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Filing # 131681336 E-Filed 07/29/2021 03:17:25 PM
IN THE CIRCUIT COURT OF THE
14TH JUDICIAL CIRCUIT IN AND
FOR BAY COUNTY, FLORIDA
CAN CAPITAL ASSET SERVICING, INC.,
a Massachusetts corporation, as successor in CASE NO. 21000949CA
interest to WebBank,
Plaintiff,
VS.
SIGNATURE DECKS AND FENCES, INC.,
a Florida corporation, d/b/a SIGNATURE
DECKS & FENCES.COM and DAVID
ELLIOTT a/k/a DAVID RICHARD ELLIOTT,
Defendants.
/
COMPLAINT
COMES NOW Plaintiff, Can Capital Asset Servicing, Inc., as successor in interest to
WebBank, by and through its undersigned attorney, and hereby states the following as its
Complaint:
PARTIES AND JURISDICTION
1. Can Capital Asset Servicing, Inc., a Massachusetts corporation (“Can Capital”), is
successor in interest to WebBank, (as explained herein).
2. Defendant, Signature Decks and Fences, Inc. d/b/a Signature Decks & Fences.com
(“Signature”), is a Florida corporation with its principal place of business in Panama City, Bay
County, Florida.
3. Defendant, David Elliott a/k/a David Richard Elliott (“Elliott” or “Guarantor”), is
an individual sui juris, who resides in Riverview, Hillsborough County, Florida and at all relevant
times mentioned herein was and is the principal officer of Signature Decks and Fences, Inc. d/b/a
Signature Decks & Fences.com (Signature and Elliott are referred to herein collectively as
“Defendants.”).4, At all relevant times mentioned herein, Defendant, Elliott, operated its business in
Panama City, Bay County, Florida.
GENERAL ALLEGATIONS
5. On or about September 26, 2019, Defendant, Signature, entered into a Business
Loan Agreement with WebBank (“Agreement”), pursuant to which WebBank loaned the principal
amount of $75,000.00 (“Principal Amount”) to Defendant, Signature, in exchange for $95,250.00
(“Repayment Amount”), a true and correct copy of which is attached hereto as Exhibit A. The
Maturity Date of the Agreement was October 1, 2020.
6. On or about September 27, 2019, in accordance with the Agreement, WebBank
funded and paid Defendant, Signature, the Principal Amount.
7. Can Capital Asset Servicing, Inc. became the successor in interest to WebBank
having purchased the Agreement from WebBank shortly after execution and funding thereof, but
prior to the filing of this Complaint.
8. Pursuant to paragraph 16 of the Agreement, Utah law (and not Florida law) governs
the Agreement and any transactions it contemplates, the construction of its terms, and the
interpretation performance and enforcement of the rights and duties of Can Capital and
Defendants.
9. Defendant, Signature, agreed:
(a) Defendant, Signature, will use the Principal Amount (and the goods or
services bought with the Principal Amount) solely for business purposes
and not for consumer, personal, family, or household purposes;
(b) to not to use the funding for the purpose to fund dividends or distributions
to shareholders, partners, members, or other owners of an equity interest in
the business; and
(c) The loan documents by the Agreement was not a “Consumer Transaction”
as defined in the Uniform Commercial Code (“UCC”).10. Pursuant to the terms and conditions of the Agreement, Defendant, Signature,
agreed to pay the Repayment Amount to Can Capital.
11. To effect payment of the Repayment Amount, Defendant, Signature, agreed to
authorize WebBank, or its successor, to debit or otherwise withdraw the Weekday Payment
Amount of $360.90 per day, as set forth in the Agreement, from an account designated by
Defendant, Signature (the “Designated Account”).
12. Can Capital purchased the Agreement from WebBank just after WebBank’s initial
funding and became the owner of the Agreement, thereafter making and attempting to make the
agreed-upon debits/withdrawals called for under the Agreement.
13. Pursuant to the Agreement with respect to Defendant, Signature’s, business and
operations, Defendant, Signature, agreed to:
(a) not materially change the nature of its business from the type originally
disclosed in connection with this Agreement;
(b) not sell or otherwise transfer its business without:
(i) Can Capital’s express prior written consent, which Can Capital may
withhold in its sole discretion for any reason or no reason and
(ii) | The assumption of all of the obligations under the Agreement using
documentation reasonably satisfactory to Can Capital, providing
such assumption would not release Signature from liability under
the Agreement.
(c) authorize Can Capital to withdraw from the Designated Account any funds
Can Capital was entitled to under the Agreement;
(d) not to revoke Can Capital’s authorization to withdraw monies from the
Designated Account;
14. Pursuant to the Agreement with respect to the Designated Account, Defendant,
Signature, agreed that:
(a) the Designated Account is and shall be a business bank account during the
Term of the Agreement;(b)
(c)
@
the Designated Account is not and will not be during the Term of the
Agreement an account established primarily for personal, family or
household purposes or otherwise an “account” as defined in 15 U.S.C.
1693a and Regulation E;
the Designated Account shall have sufficient funds during the Term of the
Agreement for all debits and other withdrawals contemplated by the
Agreement; and
if the Designated Account at any time lacks sufficient funds for any debit
of other withdrawal required by the Agreement, Defendant, Signature,
agreed to immediately transfer sufficient funds to the Designated Account
or to pay Can Capital such funds.
