Document:

Exhibit 10.21

 

 

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the "Agreement") is effective as of February 1, 2018 ("the Effective Date"), by and between PURA NATURALS, INC. (the "Company"), and Daniel kryger ("Executive ").

WHEREAS, the Company is engaged in the business of manufacturing, distributing, marketing and selling oil absorbing and related consumer cleaning products (the "Company Business");

WHEREAS, the Company desires to employ Executive and Executive desires to be employed by the Company;

WHEREAS, Executive is currently the Director of Business Development of the Company; and

WHEREAS, the Company and Executive desire to enter into this Agreement to set forth the rights, duties, benefits and obligations with respect to the employment of Executive by the Company under the terms and conditions herein provided.

NOW, THEREFORE, in consideration of Executive's employment with the Company, and the mutual and respective covenants and agreements of the parties herein contained, and other good and valuable consideration present but not specifically set forth, the parties hereto agree as follows:

1. Employment. The Company hereby agrees to employ Executive as Director of Business Development, and Executive hereby agrees to be employed by the Company, on the terms and conditions set forth herein. This Agreement and Executive's employment hereunder shall commence on February 1, 2018 (the "Start Date"), and shall continue for a period of five (5) years, unless sooner terminated in accordance with the provisions of Section 6 hereof (the "Term "). The Term will thereafter automatically extend for successive one-year periods, but Executive's employment may at any time be terminated in accordance with the provisions of Section 6 hereof.

2. Duties and Responsibilities. Executive shall serve as President for the Company, serve as a member of its Board of Directors (the "Board "), and shall report to the Board and its designees. Executive shall have the duties and responsibilities that are commensurate with that position, as well as such other duties as may be assigned to Executive by the Board from time to time. Executive shall devote all of his working time and best efforts to the business and affairs of the Company except for such time as shall reasonably be required to serve in connection with civic or charitable activities, or manage Executive's financial matters, provided that such activities, in the aggregate, do not interfere with Executive's ability to perform the duties and responsibilities of his employment hereunder. Executive shall follow the direction of the Board and their designees, and shall perform all duties and responsibilities of the position that he holds, as those duties and responsibilities may change from time to time. Executive shall comply with the Company's standards, policies and procedures in effect on the date of this Agreement and as they may change from time to time.

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3. Compensation and Related Matters.

(a) Base Salary. Executive shall receive an initial annual base salary of One Hundred Twenty Thousand US Dollars ($120,000) less required and authorized withholding and deductions. Executive's salary shall increase by ten percent (10%) per annum, and be paid in accordance with the Company's regular payroll schedule as it applies to salaried employees ("Base Salary"). Notwithstanding the preceding sentence, in no event shall Executive's Base Salary be reduced by the Company without Executive's consent. Executive may at his option defer payment of the Base Salary until a later date to be determined by Executive. Any deferred Base Salary shall accrue interest at ten percent (10%) per annum, and shall, upon Executive's written request to the Board, be convertible into options for shares of common stock of the Company on a quarterly basis, where the conversion shall be equal to a twenty-five percent (25%) discount to the market price of the Company's shares at the time of the conversion, and where each option's strike price shall be at $.001 per share.

(b) Stock. Executive shall be eligible to participate in the Company's common stock incentive plan as in effect from time to time. Pursuant to this stock provision of this Agreement and an option agreement between the Company and Executive dated on or about February 1, 2018 and attached hereto as Exhibit A, the Compensation Committee of the Board of Directors has granted Executive, effective as of the Effective Date, Two Hundred Thousand (200,000) shares of stock in the Company at par value of $.001 which shall be issued upon execution of this Agreement, and One Million (1,000,000) stock options at a purchase price of $.001 per share with a vesting schedule as follows: Twenty-Five Percent (25%) of the options shall vest immediately upon The Effective Date, Twenty-Five Percent (25%) of the options shall vest upon the Company reaching One Million U.S. Dollars ($1,000,000) in aggregate total sales revenue earned after the effective date, Twenty-Five Percent (25%) of the options shall vest upon the Company reaching Two Million U.S. Dollars ($2,000,000) in aggregate total sales revenue earned after the effective date, and the remaining unvested shares shall vest upon the Company reaching Three Million U.S. Dollars ($3,000,000) in sales revenue earned after the Effective Date. The Company may grant Executive additional stock options, restricted stock units or other awards under the Company's common stock incentive plan based on individual and Company performance criteria to be established by the Board.

