Preview
FILED: KINGS COUNTY CLERK 04/16/2024 03:04 PM INDEX NO. 510886/2024
Adopted 11/01/19
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/16/2024
BizFund, LLC
2371 McDonald Ave 2nd FL
Brooklyn, NY 11223
MERCHANT CASH ADVANCE AGREEMENT
Agreement (this “Agreement” or “Merchant Agreement”) dated 8-7-2023 between , BizFund, LLC, a Delaware limited liability
company (“Purchaser”), and the Merchant listed below (“Merchant”). Purchaser and Merchant are sometimes referred to in this
Agreement individually as a “Party” and collectively as the “Parties.” Capitalized terms used in this Agreement shall have the
respective meanings given to them in Section 5 of the attached Terms and Conditions (the “Terms”). The Terms are hereby
incorporated into and made a part of this Agreement as if set forth in this Agreement in full.
MERCHANT INFORMATION
Merchant’s Legal Name: CUT RITE LAWN CARE AND MAINTENANCE INC
D/B/A: CUT RITE LAWN CARE AND MAINTENANCE State of Incorporation/Organization: IN
Type of entity (check one): Corporation ( ) ✔ Limited Liability Company ( ) Limited Partnership (
Limited Liability Partnership ( ) General Partnership ( Sole Proprietor ( )
Address of Executive Offices: 4120 GEORGIA ST City GARY State IN Zip 46409 _
Mailing Address: SAME AS ABOVE _City State_ Zip
Date business started (mm/yy): 01/2005
Federal ID#
IN CONSIDERATION OF THE PREMISES and other good and valuable consideration, the receipt and sufficiency of which are
acknowledged by each of Merchant and Purchaser, the Parties, intending to be legally bound, hereby agree as follows:
Section 1. Purchase and Sale of Future Receipts.
1.1 Merchant hereby sells, assigns, transfers and delivers to Purchaser absolutely, without recourse, all of its
right, title and interest in, to and under its future Receipts in the amount specified below (the “Purchased Amount”) for the
purchase price specified below (the “Purchase Price”). Purchaser hereby purchases such future Receipts in the amount of the
Purchased Amount (the “Purchased Receipts”) for the Purchase Price on behalf of itself or on behalf of itself and/or as Agent
for certain Syndicate Partners. Merchant hereby agrees that it retains no right, title, ownership or other interest, legal,
beneficial or otherwise, in the Purchased Receipts.
1.2 (a) Merchant and Purchaser agree that the Purchased Amount shall be delivered to Purchaser from the
proceeds of the collection of the specified percentage (the “Specified Percentage”) of Receipts set forth below. Merchant
represents that the Specified Percentage of its average weekly receipts during the past three (3) months is approximately equal
to the estimated specific weekly amount set forth below (the “Specific Weekly Amount”). Merchant shall establish, and shall
maintain at all times during the duration of this Agreement and until all Merchant Obligations have been irrevocably satisfied
in full, a depositary account (the “Specified Account”) at a commercial bank or other financial institution selected by Merchant
that is reasonably acceptable to Purchaser (the “Financial Institution”). Merchant hereby irrevocably authorizes Purchaser to
effect ACH Debits to the Specified Account in an amount equal to the Specific Weekly Amount until Purchaser irrevocably
receives an aggregate amount equal to all Merchant Obligations. Purchaser may affect ACH Debits to the Specified Account on
the first Business Day of each calendar week in an amount equal to the Specific Weekly Amount.
(b) In the event that for any reason Purchaser is unable to effect an ACH Debit pursuant to Section 1.2(a) in
any calendar week, Merchant hereby agrees that Purchaser shall thereafter be entitled to, and hereby irrevocably authorizes
Purchaser to, effect ACH Debits to the Specified Account on each Business Day in an amount equal to the specific daily amount set
forth below (the “Specific Daily Amount”), provided that on the Business Day prior to a legal bank holiday occurring during any
business week (Monday through Friday), Purchaser may affect an ACH Debit to the Specified Account in an amount equal to
twice the Specific Daily Amount. The Specific Daily Amount equals approximately one fifth (1/5th) of the Specific Weekly
Amount and Merchant represents that the Specific Daily Amount approximates the Specified Percentage of its average daily
receipts during the past three (3) months.
