XLERATE FINANCIAL, LLC
FACTORING AND SECURITY AGREEMENT
TERMS & CONDITIONS

The following terms and conditions apply to all Factoring and Security Agreements (each, an “Agreement”) with XLerate Financial, LLC, a Florida limited liability company (“Purchaser”):

Section 1 – Definitions

1. The following terms when used in the Agreement shall have the meanings assigned to them in the UCC (as defined below) as in effect from time to time: “Account”, “Account Debtor”, “Chattel Paper”, “Commercial Tort Claim”, “Deposit Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”, “Fixture”, “General Intangible”, “Goods”, “Instrument”, “Inventory”, “Investment Property”, “Letter of Credit Rights”, “Proceeds”, “Record”, and “Supporting Obligation”.
2. Terms defined in the UCC and not otherwise defined herein shall have the meaning assigned in the UCC as in effect from time to time.
3. The following terms when used in the Agreement shall have the meanings assigned to them below:
   • a. “Baseline Prime Rate” means the Prime Rate in effect as of the date of the Agreement, as reflected in Schedule A attached to the Agreement.
   • b. “Collateral” means all of Seller’s right, title and interest in the following property, now owned or at any time hereafter acquired by Seller or in which Seller now has or at any time in the future may acquire any right, title or interest, and wherever located or deemed located: all Accounts; all cash and currency; all Chattel Paper; all Documents; all Equipment; all Fixtures; all General Intangibles; all Goods; all Instruments; all Intellectual Property; all Inventory; all Investment Property; all Letter of Credit Rights; all Vehicles; all other personal property not otherwise described above; all books and Records pertaining to the Collateral; and to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and Supporting Obligations given by any Person with respect to any of the foregoing;
   • c. “Dispute” means any dispute, deduction, claim, offset, defense or counterclaim of any kind whatsoever, regardless of whether the same is in an amount greater than, equal to or less than the Account concerned, regardless of whether the same is valid or bona fide, regardless of whether the same in whole or in part relates to the Account on which payment is being withheld or other Accounts or goods or services already paid for, and regardless of whether the same arises by reason of an act of God, civil strife, war, currency restriction, foreign political restriction or regulation, or the like, or any other reason.
   • d. “Environmental Laws” means any federal, state or local law, rule, regulation or order relating to pollution, waste disposal, industrial hygiene, land use or the protection of human health, safety, or welfare, plant life or animal life, natural resources, the environment or property.
   • e. “Events of Default” has the meaning as set forth in Section 8.1 herein.
   • f. “Factoring Fee” has the meaning set forth in Schedule A attached to the Agreement.
   • g. “Lien” means any mortgage, pledge, hypothecation, assignment, security interest, lien (statutory or otherwise), charge or other encumbrance of any nature, whether voluntary or involuntary, including, without limitation, the interest of any vendor or lessor under any conditional sale agreement, title retention agreement, capital lease or any other lease or arrangement having substantially the same effect as any of the foregoing.
   • h. “Maximum Credit Line” means the maximum aggregate Net Amount of outstanding Purchased Accounts which Purchaser may advance to Seller pursuant to Schedule A attached to the Agreement.
   • i. “Minimum Monthly Factoring Fee” has the meaning set forth in Schedule A.
   • j. “Net Amount” means, with respect to each Account, the gross invoice amount for each such Account less any discount, rebate, refund, allowance, credit, or other amount(s) of any nature that is or may be granted to, claimed by, or allowed to the Account Debtor.
   • k. “Obligations” means each and all of Seller’s covenants and obligations to Purchaser hereunder, including but not limited to the obligation to pay and perform when due all debts and all obligations, liabilities, covenants, agreements, guaranties, warranties and representations of Seller to Purchaser or its affiliates, partners, and subsidiaries, of any and every kind and nature, whether heretofore, now or hereafter owing, arising, due or payable from Seller to Purchaser or its affiliates, partners, and subsidiaries, including but not limited to timely payment in full of Net Amount of each of the Purchased Accounts.
   • l. “Posted” has the meaning set forth in Section 3.3 herein.
   • m. “Prime Rate” means, as of any date of determination, a per annum rate of interest equal to the “prime rate” established by Purchaser’s primary banking institution.
   • n. “Purchased Account” has the meaning set forth in Section 2.1 herein.
   • o. “Purchase Price” has the meaning set forth Section 3.1 herein.
   • p. “Rate Adjustment Fee” has the meaning set forth Section 3.5 herein.
   • q. “Reserve” means, with respect to each Purchased Account, an amount equal to the Net Amount of such Account multiplied by the Reserve Percent.
   • r. “Reserve Percent” has the meaning set forth in Schedule A attached to the Agreement.
   • s. “Term” means the initial 12-month period commencing on the last execution date on the signature page hereto, plus each succeeding 12-month period thereafter unless earlier terminated in accordance with the Agreement.
   • t. “UCC” means the Uniform Commercial Code as in effect from time to time in the State of Florida.
   • u. “Vehicles” means all cars, trucks, trailers, rolling stock, and other vehicles covered by a certificate of title under the laws of any state.

