Document:

Page: 1 Deal Application ID : 91663

 

 

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Libertas
Funding LLC

382
Greenwich Avenue Suite 2 Second Floor Greenwich CT 06830

 

FUTURE
RECEIVABLES SALE AGREEMENT

 

This
FUTURE RECEIVABLES SALE AGREEMENT (“Agreement”) dated 8/23/2018, is made by and between Libertas Funding LLC, a Connecticut
limited liability company (“Purchaser”), Merchant (Merchant Information below), and the Guarantor(s)/Owner(s), as
identified in the Owner/Guarantor Information below.

 

Merchant
Information

 

	Merchant
    Legal Name: Smart Works, LLC/ Smart Works IT Services, LLC/ ITECH US, Inc/ SharedLabs, Inc/ Exois Inc	DBA
    Name:
	Entity
    Type: CORPORATION	FEIN:
    814628339
	State
    Of Incorp: NJ/ VT	Bank
    Name:
	Address:
    55 Carter Dr Ste 107 / 20 Kimball Ave Ste 303N, Eddison / South Burlington, NJ/ VT, 08817 / 05403	Phone:
    9047197579

 

OWNER/GUARANTOR
INFORMATION (referred to individually or collectively as the(“Owner”)

 

	Name
    of Owner Guarantor: Jason Cory	Cell
    Phone: 9046252372	Social
    Security # : 
	Home
Address : 	City/State
    : JACKSONVILLE / FL	Zip
    Code : 32206
	Ownership
    % : 35	Email: jason.cory@sharedlabs.com	 

 

Purchase
Information

 

	Amount
    Sold	$1,370,000.00	The
    dollar value of the Future Receivables
	Discount
    Factor	1.370	The
    risk adjustment to the Amount Sold that determines the Futures Receivables Discount
	Future
    Receivable Discount	$370,000.00	The
    difference in value between the Purchase Price and the Amount Sold
	Purchase
    Price	$1,000,000.00	The
    dollar amount Purchaser is paying for the Amount Sold.
	Due
    Diligence Price Adjustment 3.0%	$30,000.00	Additional
    discount given to Purchaser for due diligence.
	Direct
    Payments to Third Parties/Renewals	$0.00
     	Paid
    to Other Funders.  
	Total
    Amount Sent to Merchant	$970,000.00	Net
    of Discount and Direct Payments to 3rd Parties:
	Specified
    Percentage	20%	Percentage
    of Future Receivables to be remitted to purchaser on a daily basis
	Estimated
    Average Monthly Future Receivables	$3,338,011.00
     	Future
    Receivables Expected Per Month based on detailed analysis of Merchant’s business and attestation from Merchant
	Expected
    weekly Remittance  	$50,183.15
     	Estimated
    Average Monthly Receivables Multiplied by Specified Percentage Divided by Number Working Days in Month (21) Times 5 (days)
	Early
    Remittance Discount	1.200
    @ 3 months	Discount
    Paid to Merchant for remitting Future Receivables Early
	Expected
    Remittance Term	Approx
    6.5 months	Expected
    term of this agreement based on the specified percentage
	Remittance
    Choice	ACH	Remittance
    can occur via ACH, Credit Card Split or Lockbox

 

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 DAILY REMITTANCE PER DAY WITHOUT THE CONSENT OF THE MERCHANT.

 

    	 

    	Page: 2 Deal Application ID : 91663

    

 

As
explained in more detail in the Terms and Conditions stated hereinafter, Merchant will be in default of this Agreement if Merchant
does or causes to be done any of the following during the term of this Agreement (see below, including but not limited to paragraph
8 and 10 for a list of the all of the events of default):

 

	 	●	Change
    or close Merchant’s bank account
	 	●	Change
    (or add a) credit card processors
	 	●	Block
    Purchaser ACH access to Merchant’s bank account
	 	●	Sell
    Merchant’s business prior to full remittance of Future Receivables above
	 	●	Deliberately
    disconnecting Purchaser’s bank monitoring software
	 	●	Retain
    a third-party debt consolidator to negotiate a change to the terms and conditions of this Agreement
	 	●	Sell
    merchants future receivables to another person or entity

 

PURCHASE
AMOUNT DISCOUNTS AND REFUNDS. The following terms are additional costs, fees or refunds that may be incurred in connection
with this Agreement upon certain circumstances, as set forth below:

 

	 	a.	Returned
    Item Refund - $35.00 Applicable in a circumstance in which Merchant has not agreed with Purchaser to a change in
    the Remittance Amount and does not have sufficient collected receivable funds in its Account to remit to Purchaser the agreed
    Remittance Amount. Upon the fourth Returned Item Refund imposed under this section, Merchant shall be deemed in Breach under
    the Agreement.
	 	 	 
	 	b.	Blocked
    Account Refund - $100.00 Applicable in a circumstance in which Merchant BLOCKS its Account from Purchasers debit
    ACH or changes its designated Account cutting off Purchaser from obtaining delivery of the agreed Remittance Amount. This
    action places Merchant in Breach under the Agreement.
	 	 	 
	 	c.	Breach
    Refund : $2,500 In the event of a breach of this Agreement, this amount will be added to the total amount to be
    remitted by the Merchant, effectively providing a breach-based discount to the Purchaser.

 

TERMS
AND CONDITIONS IN ADDITION TO THE ABOVE TERMS:

 

	 	1.	Sale.
    In consideration of the payment of the Purchase Price specified above, Purchaser purchases from Merchant, and Merchant
    sells to Purchaser, the Specified Percentage of Merchant’s future accounts, contract rights and any other obligations
    arising from or relating to the payment of monies from Merchant’s customers and/or other third-party payers including
    payments made by cash, check, electronic transfer or other form of monetary payment to Merchant in the ordinary course of
    the Merchant’s business, or otherwise, for the payment of Merchant’s sale of goods or services (“ACH Receivables”).
    Such payment of monies shall include the use by Merchant’s customers of any Payment Device (as defined herein) to purchase
    Merchant’s products and/or services that are processed by Merchants’ card processor anytime during which the Amount
    Sold is outstanding (“Credit Card Receivables”, ACH Receivables and Credit Card Receivables are hereafter collectively
    or independently referred to as “Future Receivables”). Payment Device includes credit cards, charge cards, debit
    cards, prepaid cards, benefit cards, or any other type of payment card as well as any virtual payment card or any electronic
    payment device. Merchant agrees to remit to Purchaser in accordance with the terms of this Agreement the Daily Percentage
    of the Future Receivables specified above until the Amount Sold has been forwarded to Purchaser. Purchaser purchases the Future
    Receivables free and clear of all claims, liens or encumbrances of any kind whatsoever. Merchant agrees that this Agreement
    applies to Merchant’s entire right, title and interest in the Future Receivables up to the Amount Sold. The terms and
    conditions of this Agreement shall remain in full force and effect until the Amount Sold has been delivered to Purchaser subject
    to the terms of this Agreement. Merchant and Purchaser agree that this sale and purchase is final and Merchant has no right
    to repurchase or resell the Future Receivables or any portion thereof. Merchant, any individual signing this agreement and
    Purchaser (each individually referred to herein as “Party” and collectively referred to herein as “Parties”)
    agree that the Purchase Price paid to Merchant is the price paid to purchase Merchant’s Future Receivables and that
    the transaction contemplated by this Agreement is a purchase and sale of the Future Receivables. The Parties hereby agree
    that the transaction contemplated by this Agreement is not a loan, a forbearance of money lent or any similar loan or lending
    transaction. Merchant understands, agrees and represents that this transaction is made for business or commercial purposes
    only.
	 	 	 
	 	2.	Remittance
    of Amount Sold. The Merchant hereby agrees to deliver the Amount Sold to the Purchaser as (i) the Expected Daily Remittance
    (based on a Specified Percentage) of Future Receivables by debiting, via ACH transaction, Merchant’s bank account (a
    “Direct Debit”). Purchaser, in its sole discretion, shall choose whether to receive the Amount Sold from the Merchant
    either by Direct Split or Direct Debit, (ii) as a Specified Percentage of daily amount of Credit Card Receivables directly
    from Merchant’s card processor (“Credit Card Split”) or (iii) daily amount of Future Receivables directly
    through a Lockbox arrangement “Lockbox”); or Purchaser may, in its sole discretion, upon written notice to
    Merchant, change the method by which it will accept the remittance of the Amount Sold, and provide the Merchant with updated
    remittance instructions. The following details each remittance type:

 

	 	a.	If
    Purchaser chooses to receive the remittance of the Amount Sold via a Direct Debit as the Expected Daily Remittance (based
    on a Specified Percentage) then Merchant agrees as follows:
	 	 	 	 
	 	 	1.	Bank
    Account. Merchant shall deposit all of Merchant’s Future Receivables into a bank account approved by Purchaser (the
    “Account”).

