Complaint Unlimited Fee AppliesCal. Super. - 6th Dist.November 20, 2020E-FILED 11/20/2020 4:08 PM Clerk of Court Superior Court of CA, County of Santa Clara 20CV373880 Reviewed By: R. Tien 20CV373880 10 ll 12 l3 l4 15 16 17 18 l9 20 21 22 23 24 25 26 27 28 ROBERT L. POLLAK, State Bar Number 083950 DENIS KLAVDIANOS, State Bar Number 225925 GLASSBERG, POLLAK 8: ASSOCIATES 1000 4th Street, Suite 570 San Rafael, CA 94901 (415) 291-8320 (415) 291-8111 fax Email: gpa@glassberg-pollak.com Attorneys for Plaintiff Our File No; 2020594 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA UNLIMITED CIVIL JURISDICTION TBF FINANCIAL I, LLC, a limited Case No.: liability company, Plaintiff, COMPLAINT FOR BREACH OF VS. FUTURE RECEIVABLES SALE FRANK O. GAMEZ, INC, a corporation AND FOR ATTORNEYS’ FEES dba FRANK'S AUTO SERVICE; FRANK O. GAMEZ JR; and DOES 1 through 50, inclusive, ) ) ) ) ) ) AGREEMENT, AND GUARANTY, ) ) ) ) ($33,231.44) ) )Defendants. Plaintiff complains of Defendants, and each of them, and for a First Cause of Action, alleges as follows: 1. That Defendants, DOE 1 through DOE 50, inclusive, are unknown to Plaintiff, who therefore sues said Defendants by such fictitious names, and Plaintiff will amend this Complaint to show their true names and capacities when the same have been ascertained. 2. At all times mentioned herein, Defendants, FRANK O. GAMEZ, INC. [“GAMEZ”], and DOE 1 were corporations organized and doing business under the laws of the State of California under the fictitious business name of FRANK'S AUTO SERVICE. COMPLAmT FOR BREACH 0F FUTURE RECEIVABLES SALE AGREEMENT, AND GUARANTY, AND FOR A'I'l'ORNEYS’ FEES - l 10 ll 12 l3 l4 15 16 l7 18 19 20 21 22 23 24 25 26 27 28 3. Defendant FRANK O. GAMEZ JR. [“FRANK”] , is an individual who personally guaranteed the obligations of defendant GAMEZ, as more fully described below. 4. Plaintiff TBF FINANCIAL I, LLC [“PlaintifP’] is a California limited liability company authorized to conduct business in California. 5. The claim of indebtedness sued upon herein is not subject to the provisions of Section 1812.10 and Section 2984.4 of the Civil Code for the reason that said indebtedness did not arise from a retail installment contract or under a contract pertaining to the purchase and/or financing of a motor vehicle. 6. On or about April 27, 2017, SWIFI‘ FINANCIAL CORPORATION now known as SWIFT FINANCIAL, LLC (“SWIFT”) and GAMEZ entered into a Future Receivables Sale Agreement (“Agreement”) whereby SWIFT paid GAMEZ the total amount of $61,500.00 (the “Purchase Price”) in consideration for GAMEZ’s future business receipts totaling $86,038.00 (the “Amount Sold”), that are payable to SWIFT in the amount of $1,654.58 per week via an ACH Debit Account, . commencing on or about May 3, 2017 and continuing thereafter until the Amount Sold is paid in full. A true and. correct copy of the Agreement is attached heretc as Exhibit “A” and incorporated by reference. As part of the same transaction, on or about April 27, 2017, and to guaranty payment of the Amount Sold under the Agreement, FRANK executed a personal guaranty (“Guarant'f’L a copy of which appears on page 2 of Exhibit “A”. 7. 0n or about January 22, 2018, Defendants, and each of them, breached the Agreement and Guaranty by failing to make any funds available in their ACH Debit Account. As a result, SWIFT, exercising its right under the Agreement and Guaranty declared and demanded the remaining balance of the Amount Sold immediately due and payable. 8. After applying all repayment and credits, there is now due, owing and unpaid thereon the sum of $33,231.44. COMPLAINT FOR BREACH OF FUTURE RECEIVABLES SALE AGREEMENT, AND GUARANTY, AND FOR A'ITORNEYS’ FEES - 2 10 ll 12 13 14 15 16 l7 18 19 20 21 22 23 24 25 26 27 28 9. The Agreement provides for attorneys’ fees. The sum of $5,000.00 is a reasonable amount to award as such attorneys’ fees if this matter is uncontested. If this matter is contested, Plaintiff should be awarded additional reasonable attorneys’ fees according to proof. 10. On or about December 19, 2019, SWIFT assigned, for valuable consideration, all of its right, title and interest in and to the Agreement to TBF FINANCIAL, LLC. 11. 0n or about October 22, 2020, for valuable consideration, TBF FINANCIAL, LLC assigned to Plaintiff all of its right, title and interest in and to the Agreement. WHEREFORE, Plaintiff prays for judgment against Defendants, and each of them, as follows: 1. For damages in the amount of $33,231.44; 2. For interest on said amount at the rate of ten percent (10%) per annum from January 22, 2018; 3. For reasonable attorney fees’ in the amount of $5,000.00 in the event this action proceeds on an uncontested basis; and for additional and further reasonable attorneys’ fees according to proof in the even the action is contested; 4. For costs of suit incurred herein; and 5. For such other and further relief as this Court may deem just and proper. Dated: November 20, 2020 GLASSBERG, POLLAK 8: ASSOCIATES By:W ”H]twcL ROBERT L. POLLAK Attorneys for Plaintiff COMPLAINT FOR BREACH OF FUTURE RECEIVABLES SALE AGREEMENT, AND GUARANTY, AND FOR A'ITORNEYS’ FEES - 3 EXHIBIT “A” DocuSign Enve|0pe ID: 4C4B1508-COZC-46FD-AE3A-39334CBOAC34 SWIFT/EKAPITAL FUTURE RECEIVABLES SALE AGREEMENT April 27, 2017 Business: FRANK O. GAMEZ, INC. DIBIA FRANK'S AUTO SERVICE 16250 RAILROAD A_VE MORGAN HILL CA 95037 PURCHASE SUMMARY Purchase Price: The dollar amount paid to Business that Purchaser is paying now for the Amount $ 6150000 (1)Sold. Amount Sold: The dollar amount of the Future Receivables that are being sold to Purchaser. S 35033-00 (2) Origination Fee Percentage: ( 2_5oo% of Line 1) The dollar amount deducted from Business’s Remittance Account the first business $ 153750 (3)day after Business receives the Purchase Price. REMITTANCE SUMMARY r Remittance Frequency lExpected frequency the Collected Amount is withdrawn from the Business's Weekly (4)Remitta nce Account. Collected Amount: - Dollar amount anticipated to be collected from Business’s Remittance Account at the specified Remittance Frequency based upon the Purchased Percentage. The Collected Amount is not a fixed remittance amount and is subject to change s 1654.58 (5)pursuant to the Future Receivables actually generated by Business and the Alternative Remittance Amount provisions of Section 3(c) of the Terms and Conditions. Purchased Percentage: The percentage of Business’s Future Receivables that are being sold to Purchaser. 