of business without first obtaining
Flexibility’s written consent.
k. Prohibited Business Transactions: Merchant shall not: (i) transfer or sell all or substantially all of its assets
(including without limitation the Collateral or any portion thereof) without first obtaining Flexibility’s consent;
or (ii) make or send notice of its intended bulk sale or transfer.
l. No Closing of Business. Merchant will not sell, dispose, transfer or otherwise convey all or substantially all of
its business or assets without first: (i) obtaining the express written consent of Flexibility, and (ii) providing
Flexibility with a written agreement of a purchaser or transferee of Merchant’s business or assets assuming all
of Merchant’s obligations under this Agreement pursuant to documentation satisfactory to Flexibility. Merchant
represents that it has no current plans to close its business either temporarily (for renovations, repairs or any
other purpose), or permanently. Merchant agrees that until Flexibility shall have received all of the Purchased
Amount, Merchant will not voluntarily close its business on a permanent or temporarily basis for renovations,
repairs, or any other purposes. Notwithstanding the foregoing, Merchant shall have the right to close its
business temporarily if such closing is necessitated by a requirement to conduct renovations or repairs imposed
upon Merchant’s business by legal authorities having jurisdiction over Merchant’s business (such as from a
health department or fire department, or if such closing is necessitated by circumstances outside Merchant’s
reasonable control. Prior to any such temporary closure of its business, Merchant shall provide Flexibility ten
(10) business days advance notice.
m. No Pending Bankruptcy. As of the date of Merchant’s execution of this Agreement, Merchant is not insolvent,
has not filed, and does not contemplate filing, any petition for bankruptcy protection under Title 11 of the United
States Code and there has been no involuntary bankruptcy petition brought or pending against Merchant.
Merchant represents that it has not consulted with a bankruptcy attorney on the issue of filing bankruptcy
within six months immediately preceding the date of this Agreement.
n. Estoppel Certificate. Merchant will at any time, and from time to time, upon at least one (1) day’s prior notice
from Flexibility to Merchant, execute, acknowledge and deliver to Flexibility and/or to any other person or entity
specified by Flexibility in its notice, a statement certifying that this Agreement is unmodified and in full force
and effect (or, if there have been modifications, that the same is in full force and effect as modified and stating
the modification(s) and stating the date(s) on which the Purchased Amount or any portion thereof has been
repaid.
o. Working Capital Funding. Merchant shall not further encumber the Future Receipts, without first obtaining
written consent of Flexibility.
p. Unencumbered Future Receipts. Merchant has and will continue to have good, complete and marketable title
to all Future Receipts, free and clear of any and all liabilities, liens, claims, changes, restrictions, conditions,
options, rights, mortgages, security interests, equities, pledges and encumbrances of any kind or nature
whatsoever or any other rights or interests other than by virtue or entering into this Agreement.
Guarantor #1 Initials: [ ] Guarantor #2 Initials: [ ]
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q. Business Purpose. Merchant is entering into this Agreement solely for business purposes and not as a
consumer for personal, family or household purposes.
r. No Default under Contracts with Third Parties. Merchant’s execution of and/or performance of its obligations
under this Agreement will not cause or create an event of default by Merchant under any contract, which
Merchant is or may become a party to.
s. Right of Access. In order to ensure Merchant’s compliance with the terms of this Agreement, Merchant hereby
grants Flexibility the right to enter, without notice, the premises of Merchant’s business for the purpose of
inspecting and checking Seller’s transaction processing terminals to ensure the terminals are properly
programmed to submit and or batch Merchant’s daily receipts to the Processor and to ensure that Merchant has
not violated any other provision of this Agreement. Furthermore, Merchant hereby grants Flexibility and its
employees and consultants access to Merchant’s employees and records and all other items of property located
at the Merchant’s place of business during the term of this Agreement. Merchant hereby agrees to provide
Flexibility, upon request, all and any information concerning Merchant’s business operations, banking
relationships, names and contact information of Merchant’s suppliers, vendors and landlord(s), to allow
Flexibility to interview any of those parties.
t. Phone Recordings and Contact. Merchant agrees that any call between Merchant and Flexibility and its
owners, managers, employees and agents may be recorded and/or monitored. Furthermore, Merchant
acknowledges and agrees that: (i) it has an established business relationship with Flexibility, its managers,
employees and agents (collectively, the “Flexibility Parties”) and that Merchant may be contacted by any of the
Flexibility Parties from time-to-time regarding Merchant’s performance of its obligations under this Agreement
or regarding other business transactions; (ii) it will not claim that such communications and contacts are
unsolicited or inconvenient; and (iii) that any such contact may be made by any of the Flexibility Parties in
person or at any phone number (including mobile phone number), email addresses, or facsimile number
belonging to Merchant’s office, or its owners, managers, officers, or employees.