Section 2 – Purchase and Sale of Accounts

1. Sale of Accounts. During the Term, Seller shall present to Purchaser for purchase, with recourse, all Accounts arising from the activities and services performed by Seller. Purchaser, in its sole and absolute discretion, may purchase any, all, or none of such Accounts as it may elect from time to time (each, a “Purchased Account”). Seller hereby agrees to sell, assign, transfer, convey, and deliver to Purchaser, free and clear of any and all Liens (other than the Liens granted to Purchaser hereunder), each and all such Purchased Accounts, and shall promptly notify each such Account Debtor of the sale of its Account or Accounts to Purchaser. Purchaser shall become the absolute owner of all Purchased Accounts, free and clear of all Liens (other than the Liens granted to Purchaser hereunder). All remittances or other amounts received by Seller for payment on any Purchased Account shall be held in trust by Seller for the benefit of, and promptly paid over to, Purchaser together with all Documents accompanying any such remittance to Seller. Seller hereby guarantees the timely payment of all amounts represented by the Purchased Accounts.
2. Maximum Credit Line. Notwithstanding anything to the contrary in the Agreement, Purchaser shall not be obligated to purchase any Account if, after paying the Purchase Price therefor, the aggregate Net Amount of all outstanding Purchased Accounts will exceed the Maximum Credit Line.
3. Assignments and Other Documentation. All bills and invoices for all Purchased Accounts shall bear the following legend: “This account has been assigned to and is owned by and payable only to XLerate Financial, LLC at 650 NE 32ND Street, Suite 5103, Miami, FL 31137. Any objection to this invoice must be reported to XLerate Financial, LLC at said address with a copy by email to contracts@xleratefinancial.com.” Seller shall immediately provide to Purchaser such additional documentation or information as requested by Purchaser relating to any Account.
4. Exclusivity. During the Term, Seller shall not offer to sell or sell, transfer, assign, or incur a Lien on any Account to any third party other than Purchaser.
   

Section 3 – Purchase Price; Payment; Fees; Reserve

1. Purchase Price. In consideration of the purchase and sale of each Purchased Account hereunder, Purchaser shall pay to Seller, with respect to each Purchased Account, an amount equal to the Net Amount of such Purchased Account, less the Factoring Fee (the “Purchase Price”).
2. Payment. The Purchase Price for each Purchased Account shall be payable by Purchaser to Seller as follows:
   • a. Upon presentation to Purchaser of all necessary or appropriate documents related to each Purchased Account, as determined by Purchaser, and provided that no Dispute shall then exist with the Account Debtor of such Purchased Account, Purchaser will advance to Seller the Purchase Price for such Purchased Account, less the Reserve for such Purchased Account.
   • b. In all cases, and for the avoidance of doubt, Purchaser will retain the Factoring Fee.

3. Application and Posting of Payments. Checks, instruments and all other non-cash payments delivered to Purchaser in payment or on account of the Purchased Accounts or the Obligations constitute conditional payment only until such items are actually paid in cash to Purchaser, for the purpose of computing fees earned by Purchaser, credit therefore and for bank wire transfers, shall be given after receipt by Purchaser, as provided for in Schedule A attached to the Agreement. All payments made by or on behalf of, and all credits due to Seller, may be applied and reapplied in whole or in part to any of the Obligations to such extent and in such manner, as Purchaser shall determine in its sole discretion. Purchaser shall have the continuing exclusive right to apply and reapply any and all such payments in such manner as Purchaser shall determine in its sole discretion, notwithstanding any entry by Purchaser upon any of its books and records. All payments made by an Account Debtor with respect to the Purchased Accounts, and any other payments by or on behalf of Seller to Purchaser pursuant to the Agreement, will be processed for payment by Purchaser and posted to Seller’s and/or the Account Debtor’s account with Purchaser (“Posted”) as promptly as reasonably practicable following receipt thereof, which may take up to seven (7) days following receipt thereof.
4. Minimum Monthly Factoring Fee. If, during any calendar month of the Term, the aggregate dollar amount of Factoring Fees received by Purchaser pursuant to Section 3.1 is less than the Minimum Monthly Factoring Fee, Seller shall promptly remit the difference thereof to Purchaser.
5. Rate Adjustment Fee. If, as of the last day of any calendar month of the Term, the Prime Rate is greater than the Baseline Prime Rate, Seller shall promptly pay to Purchaser an amount equal to (a) the aggregate Net Amount of Purchased Accounts for which payment has not Posted as of the first day of such month, multiplied by (b) the difference between (i) the Prime Rate in effect as of the last day of such month, and (ii) the Baseline Prime Rate (such amount, the “Rate Adjustment Fee”).
6. Other Fees and Costs. In addition to the Factoring Fee (pursuant to Section 3.1), the Minimum Monthly Factoring Fee (pursuant to Section 3.4), and the Rate Adjustment Fee (pursuant to Section 3.5), Seller shall pay to Purchaser all other fees and costs incurred hereunder immediately when due, including, but not limited to, those other fees and costs described in Schedule A attached to the Agreement.
7. Reserves. Provided that Seller is not otherwise in default in any respect under the Agreement, within thirty (30) days following the end of each calendar quarter Purchaser will remit to Seller the Reserve from any Purchased Account for which Purchaser has been paid in full by the Account Debtor during such calendar quarter; provided, however, that Purchaser shall have the right to retain all or any portion of such Reserve as a chargeback against any other delinquent Purchased Account for which Purchaser may exercise its applicable rights hereunder (including but not limited to Section 4.3) or any other amounts due and owing hereunder by Seller.