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1.3 Merchant and Purchaser acknowledge that the Merchant’s Receipts will depend upon Merchant’s success in
selling its products and services and the collection of payment therefor, that Merchant’s average daily Receipts from and after
the date of this Agreement may be more or less than the average of Merchant’s daily Receipts during the three (3) months
prior to the date of this Agreement and that there is no assurance that the Specified Percentage of Merchant’s Receipts will be
sufficient to enable Purchaser to collect Receipts in a total amount equal to the Purchased Amount. There is no time period
during which the Purchased Amount of Receipts must be collected by Purchaser and there is no interest rate or required
amortization schedule associated therewith. If Receipts arise more slowly than Purchaser anticipates because Merchant’s
business slows, or if the Purchased Amount is not collected in full because Merchant becomes bankrupt or otherwise ceases
operations in the ordinary course of business, Merchant will have no obligation or liability to Purchaser unless Merchant has
breached a representation, warranty, covenant or other obligation on its part to be performed under this Agreement.
Consequently, Merchant and Purchaser intend and agree that the transactions provided for in this Agreement constitute a
purchase and sale of future Receipts at a discount for all purposes and shall in no event constitute, or be deemed or construed
to constitute, a loan transaction. This Agreement has no term but shall remain in full force and effect until all Merchant
Obligations have been irrevocably satisfied in full.
1.4 This Agreement shall become effective and binding upon Merchant and Owner/Guarantor when it is
executed and delivered by Merchant and Purchaser provides funds to pay the Purchase Price, even if Purchaser has not
executed and delivered to Merchant a counterpart of this Agreement.
Section 2. Authorization of ACH Debits.
2.1 Merchant shall irrevocably authorize and instruct the Financial Institution to honor and effect the ACH Debits
permitted by this Agreement by properly completing, executing and delivering to the Financial Institution, with a copy to
Purchaser, a written authorization substantially in the form attached to this Agreement as Appendix B. Merchant shall not
change the Specified Account or the Financial Institution without the express prior written consent of Purchaser, which
Purchaser may give or withhold in its sole discretion. Merchant shall ensure that all of its Receipts are deposited in or
otherwise credited to the Specified Account; provided that Merchant shall only deposit, or permit to be deposited, Purchased
Receipts into the Specified Account. Merchant shall not block or otherwise interfere with Purchaser’s access to the Specified
Account to effect ACH Debits in accordance with the terms of this Agreement. Notwithstanding the foregoing provisions of
this Section 2.1, Merchant may revoke such authorization and change the financial institution at which it maintains a depositary
account upon the irrevocable satisfaction in full of all Merchant Obligations.
2.2 Merchant shall properly complete, execute and deliver to Purchaser a Bank Login Authorization in the form
attached to this Agreement as Appendix C and will provide Purchaser with all such other access codes and other information
or documents necessary to enable Purchaser to affect the ACH Debits provided for in Section 1.2 or elsewhere in this
Agreement, as well as all monthly bank statements relating to the Specified Account, promptly upon Purchaser’s request.
Merchant shall be responsible for, and shall pay upon demand, any fees or costs incurred by Purchaser as a result of any
dishonor of an ACH Debit permitted by this Agreement. Purchaser shall in no event be responsible or liable to Merchant or
the Financial Institution for any fees, costs or other expenses arising or resulting from or in connection with any rejected ACH
Debit transaction or overdraft that may result from Purchaser effecting or attempting to effect an ACH Debit permitted by this
Agreement.
2.3 Without the express prior written consent of Purchaser, which Purchaser may give or withhold in its sole
discretion, Merchant will not (a) permit to occur or suffer to exist any event that could cause the diversion of any of Merchant’s
Receipts to any account with a financial institution other than the Financial Institution or to any account with the Financial
Institution other than the Specified Account; (b) change the arrangements with the Financial Institution or with respect to the
Specified Account or the relevant access codes or other information with respect thereto in any way that is adverse to
Purchaser; (d) directly or indirectly make any promise or offer with respect to, or provide, any incentive, economic or
otherwise, such as, but not limited to, loyalty points for payment by credit card or any other method other than cash, a personal
check or other cash equivalent, the effect or result of which could be to (i) discourage the generation of a Receipt that is not
deposited in the Specified Account, or induce a customer of Merchant to pay for Merchant’s goods or services with any means
other than cash. a personal check or other cash equivalent; or (e) take any other action that could have any adverse effect upon
Merchant’s Obligations or Purchaser’s rights or remedies under this Agreement or fail to take any action if such failure could
have such adverse effect.
