Document:

Unassociated Document

    USER
SERVICE AGREEMENT

    

    This
Agreement is made this 17th day of March, 2008 by and between CJM
Financial, Inc., an Iowa company, with its principal place of business located
at 306 SE Magazine Road., Ankeny, IA 50021(hereinafter “CJM”) and BioForce
Nanosciences Holdings, Inc. (BFNH) AKA BioForce Laboratory, Inc., currently
residing at 1615 Golden Aspen Dr. Suite 101 Ames, IA (hereinafter
“Companies”).  This agreement supersedes any previous user service
agreements between Companies and CJM Financial, Inc.

    

    RECITALS

    

    A.  CJM
is engaged in the business of assisting Companies in the management of their
accounts receivable, including the actual collection of same;

    

    B.  As
part of the service it renders, CJM advances Companies cash against the future
collection of their receivables, allowing the involved Companies an immediate
realization of the amounts represented by the bills tendered to
CJM;

    

    C.  Companies
wish to engage the services of CJM to assist in the management of Companies’
accounts receivable, including participation in the cash advances against
eligible accounts receivable.

    

    NOW,
THEREFORE, in and for consideration of the foregoing and the mutual covenants
contained herein, the parties mutually agree as follows:

    

    
      1.    Scope of the
Agreement. Companies agree to submit, at Companies’ discretion (Subject
to Section 6 E), receivables from services rendered by Companies, to
CJM.  CJM, in its sole discretion, may purchase with recourse upon
Companies and any associated entity, an amount equal to all receivables that
Companies submits to CJM less the compensation paid CJM arising out of the
services rendered by Companies.  In the event Companies goes 6
consecutive months without submitting any receivables to CJM, CJM reserves the
right to charge a penalty of average factoring fees over a 3 month period or the
entire reserve account held, whichever is greater.

    

    

    
      2.    Term. The term of
this Agreement shall commence on March 17, 2008 and shall continue in effect for
a period of twelve (12) months from the commencement date hereof and for twelve
(12) month periods thereafter unless terminated by either party upon (60) days
written notice before the end of the current term, see Appendix
A.

    

    

    
      3.    Compensation to CJM.
In and for consideration of CJM’s purchase of its receivables, Companies agrees
to compensate CJM based upon a percentage of the total dollar amount of the
receivables in accordance with the Fee Schedule attached hereto as Appendix A.
Any changes to Appendix A shall be attached hereto and its terms incorporated
herein by reference.  In the event that Companies choose to sell their
Account to another Factor, CJM will charge reasonable closing fees.

       

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      4.    Reserve Account.
Companies agree that CJM shall withhold twenty percent (20%) of the charges
represented by the domestic receivables to be purchased by CJM, and thirty
percent (30%) of the charges represented by foreign receivables, pursuant to the
terms of this Agreement and hold these funds in a Reserve Account. The funds
held in Companies’ Reserve Account may be applied by CJM to any indebtedness
Companies has to CJM arising from Companies’ performance of their obligations
under the terms of this Agreement, including charge backs for any receivables
which in CJM’s sole discretion are uncollectible, or which CJM is unable to
collect within sixty (60) days. While the Reserve Account is under its control,
CJM shall not be obligated to pay interest on the Reserve
Account.

    

     