u. Knowledge and Experience of Decision Makers. The persons authorized to make management and financial
decisions on behalf Merchant with respect to this Agreement have such knowledge, experience and skill in
financial and business matters in general and with respect to transactions of a nature similar to the one
contemplated by this Agreement so as to be capable of evaluating the merits and risks of, and making an
informed business decision with regard to, Merchant entering into this Agreement.
v. Merchant’s Due Diligence. The person authorized to sign this Agreement on behalf of Merchant: (i) has
received all information that such person deemed necessary to make an informed decision with respect to a
transaction contemplated by this Agreement; and (ii) has had unrestricted opportunity to make such
investigation as such person desired pertaining to the transaction contemplated by this Agreement and verify
any such information furnished to him or her by Flexibility.
w. Arm-Length Transaction. The person signing this Agreement of behalf of Merchant: (a) has read and fully
understands content of this Agreement; (b) has consulted to the extent he/she wished with Merchant’s own
counsel in connection with the entering into this Agreement; (c) he or she has made sufficient investigation and
inquiry to determine whether this Agreement is fair and reasonable to Merchant, and whether this Agreement
adequately reflects his or her understanding of its terms.
x. Flexibility’s Consent. Merchant agrees that in every instance Merchant’s rights under this Agreement are
contingent upon first obtaining Flexibility’s consent, such consent may be withheld, granted or conditioned at
Flexibility’s sole and absolute discretion.
y. No Reliance on Oral Representations. This Agreement contains the entire agreement between Merchant and
Flexibility with respect to the subject matter of this Agreement, and supersedes each course of conduct
previously pursued or acquiesced in, and each oral agreement and representation previously made, by
Flexibility or any of the Flexibility Parties with respect thereto (If any), whether or not relied or acted upon. No
course of performance or other conduct subsequently pursued or acquiesced in, and no oral agreement or
representation subsequently made, by the Flexibility Parties, whether or not relied or acted upon, and no usage
of trade, whether or not relied or acted upon, shall amend this Agreement or impair or otherwise affect
Merchant’s obligations pursuant to this Agreement or any rights and remedies of the parties to this Agreement.
PLEDGE OF SECURITY
16. Pledge. As security for the prompt and complete payment and performance of any and all liabilities, obligations,
covenants or agreements of Merchant under this Agreement, now or hereafter arising from, out of or relating to this
Agreement, whether direct, indirect, contingent or otherwise (hereinafter referred to collectively as the “Obligations”),
Merchant hereby pledges, assigns and hypothecates to Flexibility and grants to Flexibility a continuing, perfected and
first priority lien upon and security interest in, to and under all of Merchant’s right, title and interest in and to the
following (collectively, the “Collateral”), whether now existing or hereafter from time to time acquired:
a. all accounts, including without limitation, all deposit accounts, accounts-receivable, and other receivables,
chattel paper, documents, equipment, general intangibles, instruments, and inventory, as those terms are
Guarantor #1 Initials: [ ] Guarantor #2 Initials: [ ]
202403011108 IndexNO.
INDEX #: E2024003927
E2024003927
FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024
defined by Article 9 of the Uniform Commercial Code (the “UCC”), now or hereafter owned or acquired by
Merchant; and
b. all Merchant’s proceeds, as that term is defined by Article 9 of the UCC.
17. Termination of Pledge. Upon the payment and performance by Merchant in full of the Obligations, the security interest
in the Collateral pursuant to this Pledge shall automatically terminate without any further act of either party being
required, and all rights to the Collateral shall revert to Merchant. Upon any such termination, Flexibility will execute,
acknowledge (where applicable) and deliver such satisfactions, releases and termination statements
Preview
FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM INDEX NO. E2024003927 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024 MONROE COUNTY CLERK’S OFFICE THIS IS NOT A BILL. THIS IS YOUR RECEIPT. Receipt # 3765190 Book Page CIVIL Return To: No. Pages: 15 JEFFREY MICHAEL PARRELLA 14 Wall Street Instrument: EXHIBIT(S) 20th Floor New York, NY 10005 Control #: 202403011108 Index #: E2024003927 Date: 03/01/2024 FLEXIBILITY CAPITAL, INC Time: 2:27:40 PM MARISOL SPOON INC. WEATHERSPOON, JASON BRENT Total Fees Paid: $0.00 Employee: State of New York MONROE COUNTY CLERK’S OFFICE WARNING – THIS SHEET CONSTITUTES THE CLERKS ENDORSEMENT, REQUIRED BY SECTION 317-a(5) & SECTION 319 OF THE REAL PROPERTY LAW OF THE STATE OF NEW YORK. DO NOT DETACH OR REMOVE. JAMIE ROMEO MONROE COUNTY CLERK 202403011108 Index # INDEX : E2024003927 NO. E2024003927 FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024 FLEXIBILITY CAPITAL INC. FUTURE RECEIVABLES SALE AND PURCHASE AGREEMENT This Future Receivables Sale and Purchase Agreement (this “Agreement”) dated as of __________________________________ February 6, 2024 , is made by and between Flexibility Capital, Inc., a New York corporation (“Flexibility”), and the merchant which name, address and other pertinent information appear below (the "Merchant”): Legal Business Name: Marisol _____________________________________________________________________________________________________________ Spoon INC. D/B/A: _____________________________________________________________________________________________________________ Marisol Spoon INC. Type of Entity: _____________________________________________________________________________________________________________ Corporation Business Physical Address: 821 _______________________________________________________________________________________________________ Joey CirCharleston, SC 29412 Business Mailing Address: 821 ______________________________________________________________________________________________________ Joey CirCharleston, SC 29412 Business Phone Number: (843) ___________________________________________ 897-8311 Email: j.marisolspoon@gmail.com ___________________________________________ Banking Information: Bank Name: Lendingclub ___________________________________________________ Bank Bank ABA: 211-075-086 _______________________________________________________ Bank Account Holder’s Name: ___________________________________________________________________________________________________ Marisol Spoon INC. Account # 7160714200 _______________________________________________ EIN: 45-3163325 ____________________________________________ WHEREAS, the Merchant is desirous to sell to Flexibility, and Flexibility is desirous to purchase from Merchant, a Specified Percentage of the Merchant’s Future Receipts, but only on the terms and conditions set forth in this Agreement (all capitalized terms shall have the meanings ascribed to them below). NOW, THEREFORE, for good and valuable consideration, the mutual receipts and sufficiency of which is hereby acknowledged by both parties, Flexibility and Merchant hereby agree to the foregoing and as follows: 1. Basic Terms and Definitions. a. “Effective Date” shall mean the later of: (i) the date set forth in the preamble to this Agreement, and (ii) the date when Flexibility paid the Purchase Price to Merchant. b. “Specified Percentage” shall mean ___________________________________________ ten PERCENT (_____.00%) 10 of each and every sum from sale made by Merchant. c. “Future Receipts” shall mean, collectively, all of Merchant’s receipts of monies paid and delivered to Merchant by Merchant’s customers’ and/or other vendees after the Effective Date of this Agreement; which payments or deliveries of monies can be made in the form of cash, check, credit, charge, or debit card, ACH or other electronic transfer or any other form of monetary payment in the ordinary course of Merchant’s business. d. “Purchased Amount” shall mean the total amount of the Specified Percentage of the Future Receipts that Merchant shall be under obligation to deliver to Flexibility pursuant to this Agreement. The parties agree that the Purchased Amount shall be $_______________________________________. 28,400.00 e. “Purchase Price” shall mean the total amount that Flexibility agrees to pay for the Future Purchased Receipts. The parties agree that the Purchase Price shall be $_____________________________________________. 20,000.00 f. “Daily Installment” shall mean the fixed amount that Merchant and Flexibility agree to be a good faith approximation of the Specified Percentage of Merchant’s daily Future Receipts. Merchant and Flexibility further agree that, based upon the information provided by Merchant to Flexibility concerning Merchant’s most recent accounts receivables, and subject to Merchant’s right of adjustment/reconciliation set forth in this Agreement, as of the Effective Date the Daily Installment shall be $____________________________________ 193.2 . g. “Workday” shall mean Monday through Friday except on days when banking institutions are closed for the holidays and do not process ACH payments. 2. The Term. The term of this Agreement shall commence on the Effective Date and expire on the date when the Purchased Amount is received by Flexibility in full. 3. Sale of Purchased Future Receipts. Merchant hereby sells, assigns, transfers and conveys (hereinafter, the “Sale”) unto Flexibility all of Merchant’s right, title and interest in to the Specified Percentage of the Future Receipts until the Purchased Amount shall have been delivered by Merchant to Flexibility (the “Purchased Future Receipts”); to have and hold the same unto Flexibility, its successors and assigns, forever. This Sale of the Purchased Future Receipts is made without express or implied warranty to Flexibility of collectability of the Purchased Future Receipts by Flexibility and without recourse against Merchant except as specifically set forth in this Agreement. By virtue of this Agreement, Merchant transfers to Flexibility full and complete ownership of the Purchased Future Receipts and Merchant retains no legal or equitable interest therein. 1 Guarantor #1: [ ] Guarantor #2: [ ] 202403011108 IndexNO. INDEX #: E2024003927 E2024003927 FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM Payment NYSCEF 4.DOC. NO. 2of Purchase Price. In consideration of the sale by Merchant to Flexibility ofRECEIVED the Purchased Future Receipts NYSCEF: 03/01/2024 pursuant to Flexibility agrees to pay to Merchant the Purchase Price; the Purchase Price shall be turned over and delivered to Merchant immediately after the Effective Date of this Agreement. 5. Use of Purchase Price. Merchant hereby acknowledges that it fully understands that: (i) Flexibility’s ability to collect the Purchased Amount (or any portion thereof) is contingent upon Merchant’s continued operation of its business and successful generation of the Future Receipts until the Purchased Amount is delivered to Flexibility in full; (ii) that in the event of decreased efficiency or total failure of Merchant’s business Flexibility’s receipt of the full or any portion of the Purchased Amount may be delayed indefinitely. Based upon the forgoing, Merchant agrees to use the Purchase Price exclusively for the benefit and advancement of Merchant’s business operations and for no other purpose. 