Exhibit 10.6

 

[ex10-6_001.jpg]

 

TVT Direct Funding LLC

65 W 36th St Fl 12 New York, NY 10018

 

AGREEMENT OF SALE OF FUTURE RECEIPTS

 

This AGREEMENT OF SALE OF FUTURE RECEIVABLES (this “Agreement”) dated as of
05/28/2020, is made by and between TVT Direct Funding LLC, a Delaware Limited
Liability Company as purchaser (“Purchaser”), and the merchant whose name,
address and other pertinent information is set forth below, as seller
(“Merchant”).

 

Merchant Information (see addendum)

 

Merchant Legal Name: 1847 ASIEN INC, and ASIEN’S APPLIANCE, INC.   DBA Name:
Entity Type: Corporation   FEIN: *****5125 State Of Incorporation: CA   Bank
Name: EXCHANGE BANK Address: 1801 PINER ROAD, SANTA ROSA, CA, 95403   Phone:
5623284553

 

Background

 

WHEREAS, Merchant is an entity engaged in the business that it currently
conducts and is willing to sell to Purchaser a certain portion of Merchant’s
future receivables (such portion, the “Sold Future Receipts”); and

 

WHEREAS, Purchaser is an entity engaged in the business of purchasing future
receivables and is willing to purchase from Merchant the Sold Future Receipts;
and

 

NOW, THEREFORE, for good and valuable consideration, the mutual receipt of which
and sufficiency is hereby acknowledged, the parties to this Agreement agree to
the foregoing and as follows.

 

Page 1

 

 

KEY BUSINESS TERMS AND DEFINITIONS:

 

Sold Amount of Future Receipts  $685,000.00   The dollar value of the Sold
Future Receipts that Merchant agrees to sell to Purchaser.           Purchase
Price  $500,000.00   The total amount that Purchaser agrees to pay for the Sold
Amount of Future Receipts.           Future Receipts  $1,251,286.09   All sums
due to Merchant by its customers/clients/vendees as payment for the Merchant’s
sale of goods and services in the ordinary course of Merchant’s entities from
and after the date when the Purchase Price is paid to Merchant irrespectively of
how such sums is paid over and delivered to Merchant (in the form of cash,
check, credit, credit card charge, debit card payment, ACH or any other form of
funds transfer or payment.)           Direct Payments to Third Parties/Renewals 
 N/A   Paid to Purchaser and/or Other Funders.           Total Amount Sent to
Merchant  $475,000.00   Net of Discount and Direct Payments to 3rd Parties:   
       Specified Percentage   20%  An agreed upon percentage of the Weekly
Future Receipts that Merchant shall deliver to Purchaser until the entire Sold
Amount of Future Receipts is delivered to Purchaser in accordance with this
Agreement.           Discount Factor   1.37   The risk adjustment to the Amount
Sold that determines the Futures Receivables Discount           Weekly Delivery 
$23,299.35   A dollar amount that Merchant and Purchaser agree to be a good
faith approximation of the Specified Percentage of Weekly Future Receipts as of
the date of this Agreement, based upon the information provided by Merchant to
Purchaser concerning Merchant’s most recent accounts receivables.          
Origination Fees  $25,000.00   The amount Purchaser will withhold from the
Purchase Price which represents the due diligence and costs of the Purchaser in
performing its analysis for this agreement.           Early Delivery Discount 
 1.2 @ 1 month(s)
1.22 @ 2 month(s)
1.24 @ 3 month(s)   Discount Paid to Merchant for delivering Future Receivables
Early           Estimated Term of this Agreement   7 Months   The estimated Term
of this Agreement is the period commencing on the date when the Purchase Price
is paid to Merchant (the “Commencement Date”) and expiring on the date when the
Sold Amount of Future Receipts is delivered to Purchaser in full.          
Business Day       Monday through Friday during the Term of this Agreement
except the days when the banking institutions in the state where the Merchant’s
business is located are closed for holidays and do not process ACH transfers.

 

Note: The bold type terms in the tables above and below shall constitute defined
terms with respect to this Agreement. PLEASE NOTE THAT THE PURCHASER WILL NOT
REMIT MORE THAN THE EXPECTED WEEKLY REMITTANCE PER DAY WITHOUT THE CONSENT OF
THE MERCHANT.

 

I.SALE OF FUTURE RECEIPTS; PAYMENT OF PURCHASE PRICE:

 

1.Sale of Future Receipts. Merchant hereby sells, assigns, transfers and conveys
(hereinafter, the “Sale”) unto Purchaser all of Merchant’s right, title and
interest in to the Specified Percentage of the Future Receipts until the Sold
Amount of Future Receipts is delivered by Merchant to Purchaser; to have and
hold the same unto Purchaser, its successors and assigns, until balance paid in
full. This Sale of the Sold Future Receipts is made without express or implied
warranty to Purchaser of collectability of the Sold Future Receipts by Purchaser
and without recourse against Merchant except as specifically set forth in this
Agreement. By virtue of this Agreement, Merchant transfers to Purchaser full and
complete ownership of the Sold Future Receipts and Merchant retains no legal or
equitable interest therein.

 

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2.Payment of Purchase Price.

 

a.In consideration of the transfer by Merchant to Purchaser of the Sold Future
Receipts, Purchaser agrees to pay to Merchant the Purchase Price; subject to the
immediately following subsection (b) and the satisfactory completion of
Purchaser’s due diligence (in its discretion), the Purchase Price shall be
turned over and delivered to Merchant immediately after the date of this
Agreement.

 

b.In the event as of the date when Purchaser shall deliver to Merchant the
Purchase Price, Merchant shall have owed to Purchaser a certain amount of debt
unrelated to his Agreement or certain sums pursuant to this Agreement including
without limitation any and all origination fees. (the sum of all such prior
obligations of Merchant to Purchaser, the “Prior Debt”) Merchant hereby grants
Purchaser the right to withhold from the Purchase Price to be delivered to
Merchant pursuant to subparagraph (a) above, the amount of the Prior Debt in
full satisfaction thereof. Furthermore, Merchant agrees that delivery to the
Merchant of the Purchase Price reduced by the amount of the Prior Debt shall not
be deemed to be Purchaser’s breach of its obligations under this Agreement and
such reduction shall not in any way or form shall modify or reduce Merchant’s
obligations under this Agreement.

 

c.In the event the amount of the Purchase Price is reduced by the amount of
Prior Debt, any and all references in this Agreement to the Purchase Price shall
mean “the Purchase Price as reduced by the Prior Debt, if any.”

 

II.DELIVERY OF SOLD AMOUNT OF FUTURE RECEIPTS:

 

3.Weekly Deliveries. The Sold Amount of Future Receipts shall be delivered to
Purchaser in equal amounts of Weekly Delivery. The Weekly Deliveries shall be
made once each week on the same Business Day starting on the Commencement Date,
which is the date in which the Purchaser sets forth that Weekly Deliveries are
scheduled to begin. It should be noted that the Commencement Date shall be
established by the Purchaser and shall be with no later than 15 days following
the date in which the Purchase Price (less the Origination Fees) are sent to the
Merchant. The amount of the Weekly Delivery is subject to Merchant’s right for
adjustment and/or reconciliation set forth in this Agreement. The last Weekly
Delivery shall be made when the Sold Amount of Future Receipts and other amounts
due to Purchaser under this Agreement (if any) are delivered to Purchaser in
full.