(c) Benefits. Executive shall be entitled to all rights and benefits for which he is eligible under the terms and conditions of the Company's standard benefits and compensation practices that may be in effect from time to time and provided by the Company to its employees generally. In addition to, and not in limitation of, the foregoing, during the Term, Executive shall be eligible to accrue up to four weeks (20 business days) of paid time off (PTO) per anniversary year exclusive of any business day with respect to which the Company is closed for business due to any federal, state or local holiday or any day off generally granted by the Company to its employees, subject to the Company's then-current paid time off policy (which shall not have the effect of reducing said four weeks (20 business days) of paid vacation). In addition to, and not in limitation of the foregoing, during the Term, Executive shall receive any additional benefits generally provided by the Company to executive employees of the Company,

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including group health insurance for Executive and dependents, life insurance, and long term disability insurance, and participation in the Company's 401(k) plan, all in accordance with applicable plan documents. During the Term, the Company may maintain, at its sole expense, a Two Million US Dollar ($2,000,000) term life insurance policy for the benefit of Executive, provided that Executive shall be responsible for paying all taxes due on the imputed income related thereto.

(d) Expense Reimbursement. The Company will reimburse Executive for reasonable business expenses in accordance with the Company's standard expense account and reimbursement policies.

4. Representations and Warranties of Executive. In order to induce the Company to employ Executive, Executive hereby represents and warrants to the Company as follows:

(a) Binding Agreement. This Agreement has been duly executed and delivered by Executive and constitutes a legal, valid and binding obligation of Executive and is enforceable against Executive in accordance with its terms.

(b) No Violations of Law. The execution and delivery of this Agreement and the other agreements contemplated hereby by Executive do not, and the performance by Executive of his obligations under this Agreement and the other agreements contemplated hereby will not, violate any term or provision of any law, or any writ, judgment, decree, injunction, or similar order applicable to Executive.

(c) Litigation. Executive is not involved in any proceeding, claim, lawsuit, or investigation alleging wrongdoing by Executive before any court or public or private arbitration board or panel or governmental department, commission, board, bureau, agency or instrumentality.

(d) No Conflicting Obligations. Executive is not under, or bound to be under in the future, any obligation to any person or entity that is or would be inconsistent or in conflict with this Agreement or would prevent, limit, or impair in any way the performance by him of his obligations hereunder, including but not limited to any duties owed to any former employers not to compete or use or disclose confidential information. Executive represents and agrees that he will not disclose to the Company or use on behalf of the Company any confidential information or trade secrets belonging to a third party, including any former employer. Executive further represents and agrees that he has returned, or will return before his last day of employment with his current employer, all property belonging to Executive's current and previous employers, including but not limited to any and all confidential information.

5. Restrictive Covenants.

(a) Confidentiality Critical. The parties agree that the business in which the Company is engaged is highly sales-oriented and the goodwill established between Executive and the Company's customers and potential customers is a valuable and legitimate business

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interest worthy of protection under this Agreement. Executive acknowledges and agrees that developing and maintaining business relationships is an important and essential business interest of the Company. Executive further recognizes that, by virtue of his employment by the Company, he will be granted otherwise prohibited access to confidential and proprietary data of the Company which is not known to its competitors and which has independent economic value to the Company and that he will gain an intimate knowledge of the Company's business and its policies, customers, employees and trade secrets, and of other confidential, proprietary, privileged, or secret information of the Company and its customers (" Customers ") (collectively, all such nonpublic information is referred to as " Confidential Information ").

This Confidential Information includes, but is not limited to data relating to the Company's marketing and servicing programs, procedures and techniques; business, management and personnel strategies; the criteria and formulae used by the Company in pricing its products, loss control and information management services; the Company's products and services; the Company's computer system and software; lists of prospects; customer lists; the identity, authority and responsibilities of key contacts at accounts of Customers; and the composition and organization of Customers' business. Executive recognizes and admits that this Confidential Information constitutes valuable property of the Company, developed over a long period of time and at substantial expense, and worthy of protection. Executive acknowledges and agrees that only through his employment with the Company could he have the opportunity to learn this Confidential Information.

(b) Confidential Information. Executive shall not at any time (for any reason), directly or indirectly, for himself or on behalf of any other person or entity, (A) disclose to any person or entity (except to employees or other representatives of the Company who need to know such Confidential Information to the extent reasonably necessary for Executive to perform his duties under this Agreement or such employees or representatives to perform their duties on behalf of the Company, and except as required by law) any Confidential Information, including, without limitation, business or trade secrets of, or products or methods or techniques used by, the Company, or any Confidential Information whatsoever concerning the Customers, (B) use, directly or indirectly, for his own benefit or for the benefit of another (other than a Customer) any of such Confidential Information, or (C) assist any other person or entity in connection with any action described in either of the foregoing clauses (A) and (B).

