Terms & Conditions - Factoring


Purchase and Sale of Accounts & Factoring Facility.

  1. Purchase and Sale of Accounts.  Purchaser shall have the option to purchase from Seller and Seller shall assign, transfer and convey for sale exclusively to Purchaser as absolute owner, all of Seller's right, title and interest in Seller’s now existing or hereinafter created Accounts together with all corresponding rights and remedies with respect thereto and proceeds thereof.  Upon the sale of Accounts, Seller shall not take any action inconsistent with or adverse to Purchaser’s ownership of the Accounts.  Upon the purchase of Accounts, Purchaser shall be entitled to receive Fees provided in Schedule 1.
  2. Assignment Schedule.  Seller shall submit all Accounts to Purchaser in writing and shall list such Accounts on an executed Assignment Schedule in a form satisfactory to Purchaser which shall be delivered to Purchaser together with: (a) identical duplicates of each invoice or the equivalent evidencing the terms of sale for each Account; (b) all shipping or delivery receipts; and (c) such other documents and proof of delivery of merchandise or rendition of services as Purchaser may require (collectively “Supporting Documentation”).  All documents related to the Accounts in Seller’s Control, including, without limitation, Supporting Documents, and original copies thereof, shall be held in trust by Seller for the benefit of Purchaser and shall be tendered to Purchaser upon written request.  The Parties agree the Seller may submit an Assignment Schedule electronically through Purchaser’s online Portal as provided under Section 4.4.  Upon Seller’s submission of an Assignment Schedule, Purchaser shall be deemed to have purchased the Accounts set forth therein unless Purchaser, in its sole discretion, provides Seller written notice of Purchaser’s intent not to purchase such Accounts so identified.

  3. True Sale.  It is the intention of Seller and Purchaser that the sales of the Accounts constitute true and absolute sales of the Accounts from Seller to Purchaser.  Purchaser shall have the right to resell or pledge the Accounts purchased in its sole discretion.  Seller acknowledges and agrees that Purchaser may sell participation interests in or assign all or any portion of its rights, Obligations and interest under this Purchase Agreement and in the Collateral to any Person or Entity.  If, despite such mutual intention, a court determines that such sales of the Accounts instead constitute loans, financing transactions, or if for any other reason ownership of the Accounts is not vested in Purchaser, Seller grants Purchaser a first priority security interest in the Accounts and other Collateral as set forth in Section 6.

  4. Recourse & Chargebacks.  All Accounts sold to and purchased by Purchaser are with recourse to Seller and at Seller's sole credit risk.  Purchaser may require Seller to repurchase any Account sold to Purchaser that is not paid by any customer Account Debtor within ninety (90) days after sale of the Account.  Purchaser, in its sole discretion, shall have the right to require a Chargeback on any Advances on any Account at any time, either before or after maturity or collection, for any reason, including, but not limited, to recourse for an Account or in connection with the termination of the Purchase Agreement.  Purchaser, in its sole discretion, shall have the right to apply the Chargeback against the Reserve as provided in Section 2.8.  In the event of a Chargeback on an Account, Seller agrees to pay Purchaser the full amount due thereof, and failing to do so, Seller shall be responsible for all damages, including all costs, expenses and reasonable attorney incurred, by Purchaser in attempting to collect or enforce payment of such Accounts.  Seller may repurchase any Account with a cash payment, or its equivalent, by paying Purchaser the full Net Value amount due for the Account, less any Fees already paid, subject to Purchaser’s consent.

  5. Purchase Requirements & Minimum Sales.  Seller shall submit Account Schedules to Purchaser which satisfy the Minimum Sales requirements which are based on the aggregate Net Value of Accounts sold to Purchaser as provided in Schedule 1.  

  6. Advances & Facility Limit.  Upon the purchase of Accounts, Purchaser shall have the option, in Purchaser’s sole discretion, to pay or credit to Seller an Advance for all Eligible Accounts based on the Advance Rate for said Accounts or any portion thereof, subject to Purchaser’s right to maintain a Reserve as provided in Schedule 1.  The maximum amount of funds Advanced to Seller shall not exceed the Facility Limit; provided however, that Seller shall not be excused from any Obligation hereunder if Purchaser makes any Advance in excess of the Facility Limit.

  7. Available Funds.  Upon the clearance of payments or remittances for Accounts received by Purchaser from customer Account Debtors, Available Funds will be released to Seller within two (2) business days, representing Accounts actually paid minus Fees, Chargebacks, Creditbacks, Pass Through Expenses, and out-of-pocket costs incurred by Purchaser.  All Available Funds shall be subject to Purchaser’s right to maintain a Reserve and enforce the Obligations hereunder.

  8. Reserve.  All Advances and distribution of Available Funds shall be subject to Purchaser’s right to maintain a Reserve.  The term Reserve shall be designated by a ledger entry by Purchaser representing the unpaid portion of the and all money received and shall serve as security in the event that: (a) Purchaser fails to receive or in good faith reasonably anticipates failure to receive full payment for each Account purchased for any reason; or (b) Seller has Obligations due and owing.  Purchaser may, in its sole discretion, increase or decrease such Reserve as Purchaser may deem necessary to protect Purchaser's interests by providing written notice of such increase or decrease to Seller.  Purchaser may hold any payment received, in whatever form, until Purchaser receives confirmation of the availability of good and clear funds for such payment instrument.