15. Pursuant to the Agreement, Defendant, Signature, agreed that the following
constitute “Events of Default” as defined in the Agreement:
(a)
(b)
(c)
(d)
()
@
(g)
at any given time during the Term of the Agreement a sum amount
equivalent to seven (7) Weekday Payment Amounts has come due but
remains unpaid;
Signature fails to pay any amount owed to Can Capital under the
Agreement (other than Weekday Payment Amounts) within 30 days after
Can Capital requests payment in writing;
Signature revokes or cancels any authorization for Can Capital to debit or
otherwise withdraw from or access the Designated Account;
Signature fails to maintain the insurance requested under the Agreement;
if any warranty, representation or statement made or furnished to Can
Capital by Signature, or any Signing Principal or on Signature’s or any
Signing Principal's behalf under this Agreement is or becomes false or
misleading in any material respect;
if this Agreement ceases to be in full force and effect at any time and for
any reason (including failure to create a validly perfected security interest
or Lien);
Signature:
(i) is legally dissolved, is adjudicated insolvent or bankrupt or ceases
to pay its debts as they mature,
(ii) | makes a general assignment for the benefit of or enter into an
arrangement with creditors,(iii) applies for or consents to the appointment of a receiver, trustee or
liquidator of it or a substantial part of its property,
(iv) takes action to dissolve or terminate its legal existence, or
authorizes or files a voluntary petition in bankruptcy or under any
similar law, consents to such a petition, or suffers such a petition
or proceeding to be instituted against it which remains undismissed
for a period of 60 days; or
(v) ifn individual, dies or becomes legally incompetent;
(h) commencement of foreclosure or forfeiture proceedings, whether by
judicial self-help, repossession or any other method, by creditors or by
any governmental agency against any Collateral, including a
garnishment of any of Signature’s Deposit Accounts;
(i) failure to perform or comply with any other term, provision, condition,
covenant at contained in this Agreement or any other documentation
related to this Agreement;
G) Signature defaults under any other agreement with Can Capital, any
Assignee or any affiliate of either Can Capital or any Assignee, or under
any agreement with any third party material to Signature’s business or
providing of real or personal property or the repayment of owed;
(k) Can Capital reasonably deems themselves insecure with respect to
Signature’s performance hereunder or in Can Capital’s rights with respect
to the Collateral; and
( any of the preceding events occurs with respect to any guarantor, endorser,
surety, or accommodation party of any of Signature’s obligations under the
Agreement.
16. Defendant, Elliott, executed a personal guaranty (the “Personal Guaranty”)
pursuant to which Elliott personally guaranteed, among other things, Defendant, Signature’s,
performance of the terms and conditions of the Agreement and payment of the Repayment Amount
due under the Agreement.
17. On or about January 17, 2020, Defendant, Signature, defaulted on the Agreement
for, among other things, failure to pay Can Capital in accordance with the terms of the Agreement
(see payment history attached hereto as Exhibit B):(a) A sum equivalent to seven (7) weekday payments became due by
Defendant, Signature, but remains unpaid;
(b) revoking or canceling any of the authorizations to debit or otherwise
withdraw funds or access the Designated Account or any other account
described in the Agreement.
(c) failure to perform or comply with any other term, provision, condition,
covenant at contained in this Agreement or any other documentation
related to this Agreement;
(d) | Can Capital reasonably deemed themselves insecure with respect to
Defendant, Signature’s, performance hereunder or in Can Capital’s rights
with respect to the Collateral; and
18. As of January 17, 2020, Defendant, Signature, paid $25,977.60 toward the
Repayment Amount of $95,250.00 and, accordingly, Defendant, Signature, is indebted to Plaintiff
in the total principal amount of $69,272.40, plus pre-judgment interest at the statutory rate.
19. The Plaintiff made written demand on May 19, 2020 upon the Defendants for
payment of said indebtedness of $69,272.40 but Defendants have failed to respond to said demand
and failed to pay said sums.
20. Pursuant to paragraph 10.13 of the Agreement, if Plaintiff is deemed the prevailing
party by the Court in this action, Defendants are liable for any and all expenses, including
collection costs, attorneys’ fees and expenses, expert fees and expenses, and all other expenses
which may be incurred associated with a breach of the Agreement and, by this Complaint, Plaintiff
gives Defendant, Signature, written notice that Plaintiff intends to enforce that provision of the
Agreement.
21. In the event a default is entered by the Court for failure of any Defendant or
Defendants to file a response to the Complaint in the time permitted by the Florida Rules of Civil
Procedure, $2,500 shall be deemed a reasonable attorneys’ fee incurred by Plaintiffs in this action.22. All conditions precedent to Plaintiff filing this action have been performed, have
been waived, or have been excused.
COUNT I -- BREACH OF CONTRACT
23. Plaintiff incorporates Paragraphs 1 through 22 inclusive, as though fully set forth
herein.
24. By reason of the foregoing, Defendant, Signature, has breached one or more of the
Events of Default under the Agreement, causing Can Capital to suffer damages.
25. Plaintiff is entitled to recover damages under the Agreement in an amount equal to
the Repayment Amount of $69,272.40, plus pre-judgment interest at the statutory rate.
WHEREFORE, Plaintiff prays that Judgment be entered against Defendant, Signature, in
the amount of $69,272.40, plus accrued statutory interest at the statutory rate from October 1, 2020,
the Maturity Date of the Agreement, plus attorneys’ fees as provided in the Agreement, plus post-
judgment interest at the legal statutory rate, and all costs of this action.
COUNT II - BREACH OF PERSONAL GUARANTY
26. Plaintiff incorporates Paragraphs 1 through 22, 24 and 25 inclusive, as though fully
set forth herein.
27. Defendant, David Elliott a/k/a David Richard Elliott, provided Can Capital with the
Personal Guaranty, pursuant to which Defendant, David Elliott a/k/a David Richard Elliott,
personally guaranteed, among other things, that Signature would perform pursuant to the terms
and conditions of the Agreement.