Section 4 – Security for Obligations.

1. Grant of Security Interest. Seller hereby grants, pledges and collaterally assigns to Purchaser a continuing first-priority security interest in all of Seller’s right, title and interest in and to the Collateral, whether now owned or at any time hereafter acquired by Seller or in which Seller now has or at any time in the future may acquire any right, title or interest, and wherever located or deemed located, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations. In the event of Seller’s breach of any representation or warranty made in the Agreement or the Seller’s failure to observe or perform any of the provisions or obligations of the Agreement, Seller shall be in default, and Purchaser may enforce payment and exercise any and all of the rights and remedies provided by Article 9 of the UCC. In addition, upon default by Seller, Purchaser shall also have the right to take all actions necessary to collect the Accounts (whether or not a Purchased Account) directly from the Account Debtors, including, but not limited to, (i) in Seller’s name, or otherwise, demand, make claim for, sue for, collect, grant extensions, compromise, discharge, and get or give releases for any and all monies or funds due or to become due on Accounts, (ii) notify Account Debtors of Purchaser’s security interest, regardless if Seller has sold an Account to Purchaser related to such Account Debtor and otherwise notify and instruct Account Debtors, in Seller’s name, of the address, and procedures for making payments to Purchaser, and (iii) take all reasonable steps necessary to insure payment of such amounts and monies due, and do any and all things in Seller’s name necessary or proper to carry out the purposes intended by the Agreement. Purchaser’s exercise of the foregoing rights shall be in the sole and absolute discretion of Purchaser, but Purchaser shall have no obligation to exercise any of the foregoing rights. Nothing contained in the Agreement shall in any way require Purchaser to initiate or become a party to any litigation or other legal proceedings.
2. Filing Authorization. Seller hereby authorizes Purchaser to file any document it deems necessary or appropriate to perfect and preserve Purchaser’s security interest in the Collateral, including, but not limited to, UCC-1 financing statements and any applicable amendments or continuation statements.
3. Repurchase Obligation. All Purchased Accounts purchased by Purchaser from Seller are purchased with full recourse. If Seller breaches any representation or warranty or otherwise violates or defaults on any of its obligations hereunder, or if any Purchased Account is not paid in full within ninety 90 days after the Account invoice date of Purchased Account, then upon request by Purchaser, Seller shall immediately repurchase such Purchased Account from Purchaser for an amount equal to the Net Amount of such Purchased Account (less any payments received by Purchaser on such Purchased Account from the Account Debtor), plus any unpaid fees and other amounts owed relating to the Purchased Account on demand, or at Purchaser’s option, by Purchaser’s charge to the Reserve. Any remaining Reserve held by Purchaser for such Purchased Account shall be released only in accordance with Section 3.7, and Purchaser shall in all events also be entitled to and shall retain the Factoring Fee on such Purchased Account.

Section 5 – Term; Termination.

1. Term. The Agreement shall be in effect for the Term unless terminated by either Party giving the other written notice of non-renewal not less than ninety (90) days but not more than one hundred twenty (120) days, prior to the end of the then-current 12-month Term, which written notice shall clearly state its intention to terminate at the end of the current Term. In addition, Purchaser may terminate the Agreement at any time following an Event of Default.
2. Seller’s Post-Termination Liability. After termination or expiration of the Agreement, Seller shall remain liable to Purchaser for the full and prompt payment of the full amount of Purchased Accounts which are then outstanding and unpaid, Disputed or undisputed, as well as any other Obligation then existing or thereafter arising. Purchaser’s security interest in the Collateral shall remain in effect until all Obligations of Seller are paid in full.

Section 6 – Representations, Warranties, and Covenants of Seller.