  9. Account Debtor Funding Limit.  Purchaser shall have the right to set a funding limit for each Account Debtor (“Funding Limit”) by providing written notice of the Funding limit to Seller, which Advances for Accounts billed to each respective Account Debtor shall not exceed the Funding Limit for such Account Debtor.  Seller acknowledges that Purchaser is not a credit agency and that its credit decisions are based on information received from third-party sources.  Accordingly, Purchaser reserves the right, in its sole discretion, to set and modify the Funding Limits at any time and from time to time.  Purchaser will provide Seller with written notice of any changes or modifications to Funding Limits.

  10. Lockbox.  All invoices related to any Accounts of Seller, and/or sent to any customer Account Debtor, shall set forth the Lockbox Address as the sole and exclusive address for payment from Account Debtors, whether or not such Account has been purchased.  Purchaser shall maintain and have the right to sole and exclusive Control over the Lockbox.  If Seller receives, or comes into possession or control of any payments, in whatever form, from any customer Account Debtor, Seller shall promptly, which in no event shall mean more than one (1) business day, deposit such payment related to the Accounts into the Lockbox.

  11. Notification/Verification of Account Debtors.  (a) Upon execution of this Agreement, Purchaser shall have the right to notify all present and future customer Account Debtors of Seller that payment for the Accounts shall be made directly to Purchaser (“Notification”).  (b) The Notification shall include the Payment Notation on Seller’s invoices, which informs the customer Account Debtor that the Account has been sold and assigned and that payment is due exclusively to Purchaser.  (c) Purchaser reserves the right to alter, amend or modify the Payment Notation at its discretion effective upon sending written notice to Seller. (d) Purchaser shall have the right to verify directly with any customer Account Debtor that each Account submitted by Seller on an Assignment Schedule is an Eligible Account.  Purchaser, in its sole discretion, may charge a Vendor Assurance Fee as provided in Schedule 1 to receive such verification and assurances from customer Account Debtors or venders of Seller.

  12. Fees. The Parties acknowledge and agree that all of the Fees under this Agreement are provided and set forth in Schedule 1 of Master Purchase & Sale Agreement

Seller Operations and Procedures.

  1. Misdirected Payments.  If Seller receives payment of all or any portion of any Account, Seller shall immediately (a) notify Purchaser of the receipt of such payment, (b) hold said payment in trust for Purchaser separate and apart from Seller’s own property and funds, and (c) deliver said payment to Purchaser, or deposit into the Lockbox, within one (1) business day in the identical form in which such payment was received.  Seller’s strict adherence to the provisions of this Section 4.1 are essential in order for Purchaser to purchase Seller’s Accounts on the terms set forth in this Purchase Agreement and Seller agrees to implement policies and procedures with respect to Seller’s officers, employees, agents and representatives to ensure strict compliance and prompt performance of its duties and obligations hereunder.  In the event Seller fails to adhere to its duties and obligations under this Section 4.1, Purchaser shall be entitled to charge Seller a Misdirected Payment Fee as provided in Schedule 1.
  2. Agency Appointment.  Seller irrevocably appoints Purchaser (and all Persons designated by Purchaser) as Borrower’s agent and attorney-in-fact with full authority and power to:  

    1. file any financing statements, amendments or other UCC filings in connection with the Collateral, including, without limitation, financing statements with respect to or on behalf of any undisclosed or subsequently created Related Entity of Seller;

    2. receive, open and discard all mail addressed to Seller sent via Purchaser’s address or the Lockbox;

    3. endorse the name of Seller or Seller's trade name on any check or other evidence of payment payable to Seller that may come into the possession of Purchaser;

    4. demand, enforce, sue, release, compromise and/or collect any and all moneys due Seller from any third party;

    5. compromise, prosecute or defend any claim, lawsuit or proceeding as to the Accounts;

    6. send notices, demands or requests to any Account Debtor or interested third party in the name of Seller for any purpose whatsoever deemed reasonably necessary or desirable by Purchaser; or

    7. to prepare, file and sign Borrower’s name on any proof of claim in proceeding pending in any Bankruptcy Court or similar document against any Account Debtor.  

The agency appointment under the power of attorney herein granted to Purchaser herein shall be deemed coupled with an interest and therefore irrevocable until all Accounts purchased are paid in full and all Obligations to Purchaser are satisfied.  Borrower hereby ratifies and confirms all that said agent and attorney-in-fact may do or cause to be done by virtue of any provision of this Agreement.

  1. Financial Reporting Requirements.  Seller shall submit the following to Purchaser on a calendar monthly basis, which such documentation shall be submitted on or before the tenth (10th) business day of the month following each calendar month: (a) aging Accounts Receivable report; (b) aging Accounts Payable report; (c) financial status report, including, but not limited to, Seller’s profit and loss statement(s) and balance sheet; (d) any state or federal employer’s quarterly tax return filed by Seller since the previous monthly report.
  2. Reports and Portal.  All pertinent information regarding the Accounts with respect to (a) the status of payments received from Account Debtors; (b) the Advances paid by Purchaser; (c) the Fees incurred by Seller;  will be maintained by Purchaser and may be available for review by Seller on Purchaser’s Internet website based online account detail (“Portal”).  The Parties agree that such pertinent information on the Portal will constitute an electronic Report.  Each Report issued by Purchaser to Seller in connection with payments received from Account Debtors shall be deemed conclusively accurate and binding on Seller unless within fifteen (15) days after the date a Report is made available on the Portal, Seller notifies Purchaser to the contrary in writing, setting forth with specificity the reasons why Seller believes such Report is inaccurate, as well as what Seller believes to be correct amounts.  The failure of Seller to receive any periodic Report shall not relieve Seller of the responsibility to request such Report by accessing the Portal to obtain such information; and Seller’s failure to do so shall nonetheless bind Seller to whatever Purchaser’s records reflect on the Reports.