(c) Noninterference with Employees. Executive further agrees that the Company has expended considerable time, energy and resources into training its other employees ("Co-Workers"). As a result, during his employment with the Company and for a period of eighteen (18) months thereafter, Executive shall not, for any reason, directly or indirectly, for himself or on behalf of any other person or entity, (A) induce or attempt to induce any Co-Worker to terminate employment with the Company, (B) interfere with or disrupt the Company's relationship with any of the Co-Workers, (C) solicit, entice, hire, cause to hire, or take away any person employed by the Company at that time or during the eighteen (18) month period preceding Executive's last day of employment with the Company, or (D) assist any other person or entity in connection with any action described in any of the foregoing clauses (A) through (C).

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(d) Non-competition. Executive further agrees with the Company to the following provisions, all of which Executive acknowledges and agrees are necessary to protect the Company's legitimate business interests. Executive covenants and agrees with the Company that:

(i) Unless otherwise agreed between the parties, Executive shall not, during his employment with the Company and for a period of twelve (12) months thereafter, either directly or indirectly, engage in, render service or other assistance to, or sell products or services, or provide resources of any kind, whether as an owner, partner, shareholder, officer, director, employee, consultant or in any other capacity, whether or not for consideration, to any person, corporation, or any entity, whatsoever, that owns, operates or conducts a business that competes, in any way, with the Company Business (as defined at the start of this Agreement), other than the ownership of 5% or less of the shares of a public company where Executive is not active in the day-to-day management of such company. With respect to the post employment application of this Section 5(d)(i), the restrictions shall extend only to those specific countries or provinces where the Company conducts business on the day that Executive's employment with the Company terminates.

(ii) Executive shall not, during his employment with the Company and for a period of twelve (12) months thereafter, either directly or indirectly, (A) solicit, call on or contact any Customer of the Company with whom Executive has had material contact during his employment with the Company for the purpose or with the effect of offering any products or services of any kind offered by the Company at that time or during his employment with the Company, (B) request or advise any present or future vendors or suppliers to the Company to cancel any contracts, or curtail their dealings, with the Company, or (C) assist any other person or entity in connection with any action described in any of the foregoing clauses (A) through (B).

(iii) During his employment with the Company, Executive shall not own, or permit ownership by Executive's spouse or any minor children under the parental control of Executive, directly or indirectly, an amount in excess of five percent (5%) of the outstanding shares of stock of a corporation, or five percent (5%) of any business venture of any kind, which operates or conducts a business that competes, in any way, with the Company.

(e) Non-disparagement. At any time during or after Executive's employment with the Company, Executive shall not disparage the Company or any shareholders, directors, officers, employees, or agents of the Company. During and after Executive's employment with the Company, neither the Company nor its directors or officers shall disparage Executive to third parties.

(f) Understandings.

(i) The provisions of this Section 5 shall be construed as an agreement independent of any other claim. The existence of any claim or cause of action of Executive against the Company, whether predicated on Executive's employment or otherwise, shall

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not constitute a defense to the enforcement by the Company of the terms of Section 5 of this Agreement. Executive waives any right to a jury trial in any litigation relating to or arising from this Section 5.

(ii) Executive acknowledges and agrees that the covenants and agreements contained herein are necessary for the protection of the Company's legitimate business interests and are reasonable in scope and content. Executive agrees that the restrictions contained in this Section 5 are reasonable and will not unduly restrict him in securing other employment or income in the event his employment with the Company ends. Executive acknowledges and agrees that he executed this Agreement on or before his first day of employment with the Company.

(g) Injunctive Relief. Executive acknowledges and agrees that any breach by him of any of the covenants or agreements contained in this Section 5 would give rise to irreparable injury and would not be adequately compensable in damages. Accordingly, Executive agrees that the Company may seek and obtain injunctive relief against the breach or threatened breach of any of the provisions of this Agreement in addition to any other legal or equitable remedies available.

(h) Reformation and Survival. The Company and Executive agree and stipulate that the agreements and covenants contained in this Agreement and specifically of this Section 5 are fair and reasonable in light of all of the facts and circumstances of the relationship between them. The Company and Executive agree and stipulate that Executive has hereby agreed to be bound to the obligations, restrictions and covenants of this Section 5 as a condition to his employment and in consideration of his compensation, stock option grant, restricted stock unit grant, severance terms, and all other terms and provisions of this Agreement. The Company and Executive acknowledge their awareness, however, that in certain circumstances courts have refused to enforce certain agreements not to compete. The Company and Executive agree that, if any term, clause, subpart, or provision of this Agreement is for any reason adjudged by a Court of competent jurisdiction to be invalid, unreasonable, unenforceable or void, the same will be treated as severable, and shall be modified to the extent necessary to be legally enforceable to the fullest extent permitted by applicable law, and that such modification will not impair or invalidate any of the other provisions of this Agreement, all of which will be performed in accordance with their respective terms. Thus, in furtherance of, and not in derogation of, the provisions of this Section 5, the Company and Executive agree that in such event, this Section 5 shall be deemed to be modified or reformed to restrict Executive's conduct to the maximum extent (in terms of time, geography, and business scope) that the court shall determine to be enforceable. The provisions of this Section 5 shall survive the termination of this Agreement and Executive's resignation or termination of employment, regardless of the reason and whether voluntary or involuntary.