 

    	 

    	Page: 3 Deal Application ID : 91663

    

 

	 	2.	Automated
    Clearinghouse for Expected Daily Remittance. The Merchant hereby authorizes Purchaser and its agents to initiate Automated
    Clearinghouse (“ACH”) payments equal to the Expected Daily Remittance of all deposits made into the Account each
    business day until the Purchaser has received Future Receivables equal to the Amount Sold.
	 	 	 
	 	3.	Merchant
    to Maintain the Account. Merchant understands that it is responsible for ensuring that the Expected Daily Amount to be
    debited by Purchaser remains in the Account and will be held responsible for any fees incurred by Purchaser resulting from
    a rejected ACH attempt or an Event of Default (as defined herein).
	 	 	 
	 	4.	Overdraft
    or Rejected Transactions the Responsibility of Merchant. The Purchaser is not responsible for any overdrafts
	 	 	 
	 	5.	documented
    change in the Merchant’s Future Receivables, Purchaser will continue to pull the Expected Daily Remittance amount. However,
    if Merchant provides written evidence, in the form of a complete set of invoices (or its equivalent), or natural events that
    have changed or impaired the Merchant’s ability to generate Future Receivables, and only with ongoing electronic surveillance,
    the Purchaser will agree to adjust the amount of the Expected Daily Remittance. It is the Merchant’s responsibility
    to communicate this at least one week in advance of a requested change and to cooperate with the Purchaser in good faith.
	 	 	 
	 	6.	ACH
    authorization. The Merchant shall provide all necessary ACH authorizations to the Purchaser as set forth in Appendix A
    to this Agreement.

 

	 	b.	If
    Purchaser chooses to accept the remittance of the Specified Percentage of the Amount Sold through Credit Card Split, Merchant
    will enter into an agreement with a card processor (“Processor”) acceptable to Purchaser, and authorize Processor
    to pay the Specified Percentage directly to Purchaser until Purchaser receives the total Amount Sold. Merchant acknowledges
    that Processor will be acting on behalf of Purchaser to collect the Specified Percentage. Merchant irrevocably grants Processor
    the right to hold the Specified Percentage and to pay Purchaser directly (at, before or after the time Processor credits or
    remits to Merchant the balance of the Amount Sold not sold by Merchant to Purchaser) until Purchaser receives the entire Amount
    Sold. Processor may provide Purchaser with all information Purchaser deems pertinent. Merchant agrees to hold Purchaser harmless
    for the Processor’s actions or omissions.
	 	 	 
	 	c.	If
    Purchaser chooses to accept the remittance through a Lockbox, Purchaser is authorized by Merchant to receive remittance to
    a specified bank account (“Lockbox”) directly from the Merchant’s Processor as well as Merchant’s
    invoiced customers (the “Merchant’s Counterparties”). This Authorization shall continue until the Purchaser
    has received an amount equal to the Purchased Amount, plus any additional remittance required. Merchant further authorizes
    the Merchant’s Counterparties to provide to the Purchaser and its agents all information necessary to Purchaser to determine
    the amount to be paid to the Merchant and initiate such ACH payments to the Specified Account. Upon receipt of each ACH transfer
    into the Lockbox, Purchase will retain the Specified Percentage as well as the required minimum balance for the Lockbox (the
    “Required Minimum Balance”). Purchaser will ACH transfer the difference between the received funds and the retained
    funds plus the minimum balance into the Account.

 

	 	3.	Read
    Only Electronic Bank Software. Merchant will provide Purchaser with ongoing read only electronic surveillance on a daily
    basis for the entire period during which this Agreement is in effect. Any change to Merchant’s bank account, access
    code, or permissions from its bank should be remedied as soon as possible. Merchant agrees to provide Purchaser all required
    access codes and allow Purchaser to electronically monitor the Account (e.g., using the anonymous read-only Yodlee link (or
    Decision Logic) provided by the Purchaser to the Merchant). This access both ensures that the Merchant is depositing its Future
    Receivables into the Account and provides written evidence to enable the Purchaser to be able to make adjustments to the Expected
    Remittance Amount, if necessary, upon mutual agreement with the Merchant. If the electronic access to Merchant’s Account
    is temporarily disabled for any reason, Merchant will, as soon as possible, work with the Purchaser to re-establish the link
    between the Account and the Purchaser. Any change to Merchants’ Account, access codes or permission from the bank to
    access the Account or receive ACH transactions from the Account must be remedied immediately. The failure by the Merchant
    to comply with this Section 3 shall constitute a breach/Event of Default of this Agreement.
	 	 	 
	 	4.	Timing,
    Method of Payment, Processing Trial. Merchant and Purchaser agree that Purchaser shall pay the Purchase Price or any portion
    thereof to Merchant only at a time, and through a method, acceptable to Purchaser and at Purchaser’s sole discretion.
    Merchant and Purchaser also agree that Purchaser, in its sole discretion, may refuse to pay the Purchase Price or any portion
    thereof to Merchant and cancel this Agreement at any time prior to the Purchase Price being paid. Prior to paying the Purchase
    Price, to the extent that the Purchaser chooses to receive its Amount Sold pursuant to a Direct Split, as described above,
    Purchaser may conduct a site inspection and shall conduct a processing trial (the “Processing Trial”) to determine
    whether the Daily Percentage will be correctly processed and/or reported by Merchant’s card processor or bank to Purchaser.
    In the event Purchaser determines to conduct a Processing Trial, Merchant acknowledges and agrees that Purchaser will make
    its final decision, in its sole and absolute discretion, whether to purchase the Future Receivables after completion of the
    Processing Trial. If Purchaser conducts a Processing Trial and determines not to purchase the Future Receivables, any receivables
    remitted to Purchaser during the Processing Trial shall be returned to Merchant.
	 	 	 
	 	5.	Waiver.
    There shall be effected no waiver by failure on the part of Purchaser to exercise, or delay in exercising, any right under
    this Agreement, nor shall any single or partial exercise by Purchaser of any right under this Agreement preclude any other
    future exercise of any right. The remedies provided hereunder are cumulative and not exclusive of any remedies provided by
    law or equity.

 

    	 

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	 	6.	Authorization
    to File Notice of Sale and Security Interest. Merchant hereby authorizes Purchaser to file one or more financing statement
    pursuant to the Uniform Commercial Code (UCC) to evidence -and perfect the sale of the Future Receivables and any continuation
    statements or amendments thereto. The UCC financing statement shall state that the sale of the Future Receivables is intended
    to be a sale and not an assignment for security.
	 	 	 
	 	7.	Power
    of Attorney. Merchant irrevocably appoints Purchaser as its agent and attorney-in-fact with full authority to take any
    action or execute any instrument or document to settle all obligations due to Purchaser from any third party, or any breach
    by Merchant set forth in Section 10 or any other section of this Agreement or the occurrence of an event of default as described
    and defined in 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; to receive, endorse and collect any checks, notes, drafts,
    instruments, documents or chattel paper in connection with clause (i) or (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 which Purchaser may deem necessary for the collection
    of any of the unpaid Amount Sold, or otherwise to enforce its rights with respect to the payment of the Amount Sold.
	 	 	 
	 	8.	Refunds
    and Purchaser’s Risk. Purchaser does NOT CHARGE ANY ORIGINATION OR BROKER FEES. If Merchant is charged such a fee,
    it is not being charged by Purchaser or an agent of Purchaser. Additionally, because this is not a loan, Purchaser does not
    charge any interest, finance charges, points, late fees or similar fees (except as permitted by applicable law in connection
    with civil judgments). Purchaser is purchasing the Future Receivables at a discount. Because the transaction evidenced by
    this Agreement is not a loan, there are no specific scheduled payments and no repayment term. If Merchant’s business
    slows down and Merchant’s Future Receivables decrease or if Merchant closes its business or ceases to process Payment
    Devices and Merchant has not violated any of the representations, warranties and covenants provided in paragraph 10 below,
    there shall be no default or breach of this Agreement. Purchaser is purchasing the Future Receivables and Purchaser assumes
    the risk that Merchant’s business may fail or be adversely affected by conditions outside the control of Merchant provided
    Merchant has not breached a representation, warranty or covenant set forth in paragraph 10 below. A returned item refund of
    $35.00 will be assessed if, for any reason, (a) a check, draft or similar instrument issued by the Merchant or an individual
    that signs this Agreement is not honored or cannot be processed; or (b) an electronic debit is returned unpaid or cannot be
    processed. Merchant and any individual that signs this Agreement authorize Purchaser to resubmit returned payments in its
    discretion. At Purchaser’s option, Purchaser will assess this fee the first time a payment is not honored or paid, even
    if it is later honored or paid following resubmission. Any check, draft or similar instrument may be collected electronically
    if returned for insufficient or uncollected funds. Additionally, a blocked account refund of $100.00 will be assessed as described
    above as well as a breach refund of $2,500.00 in the event that the Merchant violates the terms of this agreement, which violation
    remains uncured for more than 5 days. These refund will be paid in order to reimburse the Purchaser for the costs that it
    incurs in connection with returned items, blocked accounts and breaches, respectively.
	 	 	 
