Blueprint





 







Exhibit 10.1


 


Commercial
Billing Service


A
Division of Compass Bank  Recourse
Accounts/Electronic


P.O.
Box 2201  Transmission


Decatur,
Alabama 35602


 



MERCHANT AGREEMENT


 


This
Merchant Agreement (the "Agreement"), dated as of
________________________, 2017 (the “Effective Date”),
is made by and between Compass Bank, an Alabama banking corporation
d/b/a Commercial Billing Service (herein "Bank"), and the following
party (herein "Merchant"): jointly and severally, NDS Nutrition
Products, Inc., a Florida corporation, and iSatori, Inc., a
Delaware corporation.


 



1. 

Purchase and Sale. Merchant
agrees to sell to Bank, and Bank agrees to purchase, with full
recourse and subject to Section 2 of this Agreement and the other
terms of this Agreement, all Merchant's interest in and title to
certain present and future accounts ("Accounts") owing from
customers of Merchant ("Customers"). Accounts shall be described
more particularly by the delivery of written invoices and related
documents to Bank pursuant to Section 4 of this Agreement or by the
submission of an Electronic Transmission pursuant to Section 7 of
this Agreement. The term "Obligation" as used in this Agreement
shall mean and include Accounts.






 



2. 

Obligations to be Sold. Bank in
its sole discretion, and on an uncommitted basis, will choose
Obligations to purchase






Bank
will notify Merchant of any Obligations that Bank does not purchase
within five (5) days of Bank's receipt of such Obligation or
description thereof pursuant to Sections 4 or 7 of this Agreement.
Notwithstanding anything to the contrary contained herein, the Bank
has full recourse to Merchant for all Obligations purchased by
Bank. Bank succeeds to all rights Merchant owns in or regarding the
Obligations, including, without limitation, enforcing collection;
extending time for repayment; receiving, opening and disposing of
mail addressed to Merchant; and endorsing Merchant's name on and
negotiating Customer remittances (including checks and other
payments). For this purpose, Merchant hereby grants Bank its power
of attorney to engage in any and all of the foregoing activities.
Such power, being coupled with an interest, is irrevocable.
Merchant will hold all checks or payments on Obligations in trust
and promptly remit them in kind to Bank. Bank may set an upper
limit on the aggregate amount of Obligations owing by any
Customer.


 



3. 

Intentionally
Deleted.






 



4. 

Purchase of Obligations. Bank
will furnish Merchant a written statement for each Customer listing
an identification number and dollar limit per Customer. All
Obligations purchased by Bank must be evidenced by separate
invoices with payment terms equal to or less than 90 days (unless
otherwise approved by Bank) which reflect Bank’s name and
remittance address. Except as provided in Section 7 of this
Agreement (Electronic Transmission), within seven (7) days after
each sale of goods or services to a Customer, Merchant will deliver
or mail the invoices evidencing or constituting the Obligations to
Bank, (or to any of Bank's correspondent banks, designated by Bank,
which maintains Merchant's checking account), together with
Merchant's recap of the total amount of the Obligations and all
backup and supporting information deemed necessary by Bank, all
which must be received prior to or at the time of a funding
request. All Obligations must satisfy the Customer's requirements
for payment and show the Customer's name, address and
identification number. Bank will purchase Obligations by paying to
Merchant 100% of the face amounts of the invoices then due with
respect to such Obligations, less credits, returns, reserves or
discounts, if any. Bank will make such payments by crediting
Merchant's checking account. Prior to funding, (i) Merchant shall
notify all applicable Customers of the Bank’s purchase of the
Obligations and shall instruct such Customers to remit payments
directly to Bank, and Bank may itself at any time so notify and
instruct such Customers and (ii) Bank shall be in receipt of an
acknowledgment regarding redirection of payments to Bank from each
such Customer. Bank shall be entitled to verify the invoices in its
sole discretion.






 


 



 

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5. 

Payment. The following fees
(“Fees”) shall be due from Merchant to Bank in
connection with the Obligations purchased by Bank:






 


Non-Utilization Fee. Merchant shall pay to
Bank a Non-Utilization Fee in an amount, for any applicable period,
equal to the Libor Plus Rate (calculated as provided herein) as of
the last day of such period multiplied by the amount, if any, by
which the Minimum Utilization Amount (in the amount designated on
Annex A) exceeds the average outstanding amount of Obligations
during such period. The Non-Utilization Fee shall accrue at all
times beginning 60 days after the date of the initial purchase of
Obligations until the termination of this Agreement. The
Non-Utilization Fee shall be due and payable in arrears at the end
of each 90 day period and on the termination date of this Agreement
and shall be calculated for the applicable period then
ended.