 

4.Method of Delivery of Sold Amount of Future Receipts. Purchaser shall have the
right, at its sole and absolute discretion, to choose among the following three
methods of delivery of the Weekly Delivery to Purchaser:

 

a.Directly from the Merchant’s Approved Bank Account (as such term is defined
below) by weekly debiting the amount of Weekly Delivery via ACH debit (“Direct
Debit”); or

 

b.From the Merchant’s Approved Credit Card Processor (as such term is defined
below) by instructing such Approved Credit Card Processor to remit weekly the
amount of Weekly Delivery to Purchaser (“Credit Card Split”); or

 

c.From a special bank account established jointly by Purchaser and Merchant
whereby all Future Receipts shall be deposited into such bank account during the
term of this Agreement in accordance with a lockbox arrangement among Merchant,
Purchaser and a banking institution chosen by Purchaser and Purchaser weekly
debiting the amount of Weekly Delivery from such bank account (the “Lockbox
Arrangement”).

 

At any time during the term of this Agreement, Purchaser may change the method
by which it will accept the Weekly Delivery by providing Merchant with written
instructions of a new method of delivery of Weekly Delivery to Purchaser.

 

5.Approved Bank Account and Credit Card Processor. During the term of this
Agreement, Merchant shall: (i) deposit all Future Receipts into one (and only
one) bank account which bank account shall be preapproved by Purchaser (the
“Approved Bank Account”), (ii) use one (and only one) credit card processor
which processor shall be preapproved by Purchaser (the “Approved Credit Card
Processor”) and (iii) deposit all credit card receipts into the Approved Bank
Account. In the event the Approved Bank Account or Approved Credit Card
Processor shall become unavailable or shall cease providing services to Merchant
during the term of this Agreement, prior to the first date of such
unavailability or cessation of services, Merchant shall arrange for another
Approved Bank Account or Approved Credit Card Processor, as the case may be.

 

Account Number:     Routing Number:  

 

6.Authorization of Direct Debit, Credit Card Split and Lockbox Arrangement.

 

a.Merchant hereby authorizes Purchaser to initiate Direct Debit by way of
electronic checks or ACH debits from the Approved Bank Account in the amount of
Weekly Delivery each Business Day until Purchaser receive the full Sold Amount
of Future Receipts; Merchant shall provide Purchaser with all access code(s) for
the Approved Bank Account.

 

b.Merchant hereby authorizes Purchaser to initiate Credit Card Split by making
the necessary arrangement with the Approved Credit Card Processor for remittance
of the Weekly Delivery each Business Day until the Purchaser receives the full
Sold Amount of Future Receipts; Merchant shall provide Purchaser with all access
code(s) for the Approved Credit Card Processor.

 

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c.Merchant hereby authorizes Purchaser to initiate a Lockbox Arrangement and to
instruct Merchant’s Approved Credit Card Processor and Merchant’s invoiced
customers/clients/vendees to deposit all sums due to Merchant from each of those
parties directly to the special bank account established in accordance with the
Lockbox Arrangement; If required, Merchant shall enter into a lockbox agreement
with Purchaser and the banking institution chosen by Purchaser for the purpose
of establishing such bank account.

 

7.Third Party Appointment and Authorization. By signing below, Merchant
acknowledges that the Purchaser may, at any time, at Purchaser’s sole
discretion, and without prior notice, appoint a third party, including but not
limited to its wholly owned subsidiaries, including, without limitation, Kinetic
Direct Funding, LLC. (herein referred to as the “Servicing Agent”) to perform
any, or all, of the actions authorized by the ACH Authorization and the
Agreement. Merchant further agrees and acknowledges that Servicing Agent shall
have all of the same rights, responsibilities, and authorizations granted to
Purchaser by the ACH Authorization and the Agreement. For purposes of clarity,
any Servicing Agent may perform any and all activities to service the Agreement,
including the collection of Funds Arising from Future Receipts (as set forth
above), as if it was the Purchaser.

 

8.Fees Associated with Debiting Approved Bank Account. It shall be Merchant’s
exclusive responsibility to pay to its banking institution and/or Purchaser’s
banking institution directly (or to compensate Purchaser, in case it is charged)
all fees, charges and expenses incurred by either Merchant or Purchaser due to
rejected electronic checks or ACH debit attempts, overdrafts or rejections by
Merchant’s banking institution of the transactions contemplated by this
Agreement.

 

9.Read Only Access to the Approved Bank and Credit Card Accounts. Merchant
hereby agrees that during the term of this Agreement Purchaser shall have the
right to perform ongoing read only electronic monitoring of transactions
occurring in the Approved Bank Account and Merchant’s account with the Approved
Credit Card Processor (the “Approved Credit Card Account”). Merchant agrees to
provide Purchaser all required online access codes for the Approved Bank Account
and the Approved Credit Card Account. If Purchaser’s electronic (online) access
to Merchant’s Approved Bank Account or the Approved Credit Card Account is
disabled for any reason, Merchant shall immediately and diligently undertake all
steps required from it to restore Purchaser’s access to both Approved Bank
Account and Approved Credit Card Account. Merchant’s failure to comply with the
provisions of this Section 8 shall constitute Merchant’s material breach of its
obligations under this Agreement.

 

III.MERCHANT’S RIGHT FOR RECONCILIATION AND ADJUSTMENT:

 

10.Merchant’s Right for Reconciliation of Weekly Deliveries.

 

a.If any time during the term of this Agreement Merchant will experience
sporadic increase or decrease in its weekly receipts, Merchant shall have the
right, at its sole and absolute discretion, but subject to the provisions of
Section 10 below, to request retroactive reconciliation of the Merchant’s actual
weekly receipts for one full calendar month immediately preceding the day when
such request for reconciliation is received by Purchaser (each such calendar
month, a “Reconciliation Month”).

 

b.Such reconciliation (the “Reconciliation”) of Merchant’s weekly receipts for a
Reconciliation Month shall be performed by Purchaser within five (5) Business
Days following its receipt of the Merchant’s request for reconciliation by
either crediting or debiting the difference back to or from the Approved Bank
Account so that the total amount debited by Purchaser from the Approved Bank
Account during the Reconciliation Month at issue equal the Specific Percentage
of the Future Receipts that Merchant collected during the Reconciliation Month
at issue.

 

c.The parties acknowledge and agree that one or more Reconciliation procedures
performed by Purchaser may reduce the actual Weekly Delivery amount during the
Reconciliation Month in comparison to the one set forth in preamble of this
Agreement, and, as the result of such reduction, the term of this Agreement
during which Purchaser will be debiting the Approved Bank Account may extend
substantially.

 

11.Request for Reconciliation Procedure.

 

a.It shall be Merchant’s sole responsibility and the right hereunder to initiate
Reconciliation of Merchant’s actual receipts during any Reconciliation Month by
sending a request for reconciliation to Purchaser.

 

b.Any such request for Reconciliation of the Merchant’s weekly receipts for a
specific Reconciliation Month shall be in writing, shall include a copy of
Merchant’s bank statement and a credit card processing statement for the
Reconciliation Month at issue, and shall be received by Purchaser via email
customer.service@tvtdirectfunding.com within five (5) Business Days after the
last day of the Reconciliation Month at issue (time being of the essence as to
the last day of the period during which such demand for reconciliation shall be
received by Purchaser).

 

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c.Purchaser’s receipt of Merchant’s request for Reconciliation after the
expiration of the Five-Business-Day period following the last day of the
Reconciliation Month for which such reconciliation is requested nullifies and
makes obsolete Merchant’s request for Reconciliation for that specific
Reconciliation Month.

 

d.Merchant shall have the right to request Reconciliation as many times during
the term of this Agreement as it deems proper, and Purchaser shall comply with
such request, provided that:

 

i.Each such request is made in accordance with the terms of this Section 10.