	 	9.	Right
    to Cancel. Merchant may cancel this transaction at any time prior to midnight of the fifth business day after Purchaser
    forwards the Purchase Price to Merchant. In order to cancel the transaction, Merchant must provide notice to the Purchaser
    and return the full Purchase Price to Purchaser within five days of receipt of the Purchase Price.

 

	 	10.	Merchant’s
    Representations, Warranties and Covenants. Merchant represents, warrants and covenants that as of the date and during
    the term of this Agreement: (i) the Future Receivables are not subject to any claims, charges, liens, restrictions, encumbrances
    or security interests of any nature whatsoever; (ii) Merchant will not sell the Future Receivables to another person or entity;
    (iii) Merchant will not conduct business under any name other than as disclosed herein, shall not change its business location
    without the prior written consent of Purchaser, and shall not temporarily close its business for renovations or other purposes;
    (iv) Merchant will not change or add credit card processors or change the Account without the prior written approval of Purchaser;
    (v) Merchant will not take any action to intentionally discourage the use of credit cards, debit cards or other payment cards;
    (vi) Merchant will not undertake any transaction involving the sale of Merchant, either by an issuance, sale or transfer of
    ownership interests in Merchant that results in a change in ownership or voting control of Merchant, or by a sale or transfer
    of substantially all of the assets of Merchant; (vii) Merchant will not voluntarily permit another person or company, including
    without limitation a franchisor company (if Merchant is a franchisee), to assume or take over the operation and/or control
    of the Merchant’s business or business locations; (viii) Merchant is not currently contemplating the filing of a bankruptcy
    proceeding or closing Merchant’s business and Merchant has not retained any attorney, other consultant or professional
    to provide any advice, assistance or planning with respect to the filing of a bankruptcy; (ix) all information provided by
    Merchant to Purchaser in this Agreement, application, interview with Purchaser or otherwise and all of Merchant’s financial
    statements and other financial documents provided to Purchaser are true and correct and accurately reflect Merchant’s
    financial condition and results of operations; (x) Merchant will possess and maintain insurance in such amounts and against
    such risks as are necessary to protect its business and shall show proof of such insurance upon demand; (xi) Merchant has
    all permits, licenses, approvals, consents and authorizations necessary to conduct its business and will promptly pay all
    necessary taxes, including but not limited to employment and sales and use taxes; (xii) Merchant and the person(s) signing
    this Agreement on behalf of Merchant have full power and authority to enter into and perform the obligations under this Agreement;
    (xiii) Merchant will provide Purchaser copies of all documents related to Merchant’s card processing activity or financial
    and banking affairs within five (5) days of a request by Purchaser; (xiv) Merchant will permit Purchaser to conduct a site
    inspection of Merchant’s business, including an inspection of Merchant’s credit card terminals, at any reasonable
    time during the term of this Agreement without notice to Merchant; (xv) Merchant will not take any action to cause the Future
    Receivables to be settled or delivered to any bank account other than the bank account that the Future Receivables are being
    settled or delivered to as of the date of this Agreement and in accordance with the terms of this Agreement; (xvi) Merchant
    will not enter into any financing agreement wherein and whereby the repayment terms of the agreement require Merchant to make
    daily or weekly payments (NO “STACKING”); (xvii) Merchant will conduct its business consistent with past practice
    and shall not take any action that would have an adverse effect on the use, acceptance, or authorization of any Payment Device
    for the purchase of Merchants products or services; (xviii) Merchant has not, will not and is not contemplating retaining/paying
    in any way a third-party debt consolidator, nor has the Purchaser consulted with nor will the Purchaser consult with, a third-party
    debt consolidator in contemplation of negotiating a change to the terms and conditions of this Agreement. Merchant understands
    clearly that the breach of any of the foregoing shall constitute a breach/event of default under this Agreement; (xviv) Merchant
    will not block Purchaser from receiving/requesting ACH remittances from Merchant’s Account and will act in good faith
    to enable Purchaser to access at all times the Account for purposes of electronic surveillance; and (xvv) has disclosed any
    condition that has resulting in or would result in a material adverse change to Merchant’s business and knows of no
    condition and there is no condition which is likely to result in a material adverse change to its business. Merchant understands
    that the violation of any of these covenants at any time would constitute a breach of this Agreement. Additionally, if any
    of the representations above are not true as of the date hereof, this would also constitute a breach of this Agreement.

 

    	 

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TO
THE EXTENT THAT INFORMATION PROVIDED BY THE MERCHANT THAT IS FALSE OR MISLEADING, MERCHANT SHALL BE DEEMED TO BE IN BREACH OF
THIS AGREEMENT AND PURCHASER SHALL BE ENTITLED TO ANY REMEDIES UNDER LAW. ANY MISREPRESENTATION MADE BY MERCHANT OR OWNER OR ANY
REPRESENTATIVES OF MERCHANT OR OWNER IN CONNECTION WITH THIS AGREEMENT MAY CONSTITUTE A SEPARATE CAUSE OF ACTION FOR FRAUD OR
INTENTIONAL MISREPRESENTATION.

 

	 	11.	Specified
    Percentage. Purchaser agrees to accept the remittance of the Specified Percentage in one of the following ways: (i) directly
    from Merchant’s card processor; (ii) by debiting the Merchant’s bank account; or (iii) by debiting a deposit account
    established by Merchant that is approved by Purchaser. Purchaser may decide in its sole discretion which of the three methods
    it will accept for the remittance of the Specified Percentage and will notify Merchant prior to delivering the Purchase Price
    to Merchant. If Purchaser agrees to accept the remittance of the Specified Percentage directly from the Merchant’s card
    processor, Merchant agrees to enter into an agreement with a card processor acceptable to Purchaser (“Processor”)
    that authorizes Processor to pay the Specified Percentage directly to Purchaser rather than to Merchant until the Amount Sold
    has been forwarded by Processor to Purchaser. This authorization shall be irrevocable, absolute and unconditional. Merchant
    hereby irrevocably grants Processor the right to hold the Specified Percentage and to pay Purchaser directly (at, before or
    after the time Processor credits or remits to Merchant the balance of the Future Receivables not sold by Merchant to Purchaser)
    until the entire Amount Sold has been forwarded to Purchaser. Merchant authorizes Purchaser to act as Merchant’s agent
    for purposes of accessing and retrieving transaction history information regarding Merchant from Processor and any additional
    card processors Merchant may utilize during the term of this Agreement. Merchant acknowledges and agrees that Processor may
    provide Purchaser with Merchant’s Payment Device processing history, including without limitation Merchant’s chargeback
    experience and any communications about Merchant received by Processor from a card processing system. Merchant acknowledges
    that Purchaser does not have any power or authority to control the Processor’s actions with respect to the authorization,
    clearing, settlement and other processing of transactions and that Purchaser is not responsible for the Processor’s
    actions. Merchant agrees to hold Purchaser harmless for the Processor’s actions or omissions. If Purchaser agrees to
    accept the remittance of the Specified Percentage by debiting the Merchant’s bank account, Merchant irrevocably authorizes
    Purchaser or its designated successor or assignee to withdraw the Specified Percentage by initiating a debit via the Automatic
    Clearing House (ACH) system to the Merchants’ bank account (as listed in Merchant’s application) or such other
    bank account that Merchant maintains (“Bank Account”). Merchant agrees to complete and execute a written ACH authorization
    (the “ACH Authorization”) permitting Purchaser to debit the Bank Account pursuant to the terms of this Agreement.
    Any such ACH Authorization is incorporated into and made a part of this Agreement. In the event Purchaser withdraws an incorrect
    amount from Merchant’s Bank Account, Merchant authorizes Purchaser to credit the Bank Account for the appropriate amount.
    Merchant and each Guarantor also authorize Purchaser to act as an agent for purposes of accessing and retrieving account activity
    and account balance information from any bank accounts of Merchant or Guarantor(s). If Purchaser agrees to accept the remittance
    of the Specified Percentage by debiting a deposit account established by Merchant that is approved by Purchaser (“Approved
    Account”), Merchant agrees to complete all necessary forms to establish the Approved Account. Merchant acknowledges
    and agrees that any funds deposited into the Approved Account by Merchant’s card processor will remain in the Approved
    Account until the Specified Percentage is withdrawn by Purchaser and then the remaining funds, minus any amount required to
    maintain the minimum balance for the Approved Account, will be forwarded to Merchant’s Bank Account. If the Approved
    Account requires a minimum account balance, Purchaser may, in its sole discretion, fund the required minimum balance for the
    Approved Account out of the Purchase Price.
	 	 	 