 


Libor Plus Fee. Merchant shall pay to
Bank a Libor Plus Fee at the time the Bank receives payment for
each invoice of Customer evidencing the Obligations purchased by
Bank, or, if applicable, when the Bank requires the Merchant to
repurchase the Account relating to such Customer invoice pursuant
to the terms and conditions of this Agreement. Such “Libor
Plus Fee” shall be calculated on the basis of a 360-day year
applied to the actual number of days the Customer invoice remained
outstanding by multiplying the product of the face amount of the
Customer invoice purchased by Bank and the Libor Plus Rate
(calculated as provided herein) by the actual number of days the
Customer invoice remained outstanding, and dividing by 360.
Merchant acknowledges that the Bank will credit such Customer
invoice payment to and debit such Libor Plus Fee paid by Merchant
from Merchant’s outstanding Obligations within three (3) days
of Bank’s receipt of such Customer invoice payment, or, if
applicable, within three (3) days from Merchant’s repurchase
of the Account related to a Customer invoice as required by Bank
pursuant to the terms and conditions of this Agreement. The
“Libor Plus Rate” shall be equal to LIBOR plus 550
basis points (5.5%). The Libor Plus Rate under this Agreement is
subject to change from time to time based on changes in an
independent index which is the “LIBOR.”
“LIBOR” is the London Interbank Offered Rate for the
applicable Reference Period, determined by ICE Benchmark
Administration Limited (ICE) (or any successor or substitute
therefor), as obtained by Bank from Reuter’s, Bloomberg or
any other source providing such quotations as may be designated by
Bank from time to time (the “Rate Source”) as of the
date that is two Business Days before each Reset Date (as defined
below) (or in the event no such quotation is available on that
date, quoted on the Business Day most immediately preceding the
date of determination on which such a quotation was available), as
adjusted from time to time in Bank’s sole discretion for
then-applicable reserve requirements, deposit insurance assessment
rates and other regulatory costs. If the Rate Source states a rate
that is less than zero, the applicable rate shall be deemed to be
zero, except to the extent so adjusted by Bank. Each change in such
rate based on a change in the rate stated by the Rate Source shall
be effective from and including the first Business Day of each
month (each, a “Reset Date”). Notwithstanding the
foregoing, if for any reason Bank is not able to determine a rate
as described above, it becomes illegal for Bank to fund or maintain
purchases of Accounts as referenced herein based on the rate so
determined or Bank determines that such rate will not adequately
and fairly reflect its cost of maintaining or funding purchases of
Accounts hereunder, then upon notice to Merchant and until Bank
gives notice that such conditions no longer exist, Bank shall have
the right, in its sole discretion, to substitute an alternative
index rate selected by Bank for that rate. The “Reference
Period” means a period of one (1) month. The Reference Period
is for reference purposes only, and the index rate hereunder may
continue for a period that is longer or shorter than the Reference
Period, depending on, among other things, whether the end of the
Reference Period in a given month falls on a day other than a
Business Day. “Business Day” means each day other than
a Saturday, a Sunday, or any holiday on which Bank’s offices
are closed for business with the public. The rate defined in this
paragraph is referred to as “LIBOR” (the
“Index”).


 



6. 

Reserve Account. Bank may hold
back and apply a portion of any Purchase Price to the Reserve
Account in the amount of the Reserve Amount. The “Reserve
Account” shall mean a bookkeeping account on the books of the
Bank representing an unpaid portion of the Purchase Price,
maintained by Bank to ensure Merchant’s performance with the
provisions hereof. The “Reserve Amount” shall mean the
Reserve Percentage multiplied by the unpaid balance of the
Obligations purchased by the Bank, plus, if applicable, any amount
reserved by Bank from time to time as a result of its sole credit
judgment. The “Reserve Percentage” shall be 20%.
Merchant shall pay to Bank on demand any amount by which the
collected funds in the Reserve Account are less than the Reserve
Amount. Bank shall pay to Merchant any amount by which collected
funds in the Reserve Account are greater than the Reserve Amount
(“Reserve Excess”); provided, that the Bank will review
the Reserve Account on a bi-monthly basis and release any such
excess to the Merchant only after a review of the Reserve Account.
Before the Bank releases any Reserve Excess to Merchant, any
Accounts that are to be repurchased by the Merchant as further
described in Section 8 below will first be deducted from the
Reserve Excess. Bank may charge the Reserve Account with any
obligation, including any amounts due from Merchant to Bank
hereunder. Bank may pay any amounts due Merchant hereunder by a
credit to the Reserve Account. All Accounts to be repurchased by
the Merchant will be reconciled through the Reserve Account. NDS
Nutrition Products, Inc. and iSatori, Inc. each acknowledge and
confirm that any and all amounts held in the Reserve Account may be
used by Bank to pay any obligations owed by either NDS Nutrition
Products, Inc. or iSatori, Inc. under this Agreement.






 


 




 

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7. 

Electronic Transmission. In
lieu of Merchant's delivery of written invoices evidencing or
constituting Obligations to Bank pursuant to Section 4, Merchant
may transmit to Bank information identifying any Obligation which
Merchant wishes to sell to Bank by means of email or internet
transmission ("Electronic Transmission") subject to the terms of
this Agreement, including, without limitation, the following
terms:






 



a. 

Merchant shall
deliver to Bank by Electronic Transmission all information in a
form satisfactory to Bank which is required by Bank to describe
each specific Obligation. Bank shall be entitled to verify the
information in Electronic Transmissions.






 



b. 

Bank shall pay for
the Obligations which Bank purchases as provided in this
Agreement.






 



c. 

Electronic
Transmissions are intended only to identify Obligations, and are
not instructions for payment to any beneficiary. Payment for
Obligations identified in Electronic Transmissions and purchased by
Bank shall be subject to all provisions of this Agreement. The
parties intend that when Bank pays Merchant for an Obligation,
exclusive and unencumbered title to the Obligation shall pass to
Bank.






 



d. 

Merchant agrees
that any Obligation purchased from Merchant by Bank pursuant to an
Electronic Transmission shall be subject to this Agreement
including, without limitation, all representations and
warranties.