 

ii.If a request for Reconciliation is made after the expiration of the term of
this Agreement and, as the result of such Reconciliation, the total amount
actually debited by Purchaser from the Approved Bank Account will become less
than the Sold Amount of Future Receipts, then and in such event the term of this
Agreement shall automatically be extended until the time when the total amount
actually debited from Approved Bank Account pursuant to this Agreement shall
become equal to the Sold Amount of Future Receipts.

 

iii.In the event after the last day of the term of this Agreement Merchant will
determine in good faith that the actual amount debited by Purchaser from the
Approved Bank Account pursuant to this Agreement is greater than the Sold Amount
of Future Receipts, then and in such event Merchant shall have the right to
request final Reconciliation within five (5) Business Days following the
expiration date of the term of this Agreement (time being of the essence) and
Purchaser shall honor such request within five (5) Business Days following the
day of its receipt of such request. It shall be noted that if Purchaser receives
funds that it is not entitled to, then the Purchaser shall be required to return
those funds to the Merchant without request by the Merchant for reconciliation
as set forth above.

 

e.Nothing set forth in Sections 9 or 10 of this Agreement shall be deemed to
provide Merchant with the right to interfere with Purchaser’s right and ability
to debit the Approved Bank Account while the request for Reconciliation of
Merchant’s receipts is pending or until the Sold Amount of Future Receipts is
delivered to Purchaser in full.

 

12.Adjustment of Weekly Delivery.

 

a.If any time during the term of this Agreement Merchant will experience steady
increase or decrease in its weekly receipts, Merchant shall have the right, at
its sole and absolute discretion, but subject to the provisions of Section 12
below, to request modification (“Adjustment”) of the amount of the Weekly
Delivery that Merchant is obligated to deliver weekly to Purchaser in accordance
with the provisions of Section 3 above. Such Adjustment shall become effective
as of the date it is granted and the new adjusted amount of the Weekly Delivery
(the “Adjusted Weekly Delivery”) shall replace and supersede the amount of the
Weekly Delivery set forth in the preamble of this Agreement.

 

b.The Adjustment of the Weekly Delivery shall be performed by Purchaser within
five (5) Business Days following its receipt of the Merchant’s request for
Adjustment by modifying weekly amounts that shall be debited from the Approved
Bank Account until the Sold Amount of Future Receipts is delivered in full.
Notwithstanding anything to the contrary set forth in Sections 11 and 12 hereof,
no Adjustment shall take place until and unless Reconciliation for at least one
(1) Reconciliation Month takes place resulting in reduction of the total amount
debited from Merchant’s Approved Bank Account during the Reconciliation Month by
at least 20% in comparison to the amount that would have been debited during
that month without Reconciliation.

 

c.The parties acknowledge and agree that one or more Adjustments performed
pursuant to this Agreement may substantially extend the term of this Agreement
and the period during which Purchaser will be debiting the Approved Bank
Account.

 

d.In the event of a missed remittance of the Weekly Delivery Amount, the
Merchant acknowledges Purchaser’s right to receive daily remittances equivalent
to 20% of the Weekly Delivery Amount.

 

13.Request for Adjustment Procedure.

 

a.It shall be Merchant’s sole responsibility and the right to initiate the
Adjustment by sending a request for Adjustment to Purchaser.

 

b.A request for Adjustment (an “Adjustment Request”) shall be in writing, shall
include copies of: (i) Merchant’s three (3) consecutive bank statements of the
Approved Bank Account and credit card processing statements immediately
preceding the date of Purchaser’s receipt of the Adjustment Request, and (ii)
Merchant’s bank statements and credit card processing statements previously
provided by Merchant to Purchaser based upon which statements the amount of
Weekly Delivery set forth in preamble to this Agreement (or the then current
Adjusted Weekly Delivery, as the case may be) was determined, and shall be
received by Purchaser by email at customer.service@tvtdirectfunding.com within
five (5) Business Days after the date that is the later of the last day of the
latest bank statement enclosed with the Adjustment Request and the last date of
the latest card processing statement enclosed with the Adjustment Request (time
being of the essence as to the last day of the period during which an Adjustment
Request shall be received by Purchaser).

 

c.Purchaser’s receipt of a Merchant’s Adjustment Request after the expiration of
the above referenced Five-Business-Day period nullifies and makes obsolete such
Adjustment Request.

 

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d.Merchant shall have the right to request Adjustment of the Weekly Delivery (or
Adjusted Weekly Delivery, as the case may be) as many times during the term of
this Agreement as it seems proper, and Purchaser shall comply with such request,
provided that:

 

i.Each such request for Adjustment is made in accordance with the terms of this
Section 12.

 

ii.A request for Adjustment shall not be made after the expiration of the term
of this Agreement.

 

e.Nothing set forth in Sections 11 or 12 of this Agreement shall be deemed to
provide Merchant with the right to interfere with Purchaser’s right and ability
to debit the Approved Bank Account while the request for Adjustment is pending
or until the Sold Amount of Future Receipts is delivered to Purchaser in full.

 

IV.RISK SHARING ACKNOWLEDGMENTS AND AGREEMENTS:

 

14.Both Merchant and Purchaser Acknowledge and Agree that:

 

a.The Sold Amount of Future Receipts represents a portion of Merchant’s Future
Receipts.

 

b.This Agreement consummates the sale of the Sold Amount of Future Receipts at a
discount, not borrowing funds by Merchant from Purchaser. Purchaser does not
charge Merchant and will not collect from Merchant any interest on the monies
spent on the purchase of the Sold Amount of Future Receipts. The period of time
that it will take Purchaser to collect the Sold Amount of Future Receipts is not
fixed, is unknown to both parties as of the date of this Agreement and will
depend on how well or not well Merchant’s business will be performing following
the date hereof. As an extreme example, in the event Merchant’s business ceases
to exist after Purchaser’s payment of the Purchase Price and purchase of the
Sold Amount of Future Receipts for reason outside Merchant’s control, Purchaser
may never recover any moneys spent on such purchase without recourse.

 

c.The amount of the Weekly Delivery set forth in preamble to this Agreement is
calculated based upon the information concerning an average amount of weekly
receipts collected by Merchant’s business immediately prior to the date of this
Agreement which information was provided by Merchant to Purchaser.

 

d.The amounts of Merchant’s future weekly receipts may increase or decrease over
time.

 

e.If, based upon the Reconciliation and/or the Adjustment procedures described
above, it will be determined that the actual weekly amounts of the Specified
Percentage of the Future Receipts get reduced in comparison to the amount of the
Weekly Delivery as of the date of this Agreement set forth in the preamble of
this Agreement, and in comparison to the amount that both Merchant and Purchaser
may have anticipated or projected because Merchant’s business has slowed down,
or if the full Sold Amount of Future Receipts is not remitted because Merchant’s
business went bankrupt or otherwise ceased operations in the ordinary course of
business(but not due to Merchant’s willful mishandling of its business), and
Merchant shall have not breached this Agreement, Merchant would not owe anything
to Purchaser and would not be in breach of or in default under this Agreement.

 

15.Purchaser’s Risk Acknowledgments. Purchaser agrees to purchase the Sold
Amount of Future Receipts knowing the risks that Merchant’s business may slow
down or fail, and Purchaser hereby assumes these risks based exclusively upon
the information provided to it by Merchant and related to the business
operations of Merchant’ business prior to the date hereof and upon Merchant’s
representations, warranties and covenants contained in this Agreement that are
designed to give Purchaser a reasonable and fair opportunity to receive the
benefit of its bargain. Furthermore, Purchaser hereby acknowledges and agrees
that Merchant shall be excused from performing its obligations under this
Agreement in the event Merchant’s business ceases its operations exclusively due
to the following reasons (collectively, the “Valid Excuses”):

 

i.Adverse business conditions that occurred for reasons outside Merchant’s
control and not due to Merchant’s willful or negligent mishandling of its
business;

 

ii.Loss of the premises where Merchant’s business operates (but not due to
Merchant’s violation of its obligations to its landlord);

 

iii.Bankruptcy of Merchant;

 

iv.Natural disasters or similar occurrences beyond Merchant’s control.