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6. Termination.

(a) Termination By The Company With Cause. The Company has the right, in its reasonable determination at any time during the Term, to terminate Executive's employment with the Company for Cause (as defined below) by giving written notice to Executive as described in this Section 6(a). Prior to the effectiveness of termination for Cause under clause (i), (ii), (iii) or (iv) in the next-following paragraph, Executive shall be given thirty (30) calendar days' prior written notice from the Company, specifically identifying the reasons which are alleged to constitute Cause for any termination pursuant to the aforementioned clauses, and an opportunity to cure in the event Executive disputes such allegations; provided, however, that the Company shall have no obligation to continue to employ Executive following such thirty (30) calendar day notice period unless Executive has cured the condition giving rise to the Cause. The Company's termination of Executive's employment for Cause under clause (v) or (vi) of the next-following paragraph shall be effective immediately upon the Company's written notice to Executive. If the Company terminates Executive's employment for Cause, the Company's obligation to Executive shall be limited solely to the payment of unpaid Base Salary accrued up to the effective date of termination plus any accrued but unpaid benefits to the effective date of termination, and any unpaid bonus earned in accordance with the then applicable bonus plan or program to the effective date of termination.

As used in this Agreement, the term "Cause" shall mean and include (i) Executive's abuse of alcohol that materially affects Executive's performance of Executive's duties under this Agreement, or use of any controlled substance; (ii) a willful act of fraud, dishonesty or breach of fiduciary duty on the part of Executive with respect to the business or affairs of the Company; (iii) material failure by Executive to comply with applicable laws and regulations or professional standards relating to the business of the Company; (iv) material failure by Executive to satisfactorily perform his duties hereunder, a material breach by Executive of this Agreement, or Executive engaging in conduct that materially conflicts with the best interests of the Company or that may materially harm the Company's reputation; (v) Executive being subject to an inquiry or investigation by a governmental authority or self-regulatory organization such that the existence of such inquiry or investigation is reasonably likely to result in damage to the Company's business interests, licenses, reputation or prospects; or (vi) Executive's being convicted of a felony or a misdemeanor involving moral turpitude.

(b) Termination By The Company Without Cause. The Company shall have the right, at any time during the Term, to terminate Executive's employment with the Company without Cause by giving written notice to Executive, which termination shall be effective thirty (30) calendar days from the date of such written notice. The Company may provide thirty (30) days pay in lieu of notice. If the Company terminates Executive's employment without Cause, the Company's obligation to Executive shall be limited solely to (i) unpaid Base Salary plus any accrued but unpaid benefits to the effective date of termination, any unpaid bonus earned in accordance with the then applicable bonus plan or program to the effective date of termination; (ii) if there is no unpaid bonus earned for the year of termination, an amount equal to the product of 100% of Executive's Base Salary multiplied by a fraction, the numerator of which is the number of days he is employed by the Company during the year in which the termination occurs and the denominator of which is 365 and, if the date of termination

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occurs prior to the date on which the annual bonus, if any, for the immediately preceding year would otherwise be paid, an amount equal to the annual bonus that would have been paid to Executive for such immediately preceding year, based on the actual achievement of applicable performance goals and without regard to whether Executive is employed on the date the bonus otherwise would have been paid; (iii) severance in an amount equal to Executive's then-current Base Salary for a period of eighteen (18) months; and (iv) if Executive is eligible for and timely elects COBRA coverage for health insurance coverage, payment of Executive's COBRA premiums for the health insurance coverage for himself and his eligible dependents for a period of up to eighteen (18) months, payments to be made on a monthly basis when the premiums are due, and in the event of the death of Executive before the expiration of such eighteen (18)-month period, the Company shall, for the remainder of such period, continue to pay the COBRA premiums for the Executive's dependents (including his spouse, if any) who were receiving COBRA coverage at the time of his death. Executive's rights with regard to equity incentive awards, including stock options and restricted stock units, shall be governed by separate applicable agreements entered into between Executive and the Company; provided, however, any stock options awarded to Executive under this Agreement shall immediately vest upon termination of Executive by the Company without Cause. As a condition to his receipt of the post-employment payments and benefits under clauses (ii), (iii) and (iv) of the third sentence of this Section 6(b), Executive must be in compliance with Section 5 of this Agreement, and must execute, return, not rescind and comply with a general release of claims agreement in favor of the Company and related entities and individuals, within the timeframe and in a form to be prescribed by the Company. The amount described in clause (ii) of the third sentence of this paragraph shall be paid on the ninetieth (90th) calendar day after the date of Executive's termination of employment, and the severance described in clause (iii) of the third sentence of this paragraph shall be paid in equal installments according to the normal payroll schedule, the first payment to Executive to be made on the next scheduled payroll date that occurs on or after the ninetieth (90th) day after the date of Executive's termination of employment, provided that, in the case of amounts described in clauses (ii) and (iii) of the third sentence of this Section 6(b), the Company has received the signed general release of claims agreement and Executive has not rescinded such agreement within the rescission period set forth in such agreement. Executive shall have no duty to mitigate damages under this Section 6(b) during the applicable severance period and, in the event Executive shall subsequently receive income from providing Executive's services to any person or entity, including self employment income, or otherwise, then no such income shall in any manner offset or otherwise reduce the payment obligations of the Company hereunder.