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NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/16/2024
Section 3. Reconciliations.
3.1 Either Party may request a reconciliation of Merchant’s account under this Agreement (a “Reconciliation
Request”) by providing written notice to the other Party. Promptly upon receiving a Reconciliation Request from Purchaser,
and together with any a Reconciliation Request made by Merchant, Merchant shall provide to Purchaser, true, correct and
complete copies of all bank statements relating to the Specified Account and all monthly statements of any bank or other
financial institution at which Merchant or any of its Affiliates maintain or have maintained a depositary or other account since
the date of this Agreement through the end of the calendar month immediately prior to the calendar month in which the
Reconciliation Request is made (collectively, the “Account Statements”). Any Reconciliation Request shall be in writing and
given in accordance with the notice provisions set forth in Section 11.12.
3.2 As soon as reasonably practicable after receipt of all Account Statements, Purchaser shall provide to
Merchant, without charge, a statement (a “Reconciliation Statement”) that sets forth: (a) the total amount of Receipts that
Merchant originated after the date of this Agreement, (b) the amount equal to the product of the Specified Percentage and the
total amount of Receipts that originated after the date of this Agreement, and (c) the aggregate amount of ACH Debits effected
by Purchaser pursuant to Section 1.2. The Reconciliation Statement shall provide the foregoing information as of the last day
of the calendar month immediately prior to Purchaser’s receipt of the Reconciliation Request.
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Each Reconciliation Statement shall be final, binding and conclusive on Merchant, absent manifest error. Within ten (10)
Business Days after
the delivery of a Reconciliation Statement, Purchaser shall either deposit into the Specified Account the
amount, if any, by which the amount described in clause (c) of Section 3.2 as set forth in such Reconciliation Statement exceeds
the amount described in clause (b) of Section 3.2 as set forth in such Reconciliation Statement, or shall debit by ACH Debit the
Specified Account in the amount, if any, by which the amount described in clause (b) of Section 3.2 as set forth in such
Reconciliation Statement exceeds the amount described in clause (c) of Section 3.2 as set forth in such Reconciliation
Statement.
3.4 In the event that Merchant fails to deliver all such Account Statements on a timely basis, Purchaser
shall have no obligation under this Agreement or otherwise to provide a Reconciliation Statement with respect to
such Reconciliation Request. A failure by Merchantto make a Reconciliation Request with respect
to any period, or to provide
Account Statements pursuant to Section 3.2 with respect to a Reconciliation Request, shall not constitute a waiver by
Merchant of its right to make a Reconciliation Request in accordance with this Section 3 on a futureoccasion.
Section 4. Certain Adjustments; Fees.
4.1 Notwithstanding and in addition to Merchant's right to make a Reconciliation Request pursuant to Section
3.1, Merchant may request that Purchaser adjust, and Purchaser in its sole discretion may adjust, the Specified Percentage,
the Specific Daily Amount, any Fee or any other payment due under this Agreement to a percentage or an amount Purchaser
deems appropriate in its sole discretion. Notwithstanding anything to the contrary in this Agreement or any other agreement
between Purchaser and Merchant, upon the occurrence of an Event of Default, automatically, without any demand or other
notice from Purchaser, the Specified Percentage shall be increased to 100% and the entire remaining uncollected portion of
the Purchased Amount (the "Purchased Amount Balance") shall immediately become due and payable.
4.2 In addition to the foregoing, Merchant shall be responsible for and shall pay when due all fees, costs and
expenses provided for in Appendix A attached to this Agreement (collectively "Fees"). Appendix A is hereby incorporated into
and made a part of this Agreement as if set forth in this Agreement in full. Subject to applicable law, Purchaser may apply
amounts collected hereunder to the Merchant Obligations in such manner as Purchaser chooses in its sole discretion
ANY MISREPRESENTATION MADE BY MERCHANT OR OWNER OR GUARANTOR IN CONNECTION WITH THIS AGREEMENT MAY
CONSTITUTE A SEPARATE CAUSE OF ACTION FOR FRAUD, FRAUDULENT INDUCMENT OR INTENTIONAL
MISREPRESENTATION.