 

16.Not a Loan. Merchant and Purchaser agree that the Purchase Price is paid to
Merchant in consideration for the ownership of the Sold Amount of Future
Receipts and that payment of the Purchase Price by Purchaser is not intended to
be, nor shall it be construed as, a loan from Purchaser to Merchant that
requires absolute and unconditional repayment on a maturity date. To the
contrary, Purchaser’s ability to receive the Sold Amount of Future Receipts
pursuant to this Agreement, and the date when the Sold Amount of Future Receipts
is delivered to Purchaser in full (if ever) are subject to and conditioned upon
performance of Merchant’s business.

 

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V.MERCHANT’S OBLIGATIONS, REPRESENTATIONS, WARRANTIES AND COVENANTS:

 

17.Merchant represents, warrants and covenants that the following statements are
valid, true and correct as of the date of this Agreement and unless expressly
stated otherwise shall remain valid, true and correct during the term of this
Agreement:

 

a.Use of Purchase Price. Merchant hereby acknowledges that it fully understands
that: (i) Purchaser’s ability to receive the Sold Amount of Future Receipts is
contingent upon Merchant’s continued operation of its business and successful
generation of the Future Receipts until the Sold Amount of Future Receipts is
delivered to Purchaser in full; (ii) that in the event of decreased efficiency
or total failure of Merchant’s business Purchaser’s receipt of the full or any
portion of the Sold Amount of Future Receipts may be delayed indefinitely. Based
upon the forgoing, Merchant agrees to use the Purchase Price exclusively for the
benefit and advancement of Merchant’s business operations and for no other
purpose.

 

b.Merchant Shall Not. During the term of this Agreement, without first obtaining
Purchaser’s consent, which consent may not be unreasonably withheld, Merchant
shall not:

 

i.Change or close the Approved Bank Account or change or terminate the Approved
Processor.

 

ii.Open and deposit Future Receipts into a bank account different from the
Approved Bank Account.

 

iii.Add a credit card processor in addition to the Approved Processor.

 

iv.Sell Merchant’s business (as an entity or its assets) to a third party.

 

v.Disconnect Purchaser’s bank monitoring software.

 

vi.Sell Future Receipts to a third party. Notwithstanding the foregoing, the
Purchaser is under no obligation to consent to selling receipts to a third party
(particularly from a merchant advance company) pursuant to an agreement which
has a term of less than 12 months and withholding such consent shall in no event
be deemed unreasonably withheld.

 

vii.Breach, or deviate from strict performance of, any and all other obligations
of Merchant under this Agreement.

 

c.Financial Condition and Financial Information. Merchant’s bank and financial
statements, copies of which have been furnished to Purchaser, and future
statements which may be furnished hereafter pursuant to this Agreement or upon
Purchaser’s request, fairly represent the financial condition of Merchant as of
the dates such statements are issued, and prior to execution of the Agreement
there have been no material adverse changes, financial or otherwise, in such
condition, operation or ownership of Merchant. Merchant has a continuing,
affirmative obligation to advise Purchaser of any material adverse change in its
financial condition, operation or ownership. Purchaser may request statements at
any time during the term of this Agreement and Merchant shall provide them to
Purchaser within Five (5) Business Days. Merchant’s failure to do so is a
material breach of this Agreement.

 

d.Governmental Approvals. Merchant is in compliance and, during the term of this
Agreement, shall be in compliance with all laws and has valid permits,
authorizations and licenses to own, operate and lease its properties and to
conduct the business in which it is presently engaged.

 

e.Good Standing. Merchant is a corporation/limited liability company/limited
partnership/other type of entity that is in good standing and duly incorporated
or otherwise organized and validly existing under the laws of its jurisdiction
of incorporation or organization and has full power and authority necessary to
carry its business as it is now being conducted.

 

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f.Authorization. Merchant has all requisite power to execute, deliver and
perform this Agreement and consummate the transactions contemplated hereunder;
entering into this Agreement will not result in breach or violation of, or
default under, any agreement or instrument by which Merchant is bound or any
statute, rule, regulation, order or other law to which Merchant is subject, nor
require the obtaining of any consent, approval, permit or license from any
governmental authority having jurisdiction over Merchant. All organizational and
other proceedings required to be taken by Merchant to authorize the execution,
delivery and performance of this Agreement have been taken. The person signing
this Agreement on behalf of Merchant has full power and authority to bind
Merchant to perform its obligations under this Agreement.

 

g.Accounting Records and Tax Returns. Merchant will treat receipt of the
Purchase Price and delivery of the Sold Future Receipts in a manner evidencing
sale of its future receipts in its accounting records and tax returns and
further agrees that Purchaser is entitled to audit Merchant’s accounting records
upon reasonable Notice in order to verify compliance. Merchant hereby waives any
rights of privacy, confidentiality or taxpayer privilege in any litigation or
arbitration arising out of this Agreement in which Merchant asserts that this
transaction is anything other than a sale of future receipts.

 

h.Taxes; Workers Compensation Insurance. Merchant will promptly pay, when due,
all taxes, including without limitation, income, employment, sales and use
taxes, imposed upon Merchant’s business by law, and will maintain workers
compensation insurance required by applicable governmental authorities.

 

i.Business Insurance. Merchant will maintain general liability and
business-interruption insurance naming Purchaser as loss payee and additional
insured in the amounts and against risks as are satisfactory to Purchaser and
shall provide Purchaser proof of such insurance upon request.

 

j.Electronic Check Processing Agreement. Merchant shall not change its
processor, add terminals, change its financial institution or bank account(s) or
take any other action that could have any adverse effect upon Merchant’s
obligations or impede Purchaser’s rights under this Agreement, without
Purchaser’s prior written consent, which consent may not be unreasonably
withheld.

 

k.No Diversion of Future Receipts. Merchant shall not allow any event to occur
that would cause a diversion of any portion of Merchant’s Future Receipts from
the Approved Bank Account without first obtaining Purchaser’s approval of such
diversion.

 

l.Change of Name or Location. Merchant shall not conduct Merchant’s businesses
under any name other than as disclosed to the Processor and Purchaser and will
not change any of its places of business without first obtaining Purchaser’s
written consent, which consent may not be unreasonably withheld. Notwithstanding
the foregoing, the Purchaser is under no obligation to consent to working
capital funding (particularly from a merchant advance company) which has a term
of less than 12 months and withholding such consent shall in no event be deemed
unreasonably withheld.

 

m.Prohibited Business Transactions: Merchant shall not: (i) transfer or sell all
or substantially all of its assets without first obtaining Purchaser’s consent
unless Merchant’s obligations hereunder are repaid in full concurrently with the
closing of such transaction; or (ii) make or send notice of its intended bulk
sale or transfer.

 

n.No Closing of Business. Merchant will not sell, dispose, transfer or otherwise
convey all or substantially all of its business or assets without first: (i)
obtaining the express written consent of Purchaser, unless Merchant’s
obligations hereunder are repaid in full concurrently with the closing of such
transaction, and (ii) providing Purchaser with a written agreement of a
purchaser or transferee of Merchant’s business or assets assuming all of
Merchant’s obligations under this Agreement pursuant to documentation
satisfactory to Purchaser. Merchant represents that it has no current plans to
close its business either temporarily (for renovations, repairs or any other
purpose), or permanently. Merchant agrees that until Purchaser shall have
received all of the Sold Amount of Future Receipts, Merchant will not
voluntarily close its business on a permanent or temporarily basis for
renovations, repairs, or any other purposes. Notwithstanding the foregoing,
Merchant shall have the right to close its business temporarily if such closing
is necessitated by a requirement to conduct renovations or repairs imposed upon
Merchant’s business by legal authorities having jurisdiction over Merchant’s
business (such as from a health department or fire department) or if such
closing is necessitated by circumstances outside Merchant’s reasonable control.
Prior to any such temporary closure of its business, Merchant shall provide
Purchaser ten (10) Business Days advance notice.

