STANDARD TERMS AND CONDITIONS OF SUPPLIER EARLY PAYMENT AGREEMENT
THESE STANDARD TERMS AND CONDITIONS OF SUPPLIER EARLY PAYMENT AGREEMENT, effective as of September 23, 2020, as hereinafter amended, from time to time (the “Terms”) are incorporated in and part of the Supplier Early Payment Agreement (the “Supplier Early Payment Agreement” or the “Agreement”). Use of the term “Supplier Early Payment Agreement” in these Terms shall be a reference to the Supplier Early Payment Agreement (with these Terms incorporated) by and between Payability Commercial Factors, LLC, a Texas limited liability company (“PCF”), having offices at 10955 Lowell, Suite 800, Overland Park, KS 66210, and “Supplier,” as defined therein.
PCF and Supplier are sometimes referred to in these Terms as the “Parties.”
These Terms also reference Payability Operations, LLC, a Delaware limited liability company (“Payability Operations”), which company is not, itself, a party to the Supplier Early Payment Agreement.
These Terms, together with those in the main body of the Supplier Early Payment Agreement and in the other Exhibits thereto, set forth the terms and conditions which govern and apply to the purchase and sale, from time to time, of Purchased Receivables, each being an Account, between the Parties under the Supplier Early Payment Agreement.
A. Supplier generates Accounts by providing Goods and services rendered or to be rendered (“Services”) such as advertising, application purchases, in-app purchases, or other types of Goods and Services, to various marketplaces acceptable to PCF (each a customer and account debtor of Supplier) by the Payability System’s listing of each such PCF approved marketplace as a “Payment Plan” in the Payability System (each a “Marketplace”), which delivery of Services and sales of Goods by Supplier to such Marketplaces creates Accounts owed by the various Marketplaces to Supplier.
B. Supplier and PCF, via license from Payability Operations, LLC, Delaware limited liability company having its principal place of business at 428 Broadway, 3rd Floor, New York, NY 10013 (which company is an affiliate of Payability, LLC, a Delaware limited liability company “Payability, LLC”) will utilize the Payability System (as defined herein) to facilitate the Supplier’s receipt of early payment from PCF on Accounts owed by such Marketplaces to Supplier, by Supplier’s sale of such Accounts to PCF under the Supplier Early Payment Agreement and these Terms, as incorporated therein.
C. Supplier acknowledges that certain Marketplaces may themselves participate in the Payability System, in order to accelerate payments to Supplier on the Accounts owed by such Marketplaces to Supplier, by the Marketplace executing a Supplier Payment Acceleration Agreement with PCF (a “Marketplace Agreement”).
D. As a material part of these Terms, Supplier accepts PCF’s Purchasing Commission, as applicable, together with the Funding Period, Marketplace Credit Limit(s), the Advance Rates, Funding Facility Limit, Marketplace Payment Terms and the various other Funding Particulars shown in the Payability System or, if not stated therein, as such Funding Particulars are detailed in the Supplier Early Payment Agreement, all such Funding Particulars, as one or more of them may hereafter be modified as discussed in Recital E below, being incorporated by reference as if fully set forth herein, provided, however, that in no event will the Purchasing Commission ever exceed eight percent (8%). In the event that Supplier receives a payment from PCF and believes that the Purchasing Commissions or other pricing, Funding Periods or the Advance Rates were not what Supplier agreed to, Supplier must send written notice to PCF of Supplier’s dispute of the same within fourteen (14) days of Supplier receiving the subject payment from PCF. Payability, on behalf of PCF, will thereupon produce information from the Payability System and/or the Supplier Early Payment Agreement and send the same to Supplier, within seven (7) days from PCF’s receipt of such dispute, to establish that Supplier did, in fact, select and agree to PCF’s specific Purchasing Commissions and other pricing, Funding Periods and Advance Rates as so challenged by Supplier. If PCF is unable to produce such information, as determined in an order final beyond appeal of a court of competent jurisdiction, PCF indemnifies Supplier for, and agrees to make payment to Supplier of, all direct damages and losses of Supplier arising from Supplier’s challenge (such indemnity of PCF, however, excluding indirect, consequential and punitive damages and not extending also to any attorney’s fees of Supplier).
E. Supplier further acknowledges and agrees that some or all of PCF’s Purchasing Commissions, Funding Periods, Marketplace Credit Limit(s), Advance Rates, Funding Facility Limits, Marketplace Payment Terms or the other Funding Particulars, found as stated in Recital D above, may hereafter be modified and amended by PCF, from time to time, but always subject to the cap on the maximum Purchasing Commission provided for herein by PCF sending electronic notice of proposed changes thereto to Supplier via the Payability System. As a material part of these Terms, Supplier agrees that all proposed amendments to such Funding Particulars shall become effective and part of these Terms and the Supplier Early Payment Agreement, prospectively, upon Supplier electronically marking, in the Payability System, such later proposed changes as “accepted and agreed to by Supplier”, or by Supplier executing a written amendment to the Supplier Early Payment Agreement accepting such proposed changes.
F. Moreover, and without limitation of any of the foregoing, Supplier further consents to execute forthwith such additional documents and instruments as PCF may hereinafter request, from time to time, to further evidence PCF’s acquisition of all right, title and interest to the Purchased Receivables under the Supplier Early Payment Agreement.
G. Supplier acknowledges, as more fully set forth herein, that PCF buys the Purchased Receivables without (credit) recourse to Supplier under the Supplier Early Payment Agreement, to the extent of the Credit Risk assumed by PCF under the Supplier Early Payment Agreement and these Terms as incorporated therein.
H. Supplier further acknowledges, as provided in these Terms, that, in PCF’s sole discretion, PCF may, at any time, provide notice to the various Marketplaces of both Supplier’s sale and PCF’s purchase of the Purchased Receivables attributable to each such Marketplace, together with notice of Supplier’s pledge to PCF of any Non-Purchased Receivables owed by such Marketplaces to Supplier, in such manner and form, including written notice, as PCF may determine, in PCF’s sole discretion. Supplier further agrees that, irrespective of whether such formal notice of sale and assignment has been given by PCF to such Marketplaces (with Supplier’s Accounts being purchased on a non-notification basis if such notice is not so given), that each Marketplace will, via the Payability System, be directed, immediately upon execution of the Supplier Early Payment Agreement, to remit to payment to PCF for all Receivables then owing to Supplier by such Marketplace, whether such Receivables are Purchased Receivables or Non-Purchased Receivables, as set forth more fully below.
I. After deducting the fees and costs owed by Supplier to PCF under the Supplier Early Payment Agreement, including the applicable Purchasing Commissions and other terms found detailed in the Payability System and cross-referenced as discussed in Recitals D and E above, Supplier agrees that PCF shall disburse the collected proceeds of the Purchased Receivables to Supplier, on a Batch basis, in the manner and on the conditions set forth in the Supplier Early Payment Agreement, incorporating these Terms.
Turning to further particulars of these Terms:
1. RECITALS. The Recitals above are incorporated by reference into these Terms as if fully set forth herein.
2. DEFINITIONS. For purposes of the Supplier Early Payment Agreement and these Terms, the following terms shall have the meanings set forth below:
“Account” has the meaning set forth in Article 9 of the UCC.
“Advance” shall mean, on each date on which Purchased Receivables are initially purchased and funded by PCF, an amount, in PCF’s sole discretion, up to the product of the Advance Rate of the subject Receivables multiplied by the Purchase Price thereof.
“Approved Marketplace” means a Marketplace.
“Advance Rate” means the percentage amount shown in the Payability System as the “Advance Rate” applicable to the particular Marketplace(s) and Funding Period selected by Supplier in the Payability System or, if not shown therein, the rate set forth as the “Advance Rate” as part of the Funding Particulars in the Supplier Early Payment Agreement, in either case, up to, but never in excess, of ninety percent (90%).
“Approved Currency” means US Dollars.
“Available Receivables” has the meaning set forth in Section 3.4 of these Terms. Available Receivables, if purchased by PCF on the terms of the Supplier Early Payment Agreement, will create a liability for the Gross Amount of the Purchased Receivables due from the Marketplace to PCF, as assignee of Supplier, PCF having bought the same.
“Bankruptcy Code” means the United States Bankruptcy Code, being Title 11 of the United States Code as enacted in 1978, as the same has heretofore been and may hereinafter be amended, recodified, modified or supplemented, from time to time.
“Balance Payment” has the meaning set forth in Section 3.9 hereof.
“Batch” has the meaning set forth in Section 3.1 hereof.
“Batch Closure” has the meaning set forth in Section 3.9 hereof.
“Business Day” means any day other than Saturday, Sunday and any other day that commercial banks in the State of Texas are authorized or required by law to close.
“Chargeback” has the meaning set forth in Section 4.2 hereof.
“Chattel Paper” has the meaning set forth in Article 9 of the UCC.
“Collateral” means (i) PCF’s ownership interest in the Purchased Receivables and in the Conveyed Property related thereto, together with (ii) PCF’s interest, as lender, in the assets pledged as collateral to PCF by Supplier as security for the indebtedness and other Obligations owed by Supplier to PCF under the Supplier Early Payment Agreement, including, without limitation, credit balances due to Supplier by PCF, in respect of Purchased Receivables, and Supplier’s ownership interest in Non-Purchased Receivables.
“Concentration Limit” means the percentage of dollar amount of uncollected Accounts Receivable from a single Marketplace over the total dollar amount of uncollected Accounts Receivable owed to Supplier by all Marketplaces.
“Confidential Information” shall have the meaning set forth in Section 31 hereof.
“Conveyed Property” shall mean, collectively, the Purchased Receivables together with all cash and non-cash Proceeds and products thereof, whether in cash or in kind, all security and guarantees therefore, and all Supplier’s rights arising from the Goods and Services delivered by Supplier with respect thereto and represented thereby, and all books and records of Supplier related thereto.
“Credit Event” means, as to a Marketplace and any Purchased Receivable acquired by PCF under this Supplier Early Payment Agreement, any of the following: (i) any case or proceeding with respect to the Marketplace, voluntary or involuntary, under the Bankruptcy Code or any other Federal or State bankruptcy, insolvency, reorganization or other law affecting creditors’ rights generally, or any other or similar proceedings seeking any stay, reorganization, arrangement, composition or readjustment of the obligations and/or indebtedness of a Marketplace or (ii) any proceeding seeking the appointment of any trustee, receiver, liquidator, custodian or other insolvency official with similar powers with respect to a Marketplace or any material portion of its assets or (iii) any proceedings for liquidation, dissolution or other winding up of the business of a Marketplace or (iv) any assignment for the benefit of creditors or any marshaling of assets of a Marketplace, or (v) any other event or circumstance under which a Marketplace is financially unable to pay all or any part of a Purchased Receivable.
“Credit Risk” shall mean, with respect to the any Purchased Receivable acquired by PCF under this Supplier Early Payment Agreement, the failure or inability of PCF to collect all or any part of such Purchased Receivable solely as a result of the occurrence of a Credit Event.
“Default” has the meaning in Section 20 hereof.
“Designated ACH Debit Bank Account” means the Supplier’s bank account(s) designated for ACH debits, which shall be pre-approved by and acceptable to PCF.
“Dispute” means (i) any dispute, claim, offset, recoupment, defense, counterclaim or any other reason (including returns of Goods) or no reason, for nonpayment or any other refusal of a Marketplace to pay all or part of a Receivable for any reason whatsoever other than due solely to Credit Risk assumed by PCF, regardless of whether the same is an amount greater than, equal to or less than the face value of the Receivable, whether such reason is bona fide or not, and regardless of whether the same, in whole or in part, relates to an unpaid Receivable or any other Receivable and (ii) an act of God, force majeure, acts of restraint of public authorities, whether foreign or domestic, civil strife, war or currency restrictions or fluctuations and (iii) any other event resulting in nonpayment of all or any part of a Purchased Receivable when due at less than the Gross Amount, other than, again, due solely to Credit Risk assumed by PCF under the Supplier Early Payment Agreement. Dispute shall include any failure of a Marketplace, having the financial ability to pay a Purchased Receivable, choosing not to do so. For the avoidance of doubt, a Dispute shall not include any Purchased Receivable not collected by PCF due solely to Credit Risk assumed by PCF under the Supplier Early Payment Agreement,
“Documents” has the meaning set forth in Article 9 of the UCC.
“Electronic Earnings Data” means all data, representing liabilities of a Marketplace to the Supplier for Goods and Services delivered by Supplier to the Marketplace, as approved by the Marketplace for payment, electronically, as subsequently Electronically Transmitted or downloaded by PCF from such Marketplace via the Payability System. For avoidance of doubt, the Payability System’s calculation of the Electronic Earnings Data of Supplier and such Update Adjustments as are timely reported shall be deemed correct and accurate by each of PCF and the Supplier (and, where PCF has a Supplier Payment Acceleration Agreement in place with a Marketplace, by such Marketplace as well), with the understanding that the Payability System’s calculation may differ from that reported by the Marketplace due to, as an example, rounding or time zone differences.
“Electronic Transmission” or “Electronically Transmit” means a method of electronically transmitting or receiving information between Payability Operations, PCF, Supplier and Marketplace, via the Payability API, for the purposes contemplated by this Agreement.
“Event of Default” has the meaning set forth in Section 19 hereof.
“Financial Statements” means the income statement, balance sheet and statement of cash flows of Supplier, internally prepared for each fiscal quarter, and audited for each fiscal year, prepared in accordance with GAAP.