	 	12.	Telephone
    Monitoring, Recording and Contacts. Purchaser may choose to monitor and/or record telephone calls with Merchant and its
    owners, employees or agents. These calls are monitored and/or recorded solely for evaluation by supervisors, training, monitoring
    for compliance purposes, collections, and quality control. By signing this Agreement, Merchant agrees that any call between
    Purchaser and Merchant or a representative of Merchant may be monitored and/or recorded for these purposes. Merchant further
    agrees that: (i) it has an established business relationship with Purchaser and may be contacted from time to time regarding
    transactions with Purchaser by telephone, text message or email; (ii) such contacts are not considered unsolicited or inconvenient;
    and (iii) any such contact may be made using any wireless, mobile cellular or other number Merchant or its representative
    gave Purchaser, using any e-mail address Merchant or its representative gave Purchaser, or using an automated dialing and
    announcing or similar device, unless prohibited by law. This authorization is binding upon Merchant upon signing this Agreement
    and shall not be deemed withdrawn or revoked should Purchaser determine not to purchase the Future Receivables from Merchant.

 

    	 

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	 	13.	Miscellaneous.
    This Agreement shall be binding upon Merchant as well as its successors, assigns, related companies and Affiliated Entity
    (as defined below) as well as any company or person (or group of persons working together) that purchases substantially all
    of the Merchant’s assets or a majority of its voting interests and/or control over the Merchant. This Agreement shall
    inure to the benefit of Purchaser, its successors and assigns. This Agreement constitutes the entire Agreement between the
    Parties, and no representations, agreements, or understandings of any kind, either written or oral, shall be binding upon
    the parties unless expressly contained herein. This Agreement is a complete and exhaustive statement of the terms of the parties’
    agreement, which may not be explained or supplemented by evidence of consistent or inconsistent additional terms or contradicted
    by evidence of any prior or contemporaneous agreement. The Parties may change any of the terms of this Agreement or amend
    this Agreement but any such changes or amendments shall not be effective unless they are in writing, agreed to by both Parties,
    and signed by Merchant and/or Guarantor(s) as applicable. If any of the provisions of this Agreement are determined to be
    invalid, illegal or unenforceable in any respect, the remaining provisions shall not be affected in any manner. All Parties
    hereby acknowledge having the full power and authority to enter into and perform the obligations under this Agreement. Merchant
    and Guarantor(s) agree to execute such further and additional documents, instruments, and writings as may be necessary, proper,
    required, desirable, or convenient for the purpose of fully effectuating the terms and provisions of this Agreement. The information
    submitted by Merchant as part of its application for this transaction is hereby incorporated into and made a part of this
    Agreement. The signatures to this Agreement may be evidenced by facsimile copies or other electronic means reflecting the
    Party’s signature hereto, and any such copy or signature shall be sufficient as if it were an original signature. In
    lieu of a signature, Purchaser shall be deemed to have accepted the terms of this Agreement upon payment of the Purchase Price
    to Merchant. Paragraph 10 and paragraphs 12 through 18 shall survive any termination, satisfaction or cancellation of this
    Agreement.
	 	 	 
	 	14.	Governing
    Law This Agreement, all transactions it contemplates, the entire relationship between the Parties, and all Claims (as
    defined in paragraph 15 below), whether such Claims are based in tort, contract or arise under statute or in equity, including
    all Claims involving an Affiliated Entity of Purchaser, shall be governed by and enforced in accordance with: (i) the laws
    of the State of New York without regard to principles of conflicts of laws that would require the application of any other
    law; and (ii) federal law for the limited purpose of the Arbitration Agreement (paragraph 17 below). Affiliated Entity means
    and includes: (i) any entity or person that has owned or controlled Purchaser or any entity that has been owned or controlled
    by Purchaser; (ii) any predecessor or successor entities of Purchaser; (iii) any entity or person who at any time owns or
    holds an equity or security interest in the Future Receivables and the interest was granted by Purchaser; and (iv) all officers,
    directors, owners and employees of Purchaser, its parent company or any Affiliated Entity; and (v) any parent companies of
    any Affiliated Entity and their subsidiaries.
	 	 	 
	 	15.	Disputes
    Any claim, dispute or controversy between any of the Parties or between any of the Parties and an Affiliated Entity arising
    from or relating in any way to the relationship between the Parties, including any relationship with an Affiliated Entity,
    whether such claims are based in tort, contract, or arise under statute or in equity (referred to herein as “Claim”
    or “Claims”), shall be resolved only as provided in this Agreement. Claim includes but is not limited to: any
    disputes regarding or relating to this Agreement or the application provided in connection with this transaction; any solicitation
    or advertising materials; any activities relating to the maintenance or servicing of the transaction; any disputes arising
    from any collection activity related to a breach or alleged breach of this Agreement; any disputes concerning the processing
    or collection of Future Receivables; any disputes regarding information obtained by Purchaser from, or reported by Purchaser
    to, Merchant, credit bureaus or others; and any disputes resulting from or relating to, in any way, any previous relationship,
    agreement or contract between the Parties or Merchant and an Affiliated Entity including but not limited to an agreement under
    which Merchant sold Future Receivables to Purchaser or an Affiliated Entity. The Parties hereby agree that this provision
    amends and supersedes any provision in a previous agreement entered into between the Parties or between Merchant and an Affiliated
    Entity regardless of whether the previous agreement has been satisfied, terminated or is in default. Accordingly, any Claims
    between the Parties or made against or by an Affiliated Entity shall no longer be governed by the dispute resolution provisions
    contained in a previous agreement but shall be governed by paragraphs 14 through 19 of this Agreement; provided, however,
    that any changes this provision makes to previous agreements between the Parties or made against or by an Affiliated Entity
    shall not apply in any litigation, arbitration or other proceeding commenced before the date of this Agreement.
	 	 	 
	 	16.	Litigation.
    If a Claim is filed in court, the Claim must be filed in the State of New York and the Parties hereby agree that the exclusive
    venue for all Claims filed in court shall be in the State of New York. No court action may be brought in any other state or
    jurisdiction except as necessary to enforce a valid security interest or enforce a judgment entered in New York. The Parties
    hereby waive any claim against or objection to the in personam jurisdiction and venue in the courts of the State of New York.
    NO CLAIM FILED IN COURT WILL BE HEARD BY A JURY AND ANY CLAIM WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ACTIONS ARE NOT
    PERMITTED. NO COURT MAY ORDER, PERMIT OR CERTIFY A CLASS ACTION, REPRESENTATIVE ACTION, PRIVATE ATTORNEY-GENERAL LITIGATION
    OR CONSOLIDATED ACTION. NO COURT MAY ORDER OR PERMIT A JOINDER OF PARTIES, UNLESS BOTH MERCHANT AND PURCHASER CONSENT TO SUCH
    JOINDER IN WRITING.