    In the event that the Reserve Account
falls below twenty percent (20%) of current outstanding receivables, Companies
agrees to either pay CJM the shortage immediately upon notice or to allow CJM to
withhold one hundred (100%) of the Eligible Receivables to be purchased from
Companies until the total amount required in the Reserve Account has been
reestablished. CJM shall have the right to determine whether the Companies shall
pay the shortage immediately or whether the shortage will be deducted from
future receivables.  Companies agree to pay CJM fifteen percent (15%)
of the face amount for “Missing Notation Fee” on invoices.  Companies
agree to pay CJM fifteen percent (15%) of the amount of any payment on account
of a purchased account which has been received by Seller and not delivered in
kind to Purchaser within three (3) business days following the date of receipt
by Seller for “Misdirected Payment Fee”. “Missing Notation Fee” and “Misdirected
Payment Fee” will be deducted from reserve at the time it noticed by
CJM.  “Missing Notation Fee” shall apply if submitted invoices are
misstated or incorrect.  “Reserve Deposit Advance Fee” will be charged
in the event that CJM grants an advance on reserve account funds to Companies, a
minimum fee of 4% will be charged on the amount advanced.  This fee
may increase at the sole discretion of CJM in instances including, but not
limited to, when advanced amount is more than the Reserve Deposit Account
balance, multiple advances are requested within a six month period,
etc.  Said advance is charged against Client’s Reserve
Account.

     

    Upon termination of this Agreement
CJM shall maintain Company’s Reserve Account until all outstanding advances from
CJM have been repaid.

    5.           Warranties of
Companies. Companies represent and warrant the following:

     

    
       
A.  Companies
have filed all federal, state, and local tax returns which, to the knowledge of
Companies, are required to be filed, and Companies have paid all taxes shown on
such returns and all assessments which are due, Companies have made all required
withholding deposits. Companies represent and warrant that it does not have
knowledge of any objections to or claims for additional taxes by federal, state,
or local taxing authorities for subsequent years.

    

     

    
       
B.  Companies
have furnished CJM with true and correct financial statements. Companies
represent and warrant that there has been no material adverse change in the
condition of Companies, financial or otherwise, since the date of the financial
statements.

    

    

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C.  All
receivables submitted to CJM by Companies are bona fide existing obligations
created by the rendering of services by Companies in the ordinary course of
business. Companies are entitled, free from any security interest except any
security interest in favor of CJM created by this Agreement and the amounts
represented thereby are unconditionally owing to the Companies without defense,
offset or counterclaim; and that all shipping orders, delivery receipts, invoice
copies, bills of lading, and other documents furnished to CJM in connection
therewith will be genuine.

    

     

    
       
D.  All
of the representations and warranties made by Companies under or pursuant to
this Agreement are true and correct in all material respects.

    

     

    
       
E.  Each
representation and warranty contained herein shall be deemed to be restated and
reaffirmed to CJM on and as of the date of each purchase of Eligible Receivables
under this Agreement.  If any of the above representations and
warranties are no longer true, Companies agree to immediately notify CJM of the
change.

    

     

    6.           Affirmative
Obligations. Companies agree that they will:

     

    
       
A.  Furnish
to CJM, within ninety (90) days after the end of fiscal year of Companies,
complete audited financial statements prepared by independent certified public
accountants.

    

     

    
       
B.  Permit
CJM access to the book, records, and properties of Companies at all reasonable
times; and permit CJM to discuss Companies’ financial matters with officers of
Companies and with their independent certified public
accountants.

    

     

    
       
C.  Promptly
notify CJM in writing of any substantial change in the present management and/or
operations of Companies.

    

     

    
       
D.  Comply
in all material respects with all laws, acts, rules, regulations, and orders of
any legislative, administrative, or judicial body or official applicable to
Companies’ business operation, or the Collateral or any part
thereof

    

     

    
       
E.  Submit
all receivables generated by approved debtors, once Companies has submitted any
receivables generated by approved debtor. For example, if Companies submit
receivables generated by ABC Company to CJM for purchase, each time Companies
has receivables from ABC Company, they must be submitted to CJM for
purchase.

    

     

    
       
F.  Forward
any payments on any receivables made directly to Companies to CJM within 3
business days after receipt by Companies.

    

     

    
       
G.  Refrain
from creating or permitting any new security interests in the Collateral, other
than security interests in specifically identified fixed assets to equipment
lessors, vendors or finance companies, without the prior written consent of
CJM.