1. Organization and Power. Seller (i) is a corporation or a limited liability company duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, as the case may be (which jurisdiction is set forth on Schedule A attached to the Agreement), (ii) has the full corporate or limited liability company power and authority to execute, deliver and perform under the Agreement, to own and hold its property and to engage in its business as presently conducted, and (iii) is duly qualified to do business as a foreign corporation or limited liability company and is in good standing in each jurisdiction where the nature of its business or the ownership of its properties requires it to be so qualified.
2. Authorization; Enforceability. Seller has taken all necessary corporate or limited liability company action, as applicable, to execute, deliver and perform under the Agreement and has validly executed and delivered the Agreement. The Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally, by general equitable principles or by principles of good faith and fair dealing (regardless of whether enforcement is sought in equity or at law).
3. No Violation. The execution, delivery and performance of the Agreement by Seller, and compliance by Seller with the terms hereof, do not and will not (i) violate any provision of its articles or certificate of incorporation or formation, its bylaws or operating agreement, or other applicable formation or organizational documents, (ii) contravene any other law, order, or obligation applicable to it, (iii) conflict with, result in a breach of or constitute (with notice, lapse of time or both) a default under any indenture, mortgage, lease, agreement, contract or other instrument to which it is a party, by which it or any of its properties is bound or to which it is subject, or (iv) except for the Liens granted in favor of the Purchaser hereunder, result in or require the creation or imposition of any Lien upon any of its properties, revenues or assets.
4. Legal Name and Trade Names. Seller’s state of formation, exact legal name, and any trade names or fictitious names used by Seller are set forth on Schedule A attached to the Agreement, and Seller has delivered to Purchaser a true, accurate, and complete copy of its articles of organization, articles of incorporation, certificate of organization, certificate of incorporation, or comparable formation documents, duly certified by the appropriate officer of the state in which Seller was so formed. Seller has complied, 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.
5. Place of Business; Location of Collateral. Seller’s books and records, including, but not limited to, the books and records relating to the Accounts are and will be kept and maintained at Seller’s Principal Business Address as specified on Schedule A attached to the Agreement, and all Collateral shall be kept and maintained at Seller’s Principal Business Address or such other location as is specified on Schedule A attached to the Agreement. Seller will provide Purchaser with at least thirty (30) calendar days advance written notice in the event Seller moves the Collateral, or obtains, opens or maintains any new or additional place(s) for the conduct of Seller’s business or the location of any Collateral, or closes any existing place of business.
6. Title to Collateral; Liens. With the exception of Purchased Accounts where title vests with Purchaser, Seller is now, and will at all times hereafter be, the true, lawful and sole owner of all the Collateral. Except for the security interest granted to Purchaser, the Collateral now is and will hereafter remain, free and clear of any and all Liens.
7. Accounts. With respect to each and every Account (whether or not a Purchased Account), at the time such Account is created:
   • a. Such Account (i) represents an undisputed bona fide unconditional obligation of the Account Debtor created by the sale, delivery, and acceptance of goods or the rendition of services in the ordinary course of Seller’s business; and (ii) is owned by Seller free and clear of any and all Liens.
   • b. The Account Debtor thereof has received and accepted the goods sold and services rendered which created the Account and the invoice therefore and will pay the Net Amount of such invoice without Dispute, setoff, or deduction.
   • c. No Account Debtor on any such Account is a shareholder, director, partner or agent of Seller, or is a person or entity controlling, controlled by or under common control with Seller.
   • d. No such Account is owed by an Account Debtor to whom Seller is or may become liable in connection with goods sold or services rendered by the Account Debtor to Seller or any other transaction or dealing between the Account Debtor and Seller.
   • e. Each such Account represents goods sold or services rendered by Seller, as a carrier, in equipment owned or leased by Seller.
   • f. The Account Debtor thereof is solvent and has the financial ability to pay.
     
     Immediately upon discovery by Seller that any of the foregoing representations or warranties are or have become untrue with respect to any Account or Account Debtor, Seller shall immediately give written notice thereof to Purchaser. Seller will promptly notify Purchaser of any Disputes with respect to any Account and shall promptly settle all such disputes, at Seller’s own cost and expense (including attorneys’ fees). Seller will at all times defend Purchaser and the Collateral against all claims and demands of others.
     