Purchase Price: Specified Estimated Specific Estimated Specific Purchased Amount:
Percentage Amount: Amount:
Weekly Daily
65,000.00 4,035.00 807.00 96,850.00
g 15% $ s $
IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement as of the date first above written:
MERCHANT (#1)
EDDIE L MARTINEZ Eddie Martim
EddieMartinez (Aug7, 202312:37CD· Sign Here
By
(Print Name and Title): (Signature]
FOR MERCHANT (#2]
Sign Here
By
(Print Name and Title):
(Signature)
OWNER/GUARANTOR #1
EDDIE L MARTINEZ Eddie Martim
By EddieMartinez(Aug7, 202312:37CDT)
(Print Name): (Signature]
OWNER/GUARANTOR #2
gn Here
By
Name
By:
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NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 04/16/2024
MERCHANT CASH ADVANCE AGREEMENT TERMS AND CONDITIONS
(Payment by ACH Debits)
Section 5. Definitions. Capitalized terms used in this Agreement shall have the respective meanings set forth below in this Section
5:
“ACH Debit” means a direct debit transfer that is transacted through the Automated Clearinghouse (ACH) electronic network
for financial transactions in the United States.
“Account Statements” has the meaning set forth in Section 3.1.
“Advisor” has the meaning set forth in Section 9.
“Affiliate” of any Person means any other Person controlling, controlled by or under common control with such Person.
“Agent” means Purchaser, acting in its capacity as the administrative agent for the Syndicate Partners in connection with this
Agreement and the transactions contemplated hereby.
“Agreement” has the meaning set forth in the heading to this Agreement and includes all extensions, renewals, amendments
and other modifications and restatements thereof. Any reference herein to this “Agreement” or this “Merchant Agreement”
includes these Terms.
“Ancillary Document” means the Guaranty, a Confession of Judgment, and any other agreement, document or instrument
delivered by Merchant and/or Owner/Guarantor pursuant to or in connection with this Agreement or the transactions
contemplated hereby and in each case includes all extensions, renewals, amendments and other modifications and
restatements thereof.
“Bankruptcy Case” means any bankruptcy, insolvency, arrangement, reorganization, liquidation or other debt-relief
Proceeding under Federal or State law.
“Business Day” means any day on which commercial banks in New York, New York, or in the principal place of business of
Financial Institution, are not authorized to be open or are required to be closed for commercial transactions under
applicable law, rule or regulation.
“Event of Default” has the meaning set forth in Section 7.1.
“Fees” has the meaning set forth in Section 4.2.
“Financial Institution” has the meaning set forth in Section 1.2(a).
“Guaranty” means the guaranty at the end of this Agreement executed by Owner/Guarantor and includes all extensions,
renewals, amendments and other modifications and restatements thereof.
“Liens” has the meaning set forth in Section 6.3.
“Merchant” has the meaning set forth in the heading to this Agreement.
“Merchant Agreement” has the meaning set forth in the heading to this Agreement.
“Merchant Confidential Information” has the meaning set forth in Section 9.
“Merchant Obligations” means the Purchased Amount Balance, together with any and all Fees and all other payment
obligations of Merchant to Purchaser pursuant to this Agreement and any other Ancillary Document, including all fees, costs
and expenses of investigation, court costs and fees and expenses of attorneys and other professionals.
“Owner/Guarantor” means the member, shareholder or other owner of Merchant who has executed this Agreement and/or
the Guaranty.
“Party” and “Parties” have the respective meanings set forth in the heading to this Agreement, except that in Section 10, the
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terms “Party and “Parties” shall also include any Owner/Guarantor that has executed this Agreement or any Ancillary
Document.
“Person” means any individual, corporation, limited or general partnership, limited liability company, limited liability
partnership, joint venture, trust, association or other entity.
“Proceeding” means any claim, demand, action, suit or proceeding at law, in equity or otherwise, including any arbitration.
“Purchase Price” has the meaning set forth in Section 1.1.
“Purchased Amount” has the meaning set forth in Section 1.1.
“Purchased Amount Balance” has the meaning set forth in Section 4.1.
“Purchased Receipts” has the meaning set forth in Section 1.1.
“Purchaser” has the meaning set forth in the heading to this Agreement.
“Purchaser Advisor” has the meaning set forth in Section 9.
“Purchaser Confidential Information” has the meaning set forth in Section 9.