 



e. 

Merchant agrees
that no further act, assignment or signature shall be required in
order to transfer exclusive and unencumbered title to Bank with
respect to any Obligations purchased by Bank from Merchant pursuant
to an Electronic Transmission.






 



f. 

Merchant agrees
that an Electronic Transmission describing Obligations shall
constitute a writing, signed by Merchant and be deemed an adequate
description of the Obligations and be incorporated into the
Agreement.






 



g. 

Merchant agrees
that it will not assert a claim or defense based on any requirement
for a signed writing, whether under the Uniform Commercial Code,
any other statute or rule or common law.






 



h. 

Merchant agrees
that it shall be responsible for and indemnify and hold harmless
Bank from any loss or expense, including attorneys' fees, incurred
by Bank as a consequence of error, negligence or fraud of Merchant
or its employees in connection with any Electronic Transmission or
any failure by Merchant to deliver Electronic Transmissions in the
proper format, or any other loss arising from Bank's agreeing to
accept Electronic Transmissions.






 


Additionally,
unless Bank specifies otherwise, Merchant shall supply copies of
all Customer invoices via email or internet
transmission.


 



8. 

Repurchase of Accounts. Bank
may require that Merchant repurchase, by payment of the unpaid
amount due on the Account(s) thereof together with any unpaid fees
relating to such Account(s) purchased by the Bank on demand, or, at
Bank’s option, by Bank’s charge to the Reserve Account:
(i) any Account purchased by the Bank that is in dispute with the
Customer or against which Customer asserts an alleged claim,
defense or offset; (ii) any Account purchased by the Bank that
remains outstanding for more than 90 days past the date of purchase
by Bank from Merchant unless otherwise approved by Bank; and (iii)
all Accounts purchased by the Bank upon the occurrence of any of
the events described in Section 10(l) or upon the termination date
of this Agreement. Bank shall retain a security interest in any
Account purchased by the Bank that is repurchased by the Merchant.
Merchant agrees to notify Bank promptly of all disputes with
Customers.






 



9. 

Merchant Warranties. Merchant
hereby represents and warrants to Bank:






 



a. 

If either Merchant
is a corporation, each is duly organized and in good standing under
the laws of its incorporation state and is duly qualified and in
good standing in every other state in which it is doing business,
and the execution, delivery and performance of the Agreement are
within its corporate powers, have been duly authorized and are not
in contravention of any laws or the powers of its charter, by-laws,
or other incorporation papers, or of any indenture, agreement, or
undertaking to which Merchant is a party or by which it is
bound.






 


 




 

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b. 

Merchant has good
and clear title to the Obligations that it sells to Bank under this
Agreement and has the absolute right to sell such Obligations to
Bank.






 



c. 

Each Obligation
delivered or sold to Bank is a separate account arising from a bona
fide sale of goods or services delivered by Merchant to the named
Customer, and that the amount thereof is unconditionally due and
owing Merchant from Customer on account of such sale and is not,
and will not be, subject to any counterclaim, setoff, defense, or
other reduction.






 



d. 

Any purchase by
Bank of any Obligation shall not relieve Merchant from, or obligate
Bank to assume, any of the covenants, warranties or undertakings in
or with respect to any such Obligation to be performed by Merchant
for the benefit of its Customers.






 



e. 

Each Obligation is
due and owing within ninety (90) days of its origination date
unless otherwise approved by Bank.






 



f. 

All proceeds from
the purchase of Obligations by Bank hereunder shall be used for
general corporate purposes and to payoff Merchant’s existing
credit facility with US Bank, as approved by Bank.






 



g. 

All records of
Merchant pertaining to Obligations, general intangibles and
contract rights have always been, are and will continue to be kept
at Merchant's principal place of business located at
____________________________________________________.






 



h. 

The execution,
delivery and performance of this Agreement, the purchases of
Obligations hereunder and the use of the proceeds thereof will not
violate any governmental, licenses, authorizations, consents and
approvals applicable to Merchant or any contractual obligation
between Merchant and a third party and will not result in, or
require, the creation or imposition of any lien on any of the
Collateral or assets of Merchant pursuant to any governmental
requirements or any such third party contract (other than the
security interests and liens created by this
Agreement).






 



i. 

Merchant will
promptly pay all taxes or charges levied on or with respect to, and
will at all times keep the Collateral, free and clear of all liens,
claims, charges, security interests, mortgages, secondary financing
and encumbrances whatsoever, other than the security interests
granted to Bank hereby. Merchant agrees to take all actions that
Bank may request to establish and maintain a valid title and
security interest in the Collateral, free and clear of all other
liens, claims, charges, security interests, mortgages, secondary
financing and encumbrances whatsoever, including, without
limitation, the payment of any amounts, taxes, assessments, fees
and/or charges necessary to perfect and note Bank's interest in the
same. If such amounts, taxes, assessments, fees and/or charges
remain unpaid after the date fixed for the payment of same, or if
any lien, claim, charge, security interest, mortgage, secondary
financing or encumbrance shall arise, or be claimed or asserted
with respect to the Collateral, Bank may, without notice to
Merchant, pay such taxes, assessments, charges or claims, or take
any and all other actions (including the payment of money) deemed
desirable by Bank to remove any such lien, claim, charge, security
interest, mortgage, secondary financing or encumbrance, and
Merchant agrees that the amounts thereof, along with any amounts
necessary to perfect and note Bank's interest in any Collateral,
shall be charged to the Reserve Account described
herein.