“Fund” (or “Funds” or “Funded” or “Funding”) shall mean the advance or other payment of funds by PCF to Supplier in accordance with the terms of these Terms and the Supplier Early Payment Agreement.
“Funding Date” has the meaning set forth in Section 3.1 hereof.
“Funding Facility” means the Supplier Early Payment Agreement, these Terms, and all other documents and instruments delivered in connection therewith.
“Funding Facility Limit” means the maximum dollar amount of all Advances by PCF to Supplier on uncollected Purchased Receivables, across all Marketplaces, that may be outstanding at any time.
“Funding Particulars” means the Purchasing Commission, Funding Period, Marketplace Credit Limit, Advance Rate, Marketplace Payment Terms, Guarantors, Approved Marketplaces, special supplier covenants and such other terms as are identified as “Funding Particulars” in the Supplier Early Payment Agreement or in the Payability System.
“Funding Period” means the frequency of purchase by PCF of the Purchased Receivables as selected by Supplier in the Payability System, which period operates as illustrated in Section 3.1 hereof.
“Funding Rate” means the percentage amount shown in the Payability System as the “Funding Rate” applicable to the particular Marketplace(s) and Funding Period selected by Supplier in the Payability System.
“GAAP” means Generally Accepted Accounting Principles consistently applied, as determined by the Financial Accounting Standards Board, the Government Accounting Standards Board, and other relevant accounting authorities, as the case may be.
“General Intangibles” has the meaning set forth in Article 9 of the UCC.
“Goods” has the meaning set forth in Article 9 of the UCC.
“Gross Amount” is the total amount of an Available Receivable (including, without limitation, all taxes, service fees, freight, and other charges) owing from a Marketplace to Supplier prior to purchase of such Receivable by PCF, as calculated and created from the Electronic Earnings Data, as such data may be adjusted by Update Adjustments in accordance with these Terms, and without deducting any Reserve or the Purchasing Commissions. For clarification, Gross Amount shall exclude, if any, payment processing fees or commissions that are included in the Gross Amount, but otherwise would not actually be paid to Supplier by the Marketplace, such as, by way of example, a 30% processing fee charged to suppliers by Marketplaces, such as Facebook Credits or iTunes.
“Guarantor” means any person who has executed a Guaranty.
“Guaranty” means any guaranty of payment or performance (but not of credit losses arising from Credit Risk assumed by PCF) executed by any Person in favor of PCF, Payability Operations or Payability, LLC guarantying in any way the Obligations, and shall include any Account Validity and Performance Guarantee executed and delivered to PCF. If there is more than one Guaranty, they shall be known, collectively, as the “Guarantees” or, variously, as the “Guaranties.”
“Instruments” has the meaning set forth in Article 9 of the UCC.
“Inventory” has the meaning set forth in Article 9 of the UCC.
“Investment Property” has the meaning set forth in Article 9 of the UCC.
“Late Payment” has the meaning set forth in Section 7.1 hereof.
“Late Payment Rate” shall be 18%.
“Login Credentials” means Supplier’s user name, password and any other information necessary to login to a Supplier Marketplace Account.
“Marketplace” means an account debtor of the Supplier, together with its successors and assigns, which is listed as a “Payment Plan” in the Payability System or which is shown as an Approved Marketplace in the Funding Particulars.
“Marketplace Agreement” means a “Marketplace Supplier Payment Acceleration Agreement” between PCF and a Marketplace, if and to the extent that such an agreement is in effect, whose terms, to the extent they reference the transfer of Electronic Earnings Data and the other terms and conditions of the Supplier Early Payment Agreement and these Terms, must be fully consistent with those set forth herein.
“Marketplace Credit Limit” shall mean the maximum dollar amount of all uncollected Accounts Receivable owed to Supplier by any Marketplace on any date, or such other account as PCF may notify Supplier of, in writing or via the Funding Particulars, as it may change, from time to time.
“Marketplace Payment Terms” shall mean the maximum number of days after Supplier’s delivery of Goods or Services to any Marketplace that Supplier allows such Marketplace to pay Supplier for the associated Receivables.
“Material Adverse Effect” means a material adverse effect on any of (i) the Supplier’s ability to pay or perform its obligations under the Supplier Early Payment Agreement or (ii) the rights and remedies of PCF under the Supplier Early Payment Agreement.
“Maximum Payment Term” means ninety (90) days from the delivery by Supplier of the services or goods giving rise to any Receivable sold or pledged to PCF hereunder.
“Midnight Time” has the meaning set forth in Section 3.1 hereof.
“Non-Purchased Receivables” means Receivables of Supplier which were never sold to PCF under the Supplier Early Payment Agreement as well as Purchased Receivables which have been charged-back by PCF to Supplier under the Supplier Early Payment Agreement, together with all Accounts, Instruments, Chattel Paper, Documents, Investment Property and General Intangibles giving rise to such Receivables and all products and Proceeds thereof.
“Obligations” means all monetary and non-monetary obligations, indebtedness and liabilities of the Supplier to PCF under the Supplier Early Payment Agreement, whether incurred before or after termination of the Supplier Early Payment Agreement, whether absolute or contingent, joint or several, matured or unmatured, direct or indirect, primary or secondary, liquidated or unliquidated, and whether arising directly or indirectly or acquired from others (whether outright, by assignment, unconditionally, or as collateral security from another, and including participations or interest obligations to others), including, without limitation, all indebtedness arising from chargebacks of Purchased Receivables costs, expenses and attorneys’ fees chargeable to Supplier under the Supplier Early Payment Agreement, and all Supplier’s obligations to PCF as an indemnitor under the Supplier Early Payment Agreement. For the avoidance of doubt, Obligations shall in no event include credit losses incurred by PCF arising from Credit Risk assumed by PCF under the Supplier Early Payment Agreement nor the costs incurred by PCF to collect accounts purchased at PCF’s Credit Risk and not charged back.
“Outstanding Funded Amount” means, at any time, the aggregate of all Advances by PCF to Supplier on Purchased Receivables which have not been collected by PCF.
“Participation Percentage” shall mean the percentage of Available Receivables which Supplier shall be deemed to have offered to sell to PCF for a particular Funding Period, calculated in accordance with Section 3.4 hereof.
“Payability Account” means the representation of funds available to the Supplier, within the Payability System, to be spent or deposited to any of the Supplier’s deposit accounts that are approved and on file within the Payability System. This includes but is not limited to bank account and routing information for both ACH and wire deposits, a Payability Seller Card, or other future deposit or spending methods made available by Payable to Supplier via the Payability System. Supplier acknowledges that its Payability Account solely represents funds available to the Supplier for disbursement, and is not a bank account or deposit account held by Supplier. Any funds available to the Supplier for disbursement, as represented by the Payability Account, represent an unsecured claim against Payability.
“Payability API” means the application programming interface which allows (a) certain data regarding Supplier (such as, without limitation, Electronic Earnings Data and Update Adjustments thereto, contact, and payment information) to be transmitted to, or electronically requested from, Payability Operations by certain Marketplaces, and (b) Payability Operations to Electronically Transmit such information to PCF.
“Payability, LLC” has the meaning set forth in the Recitals.
“Payability Operations” has the meaning set forth in the Recitals.
“Payability System” means the combination of equipment, software, documentation, website and services, such as the Payability API, which, among other things, Payability Operations offers to Supplier and to PCF, to enable PCF to purchase the Purchased Receivables and settle related payment obligations on an accelerated basis, on the terms of the Supplier Early Payment Agreement.
“Payment Suspension Request” has the meaning set forth in Section 3.16 hereof.
“Person” or “person” means any individual, sole proprietorship, partnership, corporation (including, without limitation, any corporation which elects subchapter S status under the Internal Revenue Code of 1986, as amended), limited liability corporation, limited liability partnership, business trust, unincorporated association, joint stock Marketplace, trust, joint venture, or other entity or any government or any agency or instrumentality or political subdivision thereof.
“Pledged Collateral” has the meaning in Section 7.3 of these Terms.
“Proceeds” shall mean all proceeds (as set forth in Article 9 of the UCC), products, rents and profits of and from any of the Purchased Receivables or the Collateral, as the case may be, and to the extent not otherwise included in the foregoing, (i) all payments under any insurance, indemnity, warranty or guaranty with respect to any of the Purchased Receivables or the Collateral, (ii) all payments in connection with any acquisition, requisition, condemnation, seizure or forfeiture of any such property, (iii) all rights and claims to recover for any past, present or future infringement or dilution of or injury to any such property and (iv) all other amounts paid from time to time or payable under or with respect to any such property, including licensing and royalty fees.
“Program” (variously, the “Payability Program”) means both (i) the Funding Facility provided by PCF to Supplier under the Supplier Early Payment Agreement and, (ii) if one or more Marketplace Agreements are in place between PCF and any Marketplace, all supply chain finance payment facility programs which use the Payability System and incorporate both the Marketplace Agreement and a Supplier Early Payment Agreement.
“Purchase Date” has the meaning set forth in Section 3.1 of these Terms.
“Purchase Price” has the meaning set forth in Section 3.6 of these Terms. “Purchased Receivables” shall have the meaning set forth in Section 3.5 of these Terms.
“Purchasing Commission” means, with respect to any Purchased Receivable, on the date of its purchase, the Purchasing Commission applicable to such Receivables set forth in the Payability System or, if not shown therein, as set forth in the Funding Particulars in the Supplier Early Payment Agreement, incorporated by reference and as set forth in Recitals D and E above, but subject always to the maximum cap on the Purchasing Commission provided for herein. For clarification purposes, Purchasing Commissions include both fees charged by PCF to a Supplier that are based on a percentage basis as well as fees which are fixed dollar amounts (even if such dollar amount is based upon daily, weekly, calendar weekly, or monthly earnings volume of the Supplier). In no event shall the Purchasing Commission, as to any Purchased Receivable, exceed eight percent (8%).
“Receivable” shall mean accounts receivables of the Supplier offered to PCF for purchase which become a Purchased Receivable as well as any Non-Purchased Receivable; collectively, “Receivables.”
“Reserve” has the meaning set forth in section 4.1 of these Terms.
“Services” has the meaning set forth in the Recitals.
“Supplier” means the Person who supplies Goods and Services to the various Marketplaces who is identified as the “Supplier” in the Supplier Early Payment Agreement and also on page 1 of these Terms.
“Supplier Early Payment Agreement,” variously, the “Agreement,” has the meaning set forth on page 1 hereof and all Schedules and Exhibits hereto and thereto, as the same may be amended, supplemented, renewed, extended or otherwise modified from time to time.
“Supplier Marketplace Account” means Supplier’s account at a Marketplace.
“Termination Notice” has the meaning set forth in Section 21 hereof.
“Transaction” has the meaning set forth in Section 3.2 hereof.
“UCC” means the Uniform Commercial Code of the State of Texas or any other state the laws of which are required to be applied in connection with the perfection of security interests granted to PCF under the Supplier Early Payment Agreement (incorporating these Terms) whether as owner, as to the Purchased Receivables and the other Conveyed Property or as lender, as to Non-Purchased Receivables and other Collateral.
“Update Adjustment” has the meaning set forth in Section 3.3 hereof.
“US Dollars”, “US$”, “Dollars” and “$” means lawful currency of the United States of America.
3. ELECTRONIC EARNINGS DATA; PURCHASE AND SALE OF RECEIVABLES ADVANCES THEREON. The purchase and sale of the Purchased Receivables under the Supplier Early Payment Agreement and Advances by PCF to Supplier in respect of the same shall be determined as follows:
3.1 Frequency of Receivable Purchases; Batches. To the extent that PCF chooses to purchase any Available Receivables owed to Supplier by a Marketplace, PCF shall, on the terms of the Supplier Early Payment Agreement, purchase and fund such Available Receivables on the following schedule (each a “Funding Period”, collectively, the “Funding Periods”), within three (3) Business Days after the end of each of such period.
Where the Supplier chooses “Daily Payments” as to any Marketplace, the Funding Period means each Business Day that Electronic Earnings Data is reported to PCF by such Marketplace.
Where Supplier chooses “Weekly Payments” as to any Marketplace, the Funding Period means four times per month, such periods being as follows:
12:00 A.M. on the 1st, through Midnight Time on the 7th day of each month;
12:00 A.M. on the 8th through Midnight Time on the 14th day of each month;
12:00 A.M. on the 15th, through Midnight Time on the 21st day of each month; and
12:00 A.M. on the 22nd, through Midnight Time on the last day of each month.
Where Supplier chooses “Calendar Weekly Payments” as to any Marketplace, the Funding Period means starting at 12:00 A.M. on Monday of each week and ends immediately before 12:00 A.M. on the following Monday, during which time Electronic Earnings Data is reported to PCF by such Marketplace.
Where Supplier chooses “Monthly Payments” as to any Marketplace, the Funding Period means, starting at 12:00 A.M. on the first day of the month and ends immediately before 12:00 A.M. on the first day of the following month, during which time Electronic Earnings Data is reported to PCF by such Marketplace.
For these purposes, “Midnight Time” shall be the same time zone that the Marketplace reports earnings for the Supplier, but applied consistently throughout the term of the Supplier Early Payment Agreement.
Each date during any Funding Period on which PCF funds any Purchased Receivables shall be a “Funding Date”; the date on which PCF purchases any particular Purchased Receivable shall be the “Purchase Date” thereof.