6. Daily Installments of Purchased Amount. The Purchased Amount of the Specified Percentage of Future Receipts shall be delivered to Flexibility daily on Workdays in Daily Installments. 7. Approved Bank Account and Credit Card Processor.During the term of this Agreement, Merchant shall: (i) deposit all Future Receipts into one (and only one) bank account which bank account shall be acceptable and preapproved by Flexibility (the “Approved Bank Account”), (ii) use one (and only one) credit card processor which processor shall be acceptable and preapproved by Flexibility (the “Approved Processor”) and (iii) deposit all credit card receipts into the Approved Bank Account. In the event the Approved Bank Account or Approved Processor shall become unavailable or shall cease providing services to Merchant during the term of this Ag eement, prior to the first date of such unavailability or cessation of services, Merchant shall arrange for another Approved Bank Account or Approved Processor, as the case may be. 8. Authorization to Debit Approved Bank Account. c a b a i ibi i i i ia c ic c c d bi d a cc i a ai a ac da i ibi i c i c a d c a a ibi i i a acc c d ( ) d a cc b i i i a i ai c a a b b db ai . 9. Fees Associated with Debiting Approved Bank Account. It shall be Merchant’s exclusive responsibility to pay to its banking institution and/or Flexibility’s banking institution directly (or to compensate Flexibility, in case it is charged) all fees, charges and expenses incurred by either Merchant or Flexibility due to rejected electronic checks or ACH debit attempts, overdrafts or rejections by Merchant’s banking institution of the transactions contemplated by this Agreement. 10. Merchant’s Right for Reconciliation. Merchant and Flexibility each acknowledges and agrees that: a. If any time during the term of this Agreement Merchant will experience sporadic increase or decrease in its daily receipts, Merchant shall have the right, at its sole and absolute discretion, but subject to the provisions of Section 11 below, to request retroactive reconciliation of the Merchant’s actual daily receipts for one full calendar month immediately preceding da such request for reconciliation is received by Flexibility (each such calendar month, a “Reconciliation Month”). b. Such reconciliation ( c ci ia i ) of the Merchant’s daily receipts for a Reconciliation Month shall be performed by Flexibility within five (5) Workdays following its receipt of the Merchant’s request for reconciliation by either crediting or debiting the difference back to or from the Approved Bank Account so that the total amount debited by Flexibility from the Approved Bank Account during the Reconciliation Month at issue equal the Specific Percentage of the Future Receipts that Merchant collected during the Reconciliation Month at issue. c. One or more Reconciliation procedures performed by Flexibility may reduce the effective Daily Installment amount during the Reconciliation Month in comparison to the one set forth in Section 1 of this Agreement, and, as the result of such reduction, the term of this Agreement during which Flexibility will be debiting the Approved Bank Account may extend substantially. 11. Request for Reconciliation Procedure. a. It shall be Merchant’s sole responsibility and the right hereunder to initiate Reconciliation of Merchant’s actual receipts during any Reconciliation Month by sending a request for reconciliation to Flexibility. b. Any such request for Reconciliation of the Merchant’s daily receipts for a specific Reconciliation Month shall be in writing, shall include a copy of Merchant’s bank statement and a credit card processing statement for the Reconciliation Month at issue, and shall be received by Flexibility via email to ad i @Flexibilitycapital.com, with the subjection line “REQUEST FOR RECONICILIATION,” within five (5) Workdays after the last day of the Reconciliation Month at issue (time being of the essence as to the last day of the period during which such demand for reconciliation shall be received by Flexibility). c. Flexibility’s receipt of Merchant’s request for Reconciliation after the expiration of the 5-Workday period following the last day of the Reconciliation Month for which such reconciliation is requested nullifies and makes obsolete Merchant’s request for Reconciliation for that specific Reconciliation Month. d. Merchant shall have the right to request Reconciliation as many times during the term of this Agreement as it deems proper, and Flexibility shall comply with such request, provided that: i. Each such request is made in accordance with the terms of this Section 11. a c ci ia i i ad a i ai i a d a c c ci ia i a a ac a d bi d b ibi i d a cc i b c a c a d a d c i ii. a a a ica b d d i i a a ac a d bi d d Guarantor #1 Initials: [ a a 1 i ia 202403011108 IndexNO. INDEX #: E2024003927 E2024003927 FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024 Bank Account pursuant to this Agreement shall become equal to the Purchased Amount. iii. In the event after the last day of the term of this Agreement Merchant will determine in good faith that the actual amount debited by Flexibility from the Approved Bank Account pursuant to this Agreement is greater than the Purchased Amount, then and in such event Merchant shall have the right to request final Reconciliation within five (5) Workdays following the expiration date of the term of this Agreement (time being of the essence) and Flexibility shall honor such request within five (5) Workdays following the day of its receipt of such request. e. Nothing set forth in Sections 10 or 11 of this Agreement shall be deemed to provide Merchant with the right to interfere with Flexibility’s right and ability to debit the Approved Bank Account while the request for Reconciliation of