    

     

    7.           Default and Remedies.
It shall be an Event of Default under this Agreement if:

    

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A.  Companies
breach any term of this Agreement;

    

    
       
B.  Any
warranty, representation or statement made or furnished to CJM by or on behalf
of Companies or any officer of Companies proves to have been false in a material
respect when made;

    

    
       
C.  A
proceeding seeking an order for relief under the Bankruptcy Code is commenced by
or against any Company or its subsidiaries;

    

    
       
D.  Any
Company or any associated company becomes insolvent or generally fails to pay,
or admit in writing its or his inability to pay, its or his debts as they become
due.

    

    
       
E.  Any
Company or associated company applies for, consents to or acquiesces in, the
appointment of a trustee, receiver or other custodian for it or him or for any
of its or his property, or makes a general assignment for the benefit of
creditors; or, in the absence of such application, consent or acquiescence, a
trustee, receiver or other custodian is appointed for Companies or for any
associated company or for a substantial part of any Company’s
property.

    

     

    
       
F.  Any
other reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding is
commenced in respect to any Company or its associates.

    

     

    
       
G.  Any
judgments, writs, warrants of attachment, execution or similar process (not
covered by insurance) in the aggregate amount that exceeds $5,000.00 is issued
or levied against any Company or any of its assets and is not released, vacated
or fully bonded prior to any sale, or in any event, within thirty days after its
issue or levy.

    

    Upon the occurrence of any Event of
Default described above, CJM, without notice to Companies, may terminate this
Agreement. CJM shall have all of the rights and remedies provided by law or in
equity, including those of a secured party. CJM shall have the right to take
immediate possession of the Collateral and may enter any of the premises of
Companies or wherever the Collateral is located with or without process of
law.  In the event of a collection proceeding or lawsuit for any
unpaid amounts, CJM shall be entitled to receive all attorney’s fees, collection
agency fees, expert witness fees and court costs.

     

    8.           Conditions Precedent to
initial Purchase by CJM. The obligations of CJM to purchase receivables
is subject to the condition precedent that CJM shall receive simultaneously with
the execution of this Agreement all of the following, unless waived by CJM in
writing.

     

    
       
A.  Security. As security
for all present and future advances by CJM to Companies, cross collateralized
between Companies, and for all other obligations now or hereafter chargeable to
Companies hereunder, and all other obligations and liabilities of any and every
kind of Companies to CJM, due or to become due, direct or indirect, absolute or
contingent, joint or several, howsoever created, arising or evidenced, now
existing or hereafter at any time created, arising or incurred, Companies hereby
grant to CJM a Security Interest in and to the following
property:

    

     

    
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      1.
All
accounts receivable of Companies now owned and existing or hereafter acquired or
created, and whether submitted to CJM for collection. Accounts receivable
include all rights of Companies to the payment of money, whether or not earned,
including all present and future accounts receivable and all security
thereof.  All Companies are cross collateralized between companies and
guarantee each company no matter said ownership of company.

    

     

    
      2.
All
equipment of Companies, whether now owned or hereafter acquired and wherever
located. Equipment includes all replacements and substitutions therefore and all
accessories thereto.

    

     

    
      3.
All
general intangible of Companies, whether now owned or hereafter acquired,
including, but not limited to all present and future operating authorities
issued by the interstate commerce commission and/or other federal and state
regulatory agencies, trade names, and contract rights.

    

     

    
      4.
All
products and proceeds of any and all of the foregoing, including the proceeds of
any insurance covering any of the foregoing.

    

     

    
      B.  UCC-l
Financing Statements in a form acceptable to CJM, appropriately completed by and
duly executed by Companies, which UCC-1 Financing Statements shall be filed with
the appropriate governmental agency.

    

     

    
      C.Recent
UCC searches from the filing offices which reflect that no other person or
entity holds a security interest in any of the Collateral of Companies other
than approximately $70,000 of equipment serving as security to the Iowa
Department of Economic Development and a copier serving as security to an office
supply vendor.