13.00% (5)(Please note that this is [lg an interest rate). I I ns 1 of 13 Initials of IndividualSlgneflsL DocuSign Envelope ID: 4c43150m020-46FD-AEsA-39334CBOA034 Purchaser: Swift Financial Corporation, 3505 Silverside, Suite 200, Wilmington, DE 19810 A. By signing below (either manually or electronically), you, the undersigned: (1) represent that you areauthorized to bind the Business to the terms and conditions of this Agreement; (2) agree that the PurchasePrice will be used solely for business purposes and not for personal, family or household purposes; (3)acknowledge that you have read and understand this entire Agreement, incIudl ing, without limitation, theabove Purchase Summary, Remittance Summary, and the Additional Terms and Conditions (including theArbitration Provision), and the Remittance Authorization; (4) agree to all the terms and conditions of thisAgreement on behalf of the Business; and (5) acknowledge that signing any other person's name below,without such person's express consent, constitutes fraud. This Agreement and the resulting sale of Business's Future Receivables is a com mercia] transaction, Because this is a sale and not a loan, there is no defined repayment term, there is no specific date by which the entireAmount Sold must be delivered to Purchaser. If Business’s business slows down and the delivery rate ofFuture Receivables decreases or if Business’s business closes (and in each case Business has not otherwiseviolated the terms of this Agreement), there will not be an Event of Default under this Agreement. Purchaser’s obligations under this Agreement will not be effective unless and until Purchaser has completed its review of the Business and paid the Purchase Price to Business. BUSINESS CANNOT SELL ITS FUTURE RECENABLES TO ANYONE ELSE OR ENTER INTO A FINANCINGARRANGEMENT REQUIRING DAILY OR WEEKLY REMITI'ANCES DURING THE TERM OF THIS AGREEMENTWITHOUT PURCHASER'S PRIOR WRITTEN CONSENT. VIOLATION OF THIS REQUIREMENT WILL RESULT IN ANEVENT OF DEFAULT AND THE ASSESSMENT OF CERTAIN FEES. On Behalf of Business: Guarantor: Docus'uned by: Doctfilgnzd by: FRANK GAMEZ JR FRANK GAMEZ JRName (Print): Name (Print): Title: Pres1dent Date: 4/27/2017 4/27/2017 Date: Guarantor: By:_____________ On Behalf of Business (if needed): Name (Print): By: __, Date: Name (Print): Guarantor: Title: By: Date: Name (Print): Date: Swift Financial Corporation agrees to the terms of this Agreement: By: Date: 4/28/2017z Name: Al Natall DS Title: Authorized Representative I féj 2 of 13 Initials of Individual Slgner(s). DocuSign Envelope ID: 4C4B 1 508-C02C-46FD-AE3A-393B4CBOACS4 ADDITIONAL TERMS AND CONDITIONS 1. General Information and Definitions. (a) This Future Receivables Sale Agreement (this ”Agreement”) governs the terms of the purchase of Business’s Future Receivables (the ”Purchase”) by Swift Financial Corporation aka Swift Capital, a Delawa re corpo ration (”Swift” or ”Purchaser”). (b) The words ”Purchaser”, ”we,” ”us” and "our” mean Swift and Swift's succeSSOrs and assigns (and for purposes of the Arbitration Provision, the related persons identified in the Arbitration Provision). (c) The words ”you,” ”your,” "yours” and "Business” mean the entity identified as Business on the first page of this Agreement. (d) ”Guarantor" means each person who signs this Agreement in his or her individual capacity as Guarantor. (e) "Notice Address" means Swift Capital, 3505 Silverside, Suite 200, Wilmingto n, DE 19810 or any updated notice address that we provide by notice to you at any time. (f) ”Receivables” means any and all payment rights arising from or occurring as a result of your customers' purchases of goods and/or services from you, whether by cash, checks, money orders, electronic fund transfers (”EFTs”), payment cards (including, without limitation, credit cards, charge cards, debit cards, prepaid cards, benefit cards or similar cards), extensions of credit or any Other forms of payment nowknown or hereinafter developed. "Future Receivables” refers to any Receivables received by Business after this Agreement becomes effective. (g) Certain other terms are defined above in the Purchase Summary, Remittance Summary, or are defined below, including in the Remittance Authorization. (h) The Arbitration Provision, authorization to check credit, express permission to contact you at any telephone number you provide to us, and consent to receive information electronically are all effective immediately as to Business and each Guarantor. The remainder ofthis Agreement becomes effective if,and only if, we, in our sole discretion, paid the Purchase Price. We may assign all or any part of this Agreement, and any rights, licenses, responsibilities and/or obligations contained herein without restriction or limitation. YOU AGREE TO USE THE PURCHASE PRICE SOLELY FOR BUSINESS pugposssAND NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. 2. Delivefl of Future Receivables. In exchange for the Purchase Price, Business sells to Purchaser the Amount Sold. You shall deliver to us any and all amounts due under this Agreement, including, without limitation, the Purchased Percentage, or Alternative Remittance Amount if applicable, up to the Amount sold, the Origination Fee (Line 3 of the Purchase Summary) and any and all applicable fees, There i5 no interest rate nor any fixed time period during which the Amount Sold must be collected by Purchaser, Purchaser is entering into this Agreement knowing the risks that Business’s business may slow down or fan, and Purchaser assumes these risks based on Business’s representations, warranties and covenants set forth in this Agreement, which are designed to give Purchaser a reasonable and fair opportunity to receive the benefit of its bargain. 3. Origination Fee and Remittances. (a) Origination Fee: The Origination Fee is due the first business day after we pay the Purchase Price to you. The Origination Fee is not refundable. (b) Delivery ofFuture Receivables. Until the Amount Sold is collected by us in full, along with any assessed fees, you shall deliver to us the Purchased Percentage, or the Alternative Remittance Amount if applicable, according to the Remittance Frequency. Your first remittance will be due either: (i) the first business day after you receive the Purchase Price if your Remittance Frequency is daily; or (ii) the first Weekly Remittance Day you specify in Exhibit A after you receive the Purchase Price, if your Remittance Frequency is weekly. If you do not select a Weekly Remittance Day, we will select one in our sole discretion. We may add the Returned Payment Fee or other fee(s) to any payment, ns 3 of 13 lnltlals of Individual Slgneqs);[ DocuSign Envelope ID: 4C4B15os-cozc-46FD-AEaA-39334030A034 (c) Alternative Remittance Amount. At Purchaser’s option, Purchaser may allow Business to make an "Alternative Remittance Amount” each payment day until Purchaser receives full delivery of the Amount Sold and any assessed fees. In such circumstances, Business shall deliver to Purchaser Business‘s monthly bank statements for all bank accounts (the ”Bank Statements") within ten (10) days of Business's receipt thereof. If, upon Purchaser’s receipt of Bank Statements, such Bank Statern ents reflect that purchaser has