 



j. 

Neither this
Agreement, nor any document, certificate, or statement furnished
(or to be furnished) to Bank by or on behalf of Merchant pursuant
to or in connection with this Agreement contains (or will contain)
any untrue statement of a material fact or omits (or will omit) to
state a material fact necessary to make the statements contained
herein and therein not misleading. There is no fact known to
Merchant that materially and adversely affects, or will materially
and adversely affect, the assets, business, operations, or
condition of Merchant that has not been specifically set forth in
this Agreement or otherwise disclosed by Merchant to Bank in
writing. Further, there has not been any material adverse change in
the condition, business or operations of Merchant since the date of
the balance sheets, earnings statements and other financial data
referenced in this paragraph (k).






 



k. 

Merchant hereby
represents and warrants that (i) none of its assets are, for
purposes of ERISA, considered assets of a plan; (ii) no pension
plan sponsored, maintained or contributed to by Merchant or any of
its ERISA Affiliates has an accumulated funding deficiency (whether
or not waived) under Section 412 of the Code or Section 302 of
ERISA; and (3) neither Merchant nor any ERISA Affiliate has any
unsatisfied liability for withdrawal liability with respect to any
Pension Plan which is a Multiemployer Plan.






 


 




 

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l. 

There are no
judgments, actions, suits, claims, proceedings or investigations
existing, outstanding, pending, or to the best of Merchant's
knowledge after due inquiry, threatened or in prospect, before any
court, agency or tribunal, or governmental authority against or
involving Merchant or any guarantor which do or could materially
affect the business, properties, prospects, financial condition,
earnings, results of operations or earnings capacity of Merchant or
any guarantor, which impair Merchant’s ability to perform its
obligations arising under this Agreement, or which question the
validity of this Agreement or any of the documents executed and
delivered in connection herewith, or any action or instrument
contemplated by any of them






 



m. 

Merchant shall not,
without the prior written consent of Bank, suffer to exist any lien
(including any encumbrance or security interest) of any kind upon
any of its accounts or accounts receivable, whether now owned or
hereafter acquired.






 


10. Covenants.
Merchant represents, warrants and covenants as
follows:


 



a. 

Subject to any
limitations stated therein or in connection therewith, all balance
sheets, earnings statements and other financial data which have
been or may hereafter be furnished to Bank to induce it to enter
into this Agreement, to extend credit from time to time hereunder,
or otherwise furnished in connection herewith, do or will fairly
represent the financial condition of Merchant (or other persons or
entities, as applicable) as of the dates and results of operations
for the periods for which the same are furnished in accordance with
generally accepted accounting principles consistently applied, and
all other information, reports and other papers and data furnished
to Bank shall be accurate, as of the relevant date, and correct in
all material respects and complete insofar as completeness may be
necessary to give Bank a true and accurate knowledge of the subject
matter.






 



b. 

Merchant's name,
chief executive office and principal place of business are and
always have been as set forth on the third page of this Agreement,
except as otherwise disclosed in writing to Bank. Merchant will
promptly advise Bank in writing sixty (60) days prior to any change
in Merchant's name, place of organization, organizational
identification number, chief executive office or principal place of
business.






 



c. 

Merchant is not now
and will not be in default under any agreement evidencing an
obligation for the payment of money, performance of a service or
delivery of goods, demand for performance under which, or
acceleration of the maturity of which would render Merchant
insolvent or unable to meet its other debts as they become due or
conduct its business as usual.






 



d. 

Merchant is and at
all times shall remain solvent as defined under applicable Alabama
state law and the federal bankruptcy code and is not now and has
not been in the past three (3) years a debtor under any title of
the United States Bankruptcy Code, 11 U.S.C. §§ 101, et
seq.






 



e. 

Merchant does and
shall at all times while any Liabilities remain unsatisfied comply
with all applicable laws, ordinances, rules and regulations of any
governmental authority or entity governing or affecting Merchant,
any of its property, the Collateral or any part thereof, and shall
immediately notify Bank of any and all actual, alleged or asserted
violations of any such laws, ordinances, rules or regulations.
Without limitation to the generality of the foregoing, Merchant
shall comply, and cause to be complied, with all laws, governmental
standards and regulations applicable to Merchant or any Collateral
in respect of occupational health and safety, toxic and hazardous
waste and substances and environmental matters. Merchant promptly
shall notify Bank of receipt of any notice of any actual, alleged
or asserted violation of any such law, standard or regulation.
Merchant hereby agrees to indemnify, defend and hold Bank harmless
from all loss, cost, damage, claim and expense incurred by Bank on
account of Merchant's breach of any representation, warranty or
requirement of this paragraph (e), Merchant's failure to perform
the obligations of this paragraph, and/or Merchant's or any
Collateral's violating any applicable laws, ordinances, rules or
regulations, including, without limitation, any environmental or
occupational health and safety laws or regulations. This
indemnification shall survive the satisfaction of the Obligations,
the termination of this Agreement and the exercise of any right or
remedy under this Agreement. Merchant represents that there are no
pending claims or threats of claims by private or governmental or
administrative authorities relating to environmental impairment,
conditions, or regulatory requirements involving Merchant or any
Collateral.






 


 




 

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f. 