 

o.No Pending Bankruptcy. As of the date of Merchant’s execution of this
Agreement, Merchant is not insolvent, has not filed, and does not contemplate
filing, any petition for bankruptcy protection under Title 11 of the United
States Code and there has been no involuntary bankruptcy petition brought or
pending against Merchant. Merchant represents that it has not consulted with a
bankruptcy attorney on the issue of filing bankruptcy within six months
immediately preceding the date of this Agreement.

 

p.Estoppel Certificate. Merchant will at any time, and from time to time, upon
at least one (1) day’s prior notice from Purchaser to Merchant, execute,
acknowledge and deliver to Purchaser and/or to any other person or entity
specified by Purchaser in its notice, a statement certifying that this Agreement
is unmodified and in full force and effect (or, if there have been
modifications, that the same is in full force and effect as modified and stating
the modification(s) and stating the date(s) on which the Sold Amount of Future
Receipts or any portion thereof has been delivered.

 

q.Working Capital Funding. Merchant shall not further encumber the Future
Receipts, without first obtaining written consent of Purchaser, which consent
may not be unreasonably withheld.

 

Page 8

 

 

r.Unencumbered Future Receipts. Merchant has and will continue to have good,
complete and marketable title to all Future Receipts, free and clear of any and
all liabilities, liens, claims, changes, restrictions, conditions, options,
rights, mortgages, security interests, equities, pledges and encumbrances of any
kind or nature whatsoever or any other rights or interests other than by virtue
or entering into this Agreement, except for the first priority senior lien and
security interest on the Collateral granted to Crossroads Financial Group, LLC,
pursuant to the Loan and Security Agreement, dated on or about May 28, 2020 (the
“Senior Security Interest”).

 

s.Business Purpose. Merchant is entering into this Agreement solely for business
purposes and not as a consumer for personal, family or household purposes.

 

t.No Default Under Contracts with Third Parties. Merchant’s execution of and/or
performance of its obligations under this Agreement will not cause or create an
event of default by Merchant under any contract, which Merchant is or may become
a party to.

 

u.Right of Access. In order to ensure Merchant’s compliance with the terms of
this Agreement, Merchant hereby grants Purchaser the right to enter, without
notice, the premises of Merchant’s business for the purpose of inspecting and
checking Seller’s transaction processing terminals to ensure the terminals are
properly programmed to submit and or batch Merchant’s weekly receipts to the
Processor and to ensure that Merchant has not violated any other provision of
this Agreement. Furthermore, Merchant hereby grants Purchaser and its employees
and consultant’s access to Merchant’s employees and records and all other items
of property located at the Merchant’s place of business during the term of this
Agreement. Merchant hereby agrees to provide Purchaser, upon request, all and
any information concerning Merchant’s business operations, banking
relationships, names and contact information of Merchant’s suppliers, vendors
and landlord(s), to allow Purchaser to interview any of those parties.

 

v.Phone Recordings and Contact. Merchant agrees that any call between Merchant
and Purchaser and its owners, managers, employees and agents may be recorded
and/or monitored. Furthermore, Merchant acknowledges and agrees that: (i) it has
an established business relationship with Purchaser, its managers, employees and
agents (collectively, the “Purchaser Parties”) and that Merchant may be
contacted by any of the Purchaser Parties from time-to-time regarding Merchant’s
performance of its obligations under this Agreement or regarding other business
transactions; (ii) it will not claim that such communications and contacts are
unsolicited or inconvenient; and (iii) that any such contact may be made by any
of the Purchaser Parties in person or at any phone number (including mobile
phone number), email addresses, or facsimile number belonging to Merchant’s
office, or its owners, managers, officers, or employees.

 

w.Knowledge and Experience of Decision Makers. The persons authorized to make
management and financial decisions on behalf Merchant with respect to this
Agreement have such knowledge, experience and skill in financial and business
matters in general and with respect to transactions of a nature similar to the
one contemplated by this Agreement so as to be capable of evaluating the merits
and risks of, and making an informed business decision with regard to, Merchant
entering into this Agreement.

 

x.Merchant’s Due Diligence. The person authorized to sign this Agreement on
behalf of Merchant: (i) has received all information that such person deemed
necessary to make an informed decision with respect to a transaction
contemplated by this Agreement; and (ii) has had unrestricted opportunity to
make such investigation as such person desired pertaining to the transaction
contemplated by this Agreement and verify any such information furnished to him
or her by Purchaser.

 

y.Arm-Length Transaction. The person signing this Agreement of behalf of
Merchant: (a) has read and fully understands content of this Agreement; (b) has
consulted to the extent he/she wished with Merchant’s own counsel in connection
with the entering into this Agreement; (c) he or she has made sufficient
investigation and inquiry to determine whether this Agreement is fair and
reasonable to Merchant, and whether this Agreement adequately reflects his or
her understanding of its terms.

 

z.No Reliance on Oral Representations. This Agreement contains the entire
agreement between Merchant and Purchaser with respect to the subject matter of
this Agreement and supersedes each course of conduct previously pursued or
acquiesced in, and each oral agreement and representation previously made, by
Purchaser or any of the Purchaser Parties with respect thereto (if any), whether
or not relied or acted upon. No course of performance or other conduct
subsequently pursued or acquiesced in, and no oral agreement or representation
subsequently made, by the Purchaser Parties, whether or not relied or acted
upon, and no usage of trade, whether or not relied or acted upon, shall amend
this Agreement or impair or otherwise affect Merchant’s obligations pursuant to
this Agreement or any rights and remedies of the parties to this Agreement.

 

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VI.PLEDGE OF SECURITY:

 

18.Acknowledgment of Subordinated Security Interest and Security Agreement. The
Future Receipts sold by Merchant to Purchaser pursuant to this Agreement are
“accounts” or “payment intangibles” as those terms are defined in the Uniform
Commercial Code as in effect in the state in which the Merchant is located (the
“UCC”) and such sale shall constitute and shall be construed and treated for all
purposes as a true and complete sale, conveying good title to the Future
Receipts free and clear of any liens and encumbrances, from Merchant to
Purchaser. To the extent the Future Receipts are “accounts” or “payment
intangibles” then (i) the sale of the Future Receipts creates a security
interest as defined in the UCC; (ii) this Agreement constitutes a “security
agreement” under the UCC; and (iii) Purchaser has all the rights of a secured
party under the UCC with respect to such Future Receipts. Merchant further
agrees that, with or without an Event of Default, Purchaser may notify account
debtors, or other persons obligated on the Future Receipts, on holding the
Future Receipts of Merchant’s sale of the Future Receipts and may instruct them
to make payment or otherwise render performance to or for the benefit of
Purchaser. Notwithstanding the foregoing, the parties hereto agree that any such
security interest conferred hereunder shall be a second priority subordinated
lien and security interest on the Collateral, subordinated to the Senior
Security Interest, pursuant to that certain Collateral Subordination Agreement,
dated on or about May 28, 2020, among Merchant, Purchase and Crossroads
Financial Group, LLC.