Notwithstanding anything herein to the contrary, this Section 6(b) shall not apply if Executive's employment is terminated by the Company or a succeeding entity without Cause upon or within one year of a Change of Control at any time during the Term as described in Section 7 hereof. In such case, Section 7 of this Agreement shall control.

(c) Termination By Executive for Good Reason. Executive has the right, in his reasonable determination at any time during the Term, to terminate his employment with the Company for Good Reason (as defined in this Section 6(c) below) by giving written notice to the Company as described in this Section 6(c) below. Prior to the effectiveness of termination for Good Reason, within thirty (30) calendar days following the existence of a condition

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constituting Good Reason, Executive shall provide written notice to the Company specifically identifying the reason or reasons which are alleged to constitute Good Reason, and an opportunity to cure within a period of not less than thirty (30) days; provided, however, that Executive shall have no obligation to continue his employment with the Company following such thirty (30) calendar day notice period unless the Company cures the event(s) giving rise to Executive's Good Reason notice. As used in this Section 6(c), the term " Good Reason " shall mean (i) a material diminution in Executive's compensation, authority, duties or responsibilities or assignment to another executive or employee of such compensation, authority, duties or responsibilities that is or are materially inconsistent with such position or responsibilities; (ii) requiring Executive to move his place of employment more than 75 miles from his place of employment prior to such move; or (iii) a material breach by the Company of this Agreement; provided that in any such case Executive has not consented thereto. In addition to the foregoing requirements, in no event shall an Executive's termination of his employment be considered for Good Reason unless such termination occurs within two (2) years following the initial existence of one of the conditions specified in clauses (i), (ii) and (iii) of the preceding sentence.

If Executive terminates his employment for Good Reason, the Company's obligation to Executive shall be limited solely to (i) unpaid Base Salary plus any accrued but unpaid benefits to the effective date of termination, any unpaid bonus earned in accordance with the then applicable bonus plan or program to the effective date of termination; (ii) if there is no unpaid bonus earned for the year of termination, an amount equal to the product of 100% of Executive's Base Salary multiplied by a fraction, the numerator of which is the number of days he is employed by the Company during the year in which the termination occurs and the denominator of which is 365 and, if the date of termination occurs prior to the date on which the annual bonus, if any, for the immediately preceding year would otherwise be paid, an amount equal to the annual bonus that would have been paid to Executive for such immediately preceding year, based on the actual achievement of applicable performance goals and without regard to whether Executive is employed on the date the bonus otherwise would have been paid; (iii) severance in an amount equal to Executive's then-current Base Salary for a period of eighteen (18) months; and (iv) if Executive is eligible for and timely elects COBRA coverage for health insurance coverage, payment of Executive's COBRA premiums for the health insurance coverage for himself and his eligible dependents for a period of up to eighteen (18) months, payments to be made on a monthly basis when the premiums are due, and in the event of the death of Executive before the expiration of such eighteen (18)-month period, the Company shall, for the remainder of such period, continue to pay the COBRA premiums for the Executive's dependents (including his spouse, if any) who were receiving COBRA coverage at the time of his death. Executive's rights with regard to equity incentive awards, including stock options and restricted stock units, shall be governed by separate applicable agreements entered into between Executive and the Company. As a condition to his receipt of the post-employment payments and benefits under clauses (ii), (iii) and (iv) of the first sentence of this Section 6(c), Executive must be in compliance with Section 5 of this Agreement, and must execute, return, not rescind and comply with a general release of claims agreement in favor of the Company and related entities and individuals, within the timeframe and in a form to be prescribed by the Company. The amount described in clause (ii) of the first sentence of this paragraph shall be paid on the ninetieth (90th) calendar day after the date of Executive's termination of employment, and the severance described in clause (iii) of the first sentence of this paragraph shall be paid in equal installments

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according to the normal payroll schedule, the first payment to Executive to be made on the next scheduled payroll date that occurs on or after the ninetieth (90th) day after the date of Executive's termination of employment, provided that, in the case of amounts described in clauses (ii) and (iii) of the first sentence of this Section 6(c), the Company has received the signed general release of claims agreement and Executive has not rescinded such agreement within the rescission period set forth in such agreement. Executive shall have no duty to mitigate damages under this Section 6(c) during the applicable severance period and, in the event Executive shall subsequently receive income from providing Executive's services to any person or entity, including self employment income, or otherwise, then no such income shall in any manner offset or otherwise reduce the payment obligations of the Company hereunder.