 

    	 

    	Page: 7 Deal Application ID : 91663

    

 

	 	17.	ARBITRATION
    Any Party may elect to resolve any Claim by neutral, binding arbitration. An election to arbitrate a Claim may be made
    by any Party instead of filing an action in court or in response to a claim, counterclaim or cross claim filed in court by
    any Party. If a Party requests arbitration, all Claims (including counterclaims and cross claims) any Party may have against
    any other Party or Affiliated Entity, whether such Claims are deemed to be compulsory or permissive in law, shall be submitted
    to binding arbitration pursuant to this paragraph 17 (referred to herein as the “Arbitration Agreement”). The
    failure to bring such a Claim is a waiver of, and bars, the bringing of such a Claim in any subsequent arbitration or court
    action. Any arbitration hearing that requires the attendance of the Parties shall take place in the federal judicial district
    in the State of New York. The Party initiating the arbitration proceeding may select from the following arbitration administrators,
    which will apply the appropriate rules for commercial disputes in effect at the time the Claim is filed with the arbitration
    organization (“Arbitration Rules”): the American Arbitration Association (“AAA”), JAMS or any other
    organization the Parties agree to in writing. If neither AAA nor JAMS is able or willing to serve as the arbitration administrator
    and the Parties are unable to agree on a replacement administrator or arbitrator(s), then a court of competent jurisdiction
    will appoint an administrator or arbitrator(s). For information on arbitration fees and costs, a copy of the Arbitration Rules,
    or to file a claim contact AAA at 335 Madison Avenue, Floor 10, New York, New York 10017-4605, www.adr.org (phone 1-800-778-7879)
    or JAMS at 620 Eighth Ave., Floor 34, New York, NY 10018, www.jamsadr.com (phone 1-800-352-5267). In the event of a conflict
    between the Arbitration Rules and this Arbitration Agreement, this Arbitration Agreement shall govern. Judgment upon any arbitration
    award may be entered in any court with jurisdiction and may be enforced by any court having jurisdiction over that judgment.
    If a Party elects arbitration and the other Party refuses to arbitrate, the Party electing arbitration may seek a court order
    enforcing this Arbitration Agreement. In that event, the court shall determine any issues regarding enforceability of this
    Arbitration Agreement, including the validity and effect of the class action waiver (set forth below), but all other issues
    shall be decided by the arbitrator. All statutes of limitation that otherwise would apply to an action brought in court will
    apply in arbitration. NO CLAIM SUBMITTED TO ARBITRATION WILL BE HEARD BY A JURY AND ANY ARBITRATION UNDER THIS AGREEMENT
    WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED. NO ARBITRATOR MAY ORDER, PERMIT
    OR CERTIFY A CLASS ACTION, REPRESENTATIVE ACTION, PRIVATE ATTORNEY-GENERAL LITIGATION OR CONSOLIDATED ARBITRATION. NO ARBITRATOR
    MAY ORDER OR PERMIT A JOINDER OF PARTIES, UNLESS BOTH MERCHANT AND PURCHASER CONSENT TO SUCH JOINDER IN WRITING.
	 	 	 
	 	18.	Remedies
    In the event Merchant breaches, any of the provisions of this Agreement, including but not limited to the representations,
    warranties and covenants made in paragraph 9, Purchaser shall be entitled to all remedies available under law. In any action
    for damages, Purchaser shall be entitled to damages equal to the Amount Sold less the amount received by Purchaser. Merchant
    and the individuals signing this Agreement hereby agree that Purchaser may electronically debit from any of Merchant’s
    or the individual signatory’s bank accounts via ACH or otherwise all or any portion of the Amount Sold or may instruct
    Merchant’s processor to forward to Purchaser all or any portion of the Amount Sold outstanding if Merchant breaches
    this Agreement. In addition to any other remedies provided Purchaser under this Agreement, in the event that Merchant changes
    or permits the change of the Processor accepted by Purchaser, utilizes the services of an additional card processor or changes
    the Account, Purchaser shall have the right, without waiving any of its other rights or remedies and without notice to Merchant
    or Guarantor(s), to notify the new or additional card processor or the bank where the new Account is located, as the case
    may be, of the sale of the Amount Sold of Future Receivables hereunder and to direct such new or additional processor or bank
    to make payment to Purchaser of all or any portion of the amounts received or held by such card processor or bank for or on
    behalf of Merchant to pay any amounts Purchaser is entitled to receive under the terms of this Agreement. Merchant hereby
    grants to Purchaser an irrevocable power of attorney and hereby appoints Purchaser and its designees as Merchant’s attorney-in-fact
    to take any and all actions necessary or appropriate to direct such new or additional card processor to make payment to Purchaser
    as contemplated by this paragraph. The transaction(s) governed by this Agreement involves interstate commerce and the Parties
    agree that arbitration shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et. seq.) and the Arbitration Rules
    and not by any state law concerning arbitration. The arbitrator will be required to follow relevant law and applicable judicial
    precedent to arrive at a decision and shall be empowered to grant whatever relief would be available in court. The cost of
    any arbitration proceeding shall be divided as follows: (i) if a Party other than Purchaser or an Affiliated Entity initiates
    arbitration and the damages claimed are less than $25,000 or Purchaser or an Affiliated Entity initiate arbitration, Purchaser
    shall pay all arbitration fees and costs; (ii) if anyone other than Purchaser or an Affiliated Entity initiates arbitration
    and the damages claimed are $25,000 or more, the parties to the arbitration shall split the fees and costs for arbitration
    equally. Notwithstanding the foregoing, if a Party other than Purchaser believes the applicable cost of arbitration may be
    too burdensome, that Party may seek a waiver of costs under the applicable Arbitration Rules. If such a request is made but
    denied by the arbitration organization, Purchaser will consider a written request to either advance or pay all or part of
    the costs. If arbitration is elected, each Party shall be responsible for its own attorney, witness and consulting fees provided
    the prevailing Party may seek reimbursement of attorney fees and arbitration costs if they prevail as provided in paragraph
    16 below. If any part of this Arbitration Agreement, other than waivers of class action rights, is deemed or found to be unenforceable
    for any reason, the rest shall remain enforceable. If the waiver of class action rights is deemed or found to be unenforceable
    for any reason in a case in which class action allegations have been made, the remainder of this Arbitration Agreement shall
    be unenforceable.
	 	 	 
	 	19.	Attorney’s
    Fees and Costs. In the event Merchant defaults, Purchaser shall be entitled to recover from Merchant and Guarantors all
    costs of collection, including reasonable attorney’s fees and third party collection costs, including all such costs
    and fees incurred in the event of a bankruptcy filing by Merchant or Guarantors.

 

    	 

    	Page: 8 Deal Application ID : 91663

    

 

	 	20.	Reporting:
    By signing this Agreement you authorize Purchaser to obtain a credit report and any background report on the Merchant
    deemed necessary by Purchaser and any individual that signs this Agreement for purposes of deciding whether to approve the
    purchase of the Amount Sold or for any update, renewal, or for evaluating the qualification of Merchant for other products
    of Purchaser or Affiliated Entities and for any other lawful purpose. The report Purchaser obtains may include, but is not
    limited to, the business’ or individuals’ credit history or similar characteristics, employment and education
    verifications, social security verification, criminal and civil history, Department of Motor Vehicle records, any other public
    records, and any other information Purchaser deems relevant. The reports will be used by Purchaser to determine if it will
    proceed with the Purchase of the Future Receivables from Merchant and shall not be used for any other purposes.
	 	 	 
	 	21.	INDIVIDUAL
    LIABILITY OF GUARANTOR(S) FOR BREACH OF REPRESENTATIONS, WARRANTIES AND COVENANTS. By signing this Agreement on behalf
    of Merchant AND ON THEIR OWN BEHALF (each such signer a Guarantor), the Guarantors (defined as the Owners that have signed
    below) hereby assume and, jointly and severally, guarantee those obligations of the Merchant arising under this Agreement
    as set forth above and in Appendix B below. This guarantee is unlimited, absolute and without condition, and is binding upon
    each Guarantor, the Guarantor’s heirs, legal representatives, successors and assigns. The Guarantors to this Agreement
    are hereby notified that a negative credit report reflecting on his/her credit record may be submitted to a credit reporting
    agency if the terms of this Agreement are breached and the resulting damages are not satisfied. Each Guarantor acknowledges
    receiving a copy of this Agreement and having read the terms of this Agreement, including, without limitation, the guarantee
    set forth in this paragraph, and the individual owner’s and Guarantor’s signatures below shall serve as confirmation
    that they understand all terms and conditions of this Agreement.

 

EACH
PARTY ACKNOWLEDGES THAT THEY HAVE READ AND AGREE TO ALL THE FOREGOING TERMS AND CONDITIONS, INCLUDING THE CHOICE OF LAW AND ARBITRATION
PROVISIONS SET FORTH ABOVE.