Without limitation of the foregoing, it is agreed that all Available Receivables purchased by PCF during any calendar month, in respect of Supplier’s delivery of Goods and Services to Marketplaces in such month, irrespective of whether Daily, Weekly, or Monthly payments are selected by the Supplier, shall be treated and accounted for by PCF as a single “Batch,” which Batch shall encompass all Purchased Receivables sold to PCF by Supplier during such monthly period, except, however, that when “Calendar Weekly” has been selected by Supplier the “Batch” shall encompass only those Available Receivables which are offered by Supplier and thereafter purchased by PCF, becoming Purchased Receivables, within the seven (7) day calendar weekly funding period defined above.
3.2 Downloading from Marketplace of Electronic Earnings Data Used to Create Available Receivables. Promptly and on a recurring basis and with the consent of Supplier, after the date hereof, Payability Operations will Electronically Transmit all Marketplace Electronic Earnings Data, broken down into individual transactions, as reported by each Marketplace, for Goods previously provided by Supplier to and Services previously performed by Supplier for each Marketplace, including Goods or Services provided prior to entry into this Agreement (each, individually, a “Transaction”), in the format and frequency required by Payability Operations, into the Payability API.
3.3 Update Adjustments. Until the end of each Funding Period a Marketplace may, from time to time, update amounts previously reported to the Payability API with respect to the Supplier, either to delete a Transaction previously reported or to adjust a previously reported Transaction up or down based on later data available to the Marketplace (collectively, “Update Adjustments.”) Update Adjustments may not be submitted more than twenty-four (24) hours after the particular Funding Period to which the adjustment relating to has closed, time being of the essence, with any Update Adjustments submitted after such period being considered and applied (if appropriate) to the next Funding Period
3.4 Supplier’s Offer of Available Receivables to PCF. Provided that (i) a Marketplace has not issued a Payment Suspension Request to PCF under Section 3.16 hereof, (ii) Marketplace has not otherwise communicated to PCF or Supplier that PCF is not to purchase Supplier’s Receivables, or (iii) PCF has not declined to purchase such Receivables in the manner described in Section 3.5 hereof, the Electronic Earnings Data downloaded by PCF from the Marketplace to Payability between the beginning and end of the Funding Period as adjusted by the Update Adjustments timely posted, if any, shall, twenty-four (24) hours after the end of the Funding Period, be deemed to create available earnings, variously, an “approved payable,” owed to Supplier from the respective Marketplace(s) in the same amount, denominated in an Approved Currency (being, as to the Supplier, “Available Receivables”). Supplier shall thereupon be immediately deemed to have offered to sell to PCF, for the Purchase Price, the applicable Participation Percentage of all of the Available Receivables represented by the available earnings and the approved payables so created. By making such an offer to PCF, Supplier will be deemed to have made to PCF all the representations and warranties set forth in these Terms, including in Sections 11 and 12 hereof, as to the Available Receivables so offered to PCF for sale. The Participation Percentage shall be calculated at the beginning of each Funding Period by dividing the Funding Rate then in effect by the Advance Rate, except, however, the Participation Percentage shall be recalculated if Supplier increases the Funding Rate during the Funding Period.
3.5 Purchase of Available Receivables by PCF; Advances. Under the Supplier Early Payment Agreement PCF may, in its sole discretion, accept Supplier’s offer and purchase on each Purchase Date, without recourse, for the Purchase Price of the subject Receivables, all right, title and interest of Supplier in each of the subject Receivables represented by and incorporated within the available earnings created under Section 3.4 hereof for the Funding Period, together with all Accounts, Instruments, Chattel Paper, Documents, Investment Property and General Intangibles giving rise to such Receivables (collectively, the “Purchased Receivables”), and all products and Proceeds thereof and the other Conveyed Property, such purchase being evidenced by PCF’s electronically marking the subject Receivables as accounts sold to PCF in the Payability System, whereupon PCF shall deposit or otherwise make available, on the Purchase Date thereof, its initial Advance thereon as a non-interest bearing partial prepayment of the Purchase Price of the subject Receivables (and not as a loan) to the Supplier’s designated bank account or to the Supplier’s Payability Account, in which event the Supplier may deposit the Advance either to a pre-funded MasterCard or directly to Supplier’s bank account through the Payability System, with the balance of the Purchase Price being paid by PCF to Supplier in a similar manner, as provided in these Terms, when the respective Batch which includes the particular Funding Period closes, as more fully set forth in Section 3.9 below. Without limitation, Supplier acknowledges and agrees that the sale of a Purchased Receivable is complete and effective upon the initial Advance for such Purchased Receivable being made available to the Supplier’s Payability Account. Supplier shall, without limitation of the foregoing, execute all such further documents and take all such further actions as PCF may request, from time to time, to evidence this transfer of ownership of the Purchased Receivables from Supplier to PCF, including those documents provided for in Section 8 below. By purchasing Available Receivables PCF does not assume any obligation of Supplier to Marketplace or any other person in respect thereto.
3.6 Purchase Price. The purchase price for each Purchased Receivable (the “Purchase Price”) shall equal the gross outstanding face amount of the Available Receivable thereof chosen by PCF for purchase, net of any discounts, returns, credits, anticipations or allowances of any nature issued, owing, granted or outstanding with respect thereto, incorporating Update Adjustments posted with respect thereto through one date after the end of the last Funding Period in the subject month, all as reflected in the data downloaded by PCF from Marketplace to the Payability API, less the Purchasing Commission. Provided that, for purposes of disbursing payment of its remaining Purchase Price, above its Purchase Date Advance paid under Section 3.5, as applicable, PCF shall aggregate and account for the same on a Batch basis and pay Supplier for the Batch as provided for in Section 3.9 below. All funds payable by PCF to or for the account of Supplier pursuant to this Agreement shall be sent to Supplier only in accordance with Sections 3.5 above and Section 3.10 below. Supplier and PCF intend and agree that the Purchase Price for each Purchased Receivable reflects the fair market value of such Purchased Receivable as of the applicable Purchase Date.
3.7 No (credit) Recourse for financial inability to pay. Supplier sells, assigns, transfers, conveys, and delivers each Purchased Receivable and PCF buys each Purchased Receivable from Supplier under the Supplier Early Payment Agreement without recourse, meaning that PCF accepts only the Credit Risk that PCF cannot collect the Purchased Receivable from the Marketplace obligated thereon or the Designated ACH Debit Bank Account, as applicable, solely because the Marketplace obligated thereon suffers a Credit Event; i.e., is financially unable to pay thereon.
3.8 Full Recourse for all other events. Without limitation of Section 3.7, if: (i) any representation or warranty made by Supplier to PCF with respect to any Purchased Receivable is false or incorrect as of the Funding Date of such Purchased Receivable, (ii) after the Funding Date, the outstanding principal balance of a Purchased Receivable is (a) reduced as a result of any defective or rejected or returned Goods or Services, any discount, credit or any adjustment or otherwise, for any reason, by Supplier, or (b) reduced or cancelled as a result of a set-off in respect of any claim by any person or entity (whether such claim arises out of the same or a related transaction or an unrelated transaction), (iii) any Purchased Receivable is not collected by PCF in full as a result of a Dispute, or (iv) if any Purchased Receivable is otherwise not collectible by PCF in full other than due solely to Credit Risk assumed by PCF under the Supplier Early Payment Agreement, then PCF shall no longer have any Credit Risk thereon and PCF shall have full recourse to Supplier thereon, including, without limitation, under Sections 4.2 and 4.3 of these Terms. You agree to notify us, in writing, immediately upon becoming aware of a Dispute and to give us full details thereof.
3.9 Balance Payment to Supplier of the Remaining Purchase Price of Purchased Receivables. Upon each Batch being closed, upon PCF’s collection (or deemed collection) from the Marketplace or the Designated ACH Debit Bank Account, as applicable, of all Purchased Receivables in a particular Batch after the close of the given month, or PCF’s charge-back to Supplier or otherwise crediting the Purchased Receivables in the Batch (“Batch Closure”), PCF will, on the subsequent Purchase Date after Batch Closure, make a balance payment to Supplier (each a “Balance Payment”) in the same manner as the initial Advance is paid under Section 3.5 above, i.e., to the Supplier’s designated bank account or to the Supplier’s Payability Account, in which event the Supplier may deposit the Balance Payment either to a pre-funded MasterCard or directly to Supplier’s bank account through the Payability System. Such Balance Payment shall be equal to (i) the Purchase Price payable by PCF in respect of the Purchased Receivables in the Batch, minus (ii) PCF’s prior Advances on Purchased Receivables included within the Batch, minus (iii) unpaid Chargebacks, Indemnity Obligations and any other indebtedness due by Supplier to PCF, including bank and transfer fees as detailed in the Funding Particulars. For this purpose, it is agreed that PCF shall be “deemed” to have collected each Purchased Receivable in the Batch not yet collected upon the earlier of (but in any event not before the maturity date when the Purchased Receivable is due to be paid by the respective Marketplace obligated thereon): (a) the bankruptcy of the Marketplace obligated thereon or (b) 150 days from maturity of the Purchased Receivable, provided that, in the case of both (a) and (b), the Purchased Receivable is not subject to any Dispute and is not otherwise outside PCF’s assumed Credit Risk.
3.10 Payment Account Information. In order for PCF to collect repayment and issue payments to Supplier, as applicable, Payability Operations has integrated with Plaid to authenticate bank account and certain other related information. To facilitate authentication, Supplier shall be required enter its online banking credentials using the Plaid API. For additional information regarding the security of Plaid, please see its security page here: https://plaid.com/security/.
Payability Operations will Electronically Transmit bank account or other related information for Supplier (whether ACH, check, wire, or otherwise) to PCF. Payability Operations and PCF agrees not to keep or maintain payment data longer than necessary in order to collect repayment or issue payments, as applicable, under the Agreement. Supplier represents that it has supplied such information to Payability Operations on or prior to the date thereof and that Supplier will hereafter keep such information up-to-date. PCF is not responsible for delays in the electronic transfer of funds.
3.11 Approval to Fund. Delivery of the Electronic Earnings Data from a Marketplace to the Payability API together with any Update Adjustments thereto shall be deemed to constitute an irrevocable approval from Supplier for PCF to purchase and fund, in PCF’s discretion, each Available Receivable. Supplier represents to PCF that each such Available Receivable is payable without defense, offset, recoupment or counterclaim by the respective Marketplace obligated thereon.
3.12 Approved Currency. The Approved Currency shall be used for all transactions under the Supplier Early Payment Agreement and these Terms. The Parties agree that Payability Operations and/or PCF shall, as needed, convert all invoices, purchases, indebtedness, fees, costs and payments which are in currencies other than the Approved Currency to the Approved Currency, except as otherwise provided herein. The Parties further agree that, in the event that the Supplier wishes to be paid in a currency other than the Approved Currency and PCF specifically agrees to the same, in a written document signed by an authorized representative of PCF, Payability Operations and/or PCF may, in their discretion, convert all invoices, purchases, indebtedness, fees, costs and payments to the requested currency. The Supplier agrees to indemnify and reimburse PCF and PCF for any associated exchange fees, costs, expenses, or any losses arising as a result of any conversion under this Section 3.12 and further agrees that each invoice converted to a currency other than the Approved Currency shall be subject to a service charge established in the discretion of PCF and Payability Operations as set forth in the separate document approving payment in such alternative requested currency, or at the rate provided for the same in the Payability System.
3.13 True Sale of Receivables/Security Agreement. Each transfer, sale and assignment of Purchased Receivables and other Conveyed Property to PCF under the Supplier Early Payment Agreement shall constitute an absolute and irrevocable sale of such Purchased Receivables and the related Conveyed Property to PCF in a true sale and provide PCF with all right, title and interest in, and the full benefits of ownership of, the Purchased Receivables, together with all other Conveyed Property related thereto. Supplier relinquishes all right, title, interest and control over the Purchased Receivables and such Conveyed Property upon the sale of the Purchased Receivables to PCF under the Supplier Early Payment Agreement. Supplier represents and warrants to PCF that PCF shall hold a first-priority security interest in all Purchased Receivables and other Conveyed Property, as buyer and owner thereof. The Supplier Early Payment Agreement is acknowledged to be a Security Agreement and, without limitation thereof, it is agreed that PCF shall take a first priority security interest thereunder under the UCC, as the buyer and owner, of all the Purchased Receivables and the other Conveyed Property sold to PCF hereunder, to the extent the Purchased Receivables are not later charged-back, in whole or in part..
3.14 Character of Advances. Advances made by PCF to Supplier under the Supplier Early Payment Agreement shall be treated as a non-interest bearing partial pre-payments of PCF’s contractual Purchase Price of the subject Purchased Receivables and not as loans by PCF to Supplier, subject to Section 3.15.