  3. Audit.  Purchaser shall have the right to conduct an examination and verification of Seller's books and records, including without limitation, Seller’s financial documents, accounting records, accounts receivable and invoicing records and supporting documents by either an employee of Purchaser or a professional selected by Purchaser to verify the accuracy of such records (“Audit”) upon (a) the occurrence of a Default Event; (b) a breach of the Purchase Agreement by Seller; (c) Purchaser’s rights to protect its security interest hereunder; or (d) any request of Seller to modify any terms or conditions of the Purchase Agreement.  Purchaser shall be permitted to conduct an Audit upon twenty-four (24) hours advance written notice to Seller.  Seller shall cooperate co-operate and comply with all reasonable requests made by Purchaser with respect to an Audit.  Seller shall be responsible for all Audit costs and expenses and assessed as incurred as a Pass Through Fee as provided in Schedule 1.  Purchaser will provide written itemization of Audit costs and expenses either in its Account Report or accessible through the Portal.

  4. Account Debtor Credits and Disputes.  Seller agrees that it shall not grant any allowance, rebate, discount, returns, credit, or adjustment to any customer Account Debtor, or accept any return of merchandise, without express prior written consent of Purchaser.  Purchaser may, at its option, settle and/or compromise any Dispute without imputing any liability to Seller so long as the compromise is done in good faith.  Purchaser, as the sole and absolute owner of the Accounts, shall have the sole and exclusive power and authority to collect each such Account, through legal action or otherwise, and exercise, to the maximum extent permitted by applicable law, any other right now existing or hereafter arising with respect to any of such Accounts.  Any settlement made by Purchaser shall not relieve Seller of any of its obligations under the Purchase Agreement and no Chargeback shall be deemed a reassignment of Purchaser’s interest in the Accounts.

  5. Authorization for Release of Information.  To the extent permitted by applicable law, Seller gives its irrevocable consent and authorization to Purchaser and each of its respective members, managers, officers, employees, agents, representatives, attorneys and Affiliates (“Authorized Parties”), to disclose, release or exchange all information, including, but not limited to, any confidential information, regarding Seller and to communicate without limitation as to any matters related to Seller as Purchaser deems necessary or advisable from time to time and at its option with any third parties or any other Persons or Entities claiming an interest or right in or the Collateral.

Representations, Covenants and Warranties.

Seller, and those principals, owners, directors, officers, managers, employees and agents of Seller authorized to execute this Agreement or any Assignment Schedule, each make the following representations, warranties, and covenants to Purchaser upon the execution hereof, each of which shall be deemed to have been made upon the submission of an Assignment Schedule:

  1. Seller.  With respect to Seller:  
    1. is an entity duly organized, validly existing and in good standing under the laws of the state of its formation and is qualified and authorized to do business and is in good standing in all states in which such qualification and good standing are necessary;

    2. has its principal place of business as set forth at the Premises, maintains all of its books and records relating to its Accounts at the Premises;

    3. sells, assigns and transfers the Accounts to Purchaser as set forth herein solely for a business or commercial purpose, will use the proceeds thereof for working capital purposes in the ordinary course of business, and covenants that in no event shall any of the Advances or funds received be used for personal, family or household purposes;

    4. has no Parent, Subsidiary, and/or Affiliate that is not disclosed in writing to Purchaser;

    5. does not own or control, in any way whatsoever, and is not and has at any time been affiliated with any Account Debtor;

    6. is Solvent as of the Effective Date and has no undisclosed knowledge or information that Seller is in material risk of insolvency;

    7. is not a party to or subject of any Claims, lawsuits, proceedings, investigations, judgments, decrees, or awards pending or entered against Seller; and is not aware, does not know the existence of and does not have any basis to know of any demands or threats of any Claims, lawsuits, proceedings, investigations, judgments, decrees, or awards pending or entered against Seller that has not been disclosed in writing to Purchaser; and

    8. has instructed any Parent, Subsidiary or Affiliate Entity (collectively “Related Entity”) that it may not sell, transfer, assign or grant a security interest in any Accounts of that Related Entity to any third party Person or Entity other than Purchaser without first giving written notice to Purchaser and obtaining the written consent of Purchaser.

  2. Accounts.  In connection with the Accounts:  
    1. Seller has offered for sale all Seller’s right, title and interest in all of Seller’s Accounts as of the Effective Date or as applicable all Accounts created since the last Assignment Schedule;

    2. (b) Seller is the sole and absolute owner of each Account offered for sale, each Account offered for sale is sold free and clear of any liens, security interests or encumbrances and all Supporting Documentation for each Account has been duly issued prior to Seller’s delivery of each Assignment Schedule;

    3. Seller has the full right to sell, assign and transfer each Account which does not violate or conflict with the terms of any other agreement or commitment to which Seller is a party; and upon Seller's delivery of each Assignment Schedule and Purchaser’s acceptance, Purchaser’s rights thereto will vest;

    4. all terms governing each Account are accurately reflected in the Supporting Documentation and each Account is not in Dispute and represents a sum certain owed by an Account Debtor; and no Account shall bear a payment due date later than the Maximum Sale Term, which means no more than sixty (60) days following the invoice date in connection with the sale of merchandise or goods or provision or rendition of services for the Account;

    5. each invoice clearly sets forth the Lockbox Address, or if applicable the Payment Notation;

    6. each Account represents Seller's bona fide sale, delivery and acceptance of merchandise or goods or full and complete performance of services to an Account Debtor;