Merchant’s receipts is pending or until the Purchased Amount is collected by Flexibility in full. 1 . Adjustment of Daily Installment. Merchant and Flexibility each acknowledge and agree that: a. If any time during the term of this Agreement Merchant will experience steady increase or decrease in its daily receipts, Merchant shall have the right, at its sole and absolute discretion, but subject to the provisions of Section 13 below, to request modification (“Adjustment”) of the amount of the Daily Installment that Merchant is obligated to delivery daily to Flexibility in accordance with the provisions of Section 6 above. Such Adjustment shall become effective as of the date it is granted and the new adjusted amount of the Daily Installment (the “Adjusted Daily Installment”) shall replace and supersede the amount of the Daily Installment set forth in Section 1 above. b. The Adjustment of the Daily Installment shall be performed by Flexibility within five (5) Workdays following its receipt of the Merchant’s request for Adjustment by modifying daily amounts that shall be are debited from the Approved Bank Account until the Purchased Amount is paid in full. Notwithstanding anything to the contrary set forth in Sections 12 and 13 hereof, no Adjustment shall take place until and unless Reconciliation for at least one (1) Reconciliation Month takes place resulting in reduction of the total amount debited from Merchant’s Approved Bank Account during the Reconciliation Month by at least 15% in comparison to the amount that would have been debited during that month without Reconciliation. c. One or more Adjustments performed by Flexibility may substantially extend the term of this Agreement. 1 . Request for Adjustment Procedure. a. It shall be Merchant’s sole responsibility and the right to initiate the Adjustment by sending a request for Adjustment to Flexibility. b. A request for Adjustment (an “Adjustment Request”) shall be in writing, shall include copies of: (i) Merchant’s three (3) consecutive bank statements of the Approved Bank Account and credit card processing statements immediately preceding the date of Flexibility’s receipt of the Adjustment Request, and (ii) Merchant’s bank statements and credit card processing statements previously provided by Merchant to Flexibility based upon which statements the amount of Daily Installment set forth in Section 1 above (or the then current Adjusted Daily Installment, as the case may be) was determined, and shall be received by Flexibility by email at ad i @Flexibilitycapital.com, with the subject line “REQUEST FOR ADJUSTMENT,” within five (5) Workdays after the date that is the latest of the last day of the latest bank statement enclosed with the Adjustment Request and the last date of the latest card processing statement enclosed with the Adjustment Request (time being of the essence as to the last day of the period during which an Adjustment Request shall be received by Flexibility). c. Flexibility’s receipt of a Merchant’s Adjustment Request after the expiration of the above referenced 5-Workday period nullifies and makes obsolete such Adjustment Request. d. Merchant shall have the right to request Adjustment of the Daily Installments as many times during the term of this Agreement as it seems proper, and Flexibility shall comply with such request, provided that: i. Each such request for Adjustment is made in accordance with the terms of this Section 13. ii. A request for Adjustment shall not be made after the expiration of the term of this Agreement. . Nothing set forth in Sections 12 or 13 of this Agreement shall be deemed to provide Merchant with the right to interfere with Flexibility’s right and ability to debit the Approved Bank Account while the request for Adjustment is pending or until the Purchased Amount is collected by Flexibility in full. 14. Risk Sharing Acknowledgments and Arrangements. a. Merchant and Flexibility each hereby acknowledges and agrees that: i. The Purchased Future Receipts represent a portion of Merchant’s Future Receipts. ii. This Agreement consummates the sale of the Purchased Future Receipts at a discount, not borrowing funds by Merchant from Flexibility. Flexibility does not charge Merchant and will not collect from Merchant any interest on the monies spent on the purchase of the Purchased Future Receipts. The period of time that it will take Flexibility to collect the Purchased Amount is not fixed, is unknown to both parties as of the Effective Date of this Agreement and will depend on the how well or not well Merchant’s business will be performing following the Effective Date. As an extreme example, in the event Merchant’s business ceases to exist after Flexibility’s purchase of the Purchased Future Receipts for reason outside Merchant’s control, Flexibility may never recover any moneys spent on such purchase. Guarantor #1 Initials: [ ] Guarantor #2 Initials: [ ] 202403011108 IndexNO. INDEX #: E2024003927 E2024003927 FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024 iii. The amount of the Daily Installment set forth in Section 1 of this Agreement is calculated based upon the information concerning an average amount of daily receipts collected by Merchant’s business immediately prior to the Effective Date of this Agreement which information was provided by Merchant to Flexibility. iv. The amounts of Merchant’s future daily receipts may increase or decrease over time. v. If, based upon the Reconciliation and/or the Adjustment procedures described above, it will be determined that the actual daily amounts of the Specified Percentage of the Future Receipts get reduced in comparison to the amount of the Daily Installment as of the Effective Date set forth in Section 1 of this Agreement, and in comparison to the amount that both Merchant and Flexibility may have anticipated or projected because