“Receipt” means any and all payments Merchant receives for the sale of goods or services in the ordinary course of business
from, on account of or in connection with any and all invoices, accounts, contract rights and other payment obligations
arising after the date of this Agreement with or by any customer or client of Merchant or other third parties having a business
relationship with Merchant, whether such payment is made in cash or by check, money order, wire transfer or any in other
form.
“Reconciliation Request” has the meaning set forth in Section 3.1.
“Reconciliation Statement” has the meaning set forth in Section 3.2.
“Security Agreement” means the security agreement set forth in Section 11.13.
“Specific Amount” means the Specific Daily Amount or the Specific Weekly
Amount, as applicable.
“Specific Daily Amount” has the meaning set forth in Section 1.2 (b).
“Specific Weekly Amount” has the meaning set forth in Section 1.2(a).
“Specified Account” has the meaning set forth in Section 1.2(a).
“Specified Percentage” has the meaning set forth Section
1.2(a).
“Syndicate Partners” means those Persons that have acquired a participation interest in the transactions contemplated by
this Agreement
“Terms” has the meaning set forth in the heading to this Agreement.
“UCC” means the Uniform Commercial Code as in effect in the jurisdiction in which the Merchant is organized.
Section 6. Representations, Warranties and Covenants of Merchant. By executing and delivering this Agreement,
Merchant acknowledges, represents, warrants, covenants and agrees to and with Purchaser as follows:
6.1 Organization and Good Standing. Merchant is the type of entity specified on the first page of this Agreement
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and is duly organized and in good standing in its jurisdiction of organization specified on the first page of this Agreement.
Merchant is duly qualified or licensed to do business in each jurisdiction in which the operation of its business or the location of
its properties or assets requires such qualification or licensing. Merchant is a valid business and Merchant is entering into this
Agreement for business purposes only and not as a consumer for personal, family or household purposes. Merchant
understands, acknowledges and agrees it is not entitled to the rights and protections that are afforded to consumers under federal
and state law with respect to consumer loans.
6.2 Authorization. Merchant has full power and authority to execute and deliver this Agreement and any Ancillary
Document to which it is a party, and to incur and perform its obligations under this Agreement and each such Ancillary Document.
Owner/Guarantor has full capacity, power and authority to execute and deliver this Agreement on behalf of Merchant and any
Ancillary Document to which it is a party, and to incur and perform its obligations under each such Ancillary Document.
Merchant and each such Owner/Guarantor have duly authorized, executed and delivered this Agreement and any such Ancillary
Document and each of this Agreement and any such Ancillary Document constitutes their respective legal, valid and binding
obligations, enforceable against them in accordance with their respective terms.
6.3 No Conflict. Neither the execution, delivery nor performance of this Agreement or any Ancillary Document by
Merchant or any Owner/Guarantor does or will, with or without the giving of notice or the passage of time, or both, (a) conflict
with, violate, breach, cause a default or give rise to a right of acceleration in favor of any third Person under (i) the constituent
documents of Merchant or any such Owner/Guarantor; (ii) any law, rule or regulation binding on Merchant or any such
Owner/Guarantor; or (iii) any contract, agreement, trust or other understanding, commitment or arrangement, whether written
or oral, to which Merchant or any such Owner/Guarantor is a party or by which any of them, or their respective properties or
assets, is bound; (b) require the consent, authorization or approval of, or the giving of notice to, any governmental agency or
authority under any applicable law, rule or regulation; or (c) result in the creation of any claim, charge, restriction, condition,
option, right, mortgage, security interest, equity, pledge, lien or other encumbrance of any kind or nature whatsoever
(collectively, “Liens”) upon any or all of the properties or assets of Merchant or Owner/Guarantor.
6.4 Financial Condition and Financial Information.
(a) All of the information and statements made in Merchant’s application for the purchase and sale transaction
provided for in this Agreement are true, correct and complete. Merchant will promptly notify Purchaser if any of such
information or statement is no longer true, correct or complete. Merchant’s financial statements, true, complete and correct
copies of which have been furnished to Purchaser, fairly present in all material respect the financial condition and results of
operations of Merchant at their respective dates, and for the periods then ended, and since those dates there has been no material
adverse change, financial or otherwise, in the business, operations, financial condition, results of operations, assets or liabilities,
prospects or ownership of Merchant. Any financial statements delivered by Merchant to Purchaser pursuant to this Agreement
will be true, correct and complete and will fairly present in all material respects the financial condition and results of operations
of Merchant as of their respective dates and for the respective periods then ending. Merchant shall promptly advise Purchaser
of any material adverse change in its business, operations, financial condition, results of operations, assets, liabilities, prospects
or ownership. Merchant shall provide to Purchaser within five (5) Business Days after Purchaser’s request therefor, true, correct
and complete copies of all such other financial statements, bank statements or other documents relating to Merchant’s financial
condition or results of operations, all of which shall be true, correct and complete.