    7. no Account purchased or any payment made with regard thereto will at any time during or after termination of this Purchase Agreement be avoidable by any bankruptcy trustee under the Bankruptcy Code or by any creditor, whether under state or federal law, as a preference, fraudulent conveyance or otherwise;

    8. each Account purchased shall be absolutely enforceable against Seller's Account Debtor in accordance with the express terms of the invoice, whether as to price, terms delivery, guaranty or quality;

    9. Seller has immediately (and no event more than twenty-four (24) hours upon receipt of such information), notified Purchaser of any Dispute, return, rejection, loss of or damage to merchandise or goods, or any request made by an Account Debtor for an extension of time to pay or any fact or circumstance with respect to any Account which is likely to effect the sum owing thereon or any other fact or circumstance that is likely to give rise to any Default Event; and

    10. no Account or product or services billed pursuant to an Account shall be (i) subject to a warranty or any future performance conditions; (ii) offered for sale has any express or implied condition giving use to a bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment or any right to return basis; (iii) and no Account is for work in progress or represents progress billing.

  3. Financial Records.  In connection with Seller’s financial records:  (a) each fact in any financial record, statement, books and records or other documents Seller has provided to Purchaser, either before or after the execution of this Purchase Agreement, is true and accurate and no information has since come to Seller’s attention to materially affect same; (b) all Seller’s financial statements, books and records have been prepared in accordance with generally acceptable accounting standards; and (c) Seller has contemporaneously as to each Account purchased herein made the proper entry on its books and records recording the absolute sale of such Accounts to Purchaser.
    1. Financing Statements.  In connection with financing statements; Unless authorized by Purchaser in writing, no financing statement identifying Seller as Debtor, except as to Purchaser, may or has at any time during the Term of this Purchase Agreement been authorized, allowed, permitted or consented to or has been filed in any public office by any other Person or Entity.

    2. Seller Operations.  In connection with operations of Seller:  

      1. it is fully responsible for the acts and omissions of its employees, including, but not limited to, the failure of any employee, agent, representative or assign to deliver any check or other payment instrument belonging to Purchaser;

      2. no Inventory, Equipment or other Asset has been sold outside the ordinary course of Seller's business without first giving Purchaser written notice and obtaining Purchaser’s written consent;

      3. each individual that executes and delivers the Assignment Schedule has the power and authority to do so on behalf of Seller;

      4. it has filed all requisite federal state and local tax forms and has timely paid all such taxes owed when due;

      5. it shall at all times execute and deliver to Purchaser any and all documents that Purchaser deems desirable or necessary to effectuate the provisions of this Purchase Agreement;

      6. it possesses all licensees, permits, franchises, patents, copyrights, trademarks, trade names and service marks, or rights thereof, to conduct its business as now conducted, and Seller is not in violation of any third party Person or Entity with respect to such intellectual property rights to any of the foregoing;

      7. it has no delinquent obligations under any organized labor contracts;

      8. it has no delinquent obligations under any pension obligations; and

      9. the proceeds of the Advances shall be used solely by Seller for working capital purposes in the ordinary course of business.

  4. Negative Covenants of Seller.  
    1. Seller covenants that Seller shall not, without Purchaser’s prior written consent:  
      1. allow, permit, create any adverse Claim or lien upon any Account, the Collateral or the Lockbox;
      2. submit, allow, permit, or create any invoice or notice for an Account which contains a “pay to” other than the Lockbox or (if applicable) the Payment Notation;
      3. consent, allow or permit any change to (i) the location of the Premises as the principal place of business and office where books and records are kept; (ii) its corporate name, Entity name, tradename, fictitious name, assumed name or “d/b/a” name; or (iii) Seller’s federal taxpayer identification number; and
      4. allow, permit consent to any change or modification of the payment terms to any Account Debtor.
  5. Survival.  To the extent provided by law, each the foregoing representations, warranties and covenants shall (i) run to the benefit of Purchaser’s successor and assigns and will be continuing in nature and will remain in full force and effect until all Obligations and sums owing to Purchaser by Seller have been fully and indefeasibly satisfied and paid; and (ii) survive termination of this Purchase Agreement.  
  6. Grant of Security Interest.

    1. Seller hereby grants to Purchaser, as security for all present and future Obligations, a continuing first priority and exclusive security interest in all of Seller’s existing and later acquired property and Assets of any kind or description, tangible or intangible, whether now existing or hereafter arising, including, but not limited to, Accounts, Chattel Paper, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Financial Assets, Fixtures, General Intangibles, Goods, Intellectual Property, Instruments, Inventory, Investment Property, Letter of Credit Rights, Securities and all Supporting Obligations and further including all of Seller’s books and records evidencing and/or related to all Accounts, all notes secured by real estate, Commercial Tort Claims and General Intangibles, including Payment Intangibles that Seller may come to have and that is subsequently specifically referenced by written amendment, as well as all of Seller’s software, computer programs, stored data, aging schedules, trade secrets, customer lists, vehicles, books, records, returned merchandise, vehicles, furniture, fixtures, and all property of Seller at any time coming into Purchaser’s possession; and all lien rights associated with the Accounts, whether arising by operation of law or pursuant to contract or agreement, including, but not limited to, mechanic’s lien rights; and all Proceeds thereof of each of the foregoing (“Collateral”).  Seller authorizes Purchaser to file any financing statements or other instrument that Purchaser deems appropriate to perfect and protect Purchaser’s ownership rights and security interests granted hereunder without further authorization from Seller.  Seller shall at Purchaser’s request, execute and deliver to Purchaser such documents or instruments and perform such acts as Purchaser deems necessary or appropriate in order to secure an attached and perfected first priority security interest in such Collateral.  In no event shall Seller have less than a first priority security interest in the Collateral, including, but not limited to, Seller’s existing and later acquired Accounts and the proceeds thereof.