    

     

    9. Indemnification.
Companies agree to indemnify, defend and hold CJM harmless and to hold CJM
harmless from any loss, damage, claim, expense, or cause of action arising out
of negligence, incompetence or dishonesty of Companies, or Companies’ employees,
agents, or subcontractors. Companies shall pay all costs, expenses and
attorney’s fees which may be expended or incurred by CJM in enforcing this
Agreement or any provision hereof, or in litigation involving CJM because of any
act or omission, negligent or otherwise, of Companies under this
Agreement.

     

    10.  Power of Attorney.
Companies hereby appoint CJM, or its designee, as Companies’ attorney with power
to:

    

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                A.

              	
                Endorse
      Companies’ name on any checks, drafts or other forms of payment or
      security that may come into CJM’s
possession;

              

      

    

     

    
      
        	
              	
                B.

              	
                Sign
      Companies’ name on notices of assignments, financing statements and
      amendments under the Commercial Code, on verifications of accounts and
      notices to debtors;

              

      

       

    

    
      
        	
              	
                C.

              	
                Receive,
      open and dispose of all mail addressed to Companies at CJM’s
      address;

              

      

    

     

    
      
        	
              	
                D.

              	
                Send
      requests for verification of accounts to
  debtors;

              

      

    

     

    
      
        	
              	
                E.

              	
                In
      the event that Companies fail to repay advances from CJM as required, CJM
      may settle any and all disputes arising from CJM’s collection of any
      receivables; and

              

      

    

     

    
      
        	
              	
                F.

              	
                Do
      all things necessary to carry out Companies’ obligations under the terms
      of this Agreement.

              

      

    

     

    Companies
hereby ratify and affirm all actions taken by CJM in the performance of its
duties hereunder. Moreover, Companies acknowledges and agrees that CJM will not
be liable for any acts or omission, or for any error in judgment or mistake of
fact of law. This power, being coupled with a Security Interest, is irrevocable
at all times when there are receivables outstanding which have been purchased by
CJM.

     

    11.  Entire Agreement.
This Agreement represents the entire agreement between the parties hereto and
supersedes any other oral or written agreement between the parties and may only
be altered, amended or modified in writing, signed by both parties.

     

    12.  Binding Effect. This
agreement shall be binding upon the successors and assigns of the respective
parties hereto; provided, however, that neither the Companies nor CJM may assign
this agreement or any rights hereunder without the prior written consent of the
other.

     

    13.  Governing Law and Exclusive
Jurisdiction. This agreement shall be governed by and construed in
accordance with the laws of the State of Iowa and the exclusive jurisdiction for
any controversy involving this Agreement shall be the Iowa District Court for
Polk County, Iowa.

     

    14.  Notices. All notices,
requests, demands, and other communications to be given pursuant to this
Agreement shall be deemed effective on the date of deposit if sent by certified
mail, postage prepaid, and properly addressed to the party of delivered
personally on the party to whom notice is to be given.

     

    
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    15.  Waiver.  No
delay, failure or waiver by CJM to exercise any right or remedy under this
Agreement will operate to limit, preclude, cancel, waive or otherwise affect
such right or remedy.

    
 

    IN
WITNESS WHEREOF, the parties have duly signed this Agreement as of the date
first set forth above.

    
 

    
      
        	 	CJM Financial,
      Inc.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Trent
      Murphy	 
	 	 	Trent
      Murphy, President	 
	 	 	 	 
	 	 	 	 

      

      
        	 	BioForce Nanosciences
      Holdings, Inc.	 
	 	 	 	 