(b) Merchant authorizes Purchaser and its agents to investigate Merchant’s financial responsibility, credit
worthiness and financial history, and will provide to Purchaser any bank or financial statements, tax returns, etc., as Purchaser
deems necessary in its sole discretion prior to or at any time after the execution of this Agreement. A photocopy of this
Agreement shall be deemed as acceptable for release of such information by the various credit services and financial institutions.
Purchaser is authorized to request updates with respect to such information from time to time as it deems appropriate in its sole
discretion. Merchant shall authorize its bank(s) to provide to Purchaser Merchant’s banking and/or credit card processing
history to assist Purchaser in evaluating the transactions contemplated by this Agreement.
(c) Merchant and each Person signing this Agreement on behalf of Merchant and/or as Owner/Guarantor, in
respect of himself personally, authorizes Purchaser to disclose information concerning Merchant’s and each Owner/Guarantor’s
credit standing (including credit bureau reports that Purchaser obtains) and business conduct to agents, Affiliates, subsidiaries,
Syndicate Partners, Purchaser’s funding sources and credit reporting bureaus. Merchant and each Owner/Guarantor hereby
waives and releases to the maximum extent permitted by law any claim for damages against Purchaser or any of its Affiliates
relating to any (i) investigation undertaken by or on behalf of Purchaser permitted by this Agreement, or (ii) disclosure of
information permitted by this Agreement.
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6.5 Title to Assets; No Liens. Merchant has good, complete and marketable title to all of the properties and assets
used in its business, free and clear of any and all Liens or any other rights or interests that may be inconsistent with the
transactions contemplated hereby, or adverse to the interests of Purchaser. Merchant will not incur, permit or suffer to exist any
Lien on the Purchased Receipts.
6.6 Conduct of Business; Compliance with Laws. Merchant shall conduct its business in the ordinary course,
consistent with past practice, and shall use its best efforts to continue its business at least at the same level as on the date of this
Agreement. Merchant has no current plans to close its business for any reason, and agrees that until all Merchant Obligations have
irrevocably been satisfied in full, Merchant will not close its business on a temporary basis for renovation, repairs or other
similar purposes without the express prior written consent of Purchaser, which consent Purchaser may give or not give in its sole
discretion. Merchant shall use the proceeds of the Purchase Price solely in connection with the operation of its business.
Merchant will not incur any debts outside the ordinary course of business, will not make any loans, advances or other extension
of credit to any Person or guarantee or otherwise become liable for the debts or obligations of any other Person, except for the
endorsement of negotiable instruments in the ordinary course of business. Merchant is currently in compliance and shall
continue to comply with all laws, rules and regulations applicable to its business, operations, properties and assets and it has
valid and in full force and effect, and will continue to maintain in full force and effect and operate its business in compliance with,
all necessary or advisable permits, authorizations and licenses to own, operate and lease its properties and assets as and where
they are located and to conduct the business in which it is presently engaged. Without limiting the foregoing, Merchant shall pay
all required taxes on a timely basis, including employment taxes and withholdings, sales and use taxes and, if applicable, real
estate taxes. For the avoidance of doubt, this Section 6.6 does not constitute a covenant or agreement by Merchant that it will not
cease conducting its business should circumstances in the Merchant’s business beyond its control so require.