Seller’s business has slowed down, or if the full Purchased Amount is not remitted because Merchant’s business went bankrupt or otherwise ceased operations in the ordinary course of business (but not due to Merchant’s willful or negligent mishandling of its business), and Merchant shall have not breached this Agreement, Merchant would not owe anything to Flexibility and would not be in breach of or in default under this Agreement. b. Flexibility’s Risk Acknowledgments. Flexibility agrees to purchase the Purchased Future Receipts knowing the risks that Merchant’s business may slow down or fail, and Flexibility assumes these risks based exclusively upon the information provided to it by Merchant and related to the business operations of Merchant’ business prior to the date hereof and upon Merchant’s representations, warranties and covenants in this Agreement that are designed to give Flexibility a reasonable and fair opportunity to receive the benefit of its bargain. Furthermore, Flexibility hereby acknowledges and agrees that Merchant shall be excused from performing its obligations under this Agreement in the event Merchant’s business ceases its operations exclusively due to the following reasons (collectively, the “Valid Excuses”): i. adverse business conditions that occurred for reasons outside Merchant’s control and not due to Merchant’s willful or negligent mishandling of its business; ii. loss of the premises where the business operates (but not due to Merchant’s violation of its obligations to its landlord); iii. bankruptcy of Merchant; iv. natural disasters or similar occurrences beyond Merchant’s control. c. Not a Loan. Merchant and Flexibility agree that the Purchase Price is paid to Merchant in consideration for the ownership of the Purchased Future Receipts and that payment of the Purchase Price by Flexibility is not intended to be, nor shall it be construed as a loan from Flexibility to Merchant that requires absolute and unconditional repayment on a maturity date. To the contrary, Flexibility’s ability to receive the Purchased Amount pursuant to this Agreement, and the date when the Purchased Amount is paid in full (if ever) are subject to and conditioned upon performance of Merchant’s business. If, nevertheless, a court having jurisdiction over this Agreement and the parties hereto shall have determined that Merchant received a loan from Flexibility, and Flexibility has charged or received interest hereunder in excess of the highest rate allowed by law, then the rate in effect hereunder shall automatically be reduced to the maximum rate permitted by applicable law and Flexibility shall promptly refund to Merchant any interest received by Flexibility in excess of the maximum lawful rate. REPRESENTATIONS, WARRANTIES AND COVENANTS 15. Merchant represents, warrants and covenants that as of this date and during the term of this Agreement: a. Financial Condition and Financial Information. Merchant’s bank and financial statements, copies of which have been furnished to Flexibility, and future statements which may be furnished hereafter pursuant to this Agreement or upon Flexibility’s request, fairly represent the financial condition of Merchant as of the dates such statements are issues, and prior to execution of the Agreement there has been no material adverse changes, financial or otherwise, in such condition, operation or ownership of Merchant. Merchant has a continuing, affirmative obligation to advise Flexibility of any material adverse change in its financial condition, operation or ownership. Flexibility may request statements at any time during the term of this Agreement and Merchant shall provide them to Flexibility within 5 business days. Merchant’s failure to do so is a material breach of this Agreement. b. Governmental Approvals. Merchant is in compliance and, during the term of this Agreement, shall be in compliance with all laws and has valid permits, authorizations and licenses to own, operate and lease its properties and to conduct the business in which it is presently engaged. c. Good Standing. Merchant is a corporation/limited liability company/limited partnership/other type of entity that is in good standing and duly incorporated or otherwise organized and validly existing under the laws of its jurisdiction of incorporation or organization, and has full power and authority necessary to carry its business as it is now being conducted. d. Authorization. Merchant has all requisite power to execute, deliver and perform this Agreement and consummate the transactions contemplated hereunder; entering into this Agreement will not result in breach Guarantor #1 Initials: [ ] Guarantor #2 Initials: [ ] 202403011108 IndexNO. INDEX #: E2024003927 E2024003927 FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024 or violation of, or default under, any agreement or instrument by which Merchant is bound or any statute, rule, regulation, order or other law to which Merchant is subject, nor require the obtaining of any consent, approval, permit or license from any governmental authority having jurisdiction over Merchant. All organizational and other proceedings required to be taken by Merchant to authorize the execution, delivery and performance of this Agreement have been taken. The person signing this Agreement on behalf of Merchant has full power and authority to bind Merchant to perform its obligations under this Agreement. e. Accounting Records and Tax Returns. Merchant will treat receipt of the Purchase Price and payment of the Purchased Amount in a manner evidencing sale of its future receipts in its accounting records and tax returns and further agrees that Flexibility is entitled to audit Merchant’s accounting records upon reasonable Notice in order to verify compliance. Merchant hereby waives any rights of privacy, confidentiality or taxpayer