	 	
                By:
      

              	/s/ Gregory
      D. Brown	 
	 	 	Gregory
      D. Brown, Chief Financial Officer	 
	 	 	 	 
	 	 	 	 

      

    

     

    
          

         

      

    

    
      
         

      

      
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    Appendix
A

    Fee
Schedule

     

    Supplement
to “User Service Contract”

     

    Finance/Discount
Fee                                                                                                                         

    Prime
Rate                                                                       Commercial
Discount Rate

     

    1.00% to
8.00%                                                               3.00%
+ 20% Reserve (1-40 days)

    8.00%
to                                                                         
 4.00 % + 20% Reserve (1-40 days)

     

    The 20%
Reserve Discount rate shall continue daily until such a time as the total
reserve is equal to 20.00% of the current outstanding
receivables.  Debtors located outside the United States will only
receive a 70% advance rate per invoice/bill.

    After 40
days an additional (1.00%) will be charged and deducted from reserve with
recourse on the 60th
day.

     

    The above
rate is predicated on the term of the contract extending twelve (12) months
commencing with the date Companies signs this agreement.  Companies
shall pay factor a penalty of one hundred percent (100%) of any monetary damage
or $500 for terminating the agreement prior to the term expiring.  The
agreement shall automatically renew every twelve (12) months unless Companies
gives CJM written notice sixty (60) days before the end of the current
term.

    
 

    PROCESSING
FEES                                                                                                                                      

     

    Invoice
Processing:

     

    A fee of
$2 per
invoice/bill shall be deducted daily/weekly from remittance to Debtor for the
purchases of invoices/bills to domestic Debtors.  A fee of $10 per
invoice/bill shall be deducted daily/weekly from remittance to Debtor for the
purchases of invoices/bills to foreign Debtors.

    
 

                                X  /s/ Gregory D.
Brown                                           

    

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8Unassociated Document

    AMENDMENT
NUMBER 2

    to

    EMPLOYMENT
AGREEMENT

    

    This
AMENDMENT NUMBER 2
(“Amendment”) dated January 21, 2008 amends the Employment Agreement
(“Agreement”) between BioForce Nanosciences Holdings, Inc. (the “Company”) and
Eric R. Henderson (the “Employee”).

    

    In
consideration of the mutual agreements set forth below and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:

    

    1.           All
terms of the Agreement shall continue in full force and effect except as
expressly modified in this Amendment.  All terms of the Agreement
shall apply to this Amendment, except in the event and to the extent they are
expressly modified herein, in which case the terms of this Amendment shall
control.  All capitalized terms used in the Amendment not otherwise
defined shall have the same meaning as in the Agreement.

    

    2.           Section
3(a) of the Agreement is amended by deleting the provision in its entirety and
replacing it with the following:  “During the Term of this Agreement,
the Employee shall serve as the Executive Vice President and Chief Science
Officer of the Company, or in such other executive capacity as may be assigned
to the Employee, and shall perform all duties commensurate with the Employee's
position and as may be assigned to the Employee by the Chairman of the Board of
Directors or the Chief Executive Officer of the Company or such other person(s)
as may be designated by the Board of Directors of the Company (the
“Board”).  The Employee shall report to the Chairman of the Board or
the Chief Executive Officer or such other person(s) as may be designated by the
Board and shall at all times keep the Chairman of the Board and the Chief
Executive Officer (or such other officer as the Chairman of the Board, the Chief
Executive Officer or the Board may designate from time to time) promptly and
fully informed (in writing if so requested) of the Employee's conduct and of the
business or affairs of the Company, and provide such explanations of the
Employee's conduct as may be required.”

    

    3.           This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, heirs and assigns.

    

    4.           Each
party represents and warrants that the person signing this Amendment has the
full and proper authority to do so and has been empowered to make and execute
this Amendment.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    IN WITNESS WHEREOF, the
parties caused this Amendment to be executed on the day and year first written
above.

     

    
      	      
              BioForce
      Nanosciences Holdings, Inc. 

            	 	      
              Eric
      R. Henderson 

            
	 	 	 	 	 	 
	 	 	 	 	 	 
	By: 	/s/ Kerry
      Frey 	 	By: 	/s/ Eric
      R. Henderson  	 
	 	Kerry
      Frey 	 	 	 	 
	 	Chief Executive
      Officer

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