collected from Business's Remittance Account(s) during such month an amount in excess of the purchased Percentage of Business’s Future Receivables for such month, Purchaser sha ll promptly credit the Business's Remittance Account with an amount equal to the difference betWeen (i) the amount actually collected by Purchaser from the Business's Remittance Account during such month and (ii) an amount equal to the Purchased Percentage of Business’s Future Receivables for such month. If, upon Purchaser’s receipt of Bank Statements for ali Bank Accounts for a given month, such Ba nk Statements reflect that Purchaser has collected from the Business's Remittance Account during such month an amount less than the Purchased Percentage of Business’s Future Receivables for such month, Business shall promptly owe and deliver to Purchaser an amount equal to the difference between (i) the amount actually collected by the Purchaser from the Business's Remittance Account during such month a nd (ii) an amount equal to the Purchased Percentage of Business‘s Future Receivables for such month. If the amount collected from the Business's Remittance Account is within $5 of the Purchased Percentage of Business's Future Receivables for such month, neither Purchaser nor Business is required to make additional transfers for that month. This right to make an Alternative Remittance Amount terminates once an Event of Default occur5_ 4. g. Purchaser does NOT CHARGE ANY BROKER FEES to Businesses that sell their Future Receivables to Purchaser. If Business is charged such a fee, it is not being charged by Purchaser. Additionally, because this is not a loan, Purchaser does not charge any interest, finance charges, points, late fees or similar fees_ To the extent permitted by applicable law, we will charge the following fees, in addition to the Origination Fee: (a) (b) (C) Returned Remittance Fee. If for any reason any EFT or other remittance is returned unpaid or cannot be processed, we will charge a $35 fee. We will charge this fee only once for any returned or dishonored remittance, regardless whether it is honored upon resubmission. Collections Administration Fee. Upon the occurrence of any Event of Default (as defined below), we Wm charge a fee in the amount of 10% of the then-current remaining Amount Sold at the time the fee is assessed, less any assessed fees. Stacking Fee: if Business sells any of Business's Future Receivables without Purchaser's prior written consent (including, but not limited, "stacking" or Business entering into a financing arrangement requiring Business to make daily or weekly payments or remittances), in addition to any Collections Administration Fee, Business will be charged 10% of the original Amount Sold to reflect the increased risk to Purchaser of being paid. 5, Performance Guaranty. (a) By signing this Agreement, each Guarantor assumes, jointly and severally, the full, complete and timely performance of all of Business's obligations under the Agreement if a breach of any of Business’s representations, warranties or covenants occurs. If such a breach occurS, then Guarantor(s) shall perform under this Agreement including paying, or causing to be paid, any amounts due that Purchaser would otherwise be entitled to collect from Business. This guaranty is a guara nty of performance and not a guaranty of collection. Purchaser may proceed to enforce its rights against each Guarantor prior to, contemporaneously with or after, any enforcement against Business or without any enforcement against Business. The Guarantor(s)’ obligations are unconditional and absolute and shall remain in full force and effect and without regard to and shall not be released, discharged or in any way affected by (a) any amendment to this Agreement; (b) any exercise or non-exercise 0f or delay on exercising any right, remedy, power or privilege under or in respect of this Agreement; (c) any bankruptcy, insolvency, arrangement, composition, assignment for the benefit of creditors, or similar proceeding commenced by or against Business or any of its officers, directors or principal; (d) defects in the formation or authority of Business; or (e) an'y other circumstance that might otherwise constitute a legal or equitable discharge of a guarantor or surety. If payment of any sum by Business is recovered as a preference or fraudulent conveyance under any bankruptcy or insolvency law, the liability of Guarantor(s) under this guaranty 4 of 13 Initials of Individual Signequ-D‘TE DocuSign Envelope ID: 4C4B1 508602046FD-AE3A-39334CBOACS4 shall continue and remain in full force and effect notwithstanding such recovery. By this provision, the Guarantor(s) is notified that a negative credit report reflecting on his/her credit record may be submitted to a credit reporting agency if the provisions of this Section are triggered by a breach of this Agreement by Business. Each Guarantor acknowledges receiving a copy of this Agreement and having read the terms of this Agreement, including, without limitation, the guaranty set forth in this paragraph, and the Guarantor’s signature will serve as confirmation that the Guarantor understands a|| terms and conditions of this Agreement. Each Guarantor agrees that this guaranty is continuing and absolute and that Purchaser may modify or extend the terms of this Agreement, or compromise, settle or release any other obligor under this Agreement without notice or consent by Guarantor and without affecting Guarantor‘s liability. For the avoidance of doubt, Guarantor is obligated to pay the Amount sold and any assessed fees only upon ”Che occurrence of an Event of Default. (b) Provisions ongreement Applicable to Each Guarantor: Sections 8 (Our Rights upon Defaum, 9 (Representations and Warranties), 10 (Covenants), 14 (Business Information; Reporting Information to Credit Bureaus), 15 (Telephone Recordings), 16 (Contacting You; Phone and Text Messages); 17 (Correspondence), 18 (Bankruptcy), 21 (Limitation of Liability), 22 (Waiver of Right to Trial by Jury) and 24 (Arbitration Provision) and any other relevant Section apply fully to each Guarantor individually, and each reference to ”you,” or ”your” in such Sections of this Agreement shall be deemed to apply not just to Business but also to each Guarantor individually. 6. Right to Cancel. Business may cancel this transaction at any time within ten (10) days after purchaser forwards any or all of the Purchase Price to Business. However, in order to cancel the transaction, Business must return to Purchaser the entire amount of the Purchase Price received by Buginess within that same ten (10) day period. Notwithstanding the foregoing, the Origination Fee (if any) is non-cancellable and non- refundable. 