Merchant shall (i)
preserve, renew and maintain in full force and effect its corporate
or organizational existence and (ii) take all reasonable action to
maintain all authorizations, approvals, rights, privileges and
franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted under this
Agreement.






 



g. 

Merchant hereby
covenants and agrees that: (i) in addition to the prohibitions set
forth in this Agreement, and not in limitation thereof, Merchant
shall not assign, sell, pledge, encumber, transfer, hypothecate or
otherwise dispose of its interest or rights in this Agreement or in
the Collateral, or attempt to do any of the foregoing or suffer any
of the foregoing, if such proposed action will result in a
prohibited transaction under ERISA or the U.S. Internal Revenue
Code of 1986, as amended, and applicable U.S. Department of
Treasury regulations issued pursuant thereto in temporary or final
form (the “Code”); and (ii) Merchant shall take and
cause to be taken all necessary actions so that at all times the
assets of Merchant shall not be considered for any purpose of ERISA
or Section 4975 of the Code to be assets of a plan.






 



h. 

Merchant shall
indemnify and hold Bank free and harmless from and against all
loss, costs (including reasonable attorneys' fees and expenses),
taxes, damages and expenses Bank may suffer by reason of the
investigation, defense and settlement of claims, and in obtaining
any prohibited transaction exemption under ERISA necessary in
Bank's reasonable judgment, by reason of the inaccuracy of the
foregoing representations and warranties of Merchant or a breach of
the foregoing covenants of Merchant of this paragraph. The
obligations of Merchant under this Section shall survive the
payment in full of the Liabilities or other satisfaction
thereof.






 



i. 

Merchant shall at
reasonable times and from time to time allow Bank, by or through
any of its officers, managers, agents, employees, attorneys or
accountants to (i) examine, inspect and make extracts from
Merchant's books and records; (ii) analyze Merchant's financial
statements; (iii) arrange for verification of Merchant's accounts
and inventory under reasonable procedures, directly with Customers
or by other methods; and (iv) inspect, review and audit the
Collateral at any time during normal business hours, without prior
notice to Merchant.






 



j. 

The USA Patriot Act
of 2001 (Public Law 107-56) and federal regulations issued with
respect thereto require all financial institutions to obtain,
verify and record certain information that identifies individuals
or business entities which open an "account" with such financial
institution. Consequently, Bank may from time-to-time request, and
Merchant shall provide to Bank, Merchant's name, address, tax
identification number and/or such other identification information
as shall be necessary for Bank to comply with federal law. An
"account" for this purpose may include, without limitation, a
deposit account, cash management service, a transaction or asset
account, a credit account, a loan or other extension of credit,
and/or other financial services product.






 



k. 

The Liabilities of
Merchant arising under this Agreement are at least pari passu in
repayment with all other obligations of Merchant, if any such other
obligations are permitted hereunder.






 



l. 

In addition to
Bank's other rights, which are cumulative, Merchant will reimburse
Bank for and repurchase from Bank any Obligation purchased by Bank
with respect to which any of the following (which constitute
breaches of warranty under this Agreement) occurs:






 



(i) 

Any of the
warranties in this Section 9 is false or if the payment for any
Obligation is obtained from Bank by Merchant or its agents by
fraud.






 



(ii) 

Customer fails to
pay an Obligation for any reason and Bank has asked the Merchant to
repurchase it.






 



(iii) 

Goods relating to
the Obligation are returned or Customer claims to have returned
them or services relating to the Obligation are claimed to be
unsatisfactory by the Customer.






 



(iv) 

The Obligation
exceeds its dollar limit without Bank's prior
approval.






 



(v) 

The invoice is
illegible, or fails to comply with the requirements in Section 4 or
the Electronic Transmission fails to comply with the requirements
in Section 7.






 



(vi) 

The transaction
underlying the Obligation violates any law or
regulation.






 


 


 




 

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(vii) 


A Customer fails to
pay the Obligation, or any part thereof, claiming that Merchant
owes the Customer money or other obligation.










  


(viii) 

The Obligation is
not an account as that term is defined by the Uniform Commercial
Code.






 





(viii) 

The Obligation is
not an account as that term is defined by the Uniform Commercial
Code.






 



(ix) 

Merchant fails to
comply with this Agreement.






 



(x) 

The Obligation
arises in connection with a lease or lease/purchase transaction
between Merchant and its Customer.






 



(xi) 

The Obligation
arises in connection with a consumer transaction or is owed or
owing by a consumer.






 



(xii) 

Bank does not have
good title, free of any adverse interest, to any Obligation which
it has purchased.






 



m. 

Merchant is and
will be the sole and exclusive owner of the Merchant’s
accounts and proceeds of Merchant’s inventory free from any
lien, claim, charge, security interest, mortgage, secondary
financing or encumbrance, and Merchant will defend the Collateral
and all proceeds and products thereof against all claims and
demands of all persons at any time claiming the same or any
interest therein adverse to the interests of Bank. Merchant shall
not sell all or substantially all of its inventory or other
tangible assets without the prior written consent of
Bank.






 



n. 