 

	Libertas
    Funding LLC	 	 
	 	 	 
	by:
    Randy     Saluck	 /s/
    Randy Saluck 	 
	CEO,
    Libertas	(Signature)	 
	 	 	 
	FOR
    THE MERCHANT (#1)	 	 
	 	 	 
	by: Jason Cory,

                                                          President, Chairman
                                         and CEO 
	 /s/ Jason Cory 	 
	(Print
    Name and Title)	(Signature)	 
	 	 	 
	OWNER
    #1	 	 
	 	 	 
	by:
    Jason Cory	 /s/
Jason Cory 	 
	(Print
    Name and Title)	(Signature)	 

 

    	 

    	Page: 9 Deal Application ID : 91663

    

 

APPENDIX
A

 

ACH
Authorization Agreement

 

This
Authorization Agreement for Direct Deposit (ACH Credit) and Direct Collections (ACH Debits) is part of (and incorporated by reference
into) the Future Receivables Sale Agreement (the “Agreement”). Merchant should keep this important legal document
for Merchant’s records. This authorization agreement (the ACH Authorization) is entered into pursuant to the Future
Receivables Sale Agreement (the “Agreement”) dated 8/23/2018 between the undersigned Merchant and Libertas Funding
LLC (the “Purchaser”). Terms used and not defined herein will have the meanings assigned to such terms in the Agreement.

 

The
individual signing this ACH Authorization on behalf of Merchant certifies to Purchaser that he or she is a duly authorized check
signer on the financial institution account identified below, that he or she is authorized to enter into this ACH Authorization
on behalf of the Merchant, and that the Merchant will be bound by all the terms of this ACH Authorization.

 

This
authorization shall remain in effect until the sooner of (a) such time that Purchaser has received the Purchased Amount, plus
any applicable fees, under the Agreement, or (b) Purchaser permits Merchant to revoke this ACH Authorization, as evidenced in
writing to Merchant.

 

The
undersigned Merchant hereby authorizes Purchaser to initiate debit or credit entries from and to Merchants Account at the bank
specified below. Merchant and Purchaser agree to be bound by the applicable rules set forth by the National Automated Clearinghouse
Association. Furthermore, if any such ACH transactions should be returned for insufficient funds, Merchant authorizes Purchaser
to reattempt to collect such amounts by ACH, and in any such case, collect a fee as specified in the Agreement.

 

Merchant
further agrees that a breach of this ACH Authorization will constitute a breach of the Agreement.

 

Any
capitalized term(s) that are not otherwise defined shall retain the same meaning set forth in the Future Receivables Sale Agreement.

 

DISBURSEMENT
OF RECEIVABLES SALE PROCEEDS. By signing below, Merchant authorizes Purchaser to disburse the Purchase Price, less the amount
of any applicable setup fee, by initiating an ACH credit, wire transfer, or similar means to the checking account indicated below
(or a substitute checking account Merchant later identifies and is acceptable to Purchaser) (hereinafter referred to as the “Designated
Checking Account”) in the disbursal amount set forth in the accompanying Future Receivables Sale Agreement.

 

COLLECTION
OF FUNDS ARISING FROM FUTURE RECEIPTS. By signing below, Merchant authorizes Purchaser to collect amounts Purchaser is entitled
to receive under the Agreement by initiating ACH Debits of the Specified Percentage of Merchant’s daily receivables to the
Designated Checking Account each business day until Purchaser receives the Amount Sold. At the time of execution of the Future
Receivables Sale Agreement, the Parties agree that the Purchased Percentage equates to the Dollar Amount of Purchased Percentage
set forth in the Agreement, and that the Dollar Amount of Purchased Percentage shall be debited each business day. However, Merchant
acknowledges and agrees that the Dollar Amount of Purchased Percentage may change and fluctuate so that it directly correlates
to the fluctuation of the amount of Future Receivables generated by Merchant. Purchaser will debit Merchants Account in the amount
set forth in the Agreement, as may be modified from time to time by agreement of the Parties. Purchaser acknowledges that no prior
notification will be provided in advance of debits or credits authorized under the Agreement.

 

Merchant
authorizes Purchaser to increase the amount of any scheduled ACH debit entry or assess multiple ACH debits for the amount of any
previously scheduled payment(s) that was not paid because Merchant’s financial institution was not open or was not able
to process ACH transactions. If a transaction is rejected by Merchant’s financial institution for any reason other than
termination of this authorization, including without limitation insufficient funds, Merchant understands that Purchaser may, at
its discretion, attempt to process the transaction again as permitted under the NACHA Rules. Merchant also authorizes Purchaser
to initiate ACH entries to correct any erroneous payment transaction. Merchant understands that Merchant is responsible for ensuring
that funds arising from Future Receivables of Merchant remain in the Designed Checking Account each day until Purchaser debits
the amount to which it is entitled under the Future Receivables Sale Agreement. Merchant agrees to notify Purchaser promptly if
there are any changes to the account and routing numbers of the Designated Checking Account. Purchaser is not responsible for
any overdrafts, rejected transactions, or other fees that may result from credits or debits initiated under this Authorization
Agreement. This authorization is to remain in full force and effect until Purchaser has remitted the full amount of the Amount
Sold under the Agreement. The origination of ACH transactions to the Designated Checking Account must comply with, and both Merchant
and Purchaser agree to be bound by, the provisions of applicable law and the NACHA Rules. If Merchant’s financial institution
rejects Purchaser’s debits for any reason, Merchant is still responsible for making timely remittances of the Purchased
Percentage to Purchaser each business day, pursuant to the Agreement.

 

    	 

    	Page: 10 Deal Application ID : 91663

    

 

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,
(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.

 

BUSINESS
PURPOSE ACCOUNT. By signing below, Merchant attests that the Designated Checking Account was established for business purposes
and not primarily for personal, family or household purposes. The individual signing below on behalf of Merchant certifies that
he/she is an authorized signer on the Designated Checking Account. Merchant will not dispute any ACH transaction initiated pursuant
to this Authorization Agreement, provided the transaction corresponds to the terms of this Authorization Agreement. Merchant requests
the financial institution that holds the Designated Checking Account to honor all ACH entries initiated in accordance with this
Authorization Agreement.

 

Payment
Authorization. I authorize my bank to debit my account as identified above to the terms stated here. This authorization shall
remain in effect until the Purchaser and bank receive written notification from me of intent to terminate at such time and in
such manner as to afford the Purchaser and bank reasonable opportunity to act (minimum 30 days).

 

I
understand that if the total amount owed to the Purchaser is increased, I authorize this plan to continue as long as the payment
amount remains unchanged until the amount owed the Purchaser is paid off, or unless the plan is terminated earlier by me as above.

 

I
understand any added amounts can be applied for with a new ACH Debit Authorization Form.

 

All
other changes such as payment amount, frequency, bank account number change, will require a new ACH Debit Payment Authorization
Form to be filled out and submitted to Merchant 15 days prior to any change being implemented.

 

I
will be liable to pay an NSF fee of $25.00 (or the amount allowable by law), which may be automatically debited for each NSF.
I represent and warrant that I am authorized to execute this payment authorization for the purpose of implementing this
payment plan.

 

I
indemnify and hold the Purchaser and the bank harmless from damage, loss or claim resulting from all authorized actions hereunder.

 

Payments
will be scheduled weekly in the amount of $50,183.15

 

Recurring
schedule of payment will start on the following day after the financing proceeds are disbursed to the business.

 

Payments
will be deducted every day, excluding weekends until full payback amount, referred to as the Purchased Amount 1,370,000.00 is
reached.

 

Routing
Number Account:

 

Number
Account Name:

 

Bank
Name:

 

Type
of Account: Checking Savings

 

Merchants
Legal Name:Smart Works, LLC/ Smart Works IT Services, LLC/ ITECH US, Inc/ SharedLabs, Inc/ Exois Inc

 

View-Only
Access to Online Bank Login:

 

	Password:	 	 
	 	 	 
	Date:
    8/23/2018	 	 
	 	 	 
	FOR
    THE MERCHANT (#1)	 	 
	 	 	 
	by: Jason Cory

                                                                                 Chairman,
                                         President and CEO 
	 /s/
    Jason Cory 	 
	(Print
    Name and Title)	(Signature)	 

 

    	 

    	Page: 11 Deal Application ID : 91663

    

 

APPENDIX
B

 

SECURITY
AGREEMENT AND GUARANTY

 

Merchants
Legal Name: Smart Works, LLC/ Smart Works IT Services, LLC/ ITECH US, Inc/ SharedLabs, Inc/ Exois Inc

Physical
Address: 55 Carter Dr Ste 107 / 20 Kimball Ave Ste 303N, Eddison / South Burlington, NJ/ VT, 08817 / 05403

Federal
ID#: 814628339

 

Security
Interest.