28. Signature breached one or more of the terms or conditions in the Agreement with
Plaintiff, triggering the Personal Guaranty.29. Defendant, David Elliott a/k/a David Richard Elliott, has not revoked the personal
guaranty.
30. On or around May 19, 2020, Plaintiff demanded in writing that Defendant, David
Elliott a/k/a David Richard Elliott, cure Signature’s breach of the Agreement, but Plaintiff has
received no response to said demand. As a result, Defendant, David Elliott a/k/a David Richard
Elliott, has breached the Personal Guaranty, causing damages to Plaintiff in the amount of
$69,272.40, plus prejudgment interest at the statutory rate.
WHEREFORE, Plaintiff prays that Judgment be entered against Defendant, David Elliott
a/k/a David Richard Elliott, in the amount of $69,272.40, plus accrued interest at the statutory rate
from October 1, 2020, the Maturity Date of the Agreement, plus attorneys’ fees as provided in the
Agreement, plus post-judgment interest at the legal rate, and all costs of this action.
Respectfully submitted this 29th day of July, 2021.
/s/ Kurt E. Thalwitzer
KURT E. THALWITZER
Florida Bar Number 816299
Mateer & Harbert, P.A.
225 East Robinson Street, Suite 600
Post Office Box 2854
Orlando, Florida 32802-2854
Telephone: (407) 425-9044
Facsimile: (407) 423-2016
Primary: kthalwitzer@mateerharbert.com
Secondary: kmeder@mateerharbert.com
Attorneys for Plaintiff
4820-1853-8996, v. 1DocuSign Envelope |:
Agreement #:
Account ID:
BUSINESS LOAN AGREEMENT
This Business Loan Agreement (this "Agreement’) dated _September 26, 2019 _ is between WebBank (“Lender”) and the borrower listed
below ("Borrower").
A. BORROWER INFORMATION
Repayment Amount
= Principal Amount + Cost-of-Funds
(not including Origination Fee!
BUSINESS LEGAL NAME D/B/A
SIGNATURE DECKS AND FENCES INC. | Signature Decks & Fences. Com
FEDERAL TAX ID# STATE OF INCORPORATION / ORGANIZATION
203496314 FL
PHYSICAL ADDRESS (BUSINESS LOCATION) CITY STATE ZIP
1025 W 19TH ST APT 18A Panama City FL 32405
MAILING ADDRESS (FOR STATEMENTS) CITY STATE zip
1025 W 19TH ST APT 18A Panama City FL 32405
BUSINESS START DATE (MM/YY) BUSINESS ENTITY TYPE (check one):
, Corporation Limited Liability Company 1 Partnership O
09/19/2005 Limited Partnership [_] Limited Liability Partnership [[] Sole Proprietorship [J
B. _ SIGNING PRINCIPAL/GUARANTOR INFORMATION
NAME BUSINESS TITLE
David Elliott President
RESIDENTIAL ADDRESS CITY STATE ZIP
11023 Running Pine Drive Riverview FL 33569
Cc. _PAYMENT INFORMATION
Principal Amount $75,000.00 Weekday Payment Amount $360.80
We will begin to debit the Weekday Payment Amount from your
Cost-of-Funds $20,250.00 Designated Account on the first non-bank holiday weekday
immediately following the day that we transfer the Principal Amount
to you. The last payment may be less than the above amount
depending on the balance.
$95,250.00
2.99%
of the Principal Amount
(excluding ony portion of the Principal Amount being
applied to repay an existing loan balance owed to us)
Origination Fee
Total Number of Payments 264
Calendar Days to Maturity 370
Calculated based on a presumption of no missed payments.
D._ CONTACT INFORMATION
EMAIL ADDRESS
david@signaturefences.com
PHONE NUMBER
be
EXHIBIT A
(ie
Business Loan Agreement | Rev. 8.19 | Page 1 of 13DocuSign Envelope |:
KEY TERMS & CONDITIONS
You should read this entire Agreement before signing it, but we want you to be aware of the following terms and conditions:
1. ARBITRATION: Section 19 gives you and us the right to require any dispute to be resolved through BINDING INDIVIDUAL
ARBITRATION rather than in court. Individual arbitration means that neither you nor we can assert claims on behalf of a class
or in a representative capacity. You can opt out of this provision, without penalty, for a limited time.
2. FEES: Section 5.5 requires you to pay certain fees and charges in addition to the Repayment Amount. These fees and
charges include, but are not limited to, the Origination Fee, which is equal to a percentage of the Principal Amount (excluding
any portion of the Principal Amount being applied to repay an existing loan balance owed to us or our Assignees) as specified
in Table C above, late fees, dishonored payment fees and site visit fees.
3. PREPAYMENT: Section 6 gives you the right to prepay your remaining obligation under this Agreement once 90 days
have passed from the Effective Date. If you choose to exercise this right, you may be eligible for a discount of your remaining
obligation reduced by an amount that is 30% of the outstanding Cost-of-Funds portion of your loan.
4. CREDIT REPORTS: Among other things, Section 10.11 allows us to pull your credit reports in connection with this loan
and to determine your eligibility for other financial products.
5. COLLATERAL: Section 9 grants us a lien on your properties, assets and rights, which we may secure by the filing of a
financing statement, and Section 21 restricts what you can do with such Collateral.
6. SIMULTANEOUS FUNDING RESTRICTION: Section 22 restricts your ability to seek certain types of additional financing
before you have paid off your obligation to us.