3.15 Recharacterization. It is not the intention of Supplier or PCF that the conveyance of the Purchased Receivables and the other Conveyed Property by Supplier to PCF hereunder be deemed to be a grant of a security interest in the Purchased Receivables and such Conveyed Property related thereto by Supplier to PCF as collateral security to secure a debt or other obligation of Supplier to PC; rather, as aforesaid, the Parties both intend that PCF shall hold a security and ownership interest in the Purchased Receivables and the other Conveyed Property, both those sold on the date hereof and those later conveyed, as the buyer and owner thereof, in a true-sale. However, in the event that, notwithstanding the intent of the Parties, any Purchased Receivable(s) are determined to be the property of Supplier or its bankruptcy estate, by order of a court of competent jurisdiction final beyond appeal, then without derogation of the Parties’ intention that the sale of Purchased Receivables by Supplier to PCF hereunder shall constitute a true sale thereof: (i) the transfers and conveyances by Supplier provided for this under this Agreement shall be deemed to be a grant by Supplier to PCF and its assigns as lender, of a security interest in and to all of Supplier’s right, title and interest in, to and under the all Receivables owing by the respective Marketplaces to the Supplier and in the proceeds thereof, both now existing and later arising, as collateral security to secure: (1) the rights of PCF hereunder, and (2) a loan by PCF to Supplier in the amount of the Advances, and (3) all other indebtedness and Obligations owed by Supplier to PCF under the Supplier Early Payment Agreement. Supplier and PCF shall each take such actions as may be necessary so that the security and ownership interests granted to PCF herein shall at all times be a perfected security interest of first priority in favor of PCF under applicable law and will be maintained as such throughout the term of the Supplier Early Payment Agreement.
3.16 Review and Suspension of Payments by Marketplace. Marketplaces who have Marketplace Agreements with PCF may, from time to time, request that PCF delay or prevent Funding any Receivables owed to Supplier for the applicable Funding Periods (a “Payment Suspension Request”). It is understood that PCF will use reasonable efforts to avoid purchasing any Receivables upon receiving a Payment Suspension Request. After a Payment Suspension Request, PCF agrees to work with the subject Marketplace to resolve such payment dispute and issue payments, if any, as promptly as reasonably possible. Supplier consents to Marketplaces sending Payment Suspension Requests to PCF.
3.17 Non-Purchased Receivables. To the extent that PCF does not purchase all Available Receivables on any Funding Date, PCF shall not be obligated to make any payment against the Non-Purchased Receivables in question unless and until PCF subsequently actually receives full and final payment in good funds on such Non-Purchased Receivables, in which event the funds received on account of such Non-Purchased Receivables are to be disbursed pursuant to Section 5 below.
3.18 Payment by Marketplace to PCF. Supplier agrees to immediately modify, or allow Payability Operations to modify, its existing payment information with the various Marketplaces to cause PCF to be paid directly for the Purchased Receivables through each Marketplace’s electronic payment systems. Without limitation, Supplier agrees to immediately grant, or allow Payability Operations to grant to itself authorization, permission, and access for PCF and Payability Operations to Supplier’s Login Credentials within the respective Marketplace’s system, by providing a login, password, role access, and any other access sufficient to ensure that PCF is paid electronically for the Purchased Receivables and Supplier also agrees that PCF and Payability Operations may monitor and ensure that such access or payment information is not changed or altered in any way.
3.19 Direction to Marketplaces. Supplier directs and instructs each Marketplace to remit payment for all Receivables owed by such Marketplace to Supplier (both on Purchased Receivables and on Non-Purchased Receivables) directly to PCF. Supplier further authorizes PCF to deal directly with the respective Marketplaces, in the place of Supplier, both regarding all Purchased Receivables and all other Conveyed Property, as PCF’s sole property, together with, after any Default under the Supplier Early Payment Agreement, the Non-Purchased Receivables, to the fullest extent allowable by law and in accordance with, and in furtherance of, Section 17 hereof, as well as any Purchased Receivables charged back by PCF to Supplier, in which PCF shall retain a security interest thereon, as, at that point, lender as to such accounts charged-back. Each Marketplace shall be entitled to rely upon the Supplier Early Payment Agreement which PCF may send to it, in PCF’s discretion, in sending payments directly to PCF and may enforce these Terms against Supplier as applicable and plead them as a defense to any action brought by Supplier regarding such payments. Each Marketplace is an intended beneficiary of this Section 3.19.
4. RESERVE; CHARGEBACKS
4.1 Reserve. PCF shall, on the date of its initial funding to Supplier with respect to any Purchased Receivables, withhold and credit to an unallocated non-interest bearing bookkeeping account on PCF’s books and records an amount equal to the difference between the Purchase Price for the subject Purchased Receivables and PCF’s (lesser) initial Advance against the same, and PCF may also, in its discretion, establish other set-asides, reductions or reserves from time to time in connection with the accommodations offered by PCF to Supplier under this Agreement (all of the foregoing, net of the various other debits and credits to the Supplier’s account with PCF over time arising from transactions under this Agreement being, collectively, the “Reserve”), provided, however, that in no event shall PCF set up any reserves for, nor charge reserves of any kind for or with, losses of PCF arising from Credit Risk assumed by PCF under the Supplier Early Payment Agreement or for PCF’s costs to collect Receivables purchased at PCF’s Credit Risk and not charged-back. The Reserve held by PCF shall, among other things, serve as collateral security for Chargebacks and other indebtedness and Obligations due by Supplier to PCF under the Supplier Early Payment Agreement, but shall not secure PCF’s assumed Credit Risk. Supplier grants to PCF the right to set-off any indebtedness owed by Supplier to PCF under the Supplier Early Payment Agreement or under any associated agreement against amounts owed by PCF to Supplier including, without limitation, the Reserve, but, again, such debt in no event shall include credit losses of PCF arising from Credit Risk assumed by PCF under this Agreement nor the costs of PCF to collect Purchased Receivables not charged-back.
4.2 Chargebacks and Adjustments for Marketplace Credits. In the event that any Marketplace does not, whether in whole or in part, pay a Purchased Receivable for any reason other than, solely, Credit Risk assumed by PCF hereunder, which reason may include, without limitation, non-payment by reason of a Dispute or in the event that Supplier breaches any representation or warranty to PCF with respect to a Purchased Receivable or because of the payment of a Purchased Receivable by Marketplace to any person other than PCF, PCF may, in its discretion, chargeback to Supplier the subject Receivable (a “Chargeback”), thereby creating indebtedness of Supplier to PCF included in the Obligations, equal to the full uncollected amount of the Purchased Receivable so charged-back plus PCF’s associated fees and charges thereon, and the subject Receivable shall then become a Non-Purchased Receivable and the credit risk thereon shall then be that of Supplier. A Chargeback shall not release PCF’s security interest, now as lender, in the subject Receivable so charged back until the Chargeback is fully paid and satisfied.
Supplier shall, without limitation of Section 4.3 below, be responsible to pay PCF for the amount of any credit taken by a Marketplace against any Purchased Receivable by reason of a back charge, set-off, reduction, recoupment or similar adjustment asserted or effected by the Marketplace on the basis of (i) any claim of defective, rejected, returned merchandise or poor quality of Goods or Services, any cash discount or adjustment taken by the Supplier, (ii) any other disputes or claims with respect to the quality, dollar amounts or quantity of the Purchased Receivables, or their terms or price, or otherwise concerning the Supplier’s delivery of Goods or Services giving rise to the subject Receivables; or (iii) any other claim by the Marketplace against the Supplier (whether out of the same or an unrelated transaction), within two (2) Business Days of such event occurring, and if Supplier fails to do so such unpaid credit shall be included in the Obligations and immediately due and payable by Supplier to PCF, provided further that PCF may also, in its discretion, chargeback the entire Purchased Receivable in question to Supplier (in such event such Supplier shall thereupon repurchase it for the price stated in the preceding paragraph of this Section 4.2 above).
4.3 PCF’s Further Indemnity Rights. Supplier agrees to indemnify, protect, defend and hold harmless PCF and its successors, assigns, directors, officers, members, agents, attorneys and employees from and against any and all losses, liabilities, claims, costs and expenses of any kind, including attorney’s fees, caused by or arising from (i) all Disputes or claims by Marketplace or any other person claiming an interest in the Purchased Receivables in which PCF acquires an ownership interest under the Supplier Early Payment Agreement or with respect to any Non-Purchased Receivables pledged to PCF as collateral security, (ii) any breach of Supplier’s representation and warranties, duties or covenants under the Supplier Early Payment Agreement; (iii) any claims against PCF by any federal, state, or local official or authority, or any other person, seeking the turnover by PCF of monies collected by PCF from any Marketplace on Non-Purchased Receivables, and (iv) all collection expenses and legal fees incurred by PCF with respect to any of the foregoing, or otherwise arising from PCF’s administration or enforcement of the Supplier Early Payment Agreement and PCF’s rights hereunder, provided, however, for clarity, that this indemnity shall in no event extend to credit losses incurred by PCF arising solely from Credit Risk assumed by PCF under the Supplier Early Payment Agreement or to or for the costs of PCF to collect Purchased Receivables not charged back. PCF may also charge Supplier for any payment received by PCF on a Non-Purchased Receivable if PCF has to subsequently disgorge the subject payment to a third-party by reason of any breach of any Supplier representation, warranty, duty or covenant, or by reason of such payment being a voidable preference under the Bankruptcy Code. Supplier’s liabilities to PCF under this Section 4.3 (“Indemnity Obligations”) and that of any other person responsible for the Obligations under this Section, such as guarantors, shall constitute part of the Obligations and shall continue notwithstanding any termination of this Agreement.
4.4 Recovery by PCF of Indebtedness due from Supplier arising from Chargebacks, Indemnity Obligations and Otherwise; Set-off and Recoupment rights.
(a) PCF may, in its discretion, recover Chargebacks and Obligations, including Indemnity Obligations, from amounts held by PCF in the Reserve, by PCF making debits to the Reserve prior to making any final payments to the Supplier on the Purchased Receivables in any Batch, and PCF may also set-off and/or recoup against any other property of Supplier in the hands of PCF.
(b) In the event that, at any time, PCF is unable to recover any Chargebacks or Obligations, including Indemnity Obligations, from Supplier via charges by PCF to remaining credit balances in the Reserve under subparagraph (a) above, the Parties agree that PCF may, in PCF’s discretion, upon PCF later purchasing new Receivables arising from Supplier’s subsequent delivery of Goods and Services to the various Marketplaces, purchase such later arising Receivables without PCF making full, or any, cash Advances or other payments to Supplier of the Purchase Price thereon but, rather, with PCF first satisfying all remaining Chargebacks or Obligations still owing to PCF arising from prior purchases, by reduction of monies otherwise due Supplier by PCF attributable to such later Purchased Receivables. Supplier waives its right to dis-enroll from the Payability Program until all Obligations are paid in cash, in full.
(c) Without limitation of (a) and (b) above, in the event that PCF is unable to recover the full amount due on any Chargeback to or Obligations of Supplier to PCF, including Indemnity Obligations, from the Reserve or from Supplier’s future earnings, Supplier and PCF further agree that PCF may, in PCF’s discretion, debit the Supplier’s bank accounts to recover such Chargebacks or Obligations, to the maximum extent allowed by applicable law. Supplier grants PCF such rights and agrees to execute and deliver such further documents as are necessary to effectuate the same, including documents giving PCF ACH rights over such accounts.
(d) In the event that PCF is unable to recover the full indebtedness owed by Supplier to PCF arising from Chargebacks or Obligations, including Indemnity Obligations, by any of the foregoing methods, upon agreement of a Marketplace (and, any Marketplace which has a Marketplace Agreement with PCF shall be deemed to have given such consent), assign to such Marketplace some or all of PCF’s rights against Supplier attributable thereto (including PCF’s lien on any charged-back Receivables), the assignment by PCF to such Marketplace being without recourse (except as expressly provided for in this Agreement), representation or warranty by PCF, whereupon PCF will invoice such Marketplace for the remaining amounts owed by the Supplier and Marketplace shall succeed to the rights so assigned by PCF.
(e) Monies owing to PCF for Chargebacks, Indemnity Obligations and all other indebtedness of Supplier to PCF under the Supplier Early Payment Agreement are due on demand and shall bear interest at the Late Payment Rate as provided in Section 7.1 hereof.
5. FUNDS FROM NON-PURCHASED RECEIVABLES. In the event PCF or its designee receives payment, in full payment and cleared funds, from a Marketplace with respect to any Non-Purchased Receivable, PCF shall, provided that Supplier is not in Default under this Agreement or otherwise indebted to PCF, remit such payment to Supplier on the first Purchase Date after the time such funds collected with respect to Non-Purchased Receivables are deemed immediately available funds to PCF by the financial institution used by PCF or its designee. Any funds PCF receives from a Marketplace as payment with respect to any Non-Purchased Receivable shall be received by PCF, as agent, on behalf of Supplier, as principal, for collection and remittance to Supplier pursuant to the terms hereunder. Supplier hereby agrees that the obligation of any Marketplace to make payment with respect to any Non-Purchased Receivable shall be satisfied upon receipt by PCF of such payment.
6. CONDITIONS PRECEDENT TO FUNDING BY PCF. Anything herein to the contrary notwithstanding, Available Receivables of Supplier owed to Supplier by any Marketplace shall be Funded by PCF only upon satisfaction of the following conditions precedent: (a) Supplier’s execution and delivery of the Supplier Early Payment Agreement by Supplier, acting, as applicable, by a duly authorized officer, partner or member, if Supplier is not an individual; (b) PCF’s acceptance of the remittance instructions provided to PCF by Marketplace with respect to Supplier; (c) the successful transfer of the Electronic Earnings Data and the Update Adjustments thereto, to the extent attributed to Supplier, from the Marketplace’s database to the Payability API; (d) Supplier not being in Default under the Supplier Early Payment Agreement, (e) Supplier selecting or otherwise consenting to the Funding Particulars as illustrated in Recital D above, and (g) PCF first taking such other actions as PCF may require to protect PCF’s rights hereunder, such as, for example and without limitation, filing UCC-1 financing statements to perfect, as to third parties, both PCF’s ownership interest in the Purchased Receivables and the other Conveyed Property and PCF’s security interest in the Non-Purchased Receivables and other collateral pledged by Supplier to PCF, and PCF taking delivery of all required Guaranties, fully executed.