Neither the
Merchant nor any affiliate of the Merchant is a Sanctioned Person,
(i) has assets in Sanctioned Countries, or (ii) derives its
operating income from investments in, or transactions with
Sanctioned Persons or Sanctioned Countries. The proceeds of this
Agreement will not be used and have not been used to fund any
operations in, finance any investments or activities in or make any
payments to, a Sanctioned Person or a Sanctioned Country. As used
herein, “OFAC” shall mean the U.S. Department of the
Treasury's Office of Foreign Assets Control. “Sanctioned
Country” shall mean a country subject to a sanctions program
identified on the list maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml,
or as otherwise published from time to time. “Sanctioned
Person” shall mean (i) a person named on the list of
Specially Designated Nationals or Blocked Persons maintained by
OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/ , or as
otherwise published from time to time, or (ii) (A) an agency of the
government of a Sanctioned Country, (B) an organization controlled
by a Sanctioned Country, or (C) a person resident in a Sanctioned
Country, to the extent subject to a sanctions program administered
by OFAC.






 



o. 

Merchant shall
indemnify, defend and save and hold Bank (its affiliates and their
respective officers, directors, employees, advisors and agents)
harmless against any and all claims, suits, obligations, damages,
losses, liabilities, costs and expenses (including, without
limitation, attorneys’ fees), demands, penalties, fines and
forfeitures of any nature, arising out of or in any way related to
the factoring facility contemplated herein, the Agreement and any
other related documents, the sale, grant of security or any other
interest in Collateral, and the enforcement of any rights or
remedies under the Agreement or any other rights or remedies with
regard to such Collateral.






 



p. 

Merchant shall
maintain a depository account with Bank.






 



11. 

Financial Reports. Merchant
will furnish to Bank such financial information concerning Merchant
and its business at times and in form as Bank may require,
including but not limited to the following:






 




a.


the
year-end financial statements of Merchant (in form, preparation and
substance acceptable to Bank) within one hundred twenty (120) days
after the close of each of its fiscal years for annual financials,
including a balance sheet as of the close of such period, an income
statement, a reconciliation of stockholders' equity, a statement of
cash flows and an inventory valuation, reviewed by an independent
certified public accountant acceptable to Bank and analyzed in
accordance with generally accepted accounting
principles;






 




b.


monthly
financial statements of Merchant (in form, preparation and
substance acceptable to Bank) within forty-five (45) days after
each month end prepared in accordance with generally accepted
accounting principles;






 


 




 

-7-








 






 




c.


together with each
delivery of financial statements required above, the certificate of
Merchant substantially in the form of Annex C hereto signed by an
authorized officer of Merchant stating, among other things, that no
event has occurred which constitutes a failure of Merchant to
comply with or default or event of default under (but for the
requirement that notice be given, or time elapse or both) any
loans, notes, debentures, bonds, leases, or other obligations of
Merchant then outstanding, including, but not limited to, this
Agreement, or, if any such failure to comply, default or event of
default exists, specifying the nature thereof;






 




d.


such
other financial and related information when and as requested by
Bank regarding Merchant, the Collateral and any endorser, guarantor
or surety of any of the Liabilities of Merchant to
Bank..











12. 

Indemnity. Merchant will
indemnify, defend and save and hold Bank and each other Indemnitee
(as defined below) harmless from any and all claims, suits,
obligations, damages, losses, costs and expenses (including,
without limitation, reasonable attorneys’ fees), demands,
liabilities, penalties, fines and forfeitures of any nature
whatsoever, that may be asserted against or incurred by Bank or any
other Indemnitee arising out of, relating to, or in any manner
occasioned by (a) this Agreement or any other instruments or
documents evidencing any Liabilities, (b) the Obligations or any
other Collateral, or any sale, grant of security or other transfer
of any interest in any of the foregoing, under this Agreement or
otherwise, (c) the enforcement or exercise of any rights or
remedies under this Agreement or any such other instruments or
documents, or any rights or remedies with respect to any Obligation
or any other Collateral, or (d) Merchant’s sale or provision
of goods or services to any Customer. As used herein,
“Indemnitee” means each of Bank and its affiliates and
its and their respective officers, directors, employees and
agents.






 



13. 

Merchant to Pay Accounts with Other
Merchants. Merchant agrees to pay and perform at maturity
all accounts and contracts owing from Merchant to any third party,
if such third party sells or assigns such account or contract right
to Bank, without deduction or setoff for any claim or dispute which
Merchant may have with such third party.






 



14. 

Liabilities. Bank may withhold
any payments to Merchant, or apply any assets of Merchant on
deposit with or under Bank's control or in which it has a security
interest, to satisfy all present or future indebtedness or other
obligations of Merchant to Bank, whether liquidated or
unliquidated, direct or indirect, absolute or contingent, arising
under this or any other agreement or otherwise ("Liabilities"). The
term "Liabilities" does not include Obligations unless there occurs
a breach of a representation, warranty or covenant made by Merchant
to Bank with respect to such Obligation. Liabilities are due
without demand upon or notice to Merchant. As security for payment and performance
of all Liabilities, Merchant grants to Bank a continuing security
interest in any collateral now or hereafter described in any
financing statement filed against Merchant naming Bank as the
secured party (which
financing statement may describe the collateral as "All assets."),
and all of, and
Merchant's personal property, both now owned and hereafter
acquired, and wherever located, including, but not limited
to that certain collateral described on Annex B attached to
this Agreement (collectively, the "Collateral"). Upon any failure
of Merchant to pay or perform any of the Liabilities, at Bank's
option, all of the Liabilities shall become due and payable and
performable in full and Bank may collect and/or sell the Collateral
and apply the same, including, without limitation, all proceeds of
the Collateral, against the Liabilities and exercise all other
rights and remedies provided under this Agreement and applicable
law in order to satisfy the Liabilities.