7. Events of Default. Subject to applicable law, we may declare you to be in default under this Agreement if any one or more of the following events occurs and is continuing (each an ”Event of Default”): (a) You fail to make any required remittance of Future Receivabies or payment when due except as otherwise permitted by this Agreement; (b) You fail to inform Purchaser prior to a scheduled daily or weekly remittance that the Remittance Account has insufficient funds due solely to a decline in Receivables as demonstrated by written documentation provided by Business, such that a scheduled remittance is returned or dishonored; (c) You fail to maintain the Bank Accounts (as defined in Exhibit A) or open a new bank account to deposit Receivables without our consent; (d) You fail to provide copies of all documents and requested information related to your financial or banking affairs within five (5) days af‘ter a request by us; (e) You use any portion of the Purchase Price for personal, family or household purposes or to fund a dividend or other distribution to Business owners; (f) You breach any representation, warranty, agreement, promise or covenant set forth in this Agreement, or you or any of your employees or agents provides us with any false or misleading information; (g) You make any act or omission that has the result of interfering with or circumVenting, the remittance or payment to us of any amount owed under this Agreement, including, but not limited to: (i) conducting business under an alternative name; (ii) depositing Receivables into any bank accounts other than the Bank Accounts; (iii) encouraging customers to make payments by cash that yoU fail to deposit into the Bank Accounts; or (iv) manipulating the use and form of business entities for the purpose of avoiding your obligations under this Agreement; (h) You fail to permit us or our agent to conduct a site inspection of your business at any reasonable time during the term of this Agreement; (i) Without our prior express written consent, ybu enter into any credit, cash advance or other financing arrangement requiring daily or weekly payments or remittances; us Féj 5 cf 13 Inltlals of Individual Signer(s)_ DocuSign Envelope ID: 4C4B1508-002C-46FD-AE3A-393B4CBOAC34 (j) Without our prior express written consent, you sell any of your assets outs ide of the ordinary course of business; (k) Without our prior express written consent, you sell any of your Future Receivables while you owe anyamount under this Agreement; (I) Without our prior express written consent, you undertake or permit a change of control of your business; (m) You become subject to any material judgment or garnishment following the date of this Agreement; (n) You default on any other agreement that you have with us or any of our affiliates. 8. Our Rights Upon Defaul . Upon any Event of Default,: (a) all unpaid amounts of the Amount Sold and any assessed fees shall be immediately due and payable or, including all Receivables or Future ReceivabIes until the entire balance, fees and deficiencies are paid in full; (b) commence an action against you to collect a|| amounts owed in connection with this Agreement; (c) charge and recover from you the Collections Administration Fee and/or the Stacking Fee (if applicable), all of our out-of-pocket costs and expenses, including reasonable attorneys' fees, arbitration costs, and/or court costs, incu rred by us in connection with the defense, protection or enforcement of our rights under this Agreement (including, without limitation, in connection with any bankruptcy proceeding) and any other fees that may be dUe and owing (collectively, ”Costs of Collection”); (d) withdraw funds from any of your Bank Accounts by ACH debit, up to the unpaid amount that you owe us under this Agreement (including the fees as set forth in Section 4 and any Costs of Collection); and (e) we may exercise any and all rights or remedies available to a secured creditor under Article 9 of the Uniform Commercial Code or analogous state laws. All rights available to us are cumuIative and not exclusive of any other right or remedy available to us in law or equity. 9. Representations ancl Warranties. You and any individual signing this Agreement as a Guarantor represent and warrant to us, as of the date hereof and each day the Amount Sold and any assessed fees remain unpaid, as follows: (a) The Future Receivablés are not subject to any claims, charges, liens, restrictions, encumbrances or security interest of any nature whatsoever not disclosed to us prior to executing this Agreement; (b) As of the date the Purchase Price is paid to Business, Business is not the subject ofa bankruptcy or reorganization proceeding that has not been discharged or dismissed, db not have a plan to make a bankruptcy filing and have not met with a bankruptcy attorney within the past six months; (c) All information that you have provided to us is true, correct and accurately reflects your financial condition and results of operations; (d) Business has all required permits, licenses, approval, consents and authorizations necessary to conduct your business; (e) Business is in compliance with all laws, regulations and requirements that affect your business; (f) You (and each Guarantor) have full power and authority to enter into and perform your obligations (and each Guarantor’s obligations) under this Agreement; (g) Business is financially solvent (i.e., your assets exceed the value of your liabilities); (h) Business has the legal right and ability to execute this Agreement and perform all of its obligations under this Agreement without violating any O_ther agreement, obligation, promise, court order, administrative order or decree, law or regulation to which it is subject; (i) Business is duly qualified, licensed and in good standing in each state in which it is doing business; (j) Business’s papers and all amendments thereto have been duly filed and are in proper order, and any capital stock, member interest or other equity issued and outstanding was and is properly issued; , (k) Business‘s books and records are accurate and up-to-date and accessible to us; (l) Business’s legal name is exactly as shown on this Agreement; Ds Féj 6 of 13 Initials of Individual Slgner(s . --‘ DocuSign Envelope ID: 40431 508-0020-4SFD-AE3A-393B4CBOAC34 (m) All of the Bank Accounts are maintained at U.S. financial institutions and ail of the Bank Accounts we‘re established and are used solely for business purposes and not for personal, family or household purposes. 