    2. For the purpose of this Section 6, all rights granted to Purchaser shall also include each of Purchaser’s Parents, Subsidiaries and Affiliates (collectively “Related Entities”) to the extent Seller becomes indebted to any one or more Related Entities, in which event, Purchaser shall be entitled to assert on any such Related Entity’s behalf any right Purchaser receives under such agreement.  Moreover, to the extent any one of the Related Entities holds funds for or is otherwise obligated to Seller, any Related Entity may setoff or otherwise withhold such funds in favor of and disburse same to Purchaser or any other Related Entity to whom Seller is obligated.
  7. Default Event and Purchaser’s Rights and Remedies.

    1. Default Event.  A Default Event shall be deemed to have occurred hereunder upon the occurrence of any one or more of the following:  

      1. Seller shall fail to pay when due any Obligation;

      2. Seller shall fail to perform any duty under this Purchase Agreement;

      3. Seller breaches any warranty, representation or covenant set forth herein, or any warranty, representation or covenant is not true, accurate or correct in all material respects;

      4. any Assignment Schedule, report, certificate, financial statement, or other document furnished by Seller to Purchaser, or by any other Person or Entity on behalf of Seller, is untrue, incorrect or becomes untrue or incorrect in any material respect;

      5. an Insolvency Event as to Seller or Guarantor, or Guarantor’s death or disability;

      6. any lien, garnishment, citation, attachment or the like shall be filed, occur, arise or attach to the Collateral or any portion thereof, or Seller’s assets and the same is not released within a reasonable time following Purchaser’s demand thereof;

      7. a judgment is entered against Seller, unless the same is satisfied within thirty (30) days after the date of entry thereof or an appeal or appropriate proceeding for review is taken within such periods and a stay of execution pending such appeal is obtained;

      8. Seller shall fail to pay any federal or state tax or fail to timely file any tax form as and when required by applicable law;

      9. a material adverse change occurs in Seller's financial condition, business or operations;

      10. a change in the control, management or ownership of Seller; or

      11. Purchaser deems itself insecure and has reasonable cause to believe that the prospect of Seller’s performance under the Purchase Agreement appears jeopardized or if Purchaser deems itself insecure and has reasonable cause to believe that the prospect of any Guarantor’s performance appears jeopardized regardless of Seller’s performance.

  8. Rights and Remedies.  Rights and remedies available to Purchaser upon the occurrence of a Default Event include, without limitation:  
    1. all Obligations owed to Purchaser shall be immediately due and payable without demand by Purchaser;

    2. Purchaser shall have the right to charge additional fees at the Default Rate based on the Net Value of any unpaid Account at the time of default according to the Schedule 1 Default Rate; which shall be applied and Seller shall owe Default Fees in addition to any other Fees due to Purchaser hereunder;

    3. Purchaser shall have the right, at its discretion, to cease further Advances and/or to terminate this Purchase Agreement, all of which may be done without notice to Seller and Purchaser may immediately exercise all rights and remedies under this  Purchase Agreement, the UCC and applicable law;

    4. Purchaser shall have the right to enforce all lien rights of Seller and to take any and all actions necessary or desirable to enforce such lien rights in the name of Purchaser; and/or

    5. Purchaser shall be authorized to notify each bank or other financial institution in which Seller maintains a Deposit Account; and Seller hereby irrevocably authorizes such financial institution that the funds necessary to cure Seller's breach as set forth in writing by Purchaser to such financial institution shall be set aside and held in trust for the exclusive benefit of Purchaser.