7. FEES AND CHARGES; COLLATERAL; SECURITY AGREEMENT; FINANCING STATEMENTS.
7.1 Interest. Indebtedness and other Obligations owed by Supplier to PCF under the Supplier Early Payment Agreement shall, if not paid within two (2) Business Days of the date when due (such failure, a “Late Payment”), bear interest at the Late Payment Rate as set forth in these Terms. All indebtedness owed by Supplier to PCF under the Supplier Early Payment Agreement, is due on demand. Notwithstanding any provision to the contrary in the Supplier Early Payment Agreement, if a court of competent jurisdiction shall, in an order final beyond appeal, deem any Purchasing Commissions, costs, fees or other charges provided for in the Supplier Early Payment Agreement to be interest and such interest is deemed by such court to be in excess of the maximum contract rate permitted by applicable usury law, neither Supplier nor any Guarantor shall be liable to pay the amount of such interest to the extent that it is in excess of the maximum interest rate permitted by law, any such excess which may have been received by PCF shall either by applied against Supplier’s then unpaid monetary Obligations to PCF (other than any such obligations that are deemed to be excessive interest as aforesaid) or at PCF’s option refunded to Supplier, and any portion of any Purchasing Commissions (aka discount fees), costs, fees or charges deemed to be interest by such court shall be automatically reduced to the maximum interest rate allowed by law.
7.2 Purchasing Commissions. PCF shall receive Purchasing Commissions upon PCF’s purchase of the Purchased Receivables, at the rates set forth in the Payability System, as illustrated in Recital D above, subject, however, to a maximum cap on Purchasing Commissions of eight percent (8%.) Purchasing Commissions are earned and applied in full immediately upon PCF’s purchase of the subject Receivables.
7.3 Collateral security/Security Agreement. Supplier hereby grants to PCF a security interest in all Supplier assets of every kind, nature and description, real, personal, tangible and intangible, including, without limitation, all Goods, Inventory, Equipment and accessions thereto, Instruments, Documents, Accounts (other than those sold to PCF herein in a true sale, in which Supplier also grants PCF a security interest, as buyer and owner of the Purchased Receivables and the other Conveyed Property), Chattel Paper, deposit accounts, contract rights (including in the Reserve) and rights to the payment of money, General Intangibles, and the products and proceeds of all of the foregoing (the “Pledged Collateral”), as collateral security for all Obligations and indebtedness owed by Supplier to PCF under the Supplier Early Payment Agreement. This Agreement shall serve as a security agreement under Article 9 of the UCC, including for this purpose. Supplier will defend the Collateral against any competing security interests or liens to those of PCF and agrees that PCF may file such UCC-1 financing statements and take such further steps as PCF requires to perfect its ownership and security interests in the Collateral.
7.4 Expense and Cost Reimbursements. Supplier shall pay to PCF all expense and cost reimbursements and other sums due and owing to PCF under the Supplier Early Payment Agreement as part of the Obligations. Without limitation thereof, Supplier shall pay to PCF all fees, costs and expenses incurred by PCF, including attorney’s fees, incurred by PCF in connection with the administration and enforcement of the Supplier Early Payment Agreement and any other documents or instruments executed or delivered in connection therewith as part of the Funding Facility, including these Terms, as well as costs or expenses of PCF to: search for and file UCC financing statements, evidence and protect PCF’s various ownership and lien interests received under the Supplier Early Payment Agreement (but, for clarity, there shall be no reimbursement of credit losses incurred by PCF arising from Credit Risk assumed by PCF hereunder nor for PCF’s costs to collect Purchased Receivables not charged back), liquidate any of the Pledged Collateral, eliminate or cure any lack of capacity created by Supplier’s acts that PCF may have in any state to enforce or collect payments due from any Marketplace, including Supplier’s failure to qualify as a foreign entity in any such state or Supplier’s failure to observe any laws or regulations applicable to Supplier or to its assets or the conduct of Supplier’s business, or otherwise incurred by PCF to enforce PCF’s rights under the Supplier Early Payment Agreement, any Marketplace Agreement, and to protect and to preserve PCF’s rights thereunder and hereunder, whether through judicial action, in prosecuting or defending actions arising from PCF’s relationship with Supplier under the Supplier Early Payment Agreement, including actions whereby any third-party asserts a competing interest in the Purchased Receivables, the Collateral, or otherwise. Supplier’s cost and expense reimbursement obligations under this Section 7.4 shall be part of the Obligations owed by Supplier to PCF under the Supplier Early Payment Agreement and shall survive the termination of the Supplier Early Payment Agreement.
7.5 Financing Statements. PCF and its successors and assigns are hereby authorized to file UCC-1 financing statements against Supplier (in the place of its residence or state of formation, or as may otherwise be required under the UCC) to reflect and/or perfect the liens and security interest, as owner of the Purchased Receivables, now or hereinafter granted to PCF under the Supplier Early Payment Agreement, in both existing or after-acquired property, or as may otherwise be required in order for PCF to perfect the ownership, lien and other interests received by PCF under the Supplier Early Payment Agreement. In the event that any jurisdiction requires the Supplier’s signature on any such financing statement and/or other documents Supplier authorizes PCF to file such statements or documents on its behalf, as Supplier’s attorney-in-fact, with such power being irrevocable and coupled with an interest, until the Supplier Early Payment Agreement has terminated and all Obligations of Supplier to PCF thereunder have been satisfied in full.
8. CONFIRMATORY DOCUMENTS. Supplier shall, if and as required by PCF, forthwith provide PCF later confirmatory documents, in the form required by PCF, to further evidence PCF’s ownership of the Purchased Receivables sold, from time to time, by Supplier to PCF under the Supplier Early Payment Agreement on each Purchase Date and PCF’s security interest in any other Collateral hereunder.
9. PROGRAM CHANGES. Other than PCF’s right, at any time, to reduce the Advance Rate and to establish reserves under the Supplier Early Payment Agreement, both in PCF’s sole discretion, on the terms hereof, PCF shall, via electronic notice to Supplier thru the Payability System, or otherwise, provide Supplier with at least three (3) days’ notice of (a) changes to these Terms or any other terms and conditions of the Supplier Early Payment Agreement or any other Program and (b) the effective date of such changes, by posting such changes within the Payability System for the Supplier to see or otherwise providing written notice to Supplier thereof. Supplier may, if it is not satisfied with the changes so posted or notified, elect to terminate this Agreement, prospectively, no earlier than the end of the month that the subject changes under Sections 9(a) and (b) are so posted. If Supplier does not, within three (3) days’ time make a timely objection to any proposed change or elect to terminate, in either case by notice to PCF in writing, Supplier will be considered to have accepted and be bound by such changes. All changes in the Terms apply prospectively, to new Receivables purchased by PCF thereafter.
10. ACCOUNT ACCESS. By providing PCF with the Login Credentials, Supplier hereby grants to PCF a license to:
(a) access, view, alter, and otherwise use the Supplier Marketplace Accounts and copy any information therein,
(b) create sub-accounts, user access profiles and Login Credentials with respect to Supplier Marketplace Accounts, and
(c) store and maintain any Login Credentials,
in each case (a) through (c) solely as necessary or useful to assist in determining Supplier’s sales, returns, financial status, changes in business, and Future Receivables, to evaluate Supplier’s business status in connection with the Agreement and any transactions or potential transactions hereunder, or for any other purpose deemed appropriate by PCF, which relates to the business of PCF. Except as necessary to perform its rights hereunder, PCF represents and warrants that it will not sell or otherwise provide the Login Credentials to any third parties.
11. REPRESENTATIONS AND WARRANTIES OF SUPPLIER REGARDING PURCHASED RECEIVABLES. Supplier hereby represents and warrants to PCF that as of the date it was created and as of the Purchase Date of any Purchased Receivable, each such Purchased Receivable:
(a) is a bona fide, existing, unconditional and enforceable obligation of the respective Marketplace arising out of the final sale of Goods and/or the completed rendering of Services by Supplier to such Marketplace in the ordinary course of business, and is presently due and owing to PCF, in the amounts shown in the Payability System;
(b) is solely owned by Supplier, who has the right to sell, assign and transfer the Purchased Receivable to PCF;
(c) arises from Goods previously delivered or Services previously performed by Supplier to such Marketplace that do not violate any law, rule, regulation or agreement by which Supplier or any of its contractual counter-parties is bound;
(d) is free and clear from any and all encumbrances, liens, attachments, claims, security interests and rights of any person other than PCF (other than those of another lender, factor, judgment creditor or any other person with an interest in the Receivables who has, before the date of purchase by PCF, released such other person’s security interest or subordinated such security interest to PCF, in either case in a document and in a manner acceptable to PCF) of any kind, other than the rights of PCF under the Supplier Early Payment Agreement;
(e) is in the correct amount, and is free of any Dispute, deduction, claim, credit, offset, return, defense or counterclaim of any kind, whether or not any of the foregoing is bona fide;
(f) has a payment term (period) which does not exceed the Maximum Payment Term, is payable by an Approved Marketplace, and does not, together with all other uncollected Accounts owed to Supplier by such Marketplace, violate the applicable Marketplace Credit Limit;
(g) relates to a Receivable that has not been previously paid and was not previously offered to PCF under the Supplier Early Payment Agreement or previously rejected by PCF for purchase, and
(h) will not, if PCF advances thereon, cause the Funding Facility Limit to be breached.
The representations and warranties contained herein are all continuing in nature and survive both the Purchase Date and the Termination of the Supplier Early Payment Agreement.
12. REPRESENTATIONS AND WARRANTIES OF SUPPLIER AS TO ITSELF.
Supplier hereby represents and warrants to PCF that, as of the initial Purchase Date for Purchased Receivables and on each Purchase Date thereafter:
(a) Supplier has not had disputes with any Marketplace obligated thereon or with any other online marketplaces regarding fraudulent Goods or Services that Supplier has, or allegedly has, provided to the subject marketplaces;
(c) Supplier does not have an ongoing Dispute concerning Goods or Services delivered, or money owed, from any Marketplace to the Supplier, or from the Supplier to any Marketplace;
(d) Supplier is solvent, on both a balance sheet and on an equitable (cash flow) basis, and will not become insolvent, on either basis, after giving effect to the transactions under this Agreement;
(e) Supplier is duly organized, validly existing and in good standing under the laws of its state of incorporation, formation or organization, and has not changed its residence or state of formation from that shown in the Supplier Early Payment Agreement;
(f) Supplier is duly qualified to do business and holds all power and governmental authorizations and approvals required to carry on its business in each jurisdiction in which Supplier’s business is conducted;
(g) Supplier’s name and address as shown in the Supplier Early Payment Agreement are the exact legal name and current address of Supplier and, in the case of an individual Supplier acting as a sole proprietor, Supplier’s name is the exact name shown on Supplier’s unexpired driver’s license, a copy thereof of which Supplier shall supply to PCF as a condition of the Supplier Early Payment Agreement; and, in the case of a Supplier which is a registered organization under state law (i.e., a limited partnership, a corporation or a limited liability company), the state of formation and present domicile of the Supplier is correctly displayed within the Supplier Early Payment Agreement;
(h) Supplier has compiled, and will hereafter comply, with all laws relating to the conduct of business under, the ownership of property in, and the renewal or continuation of the right to use, a corporate, fictitious or trade name or trade style, and Supplier is actively engaged in business and commercial affairs.
(i) Supplier is not subject to any action, suits or proceedings pending, or to the best of Supplier’s knowledge threatened, against Supplier or any of its properties, in or before any court, arbitrator or other body, that could reasonably be expected to have a Material Adverse Effect on the Supplier Early Payment Agreement and the purchase transactions contemplated thereby and hereby, or on Supplier’s financial position;
(j) Supplier is not in Default with respect to the Supplier Early Payment Agreement or under any other contract, or the order of any court, arbitrator or governmental body;
(k) Supplier has not previously delivered Goods or Services to any Marketplace under any name other than the name of Supplier used in the Supplier Early Payment Agreement;
(l) Supplier has not received notice or otherwise learned of actual or imminent bankruptcy, insolvency, or material impairment of the financial condition of any Marketplace;
(m) Supplier is not an employee, contractor, or an affiliate of any Marketplace, through common ownership, management or control, or otherwise;
(n) Supplier has full authority to deliver all data that Supplier delivers to the various Marketplaces and such Marketplaces, in turn, deliver to PCF;
(o) Supplier is entering into the Supplier Early Payment Agreement (and these Terms, incorporated therein) solely as a business person engaged in commercial enterprises and Supplier is offering the Available Receivables to PCF arising therefrom for PCF’s purchase consideration, solely in that commercial capacity;
(p) Seller is not a consumer. Seller will use all fundings and other proceeds of the sale of the Purchased Receivables to PCF under the Supplier Early Payment Agreement solely for business and commercial purposes, and not for household or consumer purposes;
(q) Supplier has not previously assigned or encumbered its interest in any tradename or tradestyle to any third party; and
(r) Supplier has also obtained a license to use any tradenames or tradestyles which Supplier now, earlier or hereafter uses with respect to Goods and Services delivered by Supplier to all Marketplaces with whom Supplier deals, from the owner thereof, with respect to Goods and Services delivered by Supplier to such Marketplaces
The representations and warranties contained herein are all continuing in nature and survive both the Purchase Date and the Termination of the Supplier Early Payment Agreement.