8. Documents Genuine, Legal Compliance, Disposition. All statements made and all unpaid balances appearing in all invoices, bills of lading, receiving documents, shipping receipts, shipper contracts, rate confirmations, instruments and other documents evidencing the Accounts are and shall be true and correct and all such invoices, bills of lading, receiving documents, shipping receipts, shipper contracts, rate confirmations, instruments and other documents and all of Seller’s books and records are and shall be genuine and in all respects what they purport to be and all signatories and endorsers have full capacity to contract. All sales and other transactions underlying or giving rise to each Account shall fully comply with all applicable laws and governmental rules and regulations. All signatures and endorsements on all documents, instruments, and agreements relating to all Accounts are and shall be genuine and all such documents, instruments and agreements are and shall be legally enforceable in accordance with their terms. Seller has not, and shall not hereafter sell, assign, pledge, encumber, forgive (completely or partially), settle for less than payment in full, or transfer or dispose of any Account, or agree to do any of the foregoing.
9. Maintenance of Collateral. Seller has maintained and will hereafter maintain the Collateral and all of Seller’s assets useful or necessary in the conduct of Seller’s business in good working order and condition, at Seller’s sole cost and expense. Seller will not use the Collateral or any of Seller’s other properties, or any part thereof, in any unlawful business or for any unlawful purpose and will not secrete or abandon the Collateral, such properties, or any part thereof. Seller will immediately advise Purchaser in writing of any event causing loss or depreciation and of any material adverse change in the condition of the Collateral.
10. Compliance with Law and Environmental Laws—Registrations, Licensing, Operating Authority, and Permits. Seller has complied, and will hereafter comply, with all provisions of all foreign, federal, state and local law relating to Seller, including, but not limited to, those relating to Seller’s ownership of real or personal property, conduct and licensing of Seller’s business, and employment of Seller’s personnel. Seller holds, and will hereafter hold and maintain valid and current licensing, operating authority, operating permits, registrations, and safety permits, as required under federal law, including, but not limited to, the rules and regulations of the Federal Motor Carrier Safety Administration, state law, and local law, for the conduct of Seller’s business. Seller has been and is currently in compliance with all applicable Environmental Laws, including obtaining and maintaining in effect all permits, licenses or other authorizations required by applicable Environmental Laws. There are no claims, liabilities, investigations, litigation, administrative proceedings, whether pending or threatened, or judgments or orders relating to any hazardous materials asserted or threatened against Seller or relating to any real property currently or formerly owned, leased or operated by Seller.
11. Litigation. There is no claim, suit, litigation, proceeding or investigation pending or threatened by or against or affecting Seller in any court or before any regulatory commission, board or other governmental agency (or any basis therefore known to Seller) which might result, either separately or in the aggregate, in any adverse change in the business, prospects or condition of Seller, or in any impairment in the ability or right of Seller to carry on its business in substantially the same manner as it is now being conducted. Seller will immediately inform Purchaser in writing of any claim, proceeding, litigation or investigation hereafter threatened or instituted by or against Seller.
12. Complete Disclosure. There is no fact which Seller has not disclosed to Purchaser in writing which could materially adversely affect the properties, business or financial condition of Seller or any of the Collateral or which is necessary to disclose in order to keep the foregoing representations and warranties from being misleading.
13. No Violation of Federal or State Law. No Account or any contract related thereto in any manner violates any law, statute, regulation or ordinance of any governmental entity, or any agency thereof, applicable thereto.
14. Notification of Violations. Seller shall within five (5) business days notify Purchaser in writing of any violation of any law, statute, regulation or ordinance of any governmental entity, or any agency thereof, applicable to Seller which may materially affect the Collateral or Seller’s operations.
15. Continuing Effect. All representations, warranties and covenants of Seller contained in the Agreement and any other agreement with Purchaser shall be true and correct at the time of the effective date of each such agreement and shall be deemed continuing and shall remain true, correct and in full force and effect until payment and satisfaction in full of all of the Obligations, and Seller acknowledges that Purchaser is and will be expressly relying on all such representations, warranties and covenants in making advances to Seller.