10. Covenants. Until all amounts outstanding under this Agreement have been paid in full, you and any individual signing this Agreement as a Guarantor covenant to us: (a) (b) (C) (d) (e) (f) (g) (h) (i) (J) (k) (l) Business will: (i) preserve, renew and maintain in full force and effect your corporate or organizational existence, if any; (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable for the normal conduct of your business; and (iii) remain duly q ualified, licensed and in good standing in your state of organization (if any) and every other state in which you are doing business. Business will comply with: (i) all of the terms and provisions of your organiZational documents and bylaws, if any; (ii) your obligations under your material contracts and agreements; and (iii) all laws and orders applicable to you and your business, except where the failure to do so could not reasonably be expected to risk a‘ material adverse effect on your financial condition, business or prospects or your ability to perform your obligations under this Agreement. Business will pay, discharge or otherwise satisfy at or before maturity, all of your material obligations of whatever nature, including without limitation all amounts as they are or may be due under this Agreement. Business will not, without our prior written consent, (i) merge or consolidate with or into any other business entity; (ii) sell your assets or enter into anyjoint venture or partnershipvwith any person, firm or corporation; (iii) change your name, place of business, chief executive officer, mailing address or organizational identification number, if any; (iv) change your type of organization, jurisdiction of organization or other legal structure. Within five (5) days after our request, you will: (i) provide us with such information about your financial condition and operations as we may from time to time reasonably request; and (ii) sign any and all documents and provide any and all information and authorizations that we, in our sole discretion, deem necessary to implement this Agreement (including any document, information or authorization that we need in order to access, for purposes of electronic inquiry, any of your Bank Accounts). You will promptly provide notice to us in writing upon becoming aware of any Event of Default or the occurrence or existence of an event which, with the passage of time or the giving of notice or both, would constitute an Event of Default. Business will not sell or pledge any Future Receivables to another party without our prior written consent otherthan a sale or pledge pursuant to an agreement, not subsequently modified, in effect prior to the date of this Agreement and brought expressly to our attention as an agreement providing for a sale or pledge of Future Receivables. - Business will promptly pay all necessary taxes including payroll, sales and u5e taxes and you will make any payments that you are required to make pursuant to, and in accordance with, the requirements of any tax payment programs in which you participate. Without our prior express written consent, Business will, subject to the terms of this Agreement, continue to conduct all aspects of your business consistent with past practices and employ adequate staffing to maintain the operations of your business, notwithstanding the death or disability of any principal, officer or employee. You will not share your on-Iine portal log-on credentials provided by us with any third party. You will use the Purchase Price solely for business purposes and not for personal, family or household purposes. You will not make any act or omission that has the result of interfering with or circumventing, the remittance or payment to us of anv amount owed under this Agreement, including, but not limited to: (i) conducting business under an alternative name; (ii) depositing Receivables into any bank accounts other than the Bank Accounts; (iii) encouraging customers to make payments by cash that you fail to D5 7 or 13 Initials of Individual Signer(s){_F g” DocuSign Envelope ID: 404B 1 508-002C-46FD-AE3A-393B40BOAC34 11. 12. 13. 14. deposit into the Bank Accounts; or (iv) manipulating the use and form of buginess entities for the purpose of avoiding your obligations under this Agreement. Bank Accounts. You will maintain the Ba'nk Accounts (as defined in Exhibit A) u ntil all obligations are satisfied under this Agreement. Additionally, you will ensure that all funds arisi ng from Future Receivables are deposited in, or othentvise credited to, the Remittance Account(s), including, without limitation, by: (i)depositing all cash, checks and money orders into the Remittance Account(s) no later than the business dayfollowing the business day upon which any of these items are received by you; (ii) directing all EFTs relating to Future Receivables to be directly deposited into the Remittance Account(s); and (iii) directing all of your card processors to directly deposit all card payments into the Remittance Account(s). You will not permit anyevent to occur that could cause a diversion of any funds from the Remittance Account(s) to any other account or entity. You will provide us and/or our authorized agents with all information and authorizations that are necessary for verifying your Future Receivables, receipts, deposits into and withdrawals from the Remittance Account (s). Securiy Interest. Business acknowledges that it is selling certain of its Future Receivables to purchaser and that such a transaction constitutes either the sale of accounts or general intangibles pursuant to the Uniform Commercial Code or analogous state statutes. In order to secure your full performance of your obligations under this Agreement, you grant to us a continuing security interest in and to all of your presentand future accounts, receivables, chattel paper, deposit accounts, personal prOperty, goods, assets and fixtures, general intangibles, instruments, equipment and inventory (as those terms are defined in Article 9 of the Uniform Commercial Code (”UCC”)), wherever located, and with respeCt to these items, all proceedsnow or hereafter owned or acquired by you (collectively, the ”Collateral”). Upon any Event of Default, we may exercise any and all remedies available to secured parties under the UCC or any other applicable law.We have the right, but not the obligation, to create, sign on your behalfand file any and all filings that we determine are reasonably necessary to perfect our security interest in the Collateral, including without limitation, one or more UCC-1 financing statements. You agree that you will, from time to time, promptly execute and deliver all instruments and documents (including any account control agreements), and take all further action, that may be necessary or appropriate, or that we may reasonably request, to perfect our security interest in the Collateral against you and all third parties or to enable us to exercise and enforce our rights and remedies hereunder. Indemnity. You will defend, indemnify and hold us harmless from any damages, liabilities, costs, expenses (including reasonable attorneys’ fees) or other harms arising out of any violation of any laws, statutes, regulations, ordinances, contracts or other obligations pertaining to the conduct of your business. Business