Notwithstanding anything herein to the contrary, this Section 6(c) shall not apply if Executive terminates his employment with the Company or a succeeding entity for Good Reason upon or within one year of a Change of Control at any time during the Term as described in Section 7 hereof. In such case, Section 7 of this Agreement shall control.

Executive has the right, at any time during the Term, to terminate his employment with the Company without Good Reason (as defined above) by giving written notice to the Company, which termination shall be effective sixty (60) calendar days from the date of such written notice. If Executive terminates his employment without Good Reason, the Company's obligation to Executive shall be limited solely to the payment of unpaid Base Salary accrued up to the effective date of termination plus any accrued but unpaid bonus and benefits.

(d) Termination Upon Disability. The Company shall have the right, at any time during the Term, to terminate Executive's employment if, during the term hereof, Executive becomes physically or mentally disabled, whether totally or partially, as evidenced by the written statement of a competent physician licensed to practice medicine in the United States who is mutually acceptable to the Company and Executive, so that Executive is unable to perform the essential functions of his job duties hereunder, with or without reasonable accommodation, for (i) a period of three (3) consecutive months; or (ii) for shorter periods aggregating ninety (90) calendar days during any twelve-month period. If the Company terminates Executive's employment under this Section 6(d), the Company's obligation to Executive shall be limited solely to the payment of unpaid Base Salary to the effective date of termination, plus any accrued but unpaid benefits to the effective date of termination, any unpaid bonus earned in accordance with the then applicable bonus plan or program to the effective date of termination and, if there is no unpaid, earned bonus for the year in which the termination occurs, an amount equal to the product of 100% of Executive's Base Salary multiplied by a fraction, the numerator of which is the number of days he is employed by the Company during the year in which the termination occurs and the denominator of which is 365.

(e) Termination upon Death. If Executive dies during the Term, this Agreement shall terminate, except that Executive's surviving spouse (or if there is no surviving spouse, his estate) shall be entitled to receive the Base Salary and other accrued benefits earned up to the date of Executive's death.

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7. Change of Control.

(a) Anything in this Agreement to the contrary notwithstanding, if, upon or within one year of a Change of Control (as defined below) occurring at any time during the Term, the Company or a succeeding entity terminates Executive without Cause (as defined above) or Executive terminates his employment for Good Reason (as defined in Section 6(c) above), the Company or the succeeding entity's obligation to Executive shall be (i) unpaid Base Salary, bonus and benefits accrued up to the effective date of termination, (ii) if there is no unpaid bonus earned for the year of termination, an amount equal to the product of 100% of Executive's Base Salary multiplied by a fraction, the numerator of which is the number of days he is employed by the Company during the year in which the termination occurs and the denominator of which is 365 and, if the date of termination occurs prior to the date on which the annual bonus, if any, for the immediately preceding year would otherwise be paid, an amount equal to the annual bonus that would have been paid to Executive for such immediately preceding year, based on the actual achievement of applicable performance goals and without regard to whether Executive is employed on the date the bonus otherwise would have been paid, (iii) a lump sum payment equal to Executive's then-current Base Salary for a period of thirty-six (36) months, and (iv) if Executive is eligible for and timely elects COBRA coverage for health insurance coverage, payment of Executive's COBRA premiums for health insurance coverage for himself and his eligible dependents for a period of up to eighteen (18) months, payments to be made on a monthly basis when the premiums are due, and in the event of the death of Executive before the expiration of such eighteen (18)-month period, the Company shall, for the remainder of such period, continue to pay the COBRA premiums for the Executive's dependents (including his spouse, if any) who were receiving COBRA coverage at the time of his death. In the event of a without Cause Change of Control termination or a without Good Reason Change of Control termination, each as described herein, the payments in this Section 7(a) shall be in lieu of, and not in addition to, any severance pay or benefits set forth in Sections 6(b) or 6(c), whichever may apply. Notwithstanding anything to the contrary contained herein or in any award agreement between Executive and the Company, in the event of a Change of Control (as defined below), (i) all unvested stock awards held by Executive, including stock options described in Section 3(b) and any other subsequent awards, shall become fully vested upon the Change of Control and, if applicable, immediately exercisable; (ii) each such award, and each already vested award described in Section 3(b), which is a stock option shall continue to be exercisable for the remainder of its term; and (iii) with respect to any award that is subject to the attainment of performance objectives or specified performance criteria, such performance objectives and criteria shall be deemed satisfied at the target level and any performance period shall be deemed to end as of the date of the Change of Control. As a condition to his receipt of the post-employment payments and benefits under this Section 7(a), other than the vesting of awards described in the preceding sentence, Executive must be in compliance with Section 5 of this Agreement, and must execute, return, not rescind and comply with a release of claims agreement in favor of the Company, related entities and individuals and the succeeding entity, within the timeframe and in a form to be prescribed by the Company or a succeeding entity. The severance amount described in clauses (ii) and (iii) of the first sentence of this paragraph shall be paid in a lump sum on the ninetieth (90th) day after the date of Executive's termination of employment (but in any event not later than March 15 of the year following the year in which Executive's employment terminates), provided that the Company has received the signed general