  1. If a Default Event occurs due to the filing of a tax lien or levy by any federal, state or local taxing authority, until such lien or levy is satisfied and discharged, Purchaser shall be entitled to withhold any sum(s) that may otherwise be due Seller and may remit same to the appropriate taxing authority.  Moreover, Seller agrees that until the tax lien or levy is satisfied or discharged, Purchaser shall be entitled to collect all proceeds of Accounts and apply such proceeds to any Obligations.
  2. A Default Event shall not suspend, abate or terminate any performance or Obligation due to Purchaser by Seller.  Notwithstanding a termination of this Purchase Agreement, Seller's Obligations shall remain unconditionally due and owing and any amounts due shall accrue interest at the maximum rate allowable by law of the Chosen Forum until all Accounts purchased and Obligations due Purchaser have been fully satisfied.  In order to satisfy any of the Obligations due Purchaser, Seller authorizes Purchaser to initiate electronic debit or credit entries through the ACH system to any Deposit Account owned or maintained by Seller, and Seller shall indemnify and hold Purchaser harmless of any claims or damages that might arise therefrom unless Purchaser is found by a court of competent jurisdiction to have acted in bad faith and without just cause.
  3. Purchaser shall be entitled to equitable relief without having to establish an inadequate remedy at law or other grounds except that the Collateral securing Seller’s Obligations to Purchaser is subject to being dissipated; and such equitable relief may include injunctive or receivership remedies.  
  4. Upon the occurrence of a Default Event, all of Seller’s rights of access to Purchaser’s online Internet website services and the Portal shall be provisional pending Seller’s cure of all such Default Events and Purchaser, in its sole discretion, may limit or terminate Seller’s access to the Portal.  Seller acknowledges that the information Purchaser makes available to Seller online through the Portal constitutes and satisfies any duty to respond to a Request for an Accounting or Request Regarding a Statement of Account pursuant to § 9-210 of the UCC.
  5. Seller agrees to indemnify and hold Purchaser harmless from any loss or liability arising out of the assertion of any avoidance claim and shall pay to Purchaser on demand the amount thereof.  Seller shall notify Purchaser as soon as possible after Seller becomes aware of the assertion of an Avoidance Claim with respect to the Seller, an Account, the Collateral or any Account Debtor.  This Section 7.7 shall survive termination of this Purchase Agreement.
  6. Upon a Default Event, the Parties acknowledge that it shall be presumed commercially reasonable and Purchaser, in its sole discretion, shall have no duty to undertake to collect any Account if (a) Purchaser receives information from an Account Debtor that a Dispute exists; (b) Purchaser determines the Account Debtor owing such Account does not have the financial ability to pay the amount due and owing; or (c) the amount of recovery is outweighed by the likely costs and expenses to pursue any such Account.  This provision is not intended to impose any duties on Purchaser in circumstances other than those specifically addressed herein.  Furthermore, in the event Purchaser undertakes to collect from or enforce an obligation of an Account Debtor or other Person or Entity obligated on the Collateral securing the Obligations of Purchaser and determines that that possibility of collection is outweighed by the likely costs and expenses that will be incurred, Purchaser may at any such time cease any further collection efforts and such action shall be considered commercially reasonable.  Before Seller may, under any circumstances, seek to hold Purchaser responsible for taking any action not deemed commercially reasonable, Seller shall be required to first notify Purchaser, in writing, of all reasons why Seller believes Purchaser has acted in a manner not deemed commercially reasonable and advise Purchaser of the action that Seller believes Purchaser should take.
  7. Upon a Default Event, subject to all Purchaser’s rights and remedies hereunder, the Parties may elect to enter into a Forbearance Agreement in lieu of enforcement and litigation.  If the Parties enter into such a Forbearance Agreement, Seller shall be responsible for a Forbearance Fee as provided in Schedule 1.
  8. Term and Termination.
    1. Term.  The term shall remain in effect for twelve (12) months following the Effective Date and renew automatically on the yearly anniversary thereof unless terminated by the Parties pursuant to this Purchase Agreement (“Term”).  Seller may terminate this Purchase Agreement by providing Purchaser written notice of termination (“Seller Termination”) delivered to an officer of Purchaser not less than ninety (90) days prior to the requested termination date.  Notwithstanding anything to the contrary in this Purchase Agreement, and assuming no Default Event has occurred pursuant to which Purchaser may terminate without notice, Purchaser may terminate the Purchase Agreement at any time by giving not less than thirty (30) days’ written notice to Seller.
    2. Release.  Notwithstanding payment in full of all Obligations by Seller, Purchaser shall not be required to record any termination statements or satisfactions of any of Purchaser’s security interests unless and until Seller has executed and delivered to Purchaser a general release in a form satisfactory to Purchaser (“General Release”) to continue the Purchase A Seller shall have no authority to do so without Purchaser’s express written consent. Seller understands and agrees that this provision constitutes a waiver of its rights under § 9-513 of the UCC.
    3. Account Schedule.  At sole discretion of Purchaser, the failure of Seller to sell Accounts by submitting Accounts Schedules during the Term of this Purchase Agreement shall be considered a termination of this Purchase Agreement by Seller.
    4. Early Termination Fee.  In the event Seller does not provide ninety (90) day notice of a Seller Termination, or there is a Default Event under the Purchase Agreement that results in an early termination of this Purchase Agreement by either Seller or Purchaser, Seller shall pay Purchaser the Termination Fee, as provided in Schedule 1.  The Termination Fee shall be in addition to any other Fees due to Purchaser hereunder.  Any and all fees and Obligations due to Purchaser hereunder shall survive termination of this Purchase Agreement.
    5. Continuation Fee.  In the event that after such time as Seller provides a notice of Seller Termination and thereafter Seller elects to continue this Purchase Agreement, Seller shall submit such request for continuance in writing to an officer of the Purchaser (“Continuation Request”).  Purchaser may accept such Continuation Request at the sole discretion of Purchaser.  In the event that Purchaser accepts such Continuation Request, Seller shall pay Purchaser a Continuation Fee as provided in Schedule 1 to keep this Purchase Agreement in full force and effect.
    6. Collateral.  Any termination of the Purchase Agreement shall not affect Purchaser’s ownership of the Accounts purchased or Purchaser’s security interest in the Collateral, and the Purchase Agreement shall continue to be effective, until all transactions entered into and Obligations incurred hereunder have been completed and satisfied in full.  
  9. Indemnification

    1. Seller’s Indemnification.  At no time shall Purchaser owe any duty or obligation to any Account Debtor in connection with the Goods or services sold or Accounts purchased.  Seller agrees to indemnify and hold harmless, Purchaser, its Affiliates and any of their respective owners, managers, members, officers, employees, agents or representatives (each being an “Indemnified Party”), against any and all Claims, joint or several, caused by, arising out of, related to or in connection with, any costs or expenses, of any kind or nature (including, but not limited to, reasonable attorney fees) incurred by any Indemnified Party in any action or other proceeding brought by an Account Debtor, or third party on behalf of or as successor to an Account Debtor, against any Indemnified Party in connection with (i) any Account, (ii) the rejection or revocation of merchandise or (iii) disputes with respect to any services of every kind and nature, except to the extent such indemnified liability is found by a court of competent jurisdiction to have resulted solely from such Indemnified Party’s intentional misconduct, recklessness or gross negligence.  This Paragraph 9.1 and Seller’s indemnification obligations herein shall survive termination of this Purchase Agreement.