 

19.Financing Statements. Merchant authorizes Purchaser to file one or more UCC-1
forms consistent with the UCC to give notice that the Sold Amount of Future
Receipts is the sole property of Purchaser. The UCC filing may state that such
sale is intended to be a sale and not an assignment for security and may state
that Merchant is prohibited from obtaining any financing that impairs the value
of the Sold Amount of Future Receipts or Purchaser’s right to collect same.
Merchant authorizes Purchaser to debit the Approved Bank Account for all costs
incurred by Purchaser associated with the filing, amendment or termination of
any UCC filings.

 

20.Security. As security for the prompt and complete performance of any and all
liabilities, obligations, covenants or agreements of Merchant under this
Agreement, now or hereafter arising from, out of or relating to this Agreement,
whether direct, indirect, contingent or otherwise (hereinafter referred to
collectively as the “Merchant Obligations”), Merchant hereby pledges, assigns
and hypothecates to Purchaser and grants to Purchaser a continuing, perfected
and second priority subordinated lien upon and security interest (the
“Subordinated Security Interest”) in, to and under all of Merchant’s right,
title and interest in and to the following (collectively, the “Collateral”),
whether now existing or hereafter from time to time acquired:

 

a.all accounts, including without limitation, all deposit accounts,
accounts-receivable, and other receivables, chattel paper, documents, equipment,
general intangibles, instruments, and inventory, as those terms are defined by
Article 9 of the Uniform Commercial Code (the “UCC”), now or hereafter owned or
acquired by Merchant; and

 

b.all Merchant’s proceeds, as that term is defined by Article 9 of the UCC.

 

21.Termination of Pledge. Upon the performance by Merchant in full of the
Merchant Obligations, the Subordinated Security Interest in the Collateral
pursuant to this Pledge shall automatically terminate without any further act of
either party being required, and all rights to the Collateral shall revert to
Merchant. Upon any such termination, Purchaser will execute, acknowledge (where
applicable) and deliver such satisfactions, releases and termination statements,
as Merchant shall reasonably request.

 

22.Representations with Respect to Collateral. Merchant hereby represents and
warrants to Purchaser that: the execution, delivery and performance by Merchant
of this Pledge, and the remedies in respect of the Collateral under this Pledge
(i) have been duly authorized; (ii) do not require the approval of any
governmental authority or other third party or require any action of, or filing
with, any governmental authority or other third party to authorize same (other
than the filing of the UCC 1’s); (iii) do not and shall not (A) violate or
result in the breach of any provision of law or regulation, any order or decree
of any court or other governmental authority, (B) violate, result in the breach
of or constitute a default under or conflict with any indenture, mortgage, deed
of trust, agreement or any other instrument to which Merchant is a party or by
which any of Merchant’s assets (including, without limitation, the Collateral)
are bound.

 

23.Further Assurances. Upon the request of Purchaser, Merchant, at Merchant’s
sole cost and expense, shall execute and deliver all such further UCC-1s,
continuation statements, assurances and assignments of the Collateral and
consents with respect to the pledge of the Collateral and the execution of this
Pledge, and shall execute and deliver such further instruments, agreements and
other documents and do such further acts and things, as Purchaser may request in
order to more fully effectuate the purposes of this Pledge and the assignment of
the Collateral and obtain the full benefits of this Pledge and the rights and
powers herein created.

 

24.Attorney-in-fact. Merchant hereby authorizes Purchaser at any time to take
any action and to execute any instrument, including without limitation to file
one or more financing statements and/or continuation statements, to evidence and
perfect the Subordinated Security Interest created hereby and irrevocably
appoints Purchaser as its true and lawful attorney-in-fact, which power of
attorney shall be coupled with an interest, with full authority in the place and
stead of Merchant and in the name of Merchant or otherwise, from time to time,
in Purchaser’s sole and absolute discretion, including without limitation (a)
for the purpose of executing such statements in the name of and on behalf of
Merchant, and thereafter filing any such financing and/or continuation
statements and (b) to receive, endorse and collect all instruments made payable
to Merchant.

 

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VII.EVENTS OF DEFAULT AND REMEDIES:

 

25.Events of Default by Merchant. The occurrence of any of the following events
shall constitute an “Event of Default” by Merchant:

 

a.Merchant shall violate any term, condition or covenant in this Agreement for
any reason whatsoever other than as the result of Merchant’s business ceases its
operations exclusively due to any of the Valid Excuses.

 

b.Any representation or warranty by Merchant made in this Agreement shall prove
to have been incorrect, false or misleading in any material respect when made.

 

c.Merchant shall default under any of the terms, covenants and conditions of any
other agreement with Purchaser (if any).

 

d.Merchant uses multiple depository accounts without obtaining prior written
consent of Purchaser in each instance, which consent may not be unreasonably
withheld.

 

e.Merchant fails to deposit any portion of its Future Receipts into the Approved
Bank Account;

 

f.Merchant changes the Approved Bank Account or Approved Processor without
obtaining prior written consent of Purchaser in each instance, which consent may
not be unreasonably withheld;

 

g.Merchant interferes with Purchaser’s collection of Weekly Deliveries (or
Adjusted Weekly Deliveries, as the case may be.)

 

h.Merchant fails to provide timely notice to Purchaser such that in any given
calendar month there are four or more ACH transactions attempted by Purchaser
that are rejected by Merchant’s bank.

 

26.Default Under this Agreement. In case any Event of Default occurs and is not
waived by Purchaser, Purchaser may declare Merchant in default under this
Agreement.

 

27.Merchant’s Obligations Upon Default. Upon receipt of such default notice,
Merchant shall immediately deliver to Purchaser the portion of the Sold Amount
of Future Receipts that remain undelivered at the time of such default notice
together with all other Fees (as such term is defined below) that Merchant may
owe to Purchaser pursuant to this Agreement (the sum of the then undelivered
portion of the Sold Amount of Future Receipts and the Fees hereinafter shall
referred to the “Adjusted Sold Amount of Future Receipts.”) In addition,
Merchant shall also pay to Purchaser, as additional damages, any reasonable
expenses incurred by Purchaser in connection with recovering the monies due to
Purchaser from Merchant pursuant to this Agreement, including without limitation
the costs of retaining collection firms and reasonable attorneys’ fees and
disbursements (collectively, “Reasonable Damages”). The parties agree that
Purchaser shall not be required to itemize or prove its Reasonable Damages and
that the fair value of the Reasonable Damages shall be calculated fifteen
percent (15%) of the Adjusted Sold Amount of Future Receipts at the time of
default

 

28.Remedies Upon Default. Upon occurrence of an Event of Default, Purchaser may
immediately proceed to protect and enforce its rights under this Agreement
against Merchant by:

 

a.Enforcing its rights as a secured creditor under the Uniform Commercial Code
including, without limitation, notifying any account debtor(s) of Merchant of
Purchaser’s Subordinated Security Interest;

 

b.Notifying Merchant’s credit card processor of Merchant’s default under this
Agreement and to direct such credit card processor to transfer to Purchaser of
all or any portion of the amounts received by such credit card processor on
behalf of Merchant.

 

c.Commencing a suit in equity or by action at law, or both, whether for the
specific performance of any covenant, agreement or other provision contained
herein, or to enforce the discharge of Merchant’s obligations hereunder or any
other legal or equitable right or remedy including without limitation
Purchaser’s rights of a secured party under the UCC.

 

Page 11

 

 

29.Remedies are not Exclusive. All rights, powers and remedies of Purchaser in
connection with this Agreement may be exercised at any time after the occurrence
of any Event of Default, and are cumulative and not exclusive, and shall be in
addition to any other rights, powers or remedies provided to Purchaser by law or
equity.