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release of claims agreement and Executive has not rescinded such agreement within the rescission period set forth in such agreement.

(b) Change of Control Defined. For purposes of this Agreement, a "Change of Control" shall mean the occurrence of a "change in the ownership," a "change in the effective control" or a "change in the ownership of a substantial portion of the assets" of the Company during the Term, as determined in accordance with this Section 7(b). In determining whether an event shall be considered a "change in the ownership," a "change in the effective control" or a "change in the ownership of a substantial portion of the assets" of the Company, the following provisions shall apply:

(i) A "change in the ownership" of the Company shall occur on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company, as determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(v). If a person or group is considered either to own more than 50% of the total fair market value or total voting power of the stock of the Company, or to have effective control of the Company within the meaning of clause (ii) of this Section 7(b), and such person or group acquires additional stock of the Company, the acquisition of additional stock by such person or group shall not be considered to cause a "change in the ownership" of the Company.

(ii) A "change in the effective control" of the Company shall occur on either of the following dates:

(A) The date on which any one person, or more than one person acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 40% or more of the total voting power of the stock of the Company, as determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(vi). If a person or group is considered to possess 40% or more of the total voting power of the stock of the Company, and such person or group acquires additional stock of the Company, the acquisition of additional stock by such person or group shall not be considered to cause a "change in the effective control" of the Company; or

(B) The date on which a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election, as determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(vi).

(iii) A "change in the ownership of a substantial portion of the assets" of the Company shall occur on the date on which any one person, or more than one person acting as a group acquires (or has acquired during the 12-month period ending on the date

13

of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions, as determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(vii). A transfer of assets shall not be treated as a "change in the ownership of a substantial portion of the assets" when such transfer is made to an entity that is controlled by the shareholders of the Company, as determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(vii)(B).

In all cases, the determination of whether a Change of Control has occurred shall be made in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the " Code "), and the regulations, notices and other guidance of general applicability issued thereunder.

8. Code Section 409A. Notwithstanding anything herein to the contrary, if any payments to be made, or benefits to be provided, to Executive hereunder are subject to the requirements of Code Section 409A and the Company determines that Executive is a "specified employee" as defined in Code Section 409A as of the date of the termination, then, to the extent such payments or benefits do not satisfy the separation pay exemption described in Treasury Regulation § 1.409A-1(b)(9)(iii) or any other exemption available under Section 409A of the Code (the "Non-Exempt Payments"), the amount of such Non-Exempt Payments shall not be paid or commence earlier than the date that is six months after the termination. Any Non-Exempt Payment not made during the six-month period shall be paid in a lump sum payment on the first day of the seventh month following termination. For purposes of Code Section 409A, any reference to Executive's termination of employment in this Agreement shall be deemed to be a reference to Executive's "separation from service" (within the meaning of Treasury Regulation

§ 1.409-1(h), applying the default terms thereof), and any installment payments provided to Executive pursuant to this Agreement shall be treated as a series of separate payments.

9. Successors; Assignment, Etc.; Third Party Beneficiaries.

(a) Executive consents to and the Company shall have the right to assign this Agreement to its successors or assigns. All covenants or agreements hereunder shall inure to the benefit of and be enforceable by or against its successors or assigns. The terms "successors" and "assigns" shall include, but not be limited to, any succeeding entity upon a Change of Control.

(b) Neither this Agreement nor any of the rights or obligations of Executive under this Agreement may be assigned or delegated except as provided in the last sentence of this Section 9(b). This Agreement and all rights of Executive hereunder shall inure to the benefit of and be enforceable by, and shall be binding upon, Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If Executive should die while any amounts would still be payable to him hereunder had he continued to live, then all such amounts (unless otherwise provided herein) shall be paid in accordance with the terms of this Agreement to his surviving spouse, or if there is no surviving spouse, to Executive's estate.