13. FURTHER REPRESENTATIONS AND WARRANTIES. Supplier further represents and warrants to PCF that the execution and delivery by Supplier of the Supplier Early Payment Agreement and each of the other documents executed between Supplier and PCF in connection therewith, including these Terms:
(a) is duly authorized by all necessary action on its part and has been duly executed and delivered by Supplier;
(b) does not contravene or violate any Supplier organizational documents or any applicable law, rule, regulation, contract or instrument by which it or any of its property is bound;
(c) does not contravene or violate any writ, order, judgment, award, injunction or decree binding on or affecting it or its property; and
(d) will not result in the creation or imposition of any lien, encumbrance or adverse claim on assets of Supplier, other than in favor of PCF and its assigns under this Agreement.
14. ACCESS TO PAYABILITY SYSTEM. Supplier is solely responsible for maintaining the security of the information provided to it for accessing the Payability System. Supplier hereby releases Payability, LLC, Payability Operations, and PCF from any loss, liability or damages incurred by Supplier for the unauthorized use by Supplier or any person to whom Supplier provides the password to the Payability System or otherwise provides access to the Payability System, or attributable to any person who receives such access directly or indirectly from the Supplier or any person to whom Supplier provides such password or such access. Supplier acknowledges that conditions relating to the use of the Payability System by persons (including lenders) to whom Supplier provides passwords are posted in the Payability System.
15. SUPPLIER CONSENT TO DISCLOSURES TO PAYABILITY OPERATIONS AND PCF AND BETWEEN MARKETPLACE’S AFFILIATES OR PARTNERS. Supplier consents to Marketplace or its affiliates (such as payment processing companies that Marketplace may use to make payments), disclosing Supplier’s payment and Login Credentials and Electronic Earnings Data to PCF and to Payability Operations. Supplier further consents to the use of Supplier’s Login Credentials by PCF and Payability Operations to accomplish the intents and purposes of the Supplier Early Payment Agreement.
16. COVENANTS AND LIMITATIONS ON SUPPLIER ACTIONS POST-SALE OF PURCHASED RECEIVABLES. Supplier shall, as to all Purchased Receivables sold to PCF under the Supplier Early Payment Agreement:
(a) hold any payments sent in error directly to Supplier by any Marketplace on account of any Purchased Receivables in trust for the benefit of PCF, without commingling such monies with other Supplier assets, and Supplier shall immediately pay such Proceeds to PCF (and it is acknowledged that nothing herein authorizes Supplier to collect Purchased Receivables sold to PCF);
(b) as PCF’s agent, if and as requested by PCF, and without cost to PCF, send a confirmatory written invoice to each Marketplace for all Purchased Receivables owed therefrom no later than thirty (30) days from the date of Supplier’s delivery of the subject Goods or Services, in the normal course, directing in such invoice, or a written notice of assignment, acceptable in terms to PCF, that payment on such Purchased Receivables be made by Marketplace only to PCF, using the same standard of care customary in Supplier’s industry in preparing such invoice and no less than the standard of care which Supplier uses in invoicing Accounts not sold to PCF. Supplier further agrees that PCF may, in its discretion, send such invoices and/or notices of assignment directly to the respective Marketplaces and that such invoices and notices may be prepared on a Batch basis;
(c) not compromise or settle any Purchased Receivables sold to PCF under the Supplier Early Payment Agreement without the prior written consent of PCF;
(d) execute and deliver any document or instrument that PCF may reasonably request to carry out the purposes of the Supplier Early Payment Agreement, including resolutions certifying the authority of any person signing the Supplier Early Payment Agreement and its associated documents and instruments, including these Terms, and deliver supplemental confirmatory Bills of Sale and related schedules of Accounts as PCF may request, as to the Purchased Receivables sold to PCF on any particular Funding Date; and
(e) deliver to PCF, forthwith, all communications to and from each Marketplace that addresses or references the Purchased Receivables arising therefrom or Supplier’s delivery of Goods and Services to such Marketplace which gave rise to any Purchased Receivables, or materially adversely impacts the terms and conditions under which any Marketplace remits payment for any Purchased Receivables to PCF, as Supplier’s assignee, and all communications from third-parties purporting to claim a lien or interest in the Purchased Receivables or which otherwise purports to impact PCF’s rights under the Supplier Early Payment Agreement.
17. CERTAIN FURTHER SUPPLIER COVENANTS. Supplier further covenants to PCF that:
(a) Supplier will not change its state of formation or incorporation nor, if Supplier is an individual, Supplier’s principal residence, nor change the location of the Collateral in which PCF holds a security interest under the Supplier Agreement and these Terms, as incorporated therein, or any books and records related thereto, in each case without fourteen (14) days prior advance written notice to PCF;
(b) Supplier has kept and will keep and retain, for the term of this Agreement, until all Obligations of Supplier to PCF have been fully satisfied, accurate, adequate and commercially reasonable books, records and other documentation, including, without limitation, purchase orders, invoices, delivery and shipping receipts, billing and collection records, and electronically equivalent documents for all of the foregoing, with respect to both the Purchased Receivables sold to PCF and with respect to the Non-Purchased Receivables and other Collateral pledged to PCF. Supplier will send such information to PCF or make such documentation available to PCF and its agents for inspection and copying by PCF, without charge, forthwith, upon PCF’s request;
(c) Supplier will mark its books and records to show the Purchased Receivables and the other Conveyed Property as having been sold to PCF and Supplier will treat the Purchased Receivables and the other Conveyed Property as sold to PCF for purposes of both GAAP and federal, state and local taxation. Supplier will, without limitation thereof, further deliver to PCF, upon PCF’s request, all receipts, orders, acceptances and other records and documents which support both the Purchased Receivables and the other Conveyed Property in which PCF has an ownership interest and the Non-Purchased Receivables included in the Pledged Collateral;
(d) PCF may collect, use and pledge the Purchased Receivables and the other Conveyed Property, as PCF deems fit, in its sole discretion, as the owner thereof, without the need to account to Supplier for the same;
(e) Supplier will, at its sole expense, fully perform all contracts and agreements to which Supplier is a party, including those between any Marketplace and Supplier, and Supplier will further timely comply with all laws, statutes and regulations by which Supplier is bound, including those with respect to the payment of federal, state and local taxes. Without limitation thereof, Supplier shall forthwith notify PCF in writing of any third-person who claims that Supplier defaulted in such duties and obligations;
(f) Supplier will comply with all its duties and obligations under all agreements between Supplier and Payability Operations, including duties and obligations related to Supplier’s use of the Payability System;
(g) Any data which Supplier provides to any Marketplace or which any Marketplace provides to Payability Operations and PCF has been delivered by Supplier in full compliance with any agreements or laws governing the same;
(h) Supplier will not suffer a Material Adverse Effect on its assets, business, or operations after the date hereof;
(i) Supplier, if it has not already done so, shall immediately modify its payment information with all Marketplaces as required by Section 3.18 of these Terms;
(j) Supplier will not, without the prior, separate, written consent of PCF, operate during the term of the Supplier Early Payment Agreement in any name other than the legal name of Supplier shown on page 1 of the Supplier Early Payment Agreement and these Terms and, without limitation thereof, if PCF hereafter consents separately in writing or via the Payability System to Supplier using any other tradename or tradestyle, Supplier will cause such tradename or tradestyle to be properly registered in accordance with all laws and regulations applicable thereto;
(k) Supplier will at all times be duly organized, existing and in good standing under the laws of Supplier’s state of organization or, in the case of an individual Supplier, the state of Supplier’s principal residence, and in every state in which the nature of Supplier’s business requires Supplier to be so qualified;
(l) If Supplier uses any Advances from PCF to pay the wages of any employees of Supplier, Supplier will timely withhold and pay over to all applicable foreign, federal, state and local authorities all payroll taxes thereon, together with all tax and other deductions taken from employee wages; and Supplier will not use any Advance or Balance Payment hereunder to pay “net” wages;
(m) Supplier will use the Payability System only for lawful commercial transactions in the ordinary course of business;
(n) As described in Section 3.18 hereof, Supplier will (i) cause its payment information with each Marketplace to exclusively specify a PCF bank account for all payments until such time as PCF has been paid for all Purchased Receivables from such Marketplace; (ii) establish PCF as an administrative or finance role within the Supplier’s account with the Marketplace sufficient for PCF to change payment information as necessary, and not delete, remove, or alter PCF’s access thereafter; and (iii) cause each Marketplace to provide PCF will any and all access to notifications relating to payment information modifications or changes;
(o) If requested by PCF, orally or in writing, Supplier will obtain at its cost, prior to PCF’s initial fundings hereunder, public liability insurance, property damage, insurance and replacement value insurance on the Pledged Collateral, errors & omissions, defalcation/breach of duty and such other insurance coverages on Supplier and on the Pledged Collateral, naming PCF, as its interests, as lender, may appear, as an additional insured and as a loss payee, in such amounts and on such terms as PCF reasonably requires. PCF shall have the right, in the name of Supplier or its own name, to file claims under all such policies and to receive and give acquittance for any payments that may be made payable thereunder, and to execute all endorsements, receipts, releases, assignments, reassignments and other documents that may be necessary to effect the collection, compromise, or settlement of any claims under such insurance policies;
(p) If requested by PCF, orally or in writing, Supplier will execute and timely deliver, at intervals requested by PCF, fully and properly completed IRS Form 8821 (or any IRS form replacing Form 8821), and comparable forms at the state and local tax level, which PCF may file with the Internal Revenue Service and with state and local tax authorities, respectively, to grant PCF secondary notice of any tax notification events. Supplier shall not alter, amend, restate or otherwise modify, withdraw, terminate or release such powers of attorney in favor of PCF without PCF’s express written consent;
(q) PCF will have an undivided 100% first priority security and ownership interest in the Purchased Receivables, unless otherwise agreed by PCF in writing; and Supplier will not grant any security interests on any assets to person other than PCF.
(r) Supplier shall, and cause each Guarantor to, immediately advise PCF in writing of any lien, garnishment, attachment, execution or the like is issued against or attaches to the Supplier or its assets, the Pledged Collateral, or to any Guarantor or his, her or its assets.
18. ATTORNEY AND AGENT-IN-FACT.
18.1 Attorney and Agent-In-Fact. Supplier hereby appoints PCF, or any other person or entity whom PCF may designate, as the true and lawful agent and attorney-in-fact of Supplier, with full power of substitution, and empowers PCF or such other persons and entities, at Supplier’s cost and expense, to exercise at any time, all or any of the following powers which, being coupled with an interest, shall be irrevocable until the Supplier Early Payment Agreement has been terminated and PCF has fully recovered all Obligations: (i) to execute and deliver such documents and instruments as PCF deems proper in order to make collection of and otherwise realize the benefits of any Receivable purchased by PCF or, as to Non-Purchased Receivables, pledged to PCF under the Supplier Early Payment Agreement, or to realize on any of the other Pledged Collateral, including but not limited to, in the case of all of the foregoing, the endorsement of Supplier’s name on any check or money order delivered to PCF or on any and all other remittances, papers, receipts, bills of lading, documents and instruments relating to the Supplier Early Payment Agreement and the transactions thereunder; (ii) to receive, take and deposit any checks or other remittances received by PCF relating to the Receivables regardless of the notation or conditions placed thereon by any Marketplace or by any other customer or account debtor or deductions reflected thereby, and to charge the amount of any such deductions to Supplier’s account; (iii) to sign Supplier’s name to any and all documents necessary to cure or eliminate any lack of capacity that PCF may now or hereafter have, by reason of Supplier’s acts or omissions, to maintain an action in the courts of any state to enforce payment of Receivables due from account debtors or customers, including any Marketplace, located in such state and to file such documents with the appropriate public officials or agencies; (iv) receive, take, endorse, assign, deliver, accept and deposit, in the name of PCF or Supplier, any and all proceeds of Pledged Collateral; (v) file any claim under (A) any bond or (B) under any trust fund; (vi) pay any sums necessary to discharge any lien or encumbrance which is senior to PCF’s security interest, as owner, in the Purchased Receivables or PCF’s security interest, as lender, in the Pledged Collateral; (vii) notify each Marketplace that their underlying Accounts giving rise to Receivables sold or pledged to PCF have been assigned to PCF by Supplier and that payment thereof is to be made to the order of, directly and solely to PCF; (viii) communicate directly with the various Marketplaces to verify the amount and validity of the Receivables; (ix) after an Event of Default: (A) change the address for delivery of mail to Supplier to PCF’s address and to receive and open mail addressed to Supplier; (B) as to Receivables, extend the time of payment of, compromise or settle for cash, credit, return of merchandise, and upon any terms or conditions, and discharge or release any account debtor or other obligor (including filing of any public record releasing any lien granted to Supplier by such account debtor), without affecting any of the Obligations; (x) file any initial financing statements and amendments thereto that (A) as to the Pledged Collateral, indicate the collateral as all assets of the Supplier or words of similar effect, regardless of whether any particular asset comprised in the Pledged Collateral falls within the scope of Article 9 of the UCC, or as being of an equal or lesser scope or with greater detail; (B) contains any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office’s acceptance of any financing statement or amendment, including (i) whether the Supplier is an organization, the type of organization, and (ii) any organization identification number issued to the Supplier or (C) contains a notification that the Supplier has granted a negative pledge to PCF, and that any subsequent holder of a security interest as to the Purchased Receivables or the Pledged Collateral may be tortiously interfering with PCF’s rights; (xi) advises third parties that any competing lien or security interest granted by such Marketplace or, as to the Receivables, granted as to other account debtors of Supplier will interfere with PCF’s collection and legal rights; and (xii) file any correction statement required by the UCC to preserve and protect PCF’s rights.