7. TELEPHONE CONTACT: Section 14 allows us to contact you in certain ways and to record our telephone calls with you.
8. BANK HOLIDAYS: Section 5.3 states, among other things, that on the first Weekday after a bank holiday we will debit
the Designated Account to make up for the payment(s) missed because of the bank holiday, in addition to the payment
otherwise due on that Weekday, which will result in multiple payments debited in a single day on such occasions.
PLEASE READ THESE PROVISIONS CAREFULLY.
LS
WARNING REGARDING THIRD PARTY FEES: Please note, if you worked with a third-party to facilitate this loan, we may directly pay
such third-party a referral fee, but we do not permit third parties to charge you fees in connection with the funding of your loan. Please
notify CAN Capital, Inc., our Servicer, at 877-500-8282 immediately if any third party has charged you a fee for your loan or otherwise
made promises outside the scope of this Agreement.
|
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and laundering activities, Federal law requires all financial institutions to obtain,
verify, and record information that identifies each person who opens an account.
What this means for you: When you open an account, we will ask for the name, address, date of birth (for any natural person), and
other information that will allow us to identify the Signing Principal and your company. We may also ask to see the Signing Principal's
driver's license or other identifying documents about the Signing Principal and your company.
Capitalized terms not defined below will have the meaning given
to such terms above.
1, PARTIES. In this Agreement, the words “you” and “your” refer
to Borrower. The words “we”, “us" and “our” refer to Lender and
its successors or assigns, including any “Assignee” as defined in
Section 11. “Principal” refers to each one of Borrower's owners,
shareholders, partners, members, principals, officers, directors
and employees. “Signing Principal” refers to the Principal that
has executed this Agreement or a Personal Guaranty of this
Agreement.
2. EFFECTIVE DATE; TERM. The term of this Agreement (the
“Term") begins on the date we accept it at our home office in
Utah by signing it or sending you the Principal Amount,
whichever is earlier (the "Effective Date”). We may accept this
Agreement without signing it by sending you the Principal
Amount. You understand and agree that we are not required to
send you the Principal Amount until: (a) you have provided us
with all documents and fully met all conditions required by this
Agreement; and (b) the security interests we are entitled to
receive under this Agreement have been perfected. If there is a
delay in your receipt of the Principal Amount for these or any
other reasons, you agree that there will be no adverse
consequence to you or us. If any Weekday Payment Amounts,
fees or other charges under Section 5.5 below remain due and
unpaid at the end of the Term, then the Term will automatically
extend and end only when we have collected the Repayment
Amount and all other amounts due under this Agreement. In
addition, upon payment to us of the Repayment Amount and all
other amounts due under this Agreement, and provided that you
have done everything else you are required to do under this
Agreement, the Term will end and you will have no further
Business Loan Agreement | Rev. 8.19 | Page 2 of 13DocuSign Envelope |:
obligations to us under this Agreement except as otherwise
stated below.
3.PRINCIPAL AMOUNT; USE OF LOAN PROCEEDS. You
represent to us and agree that the Principal Amount will be used
only: (a) to buy merchandise, inventory or related goods you will
rent or sell to your customers, (b) to buy equipment or other
goods for use in your business, (c) for training or other services
needed by your business, and/or (d) to make improvements to
your business location (but not to buy real estate). REGARDLESS
OF ANYTHING ELSE STATED IN THIS AGREEMENT, YOU
ACKNOWLEDGE AND AGREE THAT: (A) YOU WILL USE THE
PRINCIPAL AMOUNT (AND THE GOODS OR SERVICES YOU BUY
WITH THE PRINCIPAL AMOUNT) SOLELY FOR BUSINESS
PURPOSES AND NOT FOR CONSUMER, PERSONAL, FAMILY OR
HOUSEHOLD PURPOSES; (B) YOU WILL NOT USE THE PRINCIPAL
AMOUNT TO FUND DIVIDENDS OR DISTRIBUTIONS TO ANY OF
YOUR SHAREHOLDERS, PARTNERS, MEMBERS OR ANY OTHER
OWNER OF ANY EQUITY INTEREST IN YOUR BUSINESS OR TO
PURCHASE STOCK OR OTHER SECURITIES OF ANY KIND; AND (C)
THE LOAN DOCUMENTED BY THIS AGREEMENT IS NOT A
“CONSUMER TRANSACTION" AS DEFINED IN THE UNIFORM
COMMERCIAL CODE ("UCC").
4.PROMISE TO PAY. In exchange for us loaning you the
Principal Amount, you unconditionally promise to pay us the
Repayment Amount and all other amounts this Agreement
requires you to pay. You agree to make payments to us in the
manner stated in Section 5 of this Agreement. As part of your
agreement to repay us without conditions, you waive (both as to
the original loan and any renewal, extension, refinancing,
modification or consolidation of the loan): (a) protest, demand
and presentment: (b) notice of dishonor, protest or suit; (c) all
other notices or requirements necessary to hold you liable
hereunder, and (d) all rights of exemption under the constitution
or laws of any state as to real or personal property. YOU AGREE
THAT YOUR OBLIGATIONS UNDER THIS AGREEMENT ARE
ABSOLUTE AND UNCONDITIONAL, MAY NOT BE PREPAID
EXCEPT AS SPECIFICALLY STATED HEREIN, AND SHALL
CONTINUE IN FULL FORCE AND EFFECT REGARDLESS OF ANY
CIRCUMSTANCE WHATSOEVER, AND THAT SUCH
OBLIGATIONS SHALL NOT BE AFFECTED BY ANY
COUNTERCLAIM, SET-OFF, RECOUPMENT, OFFSET, DEFENSE
OR OTHER ALLEGED RIGHT AGAINST US.