6.7 Certain Matters as to the Receipts and Payments. The Purchase Price is in full payment for the purchase, at an
agreed-upon discount, of the Future Receipts pursuant to this Agreement and equals the fair market value of the Purchased
Receipts. Purchaser has purchased and upon the funding under this Agreement, without any other action or the delivery of any
other document or instrument by Merchant, shall have good, complete and marketable title to all the Purchased Receipts as and
when the Purchased Receipts arise, free and clear of any and all Liens. If, notwithstanding Section 1.3, a court re-characterizes
the purchase and sale transaction provided for in this Agreement as a loan transaction, determines that any collections by
Purchaser pursuant to this Agreement constitute interest, determines that such payments are in excess of the highest rate
permitted by applicable law or otherwise determines that the transactions provided for in this Agreement are subject to the
usury laws of any jurisdiction, the Purchase Price or the Purchased Amount shall automatically be adjusted to a payment amount
that will equal the maximum amount permitted by applicable law. Purchaser shall promptly refund to Merchant any payments
received by Purchaser in excess of the maximum lawful amount, it being intended that Merchant not contract to pay or pay, and
that Purchaser not contract to receive or receive, directly or indirectly in any manner whatsoever, any payment in excess of that
which may be paid by Merchant under applicable law.
6.8 No Bankruptcy Pending. During the six (6) months ending on the date of this Agreement, neither Merchant nor
Owner/Guarantor has contemplated (or contemplates) or has commenced (a) any Bankruptcy Case; (b) any petition or other
Proceeding seeking the appointment of a receiver, administrator, liquidator or other person for the marshalling, sale or
liquidation of its properties or assets; or (c) an assignment for the benefit of its creditors, and there has been no involuntary
petition or Proceeding brought or is pending against Merchant or Owner/Guarantor for any of the foregoing purposes. Neither
Merchant nor Owner/Guarantor is insolvent or has admitted in writing its inability to pay its debts as they mature. Merchant
does not anticipate commencing any such Bankruptcy Case, petition or other Proceeding and it does not anticipate that any such
involuntary petition or Proceeding will be filed against it during the next twelve (12) months. For the avoidance of doubt, this
Section 6.8 does not constitute a covenant or agreement by Merchant that it will not commence or become subject to a
Bankruptcy Case in the next twelve (12) months should circumstances in the Merchant’s business beyond its control so require.
6.9 Working Capital Funding. Merchant has not and shall not enter into any arrangement, agreement or
commitment that relates to or involves the Purchased Receipts, whether in the form of a purchase of, a loan against, collateral
against or the sale, assignment, transfer, factoring or purchase of credits against, Receipts, cash deposits or receipts or future
sales with any Person other than Purchaser without Purchaser’s prior express written consent, which Purchaser may or may
not give in its sole discretion. Purchaser may share information regarding this Agreement with any third person in order to
determine whether Merchant is in compliance with the provisions of this Section 6.9. Upon the irrevocable satisfaction in full of
all Merchant Obligations, the restrictions contained in this Section 6.9 shall terminate.
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6.10 Insurance. Merchant will maintain in full force and effect liability, property and casualty and business-
interruption insurance policies in such amounts and against such risks as are satisfactory to Purchaser and shall provide
Purchaser proof of such insurance upon request.
6.11 Change of Name or Location. Merchant will not conduct its business(es) under any name other than as
set forth in the heading to this Agreement or change its name or the location of its incorporation or other organization or any of
its places of business without providing Purchaser express written notification at least twenty (20) Business Days in advance of
any such change.
6.12 Notice of Certain Events. Merchant shall give Purchaser written notice of its intention to file a Bankruptcy
Case at least five (5) Business Days prior to the filing of any Bankruptcy Case. Merchant shall give Purchaser written notice of its
intention to enter into or consummate any transaction described in Section 7.1(c) or Section 7.1(d) at least ten (10) Business
Days prior to the closing of any such transaction. Merchant shall give Purchaser advance notice of at least one (1) Business Day
in the event that sufficient funds will not be available in the Specified Account to permit Purchaser to effect ACH Debits in
accordance with the terms of this Agreement.
6.13 Estoppel Certificate. Merchant will at any time, and from time to time, upon at least one (1) Business Day’s
prior notice from Purchaser, execute, acknowledge and deliver to Purchaser and/or to any other Person specified by Purchaser,
a statement certifying that this Agreement is unmodified and in full force and effect (or, if there has been any modification, that
the same is in full force and effect as modified and stating the modification) and stating the dates on which the Purchased Amount
or any portion thereof has been collected.
6.14 Publicity. Purchaser may include Merchant’s name in a listing of its clients and in its advertising and
marketing materials. Purchaser may in its discretion disclose to Syndicate Partners information about this Agreement and the
transactions contemplated hereby.