18.2 Any and all sums paid and any and all costs expenses, liabilities, obligations and attorneys’ fees incurred by PCF with respect to the foregoing Section 17.1 shall be added to and become part of the Obligations. In no event shall PCF’s rights under the foregoing power of attorney or any of PCF’s other rights under this Agreement be deemed to indicate that PCF is in control of the business, management or properties of Supplier.
18.3 Supplier authorizes PCF to accept, endorse and deposit on behalf of Supplier any checks tendered by an account debtor “in full payment” of its obligation to Supplier. Supplier shall not assert against PCF any claim arising therefrom, irrespective of whether such action by PCF effects an accord and satisfaction of Supplier’s claims, under §3-311 of the UCC, or otherwise.
18.4 Supplier grants PCF ownership and full license to use any data collected by PCF with respect to the Supplier Early Payment Agreement or Supplier during the term of the Supplier Early Payment Agreement, provided that no personally identifiable information is disclosed to the public.
19. SUPPLIER NOTICES TO PCF OF CERTAIN EVENTS. Supplier will, until all Obligations owed by Supplier to PCF have been satisfied, give written notice to PCF of any change in Supplier’s name, identity, corporate structure, senior management and business offices and of any other information provided by Supplier to PCF contained in the Supplier Early Payment Agreement, these Terms, or any document executed pursuant thereto or hereto. Supplier agrees to sign all instruments and other documents requested by PCF in connection with the foregoing changes. In addition, Supplier will promptly give written notice to PCF should there be any default or breach of Supplier’s representations, warranties or covenants in the Supplier Early Payment Agreement or in any agreements between Supplier, on the one hand, and any Supplier lender or contractual counterparty of Supplier, on the other hand, that has not been waived by the applicable lender or counterparty or cured within the applicable cure period, if any.
20. DEFAULT. There shall occur a “Default” (or, variously, “Event of Default”) under the Supplier Early Payment Agreement upon the occurrence of any of the following events:
(a) if Supplier fails to pay when due the full amount of any Chargeback, Indemnity Obligation or other Obligation or indebtedness to PCF;
(b) Supplier breaches any representation, warranty, covenant or duty under the Supplier Early Payment Agreement (incorporating these Terms) or in or under any other agreement, instrument or document under which the Obligations arise, provided, however, that so long as no other Default exists, it shall not, as to any non-monetary covenant, duty or obligation of Supplier which was breached and is susceptible of a cure, be a Default if Supplier cures the breach within three (3) Business Days of written notice thereof from PCF to Supplier that an act or action required to be done, taken or performed by Supplier hereunder was not done, taken or performed;
(c) Supplier attempts to countermand, redirect, defeat, delay, avoid or enjoin the operation and effect of (i) any assignment or notice of assignment of PCF’s purchase of any Purchased Receivable to any Marketplace or (ii) any instruction of PCF to a depository institution to transfer funds to PCF under any deposit control agreement or any other substantially similar agreement;
(d) Supplier breaches it obligations to Payability Operations under any agreement between Supplier and such person;
(e) Any default which is susceptible to cure by Supplier under the Supplier Early Payment Agreement or any other document within the Funding Facility is not timely cured within the applicable grace period;
(f) if any Marketplace is in breach of any agreement or contract between PCF and Marketplace, including, without limitation, any Marketplace Agreement, or if there is a default under any agreement between Marketplace and PCF Operations;
(g) If Supplier (i) becomes insolvent on a balance sheet basis; (ii) becomes unable to pay its, his or her debts as they become due, (iii) files bankruptcy voluntarily or is the subject of a petition for involuntary bankruptcy (iv) is the subject of an assignment for the benefit of creditors, receivership, execution or similar action by creditors, or (v) has a judgment entered against it in excess of Twenty Thousand Dollars ($20,000) which is not bonded, paid or stayed within five (5) days;
(h) Death or withdrawal of any partner or member of Supplier, if Supplier is a partnership or a limited liability company, unless a replacement partner or member satisfactory to PCF, in writing, replaces and becomes a partner or member of Supplier in replacement of the partner or member of Supplier so deceased or withdrawn within thirty (30) days of such death or withdrawal, as the case may be;
(i) The death, bankruptcy, insolvency, financial inability to pay or the dissolution of any Guarantor of Supplier’s Obligations to PCF under the Supplier Early Payment Agreement.
(j) Dissolution of Supplier or any other obligor (if Supplier or such other obligor is a corporation, partnership or limited liability company) without PCF’s prior written consent;
(k) Termination or withdrawal of any guarantee provided by any person who is a guarantor of Supplier’s Obligations to PCF, unless a replacement guarantor acceptable to PCF, in its sole discretion, with comparable net-worth, is appointed and executes a comparable Guaranty in the form required by PCF, within fifteen (15) days of such guarantee being withdrawn or terminated, or failure of any guarantor to provide his, her or its current financial statement to PCF, acceptable to PCF, as of December 31st of each year, no later than March 31st of the following year;
(l) Any present or future guarantor of the Obligations revokes, terminates or fails to perform any of the terms of any guaranty, endorsement or other agreement of such party in favor of PCF or any affiliate of PCF or shall notify PCF of its intention to rescind, modify, terminate or revoke any guaranty of the Obligations, or any such guarantee shall cease to be in full force and effect for any reason whatever;
(m) The failure of Supplier or any guarantor to deliver to PCF unaudited financial statements of such Supplier or Guarantor, dated no earlier than thirty (30) days prior the date of PCF’s request, within ten (10) Business Days of PCF’s request for the same;
(n) Appointment of a Receiver over the Supplier or over any part of the Pledged Collateral, or over any Guarantor or his, her or its assets;
(o) Litigation is commenced against Supplier or any guarantor of Survivor’s Obligations to PCF which PCF believes may have a material adverse effect on the ability of Supplier or such Guarantor to perform their respective duties to PCF;
(p) If the Supplier Early Payment Agreement fails to create, or if PCF, for any reason, ceases to have, a valid undivided first-priority ownership and security interest in any Purchased Receivable and (B) if any federal, state, local or other tax authority seizes, levies or liens any property of the Supplier, or of any Guarantor;
(q) If Supplier, or any Guarantor, fails to immediately advise PCF in writing of any lien, garnishment, attachment, execution or the like is issued against or attaches to the Supplier, the Pledged Collateral, or any assets of any Guarantor;
(r) PCF believes itself in good faith to be insecure with respect to the prospect of repayment or performance of the Obligations, or otherwise believes that the prospects for Supplier’s payment and performance of its various obligations to PCF under the Supplier Early Payment Agreement or any document or instrument executed and delivered in connection therewith, including these Terms, is impaired;
(s) If there is created any lien or other security interest which impairs PCF’s interests in the Collateral without the written consent of PCF;
(t) If any federal, state, local or other tax authority seizes, levies or liens any property of the Supplier or of any Guarantor, or any governmental body otherwise takes, including by decree or order, any other action which limits or impairs the ability of Supplier to perform under the Supplier Early Payment Agreement or which limits or impairs the ability of any Guarantor to perform under his, her or its Guaranty;
(u) If Supplier, or any Guarantor, alters any payment information (such as but not limited to bank information, physical address, name, etc.) that would divert payments on Purchased Receivables away from PCF or, for Purchased Receivables subject to ACH Collections, the Designated ACH Debit Bank Account, as applicable; and
(v) If, in connection with Purchased Receivables subject to ACH Collections, there are insufficient funds in the Designated ACH Debit Bank Account(s) or Supplier takes any other action such that the ACH debit of the amount equal to the Purchased Receivables to be debited by PCF is not honored by Supplier’s bank.
Upon any such Default or, variously, an Event of Default, PCF shall have the right to immediately provide written notice of such Default under the Supplier Early Payment Agreement to Supplier and to exercise all rights that PCF may have in respect of such Default, at law or in equity. Without limitation thereof, PCF shall be entitled to do any or all of the following: (i) suspend PCF’s performance under the Supplier Early Payment Agreement and cease buying new Receivables; (ii) terminate the Supplier Early Payment Agreement by issuing a Termination Notice under Section 21 hereof; (iii) accelerate all of the Obligations and declare them to be immediately due and payable; (iv) set-off and/or recoup any indebtedness due by Supplier to PCF against the Reserve or any other assets of Supplier in the hands of PCF; (v) credit the indebtedness owed by Supplier to PCF against the Purchase Price otherwise payable to the Supplier with respect to other Purchased Receivables; (vi) notify all Marketplaces to pay PCF directly, if they have not already been so notified by PCF and/or Supplier, (vii) foreclose or otherwise liquidate any of the Pledged Collateral, by public or private sale, as the law may allow, and Supplier agrees that ten (10) days advance notice of any such sale or intended disposition shall be reasonable, and (viii) exercise any and all other rights of PCF at law or in equity, and PCF shall have all the rights of a secured party under the UCC. All Default remedies of PCF shall be deemed to be concurrent and cumulative, and the exercise of any one remedy or alternative remedies, shall not deemed to release any other rights or remedies. PCF may further proceed against Supplier and any Guarantors in such order as PCF deems fit. In no event shall PCF be compelled to waive or accept a proposed cure of any Event of Default. PCF shall apply the proceeds it may recover, upon exercise of any Default remedies, first to expenses incurred by PCF, then to the Obligations due and payable, in such order and manner as PCF may determine. For the avoidance of doubt, any Default shall not release PCF from its assumed Credit Risk on Purchased Receivables sold to PCF prior to that time.
21. CERTAIN FURTHER SUPPLIER COVENANTS / THIRD PARTY GUARANTIES/ AUTHORIZATIONS. Supplier will not assign (by operation of law or otherwise), dispose of, grant any option with respect to, or create or suffer to exist any adverse claim upon any Purchased Receivable or the Proceeds thereof or any contract under which any Purchased Receivable arises, or assign any right to receive income with respect thereto, except for the interest of PCF (or any of its assigns) and Supplier will defend the right, title and interest of PCF (or any of its assigns) in the Purchased Receivables and in all of the foregoing property against all adverse claims of third parties. Supplier shall not, without the prior written consent of PCF in each instance, as to Purchased Receivables, and as to Non-Purchased Receivables after any Event of Default, (i) grant any extension of time for payment of any such Accounts, (ii) compromise or settle such Accounts for less than the full amount thereof, (iii) release in whole or in part any Marketplace, (iv) lien or encumber or grant security interests on such Accounts, other than to PCF, or (v) grant any credits, discounts, allowances, deductions, return authorizations or the like with respect to such Accounts. Supplier will not, in any dispute or litigation with PCF, take or allow others to take, the position that the Supplier Early Payment Agreement gives rise to loans by PCF to Supplier rather than a true sale of the Purchased Receivables by Supplier to PCF. Supplier will use all proceeds of PCF’s fundings to Supplier under the Supplier Early Payment Agreement solely in Supplier’s business and commercial endeavors and Supplier shall not use such proceeds and fundings from PCF for any household, personal or other non-business use of Supplier, whatsoever.
Supplier will also, as a material inducement to PCF’s entry into the Supplier Early Payment Agreement, further cause those of Supplier’s officers, directors, partners, members and principals (each, a “Principal”) as PCF may require, such persons being identified as the “Guarantors” in the Funding Particulars, to enter into a personal guarantee of Supplier’s Obligations to PCF, in the form required by PCF, prior to PCF’s execution thereof or initial funding thereunder.
Supplier and each Principal and Guarantor authorize PCF, PCF’s agents and representatives and any credit reporting agency engaged by PCF to (i) investigate any references given or any other statements or data obtained from or about Supplier and each Principal or Guarantor and (ii) obtain business and personal credit and background reports at any time and from time to time for any lawful purpose, including for purposes of (a) any update or renewal of the Supplier Early Payment Agreement, (b) determining Supplier’s eligibility for another financial product offered by PCF or (c) collecting the Purchased Receivables and any amounts that Supplier owes PCF pursuant to the Supplier Early Payment Agreement. Upon written request, PCF will advise Supplier or any Principal whether a personal credit report was requested and will give the name and address of the credit reporting agency.
22. TERM AND TERMINATION. The term of the Supplier Early Payment Agreement will continue indefinitely, until earlier terminated by: (a) Supplier, by accessing the Payability System and disabling its account, or (b) by written notice from Supplier if PCF defaults hereunder and this default is not cured by PCF within twenty (20) days of such notice, provided that any termination by Supplier will take effect 30 days after such notice is provided by Supplier; or (c) by PCF at any time, without written notice to Supplier, by simply disabling Supplier from the program, or (d) by PCF issuing a written termination notice, for cause (a “Termination Notice”). No termination by either Party shall in any way affect the respective rights and obligations of the Parties with respect to any Purchased Receivables purchased by PCF prior to the date thereof, nor waive or limit the repurchase, indemnification and expense reimbursement obligations of Suppliers under the Supplier Early Payment Agreement and these Terms. Moreover, in no circumstances may any termination declared by any Party be effective earlier than the last day of the calendar month in which such Termination Notice is given. In recognition of PCF’s right to have its attorneys’ fees and other expenses incurred in connection with this Agreement secured by the Collateral, notwithstanding payment in full of all Obligations by Supplier, PCF shall not be required to record any terminations or satisfactions of any of PCF’s liens on the Collateral unless and until all such fees, expense and other obligations owed to PCF, secured by the Pledged Collateral, have been indefeasibly satisfied and paid in full. Supplier understands that this provision constitutes a waiver of its rights under §9-513 of the UCC.