Section 7 – Additional Covenants of Seller

1. Duties Regarding Accounts. Seller shall deliver to Purchaser schedules and assignments of all Accounts on Purchaser’s standard form; provided, however, that Seller’s failure to execute and deliver the same shall not affect or limit Purchaser’s security interest and other rights in and to all of Seller’s Accounts, nor shall Purchaser’s failure to purchase a specific Account affect or limit Purchaser’s security interest and other rights therein. Together with each such schedule and assignment, or later if requested by Purchaser, Seller shall furnish Purchaser with copies (or, at Purchaser’s request, originals) of all contracts, orders, invoices, bills of lading, receiving documents, shipping receipts, shipper contracts, rate confirmations, original shipping instructions, delivery receipts, other evidence of delivery, time records, and any other documents requested by Purchaser for any goods or services which gave rise to such Accounts, and Seller warrants the genuineness of all of the foregoing. Purchaser shall have the sole and exclusive right to collect the Purchased Accounts.
2. Insurance. Seller shall, at all times, and for such periods of time as Purchaser may require, at Seller’s expense, insure all of the insurable Collateral, and all of Seller’s books and records, by financially sound and reputable insurers acceptable to Purchaser, in the form of extended coverage policies against loss or damage by theft, embezzlement, fire, explosion, flood, sprinkler, or any other insurable event or risk that Purchaser may require, to the fullest extent of the insurable value thereof. Seller shall also, at all times, maintain insurance covering such risks and in such amounts as required by the Federal Motor Carrier Safety Administration, and all such insurance shall be in such form and written by financially sound and reputable insurers acceptable to Purchaser. At the request of Purchaser, all insurance policies, covering the insurable Collateral, shall name Purchaser as the exclusive loss payee, shall provide that proceeds payable thereunder shall be payable directly to Purchaser, and shall also provide that no act or default of Seller or any other person shall affect the right of Purchaser to recover thereunder. Upon receipt of the proceeds of any such insurance, Purchaser shall apply such proceeds in reduction of the Obligations, whether or not then due, in such order and manner as Purchaser shall determine, in its sole discretion. Seller shall provide Purchaser with the original or a certificate of each such policy of insurance which shall contain a provision requiring the insurer to give not less than twenty (20) calendar days advance written notice to Purchaser in the event of cancellation or termination of the policy for any reason whatsoever. If Seller fails to provide or pay for any such insurance, Purchaser is authorized (but not obligated) to procure the same at Seller’s expense. Seller agrees to deliver to Purchaser, promptly as rendered, true and correct copies of all reports, made to all insurance companies regarding the insurable Collateral.
3. Reports, Certificates. At its sole cost and expense, Seller shall report, in form satisfactory to Purchaser, such information as Purchaser may request regarding the Collateral; such reports shall be for such periods, shall reflect Seller’s records at such time and shall be rendered with such frequency as Purchaser may designate. At its sole cost and expense, Seller shall promptly provide Purchaser with all such other information concerning its affairs as Purchaser may request from time to time hereafter and shall immediately notify Purchaser of any adverse change in Seller’s financial condition and or any condition or event which constitutes a breach or an Event of Default under the Agreement. All reports furnished to Purchaser shall be complete, accurate and correct in all respects at the time furnished.
4. Access to Collateral, Books and Records. At all times, Purchaser, and any person designated by Purchaser, shall have free access to, and the right without hindrance or delay, to inspect, audit, examine and test the Collateral and any other property of Seller, wherever located, and to inspect, audit, check, copy and make extracts from Seller’s and Seller’s accountant’s books, records and accounts and all computer data containing the same, no matter where the records are stored. Seller hereby irrevocably authorizes and directs any person including, but not limited to, any of Seller’s directors, members, officers, employees, agents, accountants and attorneys having possession or control of any of the records to physically deliver them to Purchaser or any person designated by Purchaser upon Purchaser’s request or, at the option of Purchaser, make them available to Purchaser wherever the records may be located. Seller waives the benefit of any evidentiary privilege precluding or limiting the disclosure, divulgence or delivery of any of the records.
5. Prohibited Transactions; Notification of Changes. Seller shall not hereafter, without prior written notice to Purchaser and Purchaser’s prior written consent: make any change in Seller’s name, identity, corporate or capital structure; alter any of Seller’s business objectives, purposes, or operations or financial structure in such a manner as to adversely affect the ability of Seller to pay or perform any of the Obligations; or sell, lease, transfer, assign or otherwise dispose of any of the Collateral. Seller will promptly notify Purchaser in writing of any change of its officers, members, directors, partners, or key employees, a death of any partner or joint venturer (if Seller is a partnership or joint venture) and any adverse or material change in the business or financial affairs of Seller.
6. Litigation Cooperation. Should any suit or proceeding be instituted by or against Purchaser with respect to any Collateral or for the collection of enforcement of any Account, or in any manner relating to Seller, Seller shall, without expense to Purchaser, and wherever and whenever designated by Purchaser, make available Seller and its officers, employees, and agents, and Seller’s books, records, and accounts to the extent that Purchaser may deem necessary in order to prosecute or defend any such suit or proceeding.
7. Execute Additional Documentation. Seller agrees, at its sole cost and expense, on demand by Purchaser, to do all things and to execute all such security agreements, control agreements, assignments, affidavits, reports, notices, schedules of Accounts and all other documents, in form satisfactory to Purchaser, as Purchaser, in its sole and absolute discretion, may deem necessary or useful in order to perfect and maintain Purchaser’s perfected first-priority security interest in the Collateral and in order to fully consummate all of the transactions contemplated under the Agreement.