 

To
secure Merchants delivery obligations to Libertas Funding LLC (the “Purchaser”) under the Future Receivables Sale
Agreement (the “Agreement”) dated 8/23/2018, Merchant hereby grants to Purchaser a security interest in (a) all accounts,
chattel paper, documents, equipment, general intangibles, instruments and inventory, as those terms are defined in Article 9 of
the Uniform Commercial Code (the UCC), now or hereafter owned or acquired by Merchant; and (b) all proceeds, as that term is defined
in Article 9 of the UCC, ((a) and (b) are collectively, the “Collateral”).

 

Cross-Collateral/Additional
Collateral.

 

To
secure Owners (see below) delivery obligations to Purchaser under this Security Agreement and Guaranty (the “Security Agreement”),
Owner also hereby grants Purchaser as Additional Collateral a security interest in:

 

Smart
Works, LLC

55
Carter Dr Ste 107, Edision, NJ 08817

 

Smart
Works IT Services, LLC

55
Carter Dr Ste 107, Edision, NJ 08817

 

ITech
US Inc

20
Kimball Ave Ste 303N, South Burlington, VT 05403

 

SharedLabs,
Inc

118
W Adams St, Ste 200, Jacksonville, FL 32202

 

Owner
understands that Purchaser will have a security interest in the aforesaid Additional Collateral upon execution of this Security
Agreement. Merchant and Owner each acknowledge and agree that any security interest granted to Purchaser under any other agreement
between Merchant or Owner and Purchaser (the “Additional Collateral” or “Cross-Collateral”) will secure
the obligations hereunder and under the Agreement.

 

Authority
for the Purchaser to file Financing Statements; Owner Liable for Costs

 

Merchant
and Owner each agrees to execute any documents or take any action in connection with this Security Agreement as Purchaser deems
necessary to perfect or maintain Purchasers first priority security interest in the Collateral, the Additional Collateral and
the Cross-Collateral, including the execution of any account control agreements. Merchant and Owner each hereby authorizes Purchaser
to file any financing statements deemed necessary by Purchaser to perfect or maintain Purchasers security interest, which financing
statement may contain notification that Merchant and Owner have granted a negative pledge to Purchaser with respect to the Collateral,
the Additional Collateral and the Cross-Collateral, and that any subsequent lien or may be tortiously interfering with Purchasers
rights. Merchant and Owner shall be liable for and Purchaser may charge and collect all costs and expenses, including but not
limited to attorney’s fees, which may be incurred by Purchaser in protecting, preserving and enforcing Purchasers security
interest and rights.

 

Negative
Pledge. Merchant and Owner each agrees not to create, incur, assume or permit to exist, directly or indirectly, any lien on
or with respect to any of the Collateral, the Additional Collateral or the Cross-Collateral, as applicable.

 

Consent
to Enter Premises and Assign Lease. Purchaser shall have the right to cure Merchants default in the payment of rent on the
following terms. In the event Merchant is served with papers in an action against Merchant for nonpayment of rent or for summary
eviction, Purchaser may execute its rights and remedies under the Assignment of Lease. Merchant also agrees that Purchaser may
enter into an agreement with Page: 11 Merchants landlord giving Purchaser the right: (a) to enter Merchants premises and to take
possession of the fixtures and equipment therein for the purpose of protecting and preserving same; and (b) to assign Merchants
lease to another qualified Merchant capable of operating a business comparable to Merchants at such premises.

 

Remedies.
Upon any Event of Default, Purchaser may pursue any remedy available at law (including those available under the provisions
of the UCC), or in equity to collect, enforce or satisfy any obligations then owing, whether by acceleration or otherwise.

 

    	 

    	Page: 12 Deal Application ID : 91663

    

 

Owner
Guarantee of Performance Upon Breach of Merchant Agreement.

 

The
Owner Guarantees the Performance of all of the representations, warranties, covenants (collectively, the “Representations”)
made by Merchant in this Security Agreement and the Agreement, as each agreement may be renewed, amended, extended or otherwise
modified (the “Guaranteed Obligations”). To the extent there is no violation of the Representations then the Owner(s)
will not guaranty the payment of the Purchase Amount by the Merchant, or guaranty that the Merchant will generate Future Receivables
sufficient to meet its obligations under the Merchant Agreement.

 

Remedies.
The Purchaser may seek remedy via the Personal Guarantee of Performance:

 

	 	a.	at
    the time of any breach by Merchant of any representation, warranty or covenant made by Merchant in this Security Agreement
    and/or the Agreement, and
	 	b.	at
    the time Merchant admits its inability to pay its debts, or makes a general assignment for the benefit of creditors, or any
    proceeding shall be instituted by or against Merchant seeking to adjudicate it bankrupt or insolvent, or seeking reorganization,
    arrangement, adjustment or composition of it or its debts.

 

Owner
Waivers. In the event that Merchant fails to make a payment or perform any obligation when due under the Agreement, Purchaser
may enforce its rights under this Security Agreement without first seeking to obtain payment from Merchant, any other guarantor,
or any Collateral, Additional Collateral or Cross- Collateral Purchaser may hold pursuant to this Security Agreement or any other
guaranty. Purchaser does not have to notify Owner of any of the following events and Owner will not be released from its obligations
under this Security Agreement if it is not notified of:

 

	 	i.	Merchants
    failure to pay timely any amount owed under the Merchant Agreement;
	 	ii.	any
    adverse change in Merchants financial condition or business;
	 	iii.	any
    sale or other disposition of any collateral securing the Guaranteed Obligations or any other guarantee of the Guaranteed Obligations;
	 	iv.	Purchaser’s
    acceptance of this Security Agreement; and
	 	v.	any
    renewal, extension or other modification of the Agreement or Merchants other obligations to Purchaser.

 

Purchaser
Actions. Purchaser may take any of the following actions without releasing Owner from any of its obligations under this Agreement:

 

	 	i.	renew,
    extend or otherwise modify the Merchant Agreement or Merchants other obligations to Purchaser;
	 	ii.	release
    Merchant from its obligations to Purchaser;
	 	iii.	sell,
    release, Merchant from its obligations to Purchaser;
	 	iv.	sell,
    release, impair, waive, or otherwise fail to realize upon any collateral securing the Guaranteed Obligations or any other
    guarantee of the Guaranteed Obligations; and
	 	v.	foreclose
    on any collateral securing the Guaranteed Obligations or any other guarantee of the Guaranteed Obligations in a manner that
    impairs or precludes the right of Owner to obtain reimbursement for payment under this Agreement.

 

No
Reimbursement Until the Merchant Amount plus any accrued but unpaid interest and Merchants other obligations to Purchaser
under the Agreement and this Security Agreement are paid in full, Owner shall not seek reimbursement from Merchant or any other
guarantor for any amounts paid by it under this Agreement.

 

Waivers.
Owner permanently waives and shall not seek to exercise any of the following rights that it may have against Merchant, any
other guarantor, or any collateral provided by Merchant or any other guarantor, for any amounts paid by it, or acts performed
by it, under this Agreement, including:

 

	 	i.	subrogation
	 	ii.	reimbursement;
	 	iii.	performance;
	 	iv.	indemnification;
    or
	 	v.	contribution.

 

Other.
In the event that Purchaser must return any amount paid by Merchant or any other guarantor of the Guaranteed Obligations because
that person has become subject to a proceeding under the United States Bankruptcy Code or any similar law, Owners obligations
under this Agreement shall include that amount.

 

Owner
Acknowledgement. Owner acknowledges that: (i) He/She understands the seriousness of the provisions of this Agreement; (ii)
He/She has had a full opportunity to consult with legal counsel of his/her choice; and (iii) He/She has consulted with counsel
of his/her choice or has decided not to avail himself/herself of that opportunity.

 

Joint
and Several Liability. The obligations hereunder of the persons or entities constituting Owner under this Agreement are joint
and several.

 

    	 

    	Page: 13 Deal Application ID : 91663

    

 

THE
TERMS, DEFINITIONS, CONDITIONS AND INFORMATION SET FORTH IN MERCHANT AGREEMENT ARE HEREBY INCORPORATED IN AND MADE A PART OF THIS
SECURITY AGREEMENT. CAPITALIZED TERMS NOT DEFINED IN THIS SECURITY AGREEMENT AND GUARANTY SHALL HAVE THE MEANING SET FORTH IN
THE MERCHANT AGREEMENT.