5. METHOD OF REPAYMENT.
5.1 Designated Account. The “Designated Account" is the
account into which we deposit the Principal Amount based on
the business bank account information you provide us by way of
a voided check or bank notice, or any successor account(s) to
such account of which you provide us notice, subject to our
approval. You represent, warrant and agree that the Designated
Account (i) is and shall be a business bank account during the
Term of this Agreement, (ii) is not and will not be during the Term
of this Agreement an account established primarily for personal,
family or household purposes or otherwise an “account” as
defined in 15 U.S.C. 1693a and Regulation E, and (jii) shall have
sufficient funds during the Term of this Agreement for all debits
and other withdrawals contemplated by this Agreement to be
made on our behalf. If the Designated Account at any time lacks
sufficient funds for any debit or other withdrawal required by this
Agreement to be made on our behalf, you agree to immediately
transfer sufficient funds to the Designated Account or pay to us
such funds.
5.2 Payment through Weekday ACH Debits. Except as set
forth in Section 5.3, you shall pay us the Weekday Payment
Amount (set forth under “Payment Information” on page 1, Table
© on every Monday through Friday, inclusive (each a
"Weekday"), by authorizing and allowing Lender and/or
Operator (defined below) to debit or otherwise withdraw the
Weekday Payment Amount from the Designated Account on
each Weekday. Borrower hereby authorizes and requests Lender
and/or each Operator to debit or otherwise withdraw the
Weekday Payment Amounts from the Designated Account on
each Weekday until we have received the entire Repayment
Amount and all amounts due and/or owed under this Agreement,
including without limitation each Weekday Payment Amount and
all late fees, taxes, non-sufficient funds charges, reimbursements
and other amounts due pursuant to this Agreement. Borrower
further: (a) authorizes Lender and each Operator to deliver a copy
of this Agreement to the Bank as evidence of Borrower's
authorization, and (b) agrees that, except to the extent prohibited
by applicable law, Borrower's authorizations to Lender and each
Operator hereunder may be revoked only with Lender's prior
written consent. For purposes of this Agreement, the term
“Operator” shall mean any person or entity we designate to debit
or otherwise withdraw (via the Automated Clearing House
(‘ACH’) system, electronic checks, wires, or otherwise) any
amounts from your accounts as authorized or permitted by this
Agreement.
5.3 Bank Holidays and Other Exceptions. Lender and/or
Operator will debit the Designated Account for Weekday
Payment Amounts only on Weekdays on which the Bank is open
and able to process ACH transactions. On the Weekday
immediately following any Weekday or Weekdays on which the
Bank was not open or was not able to process ACH transactions
for reasons other than an insufficient Designated Account
balance, Lender or Operator will debit the Designated Account
for an amount equal to the sum of: (i) the Weekday Payment
Amount due on that Weekday, plus (ii) the Weekday Payment
Amount(s) due on the preceding Weekday(s) when the Bank was
not open or could not process ACH transactions.
5.4 Authorization to Access and Withdraw from
Designated Account. You authorize and request Lender and/or
Operator to debit or otherwise withdraw (via the ACH system,
electronic checks, wires or otherwise) the Weekday Payment
Amounts from the Designated Account each Weekday until we
have received the entire Repayment Amount and all other
amounts you owe to us under this Agreement. You agree that,
except to the extent prohibited by applicable law, you will not
revoke this authorization and instruction without our prior
written consent. In the event a withdrawal fails for non-sufficient
Business Loan Agreement | Rev. 8.19 | Page 3 of 13DocuSign Envelope |:
funds in your Designated Account, Lender and/or Operator
reserve the right to resubmit the ACH payment request, and you
hereby authorize us to either reinitiate that debit up to two (2)
additional times until the debit is paid, and, to the extent such
debit remains unpaid, to add all or a portion of the Weekday
Payment Amount associated with the unpaid debit to a debit for
a subsequent Weekday Payment Amount. You acknowledge and
agree that we and Operator may issue pre-notifications to your
Bank with respect to such debits, withdrawals and other
transactions. You agree that Operator may rely upon our
instructions, without any independent verification, in making the
transactions described above. You waive any claim for damages
you may have against Operator in connection with actions taken
based on our instructions, unless such damages were due to
Operator's failure to follow our instructions. You acknowledge
and agree that (a) Operator will be acting on our behalf with
respect to the Designated Account, (b) Operator may or may not
be our affiliate, and (c) we are not responsible and shall not be
liable for, and you agree to hold us harmless for, the actions of
Operator. You understand and agree that this Agreement allows
us to access the Designated Account. Within two business days
of any request by us, you shall provide, or cause Operator or the
Bank to provide, us with records and/or other information
regarding the Designated Account. You hereby authorize and
direct the Bank to provide us with all such information.
5.5 Fees. In addition to the Repayment Amount, you agree to
pay us the following fees and charges: (a) a one-time, non-
refundable Origination Fee in an amount calculated as set forth
in the “Key Terms and Conditions” on page 1, Table C; (b) a fee of
$30 (or such lesser amount as permitted by applicable law) for
each returned, rejected or dishonored payment, ACH debit, or
wire transfer withdrawal, it being understood that we have the
right to receive such fee for each business day on which we or
our designee attempted and were unable to debit or otherwise
withdraw from your accounts the amount we were entitled to
receive as of such date; (c) the cost of any site visit that confirms
a violation of this Agreement, not to exceed $500 for each such
visit; (d) a monthly late fee equal to $50.00 if the balance of all
Weekday Payment Amount(s) due but unpaid as of the last day
of the month exceeds $500.00, with such late fee due and debited
on the first day of the following month; (e) a fee of $250 if you
block us from deducting the Weekday Payment Amount from
your Designated Account, and (f) charges for providing copies
and other documentation you request from us (a list of such
charges will be made available upon request or online). Borrower
hereby authorizes and requests Lender and/or each Operator to
withdraw the Origination Fee from the Designated Account on or
after the Effective Date. If any fees, charges or other amounts
owed under this Agreement are due and unpaid at the end of
the loan Term, the Term shall be automatically extended
(without further notice to you) and we may continue to
withdraw the Weekday Payment Amount (or such lesser
amount due) from the Designated Account each Weekday until
all amounts due to us under this Agreement have been paid in
full.