privilege in any litigation or arbitration arising out of this Agreement in which Merchant asserts that this transaction is anything other than a sale of future receipts. f. Taxes; Workers Compensation Insurance. Merchant will promptly pay, when due, all taxes, including without limitation, income, employment, sales and use taxes, imposed upon Merchant’s business by law, and will maintain workers compensation insurance required by applicable governmental authorities. g. Business Insurance. Merchant will maintain general liability and business-interruption insurance naming Flexibility as loss payee and additional insured in the amounts and against risks as are satisfactory to Flexibility and shall provide Flexibility proof of such insurance upon request. h. Electronic Check Processing Agreement. Merchant shall not change its processor, add terminals, change its financial institution or bank account(s) or take any other action that could have any adverse effect upon Merchant’s obligations or impede Flexibility’s rights under this Agreement, without Flexibility’s prior written consent. i. No Diversion of Future Receipts. Merchant shall not allow any event to occur that would cause a diversion of any portion of Merchant’s Future receipts from the Approved Bank Account without first notifying Flexibility of such diversion. j. Change of Name or Location. Merchant shall not conduct Merchant’s businesses under any name other than as disclosed to the Processor and Flexibility and will not change any of its places of business without first obtaining Flexibility’s written consent. k. Prohibited Business Transactions: Merchant shall not: (i) transfer or sell all or substantially all of its assets (including without limitation the Collateral or any portion thereof) without first obtaining Flexibility’s consent; or (ii) make or send notice of its intended bulk sale or transfer. l. No Closing of Business. Merchant will not sell, dispose, transfer or otherwise convey all or substantially all of its business or assets without first: (i) obtaining the express written consent of Flexibility, and (ii) providing Flexibility with a written agreement of a purchaser or transferee of Merchant’s business or assets assuming all of Merchant’s obligations under this Agreement pursuant to documentation satisfactory to Flexibility. Merchant represents that it has no current plans to close its business either temporarily (for renovations, repairs or any other purpose), or permanently. Merchant agrees that until Flexibility shall have received all of the Purchased Amount, Merchant will not voluntarily close its business on a permanent or temporarily basis for renovations, repairs, or any other purposes. Notwithstanding the foregoing, Merchant shall have the right to close its business temporarily if such closing is necessitated by a requirement to conduct renovations or repairs imposed upon Merchant’s business by legal authorities having jurisdiction over Merchant’s business (such as from a health department or fire department, or if such closing is necessitated by circumstances outside Merchant’s reasonable control. Prior to any such temporary closure of its business, Merchant shall provide Flexibility ten (10) business days advance notice. m. No Pending Bankruptcy. As of the date of Merchant’s execution of this Agreement, Merchant is not insolvent, has not filed, and does not contemplate filing, any petition for bankruptcy protection under Title 11 of the United States Code and there has been no involuntary bankruptcy petition brought or pending against Merchant. Merchant represents that it has not consulted with a bankruptcy attorney on the issue of filing bankruptcy within six months immediately preceding the date of this Agreement. n. Estoppel Certificate. Merchant will at any time, and from time to time, upon at least one (1) day’s prior notice from Flexibility to Merchant, execute, acknowledge and deliver to Flexibility and/or to any other person or entity specified by Flexibility in its notice, a statement certifying that this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect as modified and stating the modification(s) and stating the date(s) on which the Purchased Amount or any portion thereof has been repaid. o. Working Capital Funding. Merchant shall not further encumber the Future Receipts, without first obtaining written consent of Flexibility. p. Unencumbered Future Receipts. Merchant has and will continue to have good, complete and marketable title to all Future Receipts, free and clear of any and all liabilities, liens, claims, changes, restrictions, conditions, options, rights, mortgages, security interests, equities, pledges and encumbrances of any kind or nature whatsoever or any other rights or interests other than by virtue or entering into this Agreement. Guarantor #1 Initials: [ ] Guarantor #2 Initials: [ ] 202403011108 IndexNO. INDEX #: E2024003927 E2024003927 FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024 q. Business Purpose. Merchant is entering into this Agreement solely for business purposes and not as a consumer for personal, family or household purposes. r. No Default under Contracts with Third Parties. Merchant’s execution of and/or performance of its obligations under this Agreement will not cause or create an event of default by Merchant under any contract, which Merchant is or may become a party to. s. Right of Access. In order to ensure Merchant’s compliance with the terms of this Agreement, Merchant hereby grants Flexibility the right to enter, without notice, the premises of Merchant’s business for the purpose of inspecting and checking Seller’s transaction processing terminals to ensure the terminals are properly programmed to submit and or batch Merchant’s daily receipts to the Processor and to ensure that Merchant has not violated any other provision