Section 8 – Event of Default and Remedies

1. Events of Default. The occurrence of any one of more of the following shall constitute an “Event of Default” hereunder: (a) Seller fails to pay or perform any Obligation as and when due; (b) there shall be commenced by or against Seller any voluntary or involuntary case under the United States Bankruptcy Code, or any assignment for the benefit of creditors, or appointment of a receiver or custodian for any of its assets, or Seller makes or sends notice of a bulk transfer; (c) Seller or any guarantor of the Obligations shall become insolvent. (d) any Lien is issued against or attaches to the Seller, Purchased Accounts, or the Collateral; (e) Seller shall breach any covenant, agreement, warranty, or representation set forth in the Agreement; (f) Seller delivers any document, financial statement, schedule or report to Purchaser which is false or incorrect in any material respect; (g) Purchaser, at any time, acting in good faith and in a commercially reasonable manner, deems itself insecure; (h) 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 Purchaser or any affiliate of Purchaser.
2. Remedies. Upon the occurrence of any Event of Default, and at any time thereafter, Purchaser, at its option, and without notice or demand of any kind (all of which are hereby expressly waived by Seller) may do any one or more of the following: (a) cease advancing money or extending credit to or for the benefit of Seller under the Agreement, and any other document or agreement; (b) accelerate and declare all or any part of the Obligations to be immediately due, payable, and performable, notwithstanding any deferred or installment payments allowed by any instrument evidencing or relating to any Obligation; (c) take possession of any or all of the Collateral wherever it may be found, and for that purpose Seller hereby authorizes Purchaser without judicial process to enter onto any of the Seller’s premises without hindrance to search for, take possession of, keep, store, or remove any of the Collateral and remain on such premises or cause a custodian to remain thereon in exclusive control thereof without charge for so long as Purchaser deems necessary in order to complete the enforcement of its rights under the Agreement or any other agreement; provided, however, that should Purchaser seek to take possession of any or all of the Collateral by Court process or through a receiver, Seller hereby irrevocable waives: (i) any bond and any surety or security relating thereto required by any statute, court rule or otherwise as an incident to such possession; (ii) any demand for possession prior to the commencement of any suit or action to recover possession thereof; and (iii) any requirement that Purchaser retain possession of and not dispose of any such Collateral until after trial or final judgment; (d) require Seller to assemble any or all of the Collateral and make it available to Purchaser at a place or places to be designated by Purchaser which is reasonably convenient to Purchaser and Seller, and to remove the Collateral to such locations as Purchaser may deem advisable; (e) place a receiver in exclusive control of Seller’s business and/or any or all of the Collateral, in order to assist Purchaser in enforcing its rights and remedies; or (g) demand payment of, and collect any Accounts, Instruments, Chattel Paper, Supporting Obligations and General Intangibles comprising part or all of the Collateral. Any and all attorneys’ fees, expenses, costs, liabilities and obligations incurred by Purchaser with respect to the foregoing shall be added to and become part of the Obligations and shall be due on demand.
3. Application of Proceeds from Disposition or Collection of Collateral; Liability of Seller for Deficiency. The proceeds received by Purchaser from the disposition of or collection of any of the Collateral shall be applied to such extent and in such manner as Purchaser shall determine in its sole discretion. If after application of the proceeds, any deficiency shall arise, under any of the Obligations, Seller shall remain liable to Purchaser, therefore. In the event that, as a result of the disposition of any of the Collateral, Purchaser directly or indirectly enters into a credit transaction with any third party, Purchaser shall have the option, exercisable at any time, in its sole discretion, of either reducing the Obligations by the principal amount of such credit transaction or deferring the reduction thereof until the actual receipt by Purchaser of cash therefore from such third party. This provision shall survive any termination, however arising, of the Agreement and any other present or future agreement.
4. Standards of Commercial Reasonableness. After an Event of Default, the Parties acknowledge that it shall be presumed commercially reasonable and Purchaser shall have no duty to undertake to collect any Account, including those in which Purchaser receives information from an Account Debtor that a Dispute exists. Furthermore, in the event Purchaser undertakes to collect or enforce an obligation of an Account Debtor or any other person obligated on the Collateral and ascertains that the possibility of collection is outweighed by the likely costs and expenses that will be incurred, Purchaser may at any such time cease any further collection efforts and such action shall be considered commercially reasonable. Before Seller may, under any circumstances, seek to hold Purchaser responsible for taking any uncommercially reasonable action, Seller shall first notify Purchaser in writing, of all of the reasons why Seller believes Purchaser has acted in any uncommercially reasonable manner and advise Purchaser of the action that Seller believes Purchaser should take.
5. Remedies Cumulative. In addition to the rights and remedies set forth in the Agreement, Purchaser shall have all the other rights and remedies accorded a secured party under the UCC and under any and all other applicable laws and in any other instrument or agreement now or hereafter entered into between Purchaser and Seller and all of such rights and remedies are cumulative and none is exclusive. Exercise or partial exercise by Purchaser of one or more of its rights or remedies shall not be deemed an election, nor bar Purchaser from subsequent exercise or partial exercise of any other rights or remedies. The failure or delay of Purchaser to exercise any rights or remedies shall not operate as a waiver thereof, but all rights and remedies shall continue in full force and effect until all of the Obligations have been fully paid and performed.