    2. Seller’s Third Party Indemnification.  Without limiting any other rights that Purchaser or the terms and conditions of this Purchase Agreement, Seller will indemnify and hold harmless each Indemnified Party hereto from and against any and all Claims, joint or several, to which such Indemnified Party may become involved in or subject under any applicable federal or state law, made by any third party, including, but not limited, to any Related Entity of Seller, or otherwise, resulting from, arising from, relating to or in connection with the Purchase Agreement and the performance by such Indemnified Party under the Purchase Agreement, and Seller shall, upon written demand, reimburse any Indemnified Party for all costs and expenses (including, but not limited to, reasonable attorney fees) as they are incurred in connection with the investigation of, preparation for or defense of any pending or threatening Claim, or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto.  In the event, after termination of the Term, Seller breaches its duty to indemnify any Indemnified Party under this Section 9.2, all of Purchaser’s rights hereunder shall be deemed reinstated, including, but not limited to, Purchaser’s rights to act as Seller’s attorney in fact in order to file any previously terminated UCC financing statements to perfect or protect Purchaser’s rights as a secured party, which rights shall not be terminated until such breach is remedied.  This Section 9.2 and Seller’s indemnification obligations herein shall survive termination of this Purchase Agreement.

      TO THE EXTENT PROVIDED BY LAW, NO INDEMNIFIED PARTY SHALL BE RESPONSIBLE FOR OR LIABLE TO SELLER OR ANY OTHER THIRD PARTY FOR INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES WHICH MAY BE ALLEGED OR ASSERTED AS A RESULT OF ANY ACTION, INACTION, TRANSACTION OR OCCURRENCE OR FINANCIAL ACCOMMODATION HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS PURCHASE AGREEMENT.  
  10. General Provisions.