6. PREPAYMENT. Beginning 90 calendar days after the Effective
Date, you may, upon notice and request to us, prepay in full all of
your remaining obligations under this Agreement, which amount
shall include any accrued or unpaid payments, fees and charges
due as of the date of repayment (your “Remaining Obligation’).
IF, AND ONLY IF, YOU MAKE YOUR PREPAYMENT VIA THE
DESIGNATED ACCOUNT, YOU WILL ALSO QUALIFY FOR AN
EARLY REPAYMENT DISCOUNT. This discount will be
communicated to you by letter as an “Early Repayment
Amount" calculated as of the date of that letter. The Early
Repayment Amount will be your Remaining Obligation reduced
by an amount that is 30% of the outstanding Cost-of-Funds
portion of your loan. Your outstanding Cost-of-Funds will be
calculated from our internal loan amortization schedule. You
must pay the Early Repayment Amount exactly as specified in the
letter we provide you. Your account will then be reconciled as of
the date that your payment is actually received, and any excess
payment amount will be handled in accordance with Section 8.3.
7. DEFAULT; REMEDIES.
7.1 Events of Default. Each of the following shail constitute
an “Event of Default” under this Agreement: (a) at any given time
during the Term of the Agreement a sum amount equivalent to
seven (7) Weekday Payment Amounts has become due but
remains unpaid; (b) you fail to pay any amount you owe us under
this Agreement (other than Weekday Payment Amounts) within
30 days after we request in writing that you do so; (c) you revoke
or cancel any authorization for Lender or Operator to debit or
otherwise withdraw from or access the Designated Account (but
only to the extent that the prohibition on your revoking or
canceling such authorization contained in this Agreement is not
prohibited by applicable law); (d) you fail to maintain insurance
required hereunder; (e) any warranty, representation or
statement made or furnished to us by you or Signing Principal or
‘on your or Signing Principal's behalf under this Agreement is or
becomes false or misleading in any material respect; (f) this
Agreement ceases to be in full force and effect at any time and
for any reason (including failure to create a validly perfected
security interest or Lien); (g) you: (i) legally dissolve, are
adjudicated insolvent or bankrupt or cease to pay your debts as
they mature, (ii) make a general assignment for the benefit of or
enter into an arrangement with creditors, (iii) apply for or consent
to the appointment of a receiver, trustee or liquidator of you or a
substantial part of your property, (iv) take action to dissolve or
terminate your legal existence, or (v) file a voluntary petition in
bankruptcy or under any similar law, or suffer such a petition or
proceeding to be instituted against you; or (vi) if an individual,
operating as a sole proprietorship, you die or become legally
incompetent; (h) commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any of your creditors or by
any governmental agency against any Collateral (as defined in
Section 9), including a garnishment of any of your accounts or
deposit accounts; (i) you fail to perform or comply with any other
term, provision, condition, covenant or agreement contained in
this Agreement or any other documentation related to this
Agreement; (j) you default under any other agreement with us,
Business Loan Agreement | Rev. 8.19 | Page 4 of 13DocuSign Envelope |:
any Assignee or any affiliate of either us or any Assignee, or under
any agreement with any third party material to your business or
providing for the lease of real or personal property or the
repayment of money borrowed; (k) we reasonably deem
ourselves insecure with respect to your performance hereunder
or in our rights with respect to the Collateral; and (1) any of the
preceding events occurs with respect to any guarantor, endorser,
surety, or accommodation party of any of your obligations
hereunder.
7.2 Remedies. Upon the occurrence of an Event of Default
under Section 7.1(g)(v), the unpaid balance of the Repayment
Amount and all other amounts you owe us under this Agreement
shall automatically become immediately due and payable. Upon
the occurrence of any other Event of Default, we shall have the
right, but not the obligation, to declare the unpaid balance of the
Repayment Amount and all other amounts you owe us under this
Agreement to be immediately due and payable. We shall have
and may exercise all the rights and remedies of a secured creditor
under the UCC. In addition, we shall have and may exercise any
and all other rights and remedies available to us at law, in equity,
or otherwise. Except as may be prohibited by applicable law, all
of our rights and remedies, whether evidenced by this Agreement
or by any other writing, shall be cumulative and may be exercised
singularly or concurrently. Election by us to pursue any remedy
will not constitute a waiver of our rights to pursue other remedies.
No forbearance or delay by us shall be deemed to waive any of
our rights or remedies or create a course of dealing between or
among the parties hereto. Any election by us to make
expenditures or to take action to perform one or more of your
obligations under this Agreement, after your failure to perform,
shall not affect our right to declare an Event of Default and
exercise our remedies.
8. ADDITIONAL REPAYMENT TERMS.
8.1 Other Payment Methods. Subject to Section 6, you may
make payments to us in addition to Weekday Payment Amounts.
to satisfy your obligations under this Agreement. All such
payments must be made in immediately available funds and U.