 

30.Power of Attorney. Each Merchant irrevocably appoints Purchaser and its
representatives as their respective agents and attorneys-in-fact with full
authority to take any action or execute any instrument or document to do the
following: (A) to settle all obligations due to Purchaser from any credit card
processor and/or account debtor(s) of Merchant; (B) upon occurrence of an Event
of Default under this Agreement, to perform any and all such obligations of
Merchant under this Agreement, including without limitation (i) to obtain and
adjust insurance; (ii) to collect monies due or to become due under or in
respect of any of the Collateral; (iii) to receive, endorse and collect any
checks, notes, drafts, instruments, documents or chattel paper in connection
with clause (i) or clause (ii) above; (iv) to sign Merchant’s name on any
invoice, bill of lading, or assignment directing customers or account debtors to
make payment directly to Purchaser; and (v) to file any claims or take any
action or institute any proceeding against Merchant which Purchaser may deem
necessary for the collection of any portion of the undelivered Sold Amount of
Future Receipts from the Collateral, or otherwise to enforce its rights under
this Agreement.

 

VIII. ADDITIONAL TERMS:

 

31.Additional Fees. In addition to all other sums due to Purchaser under this
Agreement, Merchant shall pay to Purchaser (the sum of all such charges,
hereinafter, the “Fee”):

 

a.$25,000.00 upon entering into this Agreement as reimbursement of Purchaser’s
costs associated with entering into this Agreement (the cost of due diligence on
the Merchant’s business, financial and legal due diligence, etc.). This section
31(a) is descriptive of and is NOT an additional fee to the $25,000 fee as
described in page two above under “KEY BUSINESS TERMS AND DEFINITIONS”.

 

b.$35 in each and every instance when delivery of the Weekly Delivery to
Purchaser has failed due to the insufficient funds in the Merchant’s Approved
Account.

 

c.$100 in each and every instance when Merchant blocks Purchaser’s access (or
otherwise prevents Purchaser from accessing) Merchant’s bank accounts.

 

d.$2,500 in each and every instance when, upon occurrence of an Event of
Default, Purchaser shall have agreed to waive Merchant's default.

 

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32.Merchant Deposit Agreement. Merchant shall execute an agreement with
Purchaser that would authorize Purchaser to arrange for electronic fund transfer
services and/or “ACH” payments of Weekly Delivery from the Approved Bank
Account. Merchant shall provide Purchaser and/or its authorized agent with all
information, authorizations and passwords necessary to verify Merchant’s
receivables, receipts and deposits into the Approved Bank Account. Merchant
shall authorize Purchaser and/or it’s agent to deduct weekly the amounts of
Weekly Delivery to Purchaser from settlement amounts which would otherwise be
due to Merchant from electronic check transactions and to pay such amounts to
Purchaser by permitting Purchaser to withdraw the Weekly Delivery from such
account. The authorization shall be irrevocable.

 

33.Financial Condition. Merchant authorizes Purchaser and its agents to
investigate their financial responsibility and history, and will provide to
Purchaser any bank or financial statements, tax returns, etc., as deems
necessary prior to or at any time after execution of this Agreement. A photocopy
of this authorization will be deemed as acceptable for release of financial
information. is authorized to update such information and financial profiles
from time to time as it deems appropriate.

 

34.Transactional History. Merchant shall execute written authorization(s) to
their bank(s) to provide Purchaser with Merchant’s banking and/or credit-card
processing history.

 

35.Indemnification. Merchant indemnify and hold harmless Approved Processor, its
officers, directors and shareholders against all losses, damages, claims,
liabilities and expenses (including reasonable attorney’s fees) incurred by
Approved Processor resulting from (a) claims asserted by Purchaser for monies
owed to Purchaser from Merchant and (b) actions taken by Approved Processor in
reliance upon information or instructions provided by Purchaser.

 

36.No Liability. In no event shall Purchaser be liable for any claims asserted
by Merchant under any legal theory for lost profits, lost revenues, lost
business opportunities, exemplary, punitive, special, incidental, indirect or
consequential damages, each of which is waived by Merchant.

 

37.Right to Cancel.

 

  IX.Notwithstanding anything to the contrary set forth in this Agreement,
Purchaser shall have the right to cancel this agreement any time prior to its
delivery of the Purchase Price to Merchant and, upon such cancellation, this
Agreement shall become null and void and the parties shall have no obligation
to, or rights against, each other, except that all sums delivered by Merchant to
Purchaser on account of entering into this Agreement shall be promptly returned
to Merchant.

 

  X.Notwithstanding anything to the contrary set forth in this Agreement, in the
event Merchant has not been in default under this Agreement, Merchant shall have
the right to cancel this Agreement any time until the midnight of the second
(2nd) Business Day following the date of its receipt of the Purchase Price by
notifying Purchaser of such cancellation by notice sent in accordance with this
Agreement. Upon timely delivering such cancellation notice to Purchaser, and
further provided that Merchant has otherwise complied with the provisions of
this Agreement, Merchant shall refund the entire amount of the Purchase Price
back to Purchaser within five (5) Business Days following the date of Merchant’s
receipt of the Purchase Price. Upon such refund of the Purchase Price back to
Purchaser, this Agreement shall become null and void and the parties shall have
no remaining obligations to or rights against each other except that Purchaser
shall have the right to keep, as fair and adequate compensation for its costs of
entering into this Agreement with Merchant, the entire amount of Weekly
Deliveries as well as the origination fee (as set forth above) received by
Purchaser prior to the date when this Agreement is terminated.

 

38.Merchant’s Other Agreements. Merchant will not dispose, convey, sell or
otherwise transfer, or cause Merchant to dispose, convey, sell or otherwise
transfer, any material business assets of Merchant without the prior written
consent of Purchaser, which consent may not be unreasonably withheld, until
Purchaser’s receipt of the entire Sold Amount of Future Receipts. Merchant shall
pay to Purchaser upon demand all expenses (including, without limitation,
reasonable attorneys’ fees and disbursements) incurred as the result of, or
incidental to, or relating to, the enforcement or protection of Purchaser’s
rights against Merchant under the Agreement. The obligation of the Merchant
shall be unconditional and absolute, regardless of the unenforceability of any
provision of any agreement between Merchant and Purchaser, or the existence of
any defense, setoff or counterclaim, which Merchant may assert.

 

MISCELLANEOUS:

 

39.Modifications; Agreements. No modification, amendment, waiver or consent of
any provision of this Agreement shall be effective unless the same shall be in
writing and signed by all parties.

 

40.Assignment. Purchaser may assign, transfer or sell its rights or delegate its
duties hereunder, either in whole or in part without prior notice to the
Merchant. Merchant shall have the right to assign their respective rights or
obligations under this Agreement without first obtaining Purchaser’s written
consent.

 

41.Notices. All notices, requests, consent, demands and other communications
hereunder shall be delivered by certified mail, return receipt requested, to the
respective parties to this Agreement at the addresses set forth in this
Agreement and shall become effective as of the date of receipt or declined
receipt.

 

Page 13

 

 

42.Waiver Remedies. No failure on the part of any party to exercise, and no
delay in exercising, any right under this Agreement, shall operate as a waiver
thereof, nor shall any single or partial exercise of any right under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right. The remedies provided hereunder are cumulative and not exclusive of
any remedies provided by law or equity.

 

43.Binding Effect. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and permitted assigns.

 

44.Governing Law, Venue and Jurisdiction. This Agreement shall be governed by
and construed exclusively in accordance with the laws of the State of New York,
without regards to any applicable principles of conflicts of law. Any lawsuit,
action or proceeding arising out of or in connection with this Agreement shall
be instituted exclusively in any court sitting in New York State, (the
“Acceptable Forums”). Each party signing this Agreement agrees that the
Acceptable Forums are convenient, and irrevocably submits to the jurisdiction of
the Acceptable Forums and waives any and all objections to inconvenience of the
jurisdiction or venue. Should a proceeding be initiated in any other forum, the
parties waive any right to oppose any motion or application made by either party
to transfer such proceeding to an Acceptable Forum.