of this Agreement. Furthermore, Merchant hereby grants Flexibility and its employees and consultants access to Merchant’s employees and records and all other items of property located at the Merchant’s place of business during the term of this Agreement. Merchant hereby agrees to provide Flexibility, upon request, all and any information concerning Merchant’s business operations, banking relationships, names and contact information of Merchant’s suppliers, vendors and landlord(s), to allow Flexibility to interview any of those parties. t. Phone Recordings and Contact. Merchant agrees that any call between Merchant and Flexibility and its owners, managers, employees and agents may be recorded and/or monitored. Furthermore, Merchant acknowledges and agrees that: (i) it has an established business relationship with Flexibility, its managers, employees and agents (collectively, the “Flexibility Parties”) and that Merchant may be contacted by any of the Flexibility Parties from time-to-time regarding Merchant’s performance of its obligations under this Agreement or regarding other business transactions; (ii) it will not claim that such communications and contacts are unsolicited or inconvenient; and (iii) that any such contact may be made by any of the Flexibility Parties in person or at any phone number (including mobile phone number), email addresses, or facsimile number belonging to Merchant’s office, or its owners, managers, officers, or employees. u. Knowledge and Experience of Decision Makers. The persons authorized to make management and financial decisions on behalf Merchant with respect to this Agreement have such knowledge, experience and skill in financial and business matters in general and with respect to transactions of a nature similar to the one contemplated by this Agreement so as to be capable of evaluating the merits and risks of, and making an informed business decision with regard to, Merchant entering into this Agreement. v. Merchant’s Due Diligence. The person authorized to sign this Agreement on behalf of Merchant: (i) has received all information that such person deemed necessary to make an informed decision with respect to a transaction contemplated by this Agreement; and (ii) has had unrestricted opportunity to make such investigation as such person desired pertaining to the transaction contemplated by this Agreement and verify any such information furnished to him or her by Flexibility. w. Arm-Length Transaction. The person signing this Agreement of behalf of Merchant: (a) has read and fully understands content of this Agreement; (b) has consulted to the extent he/she wished with Merchant’s own counsel in connection with the entering into this Agreement; (c) he or she has made sufficient investigation and inquiry to determine whether this Agreement is fair and reasonable to Merchant, and whether this Agreement adequately reflects his or her understanding of its terms. x. Flexibility’s Consent. Merchant agrees that in every instance Merchant’s rights under this Agreement are contingent upon first obtaining Flexibility’s consent, such consent may be withheld, granted or conditioned at Flexibility’s sole and absolute discretion. y. No Reliance on Oral Representations. This Agreement contains the entire agreement between Merchant and Flexibility with respect to the subject matter of this Agreement, and supersedes each course of conduct previously pursued or acquiesced in, and each oral agreement and representation previously made, by Flexibility or any of the Flexibility Parties with respect thereto (If any), whether or not relied or acted upon. No course of performance or other conduct subsequently pursued or acquiesced in, and no oral agreement or representation subsequently made, by the Flexibility Parties, whether or not relied or acted upon, and no usage of trade, whether or not relied or acted upon, shall amend this Agreement or impair or otherwise affect Merchant’s obligations pursuant to this Agreement or any rights and remedies of the parties to this Agreement. PLEDGE OF SECURITY 16. Pledge. As security for the prompt and complete payment and performance of any and all liabilities, obligations, covenants or agreements of Merchant under this Agreement, now or hereafter arising from, out of or relating to this Agreement, whether direct, indirect, contingent or otherwise (hereinafter referred to collectively as the “Obligations”), Merchant hereby pledges, assigns and hypothecates to Flexibility and grants to Flexibility a continuing, perfected and first priority lien upon and security interest in, to and under all of Merchant’s right, title and interest in and to the following (collectively, the “Collateral”), whether now existing or hereafter from time to time acquired: a. all accounts, including without limitation, all deposit accounts, accounts-receivable, and other receivables, chattel paper, documents, equipment, general intangibles, instruments, and inventory, as those terms are Guarantor #1 Initials: [ ] Guarantor #2 Initials: [ ] 202403011108 IndexNO. INDEX #: E2024003927 E2024003927 FILED: MONROE COUNTY CLERK 03/01/2024 12:08 PM NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 03/01/2024 defined by Article 9 of the Uniform Commercial Code (the “UCC”), now or hereafter owned or acquired by Merchant; and b. all Merchant’s proceeds, as that term is defined by Article 9 of the UCC. 17. Termination of Pledge. Upon the payment and performance by Merchant in full of the Obligations, the security interest in the Collateral pursuant to this Pledge shall automatically terminate without any further act of either party being required, and all rights to the Collateral shall revert to Merchant. Upon any such termination, Flexibility will execute, acknowledge (where applicable) and deliver such satisfactions, releases and termination statements