Section 9 – General Provisions

1. Notices. Any written notice to be given under the Agreement will be in writing and must be sent as follows: if to Seller: see Schedule A attached to the Agreement; if to Purchaser: XLerate Financial, LLC at 650 NE 32ND Street, Suite 5103, Miami, FL 31137 with a copy by email to contracts@xleratefinancial.com.
2. Payment in Full Checks. Seller authorizes Purchaser to accept, endorse and deposit on behalf of Seller any checks tendered by an Account Debtor “in full payment” of its obligation to Seller. Seller shall not assert against Purchaser any claim arising therefrom, irrespective of whether such action by Purchaser affects an accord and satisfaction of Seller’s claims, under Section 3-311 of the UCC.
3. No Lien Termination without Release. In recognition of the Purchaser’s right to have its attorneys’ fees and other expenses incurred in connection with the Agreement secured by Collateral, notwithstanding payment in full of all Obligations by Seller, Purchaser shall not be required to record any terminations or satisfactions of any of Purchaser’s liens on the Collateral unless and until Seller has executed and delivered to Purchaser a general release in a form suitable to Purchaser. Seller understands that this provision constitutes a waiver of its rights under Section 9-513 of the UCC.
4. Indemnity. Seller shall indemnify and hold Purchaser harmless from and against any and all claims, debts, losses, demands, actions, causes of action, lawsuits, damages, penalties, judgments, liabilities, costs and expenses (including, without limitation, attorneys’ fees), of any kind or nature which Purchaser may sustain or incur in connection with, or arising from, the Agreement, any other present or future agreement, or the breach by Seller of any representation, warranty, covenant or provision contained herein or therein, or any other transaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted or suffered by Purchaser relating in any way to Seller. Notwithstanding any other provision of the Agreement to the contrary, the indemnity agreement set forth in this Section shall survive termination of the Agreement. If Seller fails to honor this Section of the Agreement after termination thereof, Purchaser shall have the right to re-file its UCC-1 financing statement and shall have the right to pursue any and all rights and remedies against Seller as contemplated by the Agreement, the UCC or any law or in equity. Purchaser may, in its sole discretion, hold or supplement a Reserve to account for any avoidance claim.
5. Attorneys’ Fees and Costs. Seller shall forthwith pay to Purchaser the amount of all actual attorneys’ fees and all other costs incurred by Purchaser under and pursuant to the Agreement, or any other present or future agreement, or in connection with any transaction, or with respect to the Collateral or the defense or enforcement of Purchaser’s interests (whether or not Purchaser files a lawsuit against Seller), including any proceedings in Bankruptcy Court. In the event Purchaser files any lawsuit predicated on a breach of the Agreement or is any way related to the Agreement, the Purchaser shall be entitled to recover its costs and attorneys’ fees, including, but not limited to, attorneys’ fees and costs incurred. All attorneys’ fees and costs to which Purchaser may be entitled pursuant to this Section shall immediately become part of Seller’s Obligations and shall be due on demand.
6. Benefit of Agreement; Third Party Beneficiary; Prohibition Against Assignment. The provisions of the Agreement shall be binding upon and inure to the benefit of the respective successors, assigns, heirs, beneficiaries and representatives of the Parties and of XLerate Financial, LLC; provided, however, that Seller may not assign or transfer any of its rights under the Agreement (by operation of law or otherwise, including a merger or a transfer or issuance of a controlling interest of Seller’s equity securities) without the prior written consent of Purchaser, and any prohibited assignment shall be void. No consent by Purchaser to any assignment shall relieve Seller or any guarantor from its liability for the Obligations. Without limiting the generality of the foregoing, all rights and benefits of Purchaser under the Agreement may be exercised by any institution with which Purchaser maintains any rediscount, factoring or other relationship and by any other person or entity designated by Purchaser.
7. Section Headings, Construction. Section headings are used herein for convenience only. Seller acknowledges that the same may not describe completely the subject matter of the applicable Section, and the same shall not be used in any manner to construe, limit, define or interpret any term or provision hereof. The Agreement has been fully reviewed and negotiated between the Parties and no uncertainty or ambiguity in any term or provision of the Agreement shall be construed strictly against Purchaser or Seller under any rule of construction or otherwise.
8. Severability. Should any provision, clause or condition of the Agreement be held by any court of competent jurisdiction to be void, invalid, inoperative, or otherwise unenforceable, such defect shall not affect any other provision, clause or condition, and the remainder of the Agreement shall be effective as though such defective provision, clause or condition had not been a part hereof.
9. Integration. The Agreement, along with any Schedules referenced herein, and such other written agreements, documents and instruments as may be executed in connection herewith shall be construed together and constitute the entire, only and complete agreement between Seller and Purchaser, and all representations, warranties, agreements, and undertakings heretofore or contemporaneously made, which are not set forth herein or therein, are superseded hereby.
10. Amendment. The terms and provisions of the Agreement may not be waived, altered, modified or amended except in a writing executed by Seller and a duly authorized officer, employee, or agent of Purchaser.
11. Governing Law, Jurisdiction; Venue. The Agreement and all acts and transactions hereunder and thereunder and all rights and Obligations of Purchaser and Seller shall be governed, construed and interpreted in accordance with the internal laws of the State of Florida. Seller: (i) agrees that all actions or proceedings relating directly or indirectly hereto shall, at the option of Purchaser, be litigated in courts located within said state, and, that, at the option of Purchaser, the exclusive venue therefore shall be Miami-Dade County, State of Florida; (ii) consents to the jurisdiction and venue of any such court and consents to service of process in any such action or proceeding by personal delivery or any other method permitted by law; and (iii) waives any and all rights Seller may have to object to the jurisdiction of any such court, or to transfer or change the venue of any such action or proceeding.
12. Data Rights. Seller acknowledges and agrees that Purchaser may collect, transmit, store, use, disclose, commercialize, and otherwise process data gathered or derived from the Accounts, the Account Debtors, any software or technology platform(s) used by the Parties to facilitate the factoring of Accounts pursuant to the Agreement, or otherwise in connection with the business relationship between Purchaser, Seller, and the Account Debtors (collectively, the “Data”) for its business purposes and that Purchaser shall be the sole and exclusive owner of all such Data.