 

45.Survival of Representation, etc. All representations, warranties and
covenants herein shall survive the execution and delivery of this Agreement and
shall continue in full force until all obligations under this Agreement shall
have been complied with and satisfied in full and this Agreement shall have
terminated.

 

46.Severability. In case any of the provisions in this Agreement is found to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of any other provision contained herein shall not in any way be
affected or impaired.

 

47.Entire Agreement. Any provision hereof prohibited by law shall be ineffective
only to the extent of such prohibition without invalidating the remaining
provisions hereof. This Agreement and all amendments, riders and exhibits
thereon (if any) embody the entire agreement between Merchant and Purchaser and
supersede all prior agreements and understandings relating to the subject matter
hereof.

 

48.JURY TRIAL WAIVER. THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY COURT IN ANY
SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY
WAY RELATED TO THE TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART OR THE
ENFORCEMENT HEREOF. THE PARTIES HERETO ACKNOWLEDGE THAT EACH MAKES THIS WAIVER
KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER
EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH THEIR
ATTORNEYS.

 

Page 14

 

 

49.CLASS ACTION WAIVER. THE PARTIES HERETO WAIVE ANY RIGHT TO ASSERT ANY CLAIMS
AGAINST ANY OTHER PARTY TO THIS AGREEMENT, AS A REPRESENTATIVE OR MEMBER IN ANY
CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW
AGAINST PUBLIC POLICY. TO THE EXTENT ANY PARTY IS PERMITTED BY LAW OR COURT OF
LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST THE OTHER, THE
PARTIES HEREBY AGREE THAT: (1) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO
RECOVER ATTORNEYS’ FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR
REPRESENTATIVE ACTION (NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT TO
THE CONTRARY); AND (2) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF
THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY
SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION.

 

50.ARBITRATION. THE PARTIES ACKNOWLEDGE AND AGREE THAT EACH PURCHASER AND
MERCHANT SHALL HAVE THE RIGHT TO REQUEST THAT ALL DISPUTES AND CLAIMS ARISING
OUT OF OR RELATING TO THE CONSTRUCTION AND INTERPRETATION OF THIS AGREEMENT ARE
SUBMITTED TO ARBITRATION. THE PARTY SEEKING ARBITRATION SHALL FIRST SEND A
WRITTEN NOTICE OF INTENT TO ARBITRATE TO ALL OTHER PARTIES, BY CERTIFIED MAIL.
UPON SENDING OF SUCH NOTICE, A PARTY REQUESTING ARBITRATION MAY COMMENCE AN
ARBITRATION PROCEEDING WITH THE AMERICAN ARBITRATION ASSOCIATION (“AAA”) OR
NATIONAL ARBITRATION FORUM (“NAF”). MERCHANT AND PURCHASER SHALL PAY THEIR OWN
ATTORNEYS’ FEES INCURRED DURING THE ARBITRATION PROCEEDING. THE PARTY INITIATING
THE ARBITRATION SHALL PAY ANY ARBITRATION FILING FEE, ADMINISTRATION FEE AND
ARBITRATOR’S FEE.

 

51.RIGHT TO OPT OUT OF ARBITRATION. SELLER) MAY OPT OUT OF THE ARBITRATION
PROVISION ABOVE. TO OPT OUT OF THE ARBITRATION CLAUSE, SELLER MUST SEND BUYER A
NOTICE THAT THE SELLER DOES NOT WANT THE CLAUSE TO APPLY TO THIS AGREEMENT. FOR
ANY OPT OUT TO BE EFFECTIVE, SELLER MUST SEND AN OPT OUT NOTICE TO THE FOLLOWING
ADDRESS BY REGISTERED MAIL, WITHIN 14 DAYS AFTER THE DATE OF THIS AGREEMENT: TVT
Direct – ARBITRATION OPT OUT, 382 Greenwich avenue, Greenwich, CT 06830,
ATTENTION: Customer Service.

 

52.Captions. The captions in this Agreement are inserted for convenience of
reference only and in no way define, describe or limit the scope or intent of
this contract or any of the provisions hereof.

 

53.Counterparts and Facsimile Signatures. This Agreement can be signed in one or
more counterparts, each of which shall constitute an original and all of which
when take together shall constitute one and the same agreement. Signatures
delivered via facsimile and/or via Portable Digital Format (PDF) shall be deemed
acceptable for all purposes, including without limitation the evidentially
purposes.

 

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MERCHANT NAME: 1847 ASIEN INC.   (legal name of the business)       By: /s/
ROBERT DOUGLAS PATTERSON   Name: ROBERT DOUGLAS PATTERSON   Title: Chief
Ececutive Officer   FEIN: 850755125       MERCHANT NAME: ASIEN’S APPLIANCE, INC.
      By: /s/ Robert Patterson   Name: Robert Patterson   Title: Chief Executive
Officer
FEIN: 20-0736375       TVT Direct Funding LLC       By:     Title: CEO, TVT
Direct Funding LLC  

 

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ADDENDUM TO CONTRACT

 

Addendum to Agreement of Sale of Future Receipts

 

This is an addendum (“Addendum”) to that certain Agreement of Sale of Future
Receipts (the “Future Receipts Agreement”) entered into by and among TVT Direct
Funding LLC (the “Purchaser”), and 1847 ASIEN INC. and ASIEN’S APPLIANCE, INC.
(together, the “Seller”) dated as of May 28, 2020.

 

WHEREAS, the Purchaser and Seller wish to modify the Future Receipts Agreement
as set forth herein.

 

Now therefore, for good and valuable consideration, the parties agree as
follows:

 

A.The Seller are hereafter referred to collectively as the Merchant (the
“Merchant”).

 

B.Except as provided below, it is understood and agreed that the Merchant may
settle this Future Receipts Agreement in full by paying Purchaser the Prepayment
Amount before the end of the relevant month, as set forth below, less the amount
of any purchase payments made prior to the prepayment date, plus any unpaid fees
or charges. Month 1 begins on the first Monday following the date on which
Purchaser distributed the advance proceeds to 1847 ASIEN INC.

 

C.In the event Seller chooses not to execute this addendum Purchaser will be
entitled to the full purchased amount to settle in full Sellers obligation under
the Future Receipts Agreement.

 

D.Except as provided in this Addendum, all terms and conditions of the Future
Receipts Agreement shall remain in full force and effect.

 

E.This Addendum shall be bound by the laws of the State of New York.

 

Seller shall have no right to prepay this Advance if:

 

●The agreement and payments have previously been modified,

 

●There has been a forbearance in payments,

 

●There has been a breach of the Future Receipts Agreement,

 

Prepayment Term  Accepted Prepayment Amount  1  $600,000.00  2  $610,000.00  3 
$620,000.00 

 

All other terms of the referenced Future Receipts Agreement remain unchanged.

 

By their signatures below the parties agreed to be bound by this addendum.

 

ACCEPTED AND AGREED:   ACCEPTED AND AGREED:         Purchaser: TVT Direct
Funding LLC   Seller: 1847 Asien Inc.         By: /s/ Randy Saluck   By: /s/
ROBERT DOUGLAS PATTERSON Name: Randy Saluck   Name: ROBERT DOUGLAS PATTERSON
Title: CEO, TVT Direct Funding LLC   Title: Chief Executive Officer             
Seller: Asien’s Appliance, Inc.             By: /s/ ROBERT DOUGLAS PATTERSON    
Name: ROBERT DOUGLAS PATTERSON             By:       Title: Chief Executive
Officer 

 

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