S. Dollars paid by check, money order, wire transfer, ACH credit
or any pay-by-phone or on-line service that we offer. Any
payments sent by mail or overnight courier must be addressed to
WebBank, c/o CAN Capital, Inc. at the address set forth in Section
15, Attn: Customer Service Department. You acknowledge and
agree that payments sent to any other address may not be timely
processed or credited. Any payments made pursuant to this
Section 8.1 shall not affect in any way your obligation to pay
Weekday Payment Amounts. We may accept late, postdated or
partial payments without losing any of our rights under this
Agreement or otherwise. We have no obligation to hold
postdated checks and may process any postdated check on the
date we receive it without being liable to you for any damages or
other claims you may assert, which you hereby expressly waive.
You agree not to mark any partial payment “paid in full,” “without
recourse,” “in full satisfaction” or with any similar language, and
you agree that any such notations shall have no force or effect
and that we will not lose any of our rights under this Agreement
if we accept any such payments.
8.2 Application of Payments. Weekday Payment Amounts.
will be applied first to any Weekday Payment Amounts due, and
then to any fees, charges or other amounts due and unpaid
pursuant to this Agreement. If you make a payment other than a
Weekday Payment Amount, we generally will apply payments
first to any items we have asked you to pay, then to any other
fees you owe us, then to other amounts you owe us (such as for
amounts we incur in performing your obligations pursuant to
Section 12), and then to the balance of the Repayment Amount.
However, we reserve the right to apply payments in any order or
manner we choose, in our sole discretion.
8.3 Excess Cash. In the event the amount of cash remitted by
you pursuant to this Agreement exceeds the sum of the
Repayment Amount and any other amounts we are entitled to
receive hereunder (such excess being the “Excess Cash") by at
least $20.00, we agree to pay the full amount of such Excess Cash
to you within 30 days after our receipt thereof. In the event the
Excess Cash is less than $20.00, you agree to forfeit such Excess
Cash to us in consideration for administrative costs associated
with handling Excess Cash. You acknowledge and agree that we
have no obligation to take any action (including against
Operator) with respect to any cash being held by Operator, which
will become Excess Cash once it is paid by Operator to us, prior
to our receipt of such Excess Cash.
8.4 Reliance on Terms. The provisions of this Agreement are
for the benefit of you, Signing Principal, us, and Operator.
Notwithstanding the fact that Operator is not a party to this
Agreement, Operator may rely upon the terms of this Agreement
and raise them as defenses in any action by you or Signing
Principal.
8.5 Indemnification; Limitation of Liability. You shall
indemnify and hold each of us, Operator, its and our respective
officers, directors, affiliates, employees, agents, attorneys,
representatives, successors and assigns (collectively, the
“Indemnified Parties”) harmless from and against all losses,
damages, claims, liabilities, obligations, penalties, suits, actions,
controversies, or proceedings of any kind, imposed upon,
incurred by, or asserted against any of the Indemnified Parties, in
any way arising from, in connection with, relating to, or incident
to your breach of this Agreement or any and all actions taken by
Operator in reliance upon information or instructions provided to
Operator by us, including the payment of all costs and expenses
of every kind for the enforcement of our rights and remedies
hereunder, including reasonable attorneys’ fees, costs of any trial,
arbitration, appellate court proceeding, administrative
proceeding, or any negotiations or consultations (the
“Indemnified Amounts"). Such Indemnified Amounts will bear
interest at the rate for prejudgment interest prevailing in your
jurisdiction until paid. IN NO EVENT WILL WE OR ANY
OPERATOR BE LIABLE FOR ANY CLAIMS ASSERTED BY YOU
UNDER ANY THEORY OF LAW, INCLUDING ANY TORT OR
CONTRACT THEORY FOR LOST PROFITS, LOST REVENUES, LOST
BUSINESS OPPORTUNITIES, EXEMPLARY, PUNITIVE, SPECIAL,
Business Loan Agreement | Rev. 8.19 | Page 5 of 13DocuSign Envelope |:
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EACH
OF WHICH YOU HEREBY EXPRESSLY WAIVE.
9.GRANT OF SECURITY INTEREST. Capitalized terms used in
this Section 9 without definition which are not defined elsewhere
in this Agreement have the meanings defined in the UCC. For
valuable consideration and to secure the prompt payment and
performance in full of all of your, any Principal's or any of your
affiliates’ indebtedness, liabilities and obligations to us, whether
direct or indirect, joint or several, absolute or contingent, due or
to become due, now existing or hereafter arising, whether or not
such indebtedness, liabilities and obligations relate to the loan
described in this Agreement and whether or not contemplated
by the parties hereto at the time of the granting of this security
interest, regardless of how they arise or by what agreement or
instrument they may be evidenced or whether evidenced by any
agreement or instrument and including obligations to perform
acts and refrain from taking action as well as obligations to pay
money, including all principal, interest, other fees and expenses,
you hereby grant to us a security interest in the following
properties, assets and rights (the “Collateral"), wherever located,
whether now owned or hereafter acquired or arising and
howsoever your interest therein may arise or appear (whether by
ownership, lease, security interest, claim, or otherwise): (a) any
and all amounts owing to you now or in the future from any
merchant processor; (b) all Accounts; (c) all Chattel Paper
{including Tangible Chattel Paper and Electronic Chattel Paper);
(d) all Instruments; (e) all Goods, including, without limitation,
Equipment, motor vehicles, Inventory, Farm Products, Accessions,
and As Extracted Collateral; (f) all Documents; (g) all General
Intangibles (including, without limitation, Payment Intangibles
and software); (h) all Deposit Accounts; (i) all Letter of Credit
Rights; (j) all Investment Property; (k) all Supporting Obligations;
(l) all trademarks, trade names, service marks, logos and other
sources of business identifiers, and all registrations, recordings
and applications with the U. S. Patent and Trademark Office
("USPTO") and all renewals, reissues and extensions thereof
(collectively “IP"); (m) any records and data relating to any of the
foregoing, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of
your right, title and interest in and to all computer software
required to utilize, create, maintain, and process any such records
or data on electronic media; and (n) any and all proceeds of any
of the foregoing, including insurance proceeds or other proceeds
from the sale, destruction, loss, or other disposition of any of the
foregoing, and sums due from a third party who has damaged or
destroyed any of the foregoing or from that party's insurer,
whether due to judgment, settlement or other process. You
irrevocably authorize us and our designees at any time and from
time to time to fife: (i) in any filing office in any jurisdiction any
initial financing statements and amendments thereto that
indicate the collateral therein as all of your assets or words of
similar effect, regardless of whether such description is greater in
scope than the Collateral pledged to us hereunder; and (ii) such
recordations with the USPTO we deem necessary or desirable to
evidence the security interest in IP described above.