6.15 D/B/A’s. Purchaser may be using “doing business as” or “dba” names in connection with various matters
relating to this Agreement and the transactions contemplated hereby, including the filing of UCC-1 financing statements and other
notices or filings.
MERCHANT ACKNOWLEDGES AND AGREES THAT EACH OF ITS ACKNOWLEDGEMENTS, REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS SET FORTH IN THIS SECTION 6 OR ELSEWHERE IN THIS AGREEMENT IS
MATERIAL, THAT PURCHASER HAS RELIED THEREON IN ENTERING INTO THIS AGREEMENT AND THAT A BREACH OR
VIOLATION OF ANY OF THEM SHALL CONSTITUTE A MATERIAL BREACH OF THIS AGREEMENT. ALL SUCH
REPRESENTATIONS AND WARRANTIES SHALL BE CONTINUING REPRESENTATIONS AND WARRANTIES AND SHALL
SURVIVE THE EXECUTION, DELIVERY, PERFORMANCE AND THE TERMINATION OF THIS AGREEMENT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.
Section 7. Events of Default and Remedies.
7.1 Events of Default. The occurrence of any of the following events shall constitute an “Event of Default” hereunder:
(a) Merchant breaches or violates any covenant, agreement or other obligation contained in this Agreement
(including any breach or violation of Section 2.1, Section 2.2 or Section 2.3 or any failure to provide a timely notice of certain
events pursuant to Section 6.12) or any Person other than Purchaser that is a party to an Ancillary Document breaches or
violates any covenant, agreement or other obligation of such other Person contained in such Ancillary Document;
(b) Any representation or warranty of Merchant contained in this Agreement, or any representation or warranty
of any Person other than Purchaser in any Ancillary Document, shall prove to be incorrect, incomplete, false or misleading in
any material respect when made or at any time thereafter until all Merchant Obligations shall have been irrevocably satisfied in
full;
(c) Merchant sells, assigns, conveys or otherwise transfers all or substantially all of its assets or makes or sends any
notice of an intended bulk sale of its properties and assets without, in any such case, (i) the prior express written consent of
Purchaser, which Purchaser may give or withhold in its sole discretion, and (ii) the written agreement of any purchaser or
transferee to the assumption of all of Merchant’s obligations (including all Merchant Obligations) under this Agreement
pursuant to documentation satisfactory to Purchaser in its sole discretion;
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(d) Merchant reorganizes, merges or consolidates with, or otherwise effects a business combination with, any
Person, as a result of which the ownership of Merchant after such transaction is materially different than such ownership
immediately prior to such transaction, without, in any such case, (i) the prior express written consent of Purchaser, which
Purchaser may give or withhold in its sole discretion, and (ii) the written agreement of the surviving Person in such
reorganization, merger, consolidation or other business combination, as the case may be, to the assumption of all of Merchant’s
obligations (including all Merchant Obligations) under this Agreement pursuant to documentation satisfactory to Purchaser in
its sole discretion;
(e) Merchant takes any action, or fails to take any action, that could have the effect of encumbering the cash flow of
its business or unduly straining the viability of its operations; or
(f) Any Owner/Guarantor revokes or otherwise terminates its Guaranty, or such Guaranty otherwise becomes
invalid or unenforceable.
7.2 Remedies. In case any Event of Default occurs and is not expressly waived pursuant to Section 11.3, Purchaser
may, without any demand, protest, notice of protest or other notice of any kind, all of which Merchant hereby waives, proceed
to protect and enforce its rights or remedies set forth below in this Section 7.2 and such other rights and remedies available to it
under applicable law, whether by suit for specific performance or other equitable relief or by action at law, or both, or otherwise,
including an action for breach of this Agreement and monetary damages as a result thereof:
(a) Purchaser may enforce the provisions of the Guaranty against the Owner/Guarantor;
(b) If requested by Purchaser upon execution of this Agreement, and Merchant has executed and delivered to
Purchaser a Confession of Judgment in favor of Purchaser, Purchaser may enter such Confession of Judgment as a judgment with the
Clerk of the Court and executethereon;
(c) Purchaser may enforce its rights under Section 11.13 and pursue any and all remedies available to it under the
UCC; or
(d) Purchaser may debit Merchant’s depository accounts wherever situated by means of ACH debit or facsimile
signature on a computer-generated check drawn on Merchant’s bank account or otherwise for an amount e