Information; Reporting Information to Credit Bureaus. You, and each person individually who signs this Agreement on your behalf, in both your individual capacity and as a principal of the Business, authorize us to contact any third party, including any credit reporting or database service, your current, prior or third-party card processors, and your current and prior banks (including, without limitation, anybank where any Bank Account have been or will be maintained), so that we may confirm or obtain any information bearing on your creditworthiness or reputation, and obtain a credit report or background report on you and/or each individual who signs this Agreement on your behalf, together with whatever other information we determine is necessary to review your application or to monitor, maintain and collect on your account and for any other lawful purposes. Such information may include, without limitation, your credit history or similar characteristics, credit card, debit card and other payment card and instrument processing history (including, without limitation, your chargeback history), employment and education history, social security verification, criminal and civil history, Department of Motor Vehicle and other public agency records as well as any other information bearing on your credit standing, credit capacity or character or that we otherwise deem pertinent to this Agreement. This authorization to obtain reports is valid at anytime during which this Agreement is in effect. We may report information abOut the Purchase Price and this Agreement to other creditors, other financial institutions and credit bureaus. You have the right to dispute the accuracy of information we have reported. If you believe that any information that we have reported to a credit bureau is inaccurate, or if you believe that you have been the victim of identity theft in connection with the Purchase Price or this Agreement, youmust write us at the Notice Address, Attn: Fraud/Dispute. Please include your name, address, Advance 8 of 13 Initlals of Individual Signer(sr-‘°5 ‘ DocuSiln Envelope ID: 4C4B1508-COZC-46FD-AE3A-393B4CBDAC34 15. 16. 17. 18. 19. 20. Number, telephone number and a brief description of the problem. If available, please inélude a copy of the credit report in question. If you believe that you have been the victim of identity theft, you must send us a police report or written statement in a form we provide you alleging that you a re the victim of identity theft for a specific debt. Teleghone Recordings. You understand and agree that we may monitor and/or record any of your phone conversations with any of our representatives. However, we are not required to monitor and/or record anysuch conversations. Contacting You; Phone and Text Messages. You authorize us and our affiliates, agents, successors, assigns and service providers (collectively, the "Messaging Parties") to contact you using automatic telephone dialing systems, artificial or prerecorded voice message systems, text messaging systems and automated email systems in order to provide you with information about this Agreement, including, without limitation, information about upcoming anticipated remittance dates, missed remittance or payment dates, returned remittances and/or marketing opportunities. You authorize the Messaging Parties to make such contacts using any telephone numbers (including wireless, landline, VOIP numbers and hereinafter developed technology) or email addresses you supply to the Messaging Parties, the Messaging Parties' servicing and/or collection of amounts you owe the Messaging Parties or any other matter. You Understand that anyone with access to your telephone or email account may listen to or read the messages the Messaging parties |eave or send you, and you agree that the Messaging Parties will have no liability for a nyone accessing such messages. You further understand that, when you receive a telephone call, tEXt message or email, you may incur a charge from the company that provides you with telecommunications, wireless and/or Internet services, and you agree that the Messaging Parties will have no liability for SUCh charges. You expressly authorize the Messaging Parties to monitor and record your calls with the Messaging Parties_ The consent set forth in this Section is not required as a condition of entering into a transaction with us and you understand that, at any time, before or after you sign this Agreement, you may withdraw your consent to receive text messages and calls to your cell phone or to reCeive artificial or prerECorded voice message system calls by calling the Messaging Parties at 800-923-0007. Consent to Receive Electronic Notices and Disclosures- Corres ondence. You agree that we may send to you, either electronically or in writing as we elect, any and all documents relating to the purchase, the Purchase Price and/or this Agreement. Your consent includes, but is not limited to: (a) transacting business with us online or electronically; (b) receiving disclosures or notices electronically, either via a disclosure on our website or in an email sent to you at an email address provided by you; and (c) receiving electronically all relevant documents, communications, notices and/or contracts related to your sale of Future Receivables to us. Any written or electronic correspondence we send to you will be effective and deemed deliveredwhen emailed or mailed to you at your mail address, as it appears on our records. You shall promptly notify us of any change to your email address or your mailing address. All notices to us must be sent to the Notice Address, with such attention as may be specified in this Agreement. To the extent permitted under applicable law, any notice you send us will not be effective until we receive and have a reasonab|e opportunity to act on such notice. Bankruptg. All bankruptcy notices and related correspondence to us must be sent to the Notice Address, Attn: Bankruptcy Notice. You represent and covenant that you have no current intent to file any bankruptcy petition and have not consulted a bankruptcy attorney in the past six months. The fact that Business goes bankrupt or is going out of business, in and of itself, does not constitute an Event of Default. Inadvertent Overcharges. It is not our intention to charge any fees or other amounts in excess of those permitted by applicable law or this Agreement. If any fee or other amount is finally determined to be in excess of that permitted by applicable law or this Agreement, the excess amount will be applied to reduce any amount due under this Agreement or, if there is no amount due under this Agreement, Wm be refunded to you. Delay in Enforcement. We may at any time and in our sole discretion delay 0r waive enforcing any of our rights or remedies under this Agreement or under applicable law without losing any of those or any other rights or remedies. Even if we do not enforce any rights or remedies at any one time, we may enforce them at a later date. D8 9 of 13 Initials of lndlvidual Signer(s) Fé‘j ‘ DocuSign Envelope ID: 4C4B1508-0OZC-46FD-AE3A-39334030AC34 21. 