 



15. 

Termination, Modification. If
Merchant violates this Agreement in any respect, or if Merchant
becomes insolvent, or a proceeding in bankruptcy is filed by or
against Merchant, then Bank may terminate this Agreement without
notice to or demand upon Merchant. This Agreement shall
automatically renew annually on the anniversary of the Effective
Date unless the Bank otherwise terminates this Agreement upon
written notice to the Merchant. Termination shall not affect Bank's
rights with respect to any transactions which occur prior to the
effective date of such termination. Bank reserves the right to
modify the terms of this Agreement as to any Fees amount upon 30
days’ written notice to Merchant. Otherwise, this Agreement
may not be modified without the written consent of both
parties.






 



16. 

Financing Statement. Merchant
authorizes Bank to execute and file in Merchant's name with the
Uniform Commercial Code (“UCC”) filing office in
Merchant’s state of organization (as determined by the UCC)
financing statements covering the Collateral and hereby grants Bank
its power of attorney to execute such financing statements in
Merchant's name. Such power, being coupled with an interest, is
irrevocable. Merchant agrees to execute and deliver any and all
financing statements and other papers as Bank may reasonably
require in connection with this Agreement.






 


 




 

-8-








 






 



17. 

Intention to Construe Transactions as
True Sales. It is the intention of the parties to enter into
a purchase and sale agreement and not a loan, borrowing or
financing; however, the parties agree that should any portion of
the Agreement be construed a loan, borrowing or financing, that
portion of the Agreement shall have a structure that will comply
with any applicable usury law. Notwithstanding the applicable Fees
specified herein, if on any day the use of such fee would be deemed
to result in an interest rate which exceeds the Maximum Allowable
Rate (as defined below) for that day, then the applicable Fee shall
be the Maximum Allowable Rate on such day.






 


"Maximum Allowable
Rate" means, on any day, the maximum nonusurious rate of interest
permitted for that day by applicable law, stated as a rate per
month. It is expressly acknowledged and agreed that Alabama law,
including without limitation the laws governing interest, shall be
applicable to this Agreement and shall establish the Maximum
Allowable Rate; provided, however, that if for any reason
whatsoever it is determined by a court of competent jurisdiction
that, notwithstanding the Merchant's and the Bank's express
agreement that no law other than Alabama law shall be applicable to
this Agreement with respect to usury, on any day that any other law
is deemed applicable, the Maximum Allowable Rate shall be the
maximum nonusurious rate of interest applicable to an entity such
as Merchant in the applicable jurisdiction.


 


If for
any reason Merchant's performance of an agreement or obligation
under this Agreement involves exceeding the limit of validity
prescribed by applicable law, then such agreement or other
obligation shall be reduced to the limit of such validity, and if
for any reason amounts paid under this Agreement during its full
term are deemed interest which produces a rate which exceeds the
Maximum Allowable Rate, Bank shall refund to Merchant such portion
of said interest as shall be necessary to cause the interest paid
on this Agreement to produce a rate equal to the Maximum Allowable
Rate.


 



18. 

Fees. Merchant and Bank agree
that the Fees constitute consideration to Bank for services in,
among other things, making credit investigations, supervising the
ledgering and collection of Obligations, and generating reports.
The Fees also represent consideration for other out of pocket
expenses such as the preparation of this Agreement, insurance
premiums, public records search fees, filing fees,
etc.






 



19. 

Expenses. Irrespective of
whether any Obligations are purchased hereunder, Merchant shall pay
all fees and expenses, including, without limitation, legal fees
and expenses, filing fees, insurance premiums and expenses,
appraisal fees, recording costs and taxes (except taxes measured by
Bank's income) incurred by Bank or Merchant from time to time in
connection with the preparation and closing, filing,
administration, amendment and modification of this Agreement and
those documents and instruments associated with the perfection and
creation of the security interests and other rights granted
pursuant hereto and Bank's selling, negotiating, documenting and/or
enforcing participations in the factoring arrangement established
under this Agreement. Merchant shall pay to Bank on demand any and
all such fees and expenses incurred or paid by Bank, together with
any and all fees, expenses and costs (a) of collection or (b)
otherwise incurred or paid by Bank in protecting, enforcing or
realizing its rights upon or with respect to any of the Liabilities
or the Collateral (including, without limitation, reasonable
counsel fees, including, without limitation, those incurred in
connection with any appeal or any bankruptcy proceedings). After
deducting all of said fees and expenses, the residue of any
proceeds of collection or sale of Liabilities or Collateral shall
be applied to the Liabilities and interest, charges and expenses
constituting or related to the Liabilities in such order of
preference as Bank may determine, proper allowance for Liabilities
not then due being made, and, to the extent allowed by law, without
limiting any of Merchant's or any guarantor's obligations or any of
Bank's rights under this Agreement, Merchant and guarantors shall
remain liable for any deficiency.






 


 




 

-9-








 






 



20. 