23. NO WAIVERS / CERTAIN CONFLICTS. PCF’s failure to exercise any right shall not be deemed a waiver of such right or cause the loss of any future rights by PCF. Unless otherwise expressly stated herein, in the event of any conflict between the terms of the Supplier Early Payment Agreement (incorporating these Terms) and any other agreement to which PCF and Supplier are parties the terms of the Supplier Early Payment Agreement will control.
24. TAXES. All payments made to PCF pursuant to the Supplier Early Payment Agreement and these Terms or under any instrument or document delivered herewith shall be free and clear of all taxes, documentation, levies, stamps, charges, deductions, withholdings and duties of every kind and nature (excluding only income taxes imposed on PCF’s net income and franchise taxes imposed on PCF, in lieu of income taxes by the State of Texas, where PCF is domiciled, and any political subdivisions thereof), all of the foregoing (other than those Texas taxes so excluded) constituting “Taxes.” Supplier indemnifies and holds PCF harmless from all such Taxes. If Supplier is obligated to withhold Taxes on any monies payable to PCF under this Agreement Supplier shall gross-up such payment by the amount of such Taxes so that PCF shall receive the same amount it would have otherwise received had no such Taxes been due and Supplier shall pay the full amount of the Taxes so deducted to the relevant tax authority. Supplier shall further pay all excise and property taxes attributable to payments made under this Agreement or any instrument delivered in connection therewith, as well as all penalties and interest relating to Taxes or such excise and property taxes.
25. SUCCESSORS AND ASSIGNS/COUNTERPARTS. The terms and provisions of the Supplier Early Payment Agreement and all other associated documents and instruments delivered in connection herewith, including these Terms, shall be binding upon and shall inure to the benefit of the respective Parties thereto and their respective heirs, executors, administrators, personal representatives, successors, and assigns. Supplier may not assign any of its rights or obligations thereunder or hereunder without the prior written consent of PCF. PCF may assign any or all of its rights or obligations thereunder without the consent of Supplier. The Supplier Early Payment Agreement may be signed in counterparts which, taken together, shall constitute a single agreement, with electronic or PDF signatures being accepted for all purposes, and it is stipulated that the last signatory to the Supplier Early Payment Agreement and these Terms is PCF. Without limitation thereof, Supplier agrees, if requested by PCF, to execute and deliver a hard-copy of both the Supplier Early Payment Agreement and these Terms, both signed by Supplier, to PCF within five (5) Business Days of Supplier’s electronic signature and acceptance hereto, or at any such later time or times that PCF may require.
26. SEVERABILITY. The unenforceability for any reason of any provision of the Supplier Early Payment Agreement or any other document shall not impair or limit the operation or validity any other provision of the Supplier Early Payment Agreement, these Terms, or any other agreements now or hereafter existing among Supplier and PCF or any other Party thereto.
27. GOVERNING LAW/CONSENT TO JURISDICTION. The Supplier Early Payment Agreement and these Terms incorporated therein, as well as any disputes arising from or related in any way thereto, are governed by the law of the State of Texas applicable to contracts executed wholly within the state (without giving effect to principles of conflicts of laws). Unless otherwise agreed by PCF in writing, Supplier IRREVOCABLY CONSENTS to the exclusive venue and jurisdiction of the federal and state courts located in the State of Texas for all disputes under or related to the Supplier Early Payment Agreement and all instruments and documents executed and delivered in connection therewith, or in any way related thereto, including these Terms, waiving all objections that such courts are an inconvenient forum or that venue therein is improper. Notwithstanding the foregoing, PCF shall have the right to bring any action or proceeding against Supplier or any Marketplace in the courts of Texas, or in such other courts and jurisdictions, as PCF reasonably deems appropriate to enforce its rights against such persons.
28. WAIVER OF JURY TRIAL RIGHTS. THE PARTIES HERETO HEREBY EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY for any claim, demand, action, or cause of action arising out of or in connection with the Supplier Early Payment Agreement, these Terms, and all documents and instruments delivered in connection therewith, whether in contract, tort, or otherwise.
29. LIMITATION OF LIABILITY/SPECIAL INDEMNITY RIGHTS OF PCF. For purposes of this Agreement:
(a) PCF and Payability shall have no liability for interruption of services or other losses or damages created by weather, civil strife, war, or natural disaster, such as floods or hurricanes.
(b) PCF shall not be liable for any claim or damages for loss of business, lost profits, loss of goodwill, impairment of revenue or any form of indirect, consequential, special, exemplary or punitive losses or punitive damages related to or arising from this Agreement and the agreements executed and delivered in connection herewith and the transactions hereunder and thereunder.
(c) PCF shall not have any liability in connection with (a) PCF’s access and use of the Supplier Marketplace Accounts and the Login Credentials; or (b) the exercise of any of PCF’s license rights set forth in Section 10 above.
(d) Supplier hereby agrees to indemnify, defend and hold harmless the PCF Parties from and against any and all third party claims, actions, suits, demands, damages, liabilities, obligations, losses, settlement, judgments, costs and expenses (including reasonable attorneys’ fees and costs) which arise out of, relate to or result from (a) PCF’s access and use of the Login Credentials and Supplier Marketplace Accounts; or (b) the exercise by PCF of the license rights granted in Section 10.
30. USA PATRIOT ACT. Supplier represents and warrants that neither it nor any of its shareholders, owners, partners, members, subsidiaries, affiliates, family members or relatives has been designated, and is not owned and controlled, by a “suspected terrorist” as defined in Executive Order 13224. Supply further acknowledges that Supplier must both comply with all applicable anti-terrorism, bank secrecy, criminal and money-laundering laws, in addition to all other obligations and duties of the Parties hereunder. In furtherance of the same, Supplier represents and warrants to PCF that:
(i) None of the cash or property of that Supplier or will pay or contribute to PCF has been or will be derived from, related to, any activity that may violate any of such laws.
(ii) No contribution or payment to PCF by Supplier, or any of its shareholders, owners, partners, members, subsidiaries, affiliates, family members or relatives, to the extent they are within the control of such persons, shall cause PCF to be in violation of the United States Bank Secrecy Act, the United States International Money Laundering Control Act of 1986, the United States International Money Laundering Abatement, Anti-Terrorism Financing Act of 2001, the International Emergency Economic Powers Act or statutes, rules or regulations promulgated by the U.S. Treasury Office of Foreign Exchange Control.
(iii) Supplier agrees to provide to PCF all information required to establish that the above representations are true and correct, to advise PCF immediately in writing of any violation by Supplier of such laws, or any claim by any person that Supplier might violate such laws. Supplier agrees to cooperate with PCF in PCF’s duties under such laws and agrees that PCF may, if it appears that the aforesaid representations of Supplier in this Section 29 are not true, in whole or in part, to cooperate with PCF in remediating the same. Supplier agrees to provide, and further agrees that PCF may release to applicable legal authorities, any information with respect to Supplier and its shareholders, owners, partners, members, subsidiaries, affiliates, family members and relatives as may be required to establish compliance with the foregoing laws.
Supplier further agrees to deliver to PCF copies of Supplier’s driver’s license, documents establishing the identity of Supplier’s shareholders, partners, members or other owners, and all other documents and information required for PCF to comply with its duties under the laws aforesaid.
31. MODIFICATIONS. The Supplier Early Payment Agreement, these Terms, the Funding Particulars found and agreed to therein or, as applicable, in the Payability System, the Guaranties and the various other documents executed and delivered in connection therewith contain all of the term and conditions relating to the subject matter of the Supplier Early Payment Agreement and the Funding Facility and supersede any prior written or oral negotiations or agreements. No other promises or representations have been made by any Party to the other Party. The Supplier Early Payment Agreement may only be amended in a writing signed by both Parties hereto.
32. CONFIDENTIALITY. Supplier agrees to hold the terms and conditions of the Supplier Early Payment Agreement, these Terms, and the related exhibits, agreements and documents executed in connection therewith, except any information which is of public record (collectively, the “Confidential Information”) strictly confidential. Supplier shall not disclose the Confidential Information to any third-party without the prior written consent of PCF or pursuant to the order of a court of competent jurisdiction. Supplier agrees to give PCF immediate written notice of any subpoena or other requirement whereby a third-party seeks to require Supplier to disclose any of the Confidential Information so that Supplier can seek a protective order or otherwise seek to protect its interests, as appropriate. Supplier expressly agrees that PCF and Payability Operations may share the Supplier Early Payment Agreement and these Terms with any Marketplace, as they see fit.
33. NOTICES. Any notice or other communication made or given with respect to or pursuant to the Supplier Early Payment Agreement, these Terms, or any other documents or instruments executed and delivered in connection therewith shall be in writing and may be personally served or sent by nationally recognized overnight courier service and shall be deemed to have been given when delivered.
Notices for PCF shall be addressed to:
Payability Commercial Factors, LLC
(a Texas limited liability company)
10955 Lowell, Suite 800
Overland Park, KS 66210
Attn. Mr. Keith Smith
Notices to Supplier shall be delivered to the name and address of Supplier as recorded in the Payability System
34. WAIVER OF THE AUTOMATIC STAY. If Supplier becomes a debtor under any chapter of the United States Bankruptcy Code, title 11, U.S.C., or under any comparable law, Supplier hereby AGREES AND WAIVES THE BENEFITS OF THE AUTOMATIC STAY (of 11 U.S.C. §362 or under comparable law) to the maximum extent allowed by applicable law and Supplier agrees that it will not raise any defense to a motion for relief from the automatic stay brought by PCF or any successor or assignee thereof in reliance on this waiver. Supplier has consulted with counsel of its choice before agreeing to this waiver.
35. EXCLUSIVE FINANCIER. In consideration of PCF’s entry into this Agreement, Supplier represents that for the term of this Agreement, and for thirty (30) days thereafter, PCF shall be, unless otherwise agreed to by PCF in writing, the sole financier of Supplier, and Supplier further covenants during such time not to use any Accounts owned by Supplier and not sold to PCF hereunder as collateral for any loan or other extension of credit from any factor or lender during such time. In other words, Supplier covenants that PCF shall be Supplier’s sole Accounts purchaser and financier during such time. In addition to the foregoing, Supplier shall not pay any fee, directly or indirectly, to the Marketplace in consideration of reducing or adjusting their payment terms.
36. SIGNATURES. The Parties agree that PDF and electronic signatures are acceptable for all purposes, and that both PCF and Supplier may sign the Supplier Early Payment Agreement electronically, by clicking on the Payability Sign-Up showing their respective signatures. Supplier shall further deliver a hand-signed copy of the Supplier Early Payment Agreement to PCF, as well as any other document or instrument which is part of the Funding Facility, as and if requested by PCF.
37. OTHER WAIVERS. Supplier hereby expressly waives: (i) notice of acceptance of these Terms or the Supplier Early Payment Agreement; (ii) notice of any default under the Supplier Early Payment Agreement or these Terms; (iii) demand for observance or performance of, or enforcement of, any terms or provisions of the Supplier Early Payment Agreement or these Terms; (iv) all other notices and demands otherwise required by law which such Supplier may lawfully waive; (v) the right to assert in any action or proceeding hereupon any setoff, counterclaim or other claim which it may have against PCF, Payability Operations or Payability, LLC; (vi) all rights (statutory or otherwise) that require PCF, Payability Operations or Payability, LLC to make an election of remedies where PCF holds security interests and liens on both the real and personal property of Supplier, any guarantor of or any other obligor on the Obligations or to take recourse first or solely against any particular Collateral securing the Obligations; (vii) all rights (statutory or otherwise) that restrict, affect or impair the rights or remedies of PCF, Payability Operations or Payability, LLC to collect any deficiency after the application to the Obligations of any proceeds arising from the foreclosure on the Collateral; (viii) any defense based on the adequacy of a remedy at law which might be asserted as a bar to the remedy of specific performance of the Supplier Early Payment Agreement (with these Terms incorporated) in any action brought therefor by any party hereto (expressly including any action to enforce the Supplier’s obligations under Section 16(s)), and (ix) so long as this Agreement remains in effect, the benefit of all other principles or provisions of law, statutory or otherwise, which are or might be in conflict with the specific terms hereof.
38. PCF’S DISPOSITION OF PURCHASED RECEIVABLES. Supplier acknowledges that PCF may sell, factor or otherwise dispose of the Purchased Receivables, in whole or in part, in PCF’s sole discretion.
39. LAPSE OF PCF CREDIT APPROVAL. PCF may, in its sole discretion, withdraw its credit approval of a Marketplace prospectively, in whole or in part, via written notice to the Supplier or by removing the Marketplace as an approved Marketplace in the Payability System. Any Receivables purchased by PCF from a Marketplace after that time shall be purchased by PCF on a full-recourse, Supplier-risk basis, to the extent beyond the new credit approval so shown on the Payability System.