  1. Governing Law.  The Purchase Agreement shall be deemed negotiated, executed and delivered at and shall be deemed to have been made in the Chosen Forum which shall be the laws of the State of Illinois.  The Purchase Agreement in all respects shall be governed by and construed in accordance with the domestic laws of the Chosen Forum, without regard to any choice of law or conflict of law provisions or rules (whether of the Chosen Forum or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Chosen Forum.
  2. Jurisdiction and Venue.  As part of the consideration for this Purchase Agreement, Seller hereby consents to the exclusive jurisdiction of any state or federal court sitting in the Chosen Forum in any action or proceeding the subject matter of which arises out of or relates, directly or indirectly, to the Purchase Agreement and each of Seller and Purchaser agree that all claims in respect to any action or proceeding shall be heard and determined exclusively in the Chosen Forum.  
  3. Waiver of Jury Trial.  EACH OF PURCHASER, SELLER AND ANY OBLIGOR HEREUNDER ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS PURCHASE AGREEMENT OR ANY DOCUMENT ARISING HEREUNDER OR WITH RESPECT TO THE TRANSACTION CONTEMPLATED HEREIN WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES.  ACCORDINGLY, EACH OF PURCHASER, SELLER AND ANY OBLIGOR HEREUNDER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED HEREON, INCLUDING, BUT NOT LIMITED TO, ANY CLAIM, COUNTERCLAIM, CROSS-CLAIM, THIRD PARTY CLAIM, DISPUTE, DEMAND, SUIT OR PROCEEDING ARISING OUT OF OR RELATED HERETO WHETHER, UNDER OR IN CONNECTION WITH THE PURCHASE AGREEMENT OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, INCLUDING ANY COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY AND EACH PARTY AGREES THAT ALL SUCH PROCEEDINGS SHALL BE TRIED BEFORE A JUDGE AND NOT A JURY.
  4. Attorney’s Fees.  Seller agrees to pay and reimburse Purchaser for all reasonable attorney’s fees, court costs and other expenses incurred by Purchaser arising under or related to the interpretation or enforcement of this Purchase Agreement, including, but not limited to, protecting or enforcing Purchaser’s interest in the Accounts purchased, the Collateral securing Seller’s Obligations or in connection with any Insolvency Event of Seller or Account Debtor.  Notwithstanding the existence of any law, statute or rule, in any jurisdiction that may provide Seller with a right to attorney’s fees or costs, Seller hereby waives any and all rights to hereafter seek attorney’s fees or costs thereunder against Purchaser and Seller further agrees that Purchaser exclusively shall be entitled to indemnification and recovery of any and all attorney’s fees or costs in respect to any litigation based hereon, arising out of, or related hereto, or in connection with, this Purchase Agreement and/or any other agreement executed in conjunction herewith, or any course of conduct, course of dealing, oral or written statements or actions of either Party.
  5. Assignment.  This Purchase Agreement shall inure to the benefit of and is binding upon the Parties, together with their executors, administrators, successors, and assigns.  Seller hereby gives Purchaser the right at any time to assign and delegate all of its rights and duties under the Purchase Agreement to any entity affiliated with Purchaser or any entity which has a common owner with Purchaser.  Seller may neither assign any of its rights nor delegate any of its duties under the Purchase Agreement to any Person, Entity or third party without the express prior written consent of Purchaser, which consent shall be in Purchaser’s sole and exclusive discretion.
  6. Entire Agreement.  The Purchase Agreement contains the entire understanding of the Parties hereto and relating to the subject matter hereof and is the final and complete expression of their intent.  No prior or contemporaneous negotiations, promises, agreements, covenants, or representations of any kind or nature, whether made orally or in writing, have been made by the Parties, or any of them, in negotiations leading to this Assignment or relating to the subject matter hereof, which are not expressly contained herein, or which have not become merged and finally integrated into this Purchase Agreement; it being the intention of the Parties hereto that in the event of any subsequent litigation, controversy, or dispute concerning the terms and provisions of this Purchase Agreement, no Party shall be permitted to offer or introduce oral or extrinsic evidence concerning the terms and conditions hereof that are not included or referred to herein and not reflected in writing.  No conditions exist to the legal effectiveness of this Purchase Agreement unless expressly set forth herein.
  7. Amendments.  No amendment, modification or waiver, oral or otherwise, with respect to any provision will in any event be effective unless the same is in writing and signed by an officer of Purchaser.   Such amendment or modification or waiver must have an original signature of an officer of Purchaser, and no email correspondence shall be considered a writing for purposes of such amendment, modification or waiver.
  8. Waiver.  No failure or delay on Purchaser’s part in exercising any right, power or remedy granted to Purchaser hereunder will constitute or operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right set forth herein.
  9. Limitation of Liability.  Seller’s sole remedy for any breach alleged to have been committed by Purchaser of any obligation or duty owed under the Purchase Agreement, any other agreement between Seller and Purchaser or any duty or obligation arising out of or related to the Purchase Agreement shall be limited to the Available Funds, which Available Funds shall be the amount five (5) days after the time notice in writing of such breach is first given to Purchaser.  Under no circumstances shall Purchaser be liable for any incidental, special, consequential, punitive or exemplary damages, including, but not limited to, loss of goodwill, loss of profit, or any other losses associated therewith, whether Purchaser did or did not have any reason to know of a loss that may result from any general or particular requirement of Seller.
  10. Relationship of Parties.  Seller acknowledges that the relationship under the Purchase Agreement is principally that of seller and purchaser and that there is not now, and Seller will at no time seek or attempt to establish, any fiduciary or confidential relationship between Purchaser and Seller. Seller waives any right to assert, now or in the future, the existence or creation of any fiduciary or confidential relationship between Purchaser and Seller in any action or proceeding, whether by way of claim, counterclaim, cross claim or otherwise.
  11. Notices.  (a) Notice with respect to the ordinary course of business in the performance of this Agreement may be sent electronically via email to each Party’s duly authorized representative.  (b) Any notice or other communication by either Party to the other in connection with a Default Event, breach of the Purchase Agreement, termination of the Purchase Agreement shall be in writing shall be sent to the address set forth in Page 1 of the Purchase Agreement and shall be given and be deemed to have been duly given, (i) three (3) business days following deposit in the United States mail, with proper postage prepaid; (ii) upon delivery if delivered by hand to the Party to be notified; or (iii) the following day if sent by a nationally recognized overnight courier delivery service (e.g., FexEd, UPS etc.).  The address for notices may be changed by written notice delivered as set forth herein.  No email correspondence shall be considered a written notice for purposes of this Section 10.11(b).
  12. Additional Instruments.  Each of the Parties shall from time to time, at the request of others, execute, acknowledge and deliver to the other Party any and all further instruments that may be reasonably required to give full effect and force to the provisions of the Purchase Agreement.
  13. Execution, Originals, and Counterparts.  Execution of this Purchase Agreement shall be deemed to occur in Cook County State of Illinois.  The Purchase Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original and constitute one and the same agreement.  Facsimile or eSignature copies with signatures shall be given the same legal effect as an original.  Delivery of a manually executed copy of a signature page of this Purchase Agreement by facsimile or by electronic transmission of a portable document format file or equivalent such as a PDF file electronically signed shall be effective as delivery of a manually executed original counterpart of this Purchase Agreement.  Agreements may be electronically signed and are considered legally binding hereunder.
  14. Severability.  In case any one or more of the terms, conditions or provisions contained in the Purchase Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and the Purchase Agreement shall be construed as if such invalid, illegal or unenforceable provision is stricken and had never been contained herein.
  15. Interpretation.  In the event an ambiguity or question of intent or interpretation arises, the Purchase Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of the Purchase Agreement.
  16. No Third Parties Benefited.  The Purchase Agreement is made and entered into for the sole benefit of the Parties hereto, their permitted successors and assigns, and no other Person or Entity shall have any right, remedy or action under the Purchase Agreement.
  17. Enforcement.  Each Party has read this Purchase Agreement, understands its contents, and represents that each has full and complete authority to sign this Purchase Agreement and that the execution, delivery and performance hereunder has been duly authorized by each Party.  Each of the Parties hereto has had an opportunity to consult with its respective legal counsel prior to executing this Purchase Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Purchase Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Purchase Agreement.
  18. Headings & Construction.  The headings contained in this Purchase Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Purchase Agreement.  Whenever the singular number is used in this Purchase Agreement and when required by the context, the same shall include the plural.
  19. Merger/No Reliance.  Seller specifically acknowledges and agrees that Purchaser has not made and shall not at any time be deemed to have made and hereby disclaims any representations, warranties, promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future of by Purchaser except as specifically set forth herein.   This Agreement is executed freely and voluntarily and without reliance upon any statement or representation of Purchaser or any of Purchaser’s attorneys, agents, or other representatives in connection therewith except as set forth herein.  There are no and Seller is not relying on any written or oral representations not expressly written in this Purchase Agreement.

These Terms & Conditions are incorporated into the Master Purchase and Sale Agreement signed by client.