Miscellaneous. This Agreement
supersedes all previous agreements or understandings between the
Bank's Commercial Billing Service division and Merchant. This
Agreement may not be assigned except that Bank may assign this
Agreement to its parent or wholly owned subsidiary of Bank or its
parent or any other third party. This Agreement has been negotiated
and is being executed and delivered in the State of Alabama, or if
executed elsewhere, shall become effective upon Bank's approval,
acceptance and execution of the original of this Agreement in
Alabama. Alabama law shall apply to the Agreement and the
transactions contemplated hereby, except that the laws of the state
of Merchant's residence shall apply to the extent necessary to give
full effect and enforcement to Bank's rights hereunder. Bank shall
not be deemed to have waived any of its rights upon or under any of
the Liabilities or Collateral unless such waiver be in writing and
signed by Bank. No course of dealing and no delay or omission on
the part of Bank in exercising any right shall operate as a waiver
of such right or any other right. A waiver on any one occasion
shall not be construed as a bar to or waiver of any right on any
future occasion. In the event any one or more of the terms or
provisions contained in this Agreement, in any of the other
documents executed and delivered in connection herewith or in any
other instrument or agreement referred to herein or executed in
connection with or as security for the Liabilities, or any
application thereof to any person or circumstances, shall be
declared prohibited, illegal, invalid or unenforceable to any
extent in any jurisdiction, as determined by a court of competent
jurisdiction, such term or provision, in that jurisdiction, shall
be ineffective only to the extent of such prohibition, illegality,
invalidity or unenforceability, or as applied to such persons or
circumstances, without invalidating or rendering unenforceable the
remaining terms or provisions hereof or thereof or affecting the
validity or enforceability of such term or provision in any other
jurisdiction or as to other persons or circumstances in such
jurisdiction, unless such would effect a substantial deviation from
the general intent and purpose of the parties, make a significant
change in the economic effect of the transactions contemplated
herein on Bank, or impair the validity or perfection of Bank's
security interest in any Collateral or the validity of any guaranty
or other security for the Liabilities, in which event a substitute
provision shall be supplied by the court in order to provide Bank
with the benefits intended by such invalid term or
provision.






 



21. 

Waiver of Trial by Jury.
BANK AND MERCHANT HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH THIS AGREEMENT, THE LOAN, THE LIABILITIES, ALL
OTHER DOCUMENTS GIVEN TO EVIDENCE OR SECURE THIS AGREEMENT AND/OR
THE LIABILITIES, OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR
STATEMENTS RELATED THERETO (WHETHER VERBAL OR
WRITTEN).






 



22. 

Attorneys' Fees. If any amounts
owed to Bank under this Agreement are collected by or through an
attorney at law, then Merchant agrees to pay Bank's reasonable
attorneys' fees.






 




 

-10-








 






 


 


IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed all as of the day and year first written
above.


 


 


MERCHANT:


 


NDS NUTRITION PRODUCTS,
INC.,


a
Florida corporation


 


By:


Its:



Date:



 


 


iSATORI,
INC.,


a
Delaware corporation


 


By:


Its:



Date:


 











 




 





 


APPROVED,
ACCEPTED AND EXECUTED


in the
State of Alabama by


COMPASS
BANK,


d/b/a
Commercial Billing Service


 



By:                                                                            





       
Sherri Edgil
        Its: SVP and
Director of Operations


 


 




 

-11-








 






 



ANNEX A

 



SPECIFIC TERMS APPLICABLE TO TRANSACTION

 


	

 


Minimum
Utilization Amount

	

 


$3,000,000.00







 


 


 




 

-12-








 






 



ANNEX B


 



COLLATERAL


 


All
present and future inventory, accounts, accounts receivable,
general intangibles and returned goods, together with all reserves,
balances, deposits, and property at any time owing to the credit of
Merchant with Bank and any and all substitutions, accessions,
additions, parts, accessories, attachments, replacements, proceeds
and products of, for and to inventory, whether now or hereafter
owned, existing, created, arising or acquired.


 


 


 




 

-13-








 






 



ANNEX C


 



COMPLIANCE CERTIFICATE

 



CERTIFICATE


 


Reference is made to that certain Merchant
Agreement (the "Agreement") executed by NDS NUTRITION PRODUCTS, INC.
and iSATORI, INC. (together,
jointly and severally, "Merchant"), in favor of COMPASS BANK d/b/a Commercial
Billing Service ("Bank"), on or
about _________________ ___, 2017. Capitalized terms used but not
defined herein shall have the meaning attributed to the same in the
Agreement. Merchant hereby represents, warrants and covenants to
and in favor of Bank as follows:


 




(a)

no
default or event of default (or any event that would constitute an
event of default but for the requirement that notice be given or
time elapse or both) has occurred or is continuing under the
Agreement or under any other loans, notes, debentures, bonds,
leases or other obligations of Merchant now
outstanding;






 




(b)

all
representations, warranties and covenants contained in the
Agreement are expressly reaffirmed and restated as of the date
hereof;






 




(c)

neither
Merchant nor, to the best of Merchant's knowledge, any other party
has any matured or unmatured claim, offset or cause of action
against Bank or its officers, agents or affiliates arising under or
in connection with the Liabilities; and






 




(d)

all
financial statements, reports and other documents delivered to Bank
on or before the date hereof under or in connection with the
Agreement are, as of the relevant date, complete and accurate and
may be relied upon by Bank.






 


 


NDS NUTRITION PRODUCTS,
INC.,


a
Florida corporation


 




By:                                                       








Its:                                                       








Date:                                                       






 


 


iSATORI,
INC.,


a
Delaware corporation


 




By:                                                       








Its:                                                       








Date:                                                       






 




 

-14-