22. 23. 24. Limitation of Liability. WITH RESPECT To ANY CLAIMS You MAY HAVE AGAINST us, YOUR SOLE REMEDYWILL BE ACTUAL MONEY DAMAGES THAT SHALL NOT EXCEED THE AMOUNT o z: ANY FUNDS OVERPAID Tous. IN No EVENT SHALL WE BE LIABLE To vou FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY,SPECIAL 0R INDIRECT DAMAGES 0R LOSSES, 0R LOST PROFITS, RELATING To THIS AGREEMENT, IN TORT,CONTRACT, 0R OTHERWISE, INCLUDING ANY NEGLIGENCE. Waiver of Right to Trial by Jug. YOU AND WE ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS ACONSTITUTIONAL RIGHT BUT MAY BE WAIVED IN CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BYLAW, YOU AND WE KNOWINGLY AND VOLUNTARILY WAlVE ANY RIGHT T0 TRIAL BY JURY IN THE EVENT OFLITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT. THIS JURY TRIAL WAIVER SHALL NOTAFFECT OR BE INTERPRETED AS MODIFYING IN ANY FASHION THE ARBITRATION PROVISION TO WHICH YOUAND WE ARE SUBJECT, WHICH CONTAINS ITS OWN SEPARATE JURY TRIAL WAIVER. Governing Law, Venue and Jurisdiction. Except as set forth to the contrary in the Arbitration Provision, anyclaim, dispute or controversy arising from or relating to the Purchase or this Agreement or in any wayrelated to the parties‘ relationship, whether based in contract, tort, fraud or otherwise, is governed by, andconstrued in accordance with, federal law and, to the extent state law applies, the law of the State ofDelaware without regard to otherwise applicable principles of conflicts of law. This Agreement is made andperformed in the State of Delaware. All litigation, suits, court proceedings and other actions (except as setforth to the contrary in the Arbitration Provision) arising from or relating to the Purchase or this Agreementor in any way related to the parties’ relationship will be submitted to the jurisdiction of the state and federalcourts of the State of Delaware and the exclusive venue for all such suits, proceedings and other actions willbe in New Castle County, Delaware or such other jurisdiction that may be mutually agreed to by the parties.No action may be brought in any other state orjurisdiction. Notwithstanding the foregoing, Purchaser mayelect to commence litigation and court proceedings in the state and federal courts of the state in whichBusiness is located. The parties waive any claim against or objection to the in personam jurisdiction andvenue in the courts of New Castle County, Delaware. ALL PARTIES TO THIS AGREEMENT WAIVE TRIAL BYJURY IN ANY ACTION, PROCEEDING, SUIT, COUNTERCLAIM, CROSS-CLAIM, 0R THIRD-PARTY CLAIMBROUGHT BY ANY OF THE PARTIES HERETO ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANYWAY RELATED TO OR CONNECTED WITH THIS AGREEMENT Arbitration Provision. (a) Any party may elect to resolve any Claims (as defined below) or disputes by submitting to binding arbitration before one arbitrator selected by an Administrator. ”Administrator" means the AmericanArbitration Association (”AAA”), www.adr.org, 800-778-7879 or JAMS, www.iamsadr.com 800.352.5267 or, if AAA and JAMS cannot serve, another company selected by you and us or by a court. For purposesof this Arbitration Provision, ”we”, ”us”, and "our” mean Purchaser, together with any subsequent holder of this Agreement or participant in the Purchase, and each of our and their respective officers,directors, agents, representatives, contractors, employees, successors and assigns; and ”you” and”your” mean Business, its Principals, and each Guarantor, together with their successors. Filing, administrative, hearing and/or other fees, including attorneys fees and costs, will be borne in accordance with the Administrator’s rules, except as set forth in Section 8 above related to an Event ofDefault. For a AAA proceeding, AAA‘s Commercial Arbitration Rules shall apply. For a JAMS proceeding,Streamlined Arbitration Rules shall apply. Arbitrations may be held via teleconference, but if the arbitrator decides that a hearing is required, the arbitration will be held in Wilmington, Delaware orother state as may be mutually agreed upon. NO CLAIM SUBMITI'ED TO ARBITRATION WILL BE HEARDBY AJURY. (b) "Claim” shall mean any claim, dispute or controversy between you and us that requires a legal decisionto resolve, including disputes arising from actions or omissions prior to the date of this Agreement.”Claim” has the broadest reasonable meaning and includes disputes based upon contract, tort, fraud,constitution, statute, regulation, ordinance, common law and equity. "Claim” includes any claim ,asserted by or against any officer, director, or employee of the Business in his or her individual caplacity.However, Claim does not include disputes about the validity, enforceability, Coverage or scope ofthisarbitration provision or any part thereof (including, without limitation, the Class Action Waiver (set forth in subsection (f) below), the final sentence in subsection (e) and/or this sentence); alglssuch disputes are 1o of 13 Initials oflndlvidualSlgner(s): J- __ ___ DocuSign Envelope ID: 4C4B1508-COZC4SFD-AE3A-393B4CBOACS4 25. for a court to decide in which case the sole and exclusive jurisdiction is the state and federal courts located in New Castle County, Delaware and, in such instances, the parties irrevocably waive any objection based on venue or jurisdiction. However, any dispute or argume nt that concerns the validityor enforceability of the Agreement as a whole is for the arbitrator to decide, (c) Any court with jurisdiction may enter judgment upon the arbitrator’s award, which will be final and binding except for any appeal right under the Federal Arbitration Act (the ” FAA")_ (d) The Purchase involves interstate commerce and this Arbitration Provision shall be governed by the FAAand not by any state law concerning arbitration. The arbitrator shall follow applicable substantive law tothe extent consistent with the FAA, applicable statutes of limitation and privilege rules that would apply in a court proceeding, and shall be authorized to award a” remedies available in an individual lawsuit under applicable substantive law, including, without limitation, compensatory, statutory and punitivedamages (which shall be governed by the constitutional standards applicable in'judicia! proceedings), declaratory, injunctive or other equitable relief, and attorneys’ fees and costs. Upon the timely request of either party, the arbitrator shall write a brief explanation of the basis of the award_ The arbitrator Wm follow rules of procedure and evidence consistent with the FAA, this Arbitration Provision and the Administrator’s rules. (e) This Arbitration Provision shall survive