 

	FOR THE MERCHANT (#1)	 
	 	 	 
	by:	Jason Cory

                                                                      President,
                                         Chairman and CEO  
	 /s/
    Jason Cory 	 
	(Print Name and Title)	(Signature)	 
	 	 	 
	OWNER #1	 	 
	 	 	 
	by:	Jason
    Cory	 /s/ Jason Cory 	 
	(Print Name and Title)	(Signature)	 

 

    	 

    	Page: 14 Deal Application ID : 91663

    

 

ADDENDUM
TO CONTRACT

 

Addendum
to Merchant Agreement

 

This
is an addendum (“Addendum”) to that certain merchant agreement (the “Merchant Agreement”) entered into
by and among Libertas Funding LLC (the “Purchaser”), Jason Cory (the “Owner”) and Smart Works, LLC/ Smart
Works IT Services, LLC/ ITECH US, Inc/ SharedLabs, Inc/ Exois Inc (the “Seller”) dated as of 8/23/2018.

 

WHEREAS,
the Purchaser, the Owner and Seller wish to modify the Merchant Agreement as set forth herein.

 

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

 

	 	a.	The
    Owner and 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 Merchant Agreement in full by paying Purchaser
    the pre-payment Amount before the end of the relevant month, as set forth below, less the amount of any purchase payments
    made prior to the pre-payment 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 Smart Works, LLC/ Smart Works IT Services, LLC/ ITECH US, Inc/ SharedLabs,
    Inc/ Exois Inc.
	 	c.	In
    the event Seller chooses not to execute this addendum Buyer will be entitled to the full purchased amount to settle in full
    Sellers obligation under the Merchant Agreement.
	 	d.	Except
    as provided in this addendum, all terms and conditions of the Merchant Agreement and the Supplement shall remain in full force
    and effect.
	 	e.	This
    addendum shall be bound by the laws of the state of New York

 

Borrower
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 Purchase Agreement,
	 	●	If
    any funds used for the prepayment come from another funding company, whether in the form of a business loan or a merchant
    cash advance.

 

	Prepayment Term	 	Accepted Prepayment Amount	 
	3 Months	 	$	1,200,000.00	 

 

All
other terms of the referenced contract remain unchanged.

 

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

 

	ACCEPTED AND AGREED:	 	ACCEPTED AND AGREED:
	 	 	 
	Buyer: Libertas Funding LLC	 	Seller: Smart Works, LLC/ Smart Works IT Services, LLC/ ITECH US, Inc/ SharedLabs, Inc/ Exois Inc
	 	                                                   	 	 	                               
	By:
    	 /s/ Randy Saluck 	 	By:
    	 /s/ Jason Cory 
	Name: 
    	Randy
    Saluck	 	Name:	Jason
    Cory
	Title:
    	CEO,
    Libertas	 	Title:	 Chairman,
    President and CEO 
	 	 	 	 	 
	 	 	 	By:	 /s/ Jason Cory 
	 	 	 	Owner
    1 : 	Jason
    Cory

 

    	 	 	 

    	Page: 15 Deal Application ID : 91663	 

    

 

ADDENDUM
TO CONTRACT

 

Addendum
to Merchant Agreement

 

Purchase
Price: $1,000,000.00 Purchased Percentage: 20% Purchased Amount: $1,370,000.00 Estimated Weekly Amount: $50,183.15

 

This is
an addendum (“Addendum”) to that certain merchant agreement 91663 (the “Merchant Agreement”) entered into
by and among Libertas Funding LLC (the “Purchaser”), Jason Cory (the “Owner”) and Smart Works, LLC/ Smart
Works IT Services, LLC/ ITECH US, Inc/ SharedLabs, Inc/ Exois Inc (the “Seller”) dated as of 8/23/2018.

 

WHEREAS,
the Purchaser, the Owner and Seller wish to modify the Merchant Agreement as set forth herein.

 

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

 

A.
The Seller and the Owner (hereafter collectively referred to as the “Merchant”), hereby authorize Purchaser to
execute the transactions detailed below in section E (Weekly Purchase Program).

 

B.
The Merchant understands that all transactions described in this Addendum will be executed for remittance of the receivables
purchase detailed in the Merchant Agreement.

 

C.
Except as provided in this Addendum, all terms and conditions of the Merchant Agreement shall remain in full force and effect.
All capitalized terms not defined in this Addendum shall have the meaning as set forth in the Merchant Agreement.

 

D.
Upon execution of Merchant Agreement, the Merchant agrees to be bound by the purchase program detailed in section E below.

 

E.
Weekly Purchase Program.

 

a.
In order to maintain a stable and predictable cash flow, the Merchant has advised Purchaser that it seeks to participate in Purchasers
optional Weekly Purchase Program pursuant to which, in lieu of Purchaser debiting the Specified Daily Amount on a daily basis
from the Merchant ’ s bank account via the ACH network, Purchaser and its agents will initiate Weekly ACH payments
from Merchants bank account in a designated amount (Estimated Weekly Amount) on the same Weekday each week until the Purchased
Amount is received.

 

b.
Accordingly, as is set forth in the Merchant Agreement, the Merchant hereby authorizes Purchaser and its agents to initiate ACH
payments in the amount(s) determined in accordance with this Addendum and the Merchant Agreement until the Purchaser has received
an amount equal to the Purchased Amount, plus any additional fees incurred, and authorizes all applicable third parties to provide
to the Purchaser and its agents all information necessary to permit such third parties to determine the amount to be paid to the
Merchant and initiate such ACH payments. The Merchant shall effectuate the foregoing through an ACH Authorization, as set forth
in the Merchant Agreement.

 

c.
Purchaser shall initiate each weekly ACH payment from the Account in the amount that is the estimated weekly amount (the “Estimated
Weekly Amount”), as set forth above. The Estimated Weekly Amount represents an amount that is five (5) times the Specified
Daily Amount that is set forth in the Merchant Agreement.

 

d.
No less than every two (2) months after the funding of the Purchase Price to Merchant (each such time period, a Calculation Period),
either Purchaser or Merchant may give written notice to the other party providing an adjustment in the Estimated Weekly Amount
based upon the daily average receivables and/or weekly average receivables during the preceding Calculation Period.

 

e.
The first weekly remittance by the Merchant of the first Estimated Weekly Amount payment (the “First Remittance”)
to the Purchaser will be made on the first business day after Purchaser provides the amount of funds representing the Purchased
Amount (as set forth above) to the Buyer. All following weekly remittances by the Merchant to the Purchaser will be made on the
same weekday as the First Remittance.

 

f.
In the event that the weekly remittance should fall on a bank holiday Buyer will take the weekly remittance on the business day
prior to the respective holiday.

 

    	 	 	 

    	Page: 16 Deal Application ID : 91663	 

    

 

g.
In the event of a missed remittance of the Estimated Weekly Amount, the Merchant acknowledges Purchaser’s right to receive
daily remittances and revert the ACH schedule for the Specified Daily Amount as set forth in the Merchant Agreement on the 1st
business day after the missed remittance.

 

F.
This Addendum shall be governed by the laws of the State of Connecticut.

 

G.
This Addendum may only be modified in writing by Purchaser and Merchant.

 

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

 

	ACCEPTED AND AGREED:	 	ACCEPTED AND AGREED:
	 	 	 
	Purchaser:
    Libertas Funding LLC	 	Seller: Smart Works, LLC/ Smart Works IT Services, LLC/ ITECH US, Inc/ SharedLabs, Inc/ Exois Inc
	 	                              	 	 	 
	By: 	 /s/ Randy Saluck 	 	By: 	 /s/ Jason Cory 
	Name:  	Randy Saluck	 	Name:	Jason Cory
	Title: 	CEO, Libertas	 	Title:	Chairman, President and CEO
	 	 	 	 	 
	 	 	 	By:	 /s/ Jason Cory
	 	 	 	Owner 1 : 	Jason CoryEX-4.2

 Exhibit 4.2 
  

					
	Name of Company:	  		  	
		
		  	LAIX Inc.
			
	Number:	  		  	
		  	 Number 
 [cert no.]
	  	 [class of shares] Share(s)

-[no. of share]-

		
	 Ordinary Share(s):
 -[no. of
shares]-
	  	 Incorporated under the laws of the Cayman Islands

 
 Share capital is US$250,000 divided into

(i) 200,000,000 Class A Ordinary Shares of a par value of US$0.001 each;

(ii) 25,000,000 Class B Ordinary Shares of a par value of US$0.001 each and

(iii) 25,000,000 shares of a par value of US$0.001 each;

	
	
	
	Issued to:	  		  	
	[name of shareholder]    	  		  	
		
	Dated	  	THIS IS TO CERTIFY THAT [name of shareholder] is the registered holder of [no. and class of shares] Share(s) in the above-named Company subject to the Memorandum and Articles of Association
thereof.
			
	Transferred from:	  		  	
		  	EXECUTED on behalf of the said Company on the                      day of
                     2018 by:
			
		  	DIRECTOR

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