10.REPRESENTATIONS, WARRANTIES AND COVENANTS.
You and Signing Principal represent, warrant and covenant the
following as of the Effective Date and during the Term of this
Agreement:
10.1 Your Business and Operations. You shall: (a) not
materially change the nature of your business from what was
originally disclosed to us in connection with this Agreement; and
(b) not sell or otherwise transfer your business without: (i) our
express prior written consent, which we may withhold in our sole
discretion for any reason or no reason, and (ji) the assumption by
transferee of all of your obligations under this Agreement using
documentation reasonably satisfactory to us, provided such
assumption will not release you from liability under this
Agreement.
10.2 Name, Location, Authority, Etc. (a) You are and shall
remain duly organized, licensed, validly existing and in good
standing under the laws of your state or jurisdiction of
organization and are and shall remain duly qualified, licensed and
in good standing in each and every other state and jurisdiction in
which the failure to do so could have a material adverse effect on
your financial condition, business or operations; (b) your exact
legal name set forth under “Borrower Information” on page 1,
Table A, is true and correct and you do not and shall not conduct
your business under any other name; (c) you shall not change
your place of business, your legal name, entity type or state or
jurisdiction of organization, unless you have provided us with at
least 60 days’ prior written notice and you, at your sole cost and
expense, provide such documents, agreements and information
we request and take such other actions as we deem necessary or
desirable to protect our interests hereunder and in the Collateral;
(d) you are authorized and permitted, by law, your organizational
documents, contracts to which you or Signing Principal is a party
and otherwise, to execute, deliver and perform this Agreement
and all related documents; (e) all of your organizational and
formation documents and all amendments thereto have been
duly filed and are in proper order and any capital stock,
membership interests or other ownership interest issued by you
and outstanding was and is properly issued and all of your books
and records are accurate and up to date and will be so
maintained; (f) you are subject to no charter, corporate or other
legal restriction, or any judgment, award, decree, order,
governmental rule or regulation or contractual restriction that
could have a material adverse effect on your financial condition,
business or prospects; (g) you are and will continue to be in
compliance with your organizational and formation documents,
all contractual requirements by which you may be bound, and all
applicable federal, state and local laws, statutes, regulations,
ordinances and rules pertaining to the conduct of your business,
including without limitation the regulations of card associations
and payment networks; (h) there is no action, suit, proceeding or
investigation pending or, to your knowledge, threatened against
Business Loan Agreement | Rev. 8.19 | Page 6 of 13DocuSign Envelope |:
or affecting you or any of your assets before or by any court or
other governmental authority which, if determined adversely to
you, would have a material adverse effect on your financial
condition, business or prospects or the value of the Collateral;
and (i) you possess and are in compliance with all permits,
licenses, approvals, consents, registrations and other
authorizations necessary to own, operate and/or lease your
properties and to conduct your business.
10.3 Location of the Collateral. You agree to keep the
Collateral (or, to the extent the Collateral consists of intangible
property such as Accounts or General Intangibles, the records
concerning the Collateral) at the location(s) shown under
“Borrower Information” on page 1, Table A, or at such other
locations as we have agreed to in advance in writing. Upon our
request, you will deliver to us in form satisfactory to us a schedule
describing the Collateral in such detail as we reasonably request.
You shall not remove the Collateral from its existing location
without our prior written consent.
10.4 Repairs and Maintenance. You shall: (a) only use
Collateral in a prudent, businesslike manner for its originally-
intended purpose and solely for business purposes and NOT for
any consumer, personal, household or family purpose; (b) comply
promptly with all applicable insurance policies, laws, ordinances,
rules, regulations and requirements of all governmental
authorities, now or hereafter in effect, applicable to the
ownership, production or disposition thereof; and (c) pay when
due all taxes and claims for work done on, or services or material
furnished in connection with, the Collateral.
10.5 Inspection of Collateral and Place of Business. We or
our designated representatives and agents shall have the right
during your normal business hours and at any other reasonable
time to examine the Collateral where located and the interior and
exterior of any of your places of business. During an examination
of any of your places of business, we may examine, among other
things, whether you (a) have a place of business that is separate
from any personal residence, (b) are open for business, and (c)
have sufficient inventory to conduct your business. When
performing an examination, we may photograph the interior and
exterior of any your places of business, including any signage,
and may photograph any Principal.
10.6 Insurance. You shall maintain insurance in such amounts
and against such risks as are consistent with past practice and
shall show proof of such insurance upon our request. You shall
promptly notify us of any loss or damage to the Collateral.
10.7. Business Information; Reliance; Compliance. All
information (financial and other) provided by or on your or
Signing Principal's behalf to us i