the termination or expiration of this Agreement, your fulfillment or default of your obligations under this Agreement and/or your or our bankruptcy or insolvency (to theextent permitted by applicable law). In the event of any conflict or inconsistency between this Arbitration Provision and the Administrator’s rules or other parts of this Agreement, this Arbitration Provision will govern. If any portion of this Arbitration Provision, other than the class Action Waiver, isdeemed invalid or unenforceable, the remaining portions shall nevertheless remain in force, |f a determination is made with respect to any class Claim that the Class Action waiver is unenforceable, only this sentence of the Arbitration Provision will remain in force and the remaining provisions shall be null and void, provided that the determination concerning the Class Action waiver sha|| be subject to appeal. (f) Class Action Waiver: EXCEPT AS PROHIBITED BY PUBLIC POLICY, NEITHER YOU NOR WE WILL HAVETHE RIGHT TO: (l) PARTICIPATE IN A CLASS ACTION, EITHER AS A CLASS REPRESENTATIVE, CLASSMEMBER OR OTHERWISE; (ll) ACT AS A PRIVATE ATTORNEY GENERAL; OR (Ill) JOIN 0R CONSOLIDATE CLAIMS BY OR AGAINST YOU WITH CLAIMS BY OR AGAINST ANY OTHER PERSON, AND THE ARBITRATOR SHALL HAVE NO AUTHORITY TO CONDUCT ANY SUCH CLASS, PRIVATE A1TORNEY GENERAL OR MULTIPLE-PARTY PROCEEDING. Miscellaneous. This Agreement shall be binding upon Business and inure to the benefit of Purchaser, its successors and assigns. Neither this Agreement, nor any of the rights, licenses, responsibilities and/or obligations contained therein, may be transferred, assigned, licensed or delegated by Business without our written permission, which we are not required to give. This Agreement constitutes the entire understandingamong the parties pertaining to the sale of Future Receivables, and merges and supersedes all prior negotiations, discussions (whether oral or written) and earlier contracts of a similar nature. This Agreementmay not be amended, modified or limited except by a written agreement executed by both you and us. Anyprovision of this Agreement that is found to be invalid under applicable law shall be invalid only with respect to the offending provision and only to the extent of the invalidity and this Agreement shall be construed so as to best effectuate the intent of the parties. FéJ 11 of 13 Initials of Individual Signer(s - -‘* DocuSign Envelope ID: 4C4B1508-002C46FD-AEaA-39334CBOA034 EXHIBIT A AUTHORIZATION TO CREDIT AND DEBIT BUSINESS’S BANK ACCOUNT(S) ("REMITI'ANCE AUTHORIZATION") The following is a list of all of Business’s bank accounts (as subsequently supplemented, the ”Bank Accounts").The Bank Account(s) marked ”Deposit Funds" is the "Deposit Account” and the Bank Account(s) marked”Withdraw Remittances” is the ”Remittance Account." However, if no Bank Account is marked as the DepositAccount, we may treat any Bank Account as the Deposit Account. Also, if no Bank Account i5 marked a5 theRemittance Account, we may treat any Bank Account as the Remittance Account, a nd if any payment cannot beinitiated by us from the primary Remittance Account for any reason, we may treat any other Bank Account asthe Remittance Account. Deposit Withdraw Account #1 Funds Remittances Bank Name: E m Routing #: _ Account #:m Deposit Withdraw Account #2 Funds Remittances Bank Name: D D Routing fl: Account #: Deposit Withdraw Account #3 Funds Remittances Bank Name: [j D Routing 1:: Account #z If your Remittance Frequency is weekly, your remittance day (the “Weekly Remittance Day”), will be set tomm. If you would like to change your Weekly Remittance Day, please select a day below. Weekly Remittance Day selected must be a weekday: U Monday U Tuesday E] Wednesday [:1 Thursday D Friday (a) Bank Account Verification. You promise that each Bank Account identified above or at some later time isyour bank account and that you have the power and authority to (i) initiate remittances or payments fromsuch Bank Account and (ii) authorize us to initiate remittances or payments frOm such Bank Account, youpromise that each Bank Account is a legitimate, open, and active bank account used solely for businesspurposes and not for personal, family or household purposes. You authorize us to verify any informationyou have provided about any Bank Account and to correct any missing, erroneous or out-of-date information. (b) Payment ofPurchase Price. You authorize and request us to disburse to the Deposit Account by an EFT thePurchase Price set forth on Line 1 of the Purchase Summary (and any other amount we subsequently agreeto pay to you). (c) Remittances and AdditionaIAmounts. You authorize and direct us (or our service provider) to initiateelectronic fund transfers (”EFTs”) from the Remittance Account for the Collected Amount, or A|temativeRemittance Amount if applicable, in accordance with the Remittance Frequency. For the amount due on thedate of the final remittance, we may increase or decrease the amount of the EFT to equal the total amountthen outstanding under this Agreement. You authorize us to initiate EFTs from the Remittance Account forany fee or charge you owe, and, if an Event of Default occurs, for any amounts due under this Agreement Atour election, we may add any fee or charge you owe us to the EFT we initiate to collect a payment. If anyremittance or payment is scheduled to be made on a bank holiday, such remittance yment will bemade on the next business day. I Féj 12 of 13 lnltlals of Individual Signer(s): DocuSign EnveIOpe ID: 4C4B 1508-002046FD-AE3A-393B4CBOAC34 (d) (e) (f) (g) Error Correction. In the event we make an error in processing any remittance, payment or credit, youauthorize us to initiate an EFT to or from the Bank Accounts to correct the erro r. Resubmissions and Dishonored Remittances. You agree that we may resubmit up to two times any EFT thatis rejected or dishonored. Your bank may charge you fees for unsuccessful EFl's. You agree that we will haveno liability to you for such fees. No Termination. You shall keep this Remittance Authorization in force so long as this Agreement remains inplace and/or any amount remains outstanding under this Agreement. Compliance with Law and Network Rules. You acknowledge that the origination of EFTs to and from the BankAccounts must comply with U.S. law and applicable network rules. Business agrees to be bound by the rulesof NACHA. (h) Alternative Payment Methods. If you know that we will be unable to process a daily or weekly remittanceby an EFT under this Remittance Authorization, you must: (i) notify us; and (ii) mail or deliver a check ormoney order to us in the Remittance Amount at the Notice Address, Attn: Rem ittances or, if offered, remitthe Remittance Amount by any pay-by-phone or online service that we may ma ke available from time totime. :ns 13 of 13 Initials of lndivldual Signer(s):