14

10. Notice. For purposes of this Agreement, all notices and other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person or when mailed by United States registered or certified mail, return receipt requested, first-class postage prepaid, addressed as follows:

	
If to Executive :

	
If to the Company :

	
Mr. Daniel Kryger

	
 Attn: Corporate Secretary

	
18 Three Pond Road

	
23101 Lake Center Drive, #100

	
Smithtown, NY 11787

	
 Lake Forest, CA 92630

or to such other address as any party may have furnished to the other in writing in accordance with this Section 10, except that notices of any change of address shall be effective only upon actual receipt.

11. Miscellaneous. No provision of this Agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in writing signed by Executive and such officers as may be specifically designated by the Board. No waiver by either party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any similar or dissimilar condition or provision at the same or any other time. No agreements or representations (whether oral or otherwise, express or implied) with respect to the subject matter of this Agreement have been made by either party which are not set forth expressly in this Agreement or which are not specifically referred to in this Agreement. If any term, clause, subpart, or provision of this Agreement is for any reason adjudged to be invalid, unreasonable, unenforceable or void, the same will be treated as severable, shall be modified to the extent necessary to be legally

enforceable to the fullest extent permitted by applicable law, and will not impair or invalidate any of the other provisions of this Agreement, all of which will be performed in accordance with their respective terms. The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of Indiana.

12. Validity. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under any present or future law or court decision, and if the rights or obligations of the Company and Executive will not be materially and adversely affected thereby, (a) such provision shall be fully severable from this Agreement, (b) this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom, and (d) in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid, and enforceable provision as similar to the terms and intent of such illegal, invalid, or unenforceable provision as may be possible.

13. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

15

14. Litigation. The parties agree that the exclusive venue for any litigation commenced by the Company or Executive relating to this Agreement shall be the state courts located in Orange County, California or the United States District Court, Southern District of California. The parties waive any rights to object to venue as set forth herein, including any

argument of inconvenience for any reason.

15. Entire Agreement. This Agreement constitutes (i) the binding agreement between the parties and (ii) represents the entire agreement between the parties and supersedes all prior agreements relating to the subject matter contained herein. All prior negotiations concerning Executive's employment with the Company have been merged into this Agreement and are reflected in the terms herein.

IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of The Effective Date.

COMPANY:

Pura Naturals, Inc.

/s/ Robert Doherty

By: Robert Doherty

Title: Chief Executive Officer

EXECUTIVE:

/s/ Daniel Kryger

Daniel Kryger

 

16Exhibit 10.28

 

 

  

Contract#: 1158251

Sales Partner: House Account

LOAN AGREEMENT (ACH Repayment) (California)

Agreement dated      May 21 2018      between Strategic Funding Source, Inc. ("SFSI") and the borrower listed below ("Borrower").

                (Month)(Day)(Year)

BORROWER INFORMATION

 

	
Borrower's Legal Name: PURA NATURALS, INC.

	 	 	 	 	 	 
	
D/B/A: Pura Naturals

	 	 	 	
State of Incorporation / Organization: CA 

	
Type of entity: Corporation

	 	 	 	 	 	 
	
Physical Address: 23101 Lake Center Dr Ste

	 	
 City: Lake Forest

	 	
 State: CA

	 	
 Zip: 92630-2898

	
100

	 	 	 	 	 	 
	
Mailing Address:

	 	
City:

	 	
State:

	 	
Zip:

	
Date business started (mm/yy): 12/2005

	 	
Federal ID# 47-4164403

	 	 	 	 
	
Monthly Total Sales _____________

	 	
Monthly Card Sales ________

	 	
Monthly Cash Sales _________

	 	 

LOAN TERMS

For value received, Borrower hereby promises to pay to SFSI, as the lead creditor, for itself and other co-investors (collectively the Funders), the principal amount specified below ("Loan Amount"), plus interest, in lawful money of the United States. Borrower shall deliver the principal and interest amount specified below (the "Repayment Amount") to SFSI from the payment of monies from Borrower's customers' and/or other third party (the "Receipts" defined as all payments made by cash, check, electronic transfer or other form of monetary payment in the ordinary course of the Borrower's business), for the payment of Borrower's sale of goods or services.

The Repayment Amount shall be paid to SFSI by Borrower's irrevocably authorizing only one depositing account acceptable to SFSI (the "account") to remit the percentage specified below (the "Specified Percentage") of the Borrower's settlement amounts due from each transaction, until such time as SFSI receives payment in full of the Repayment Amount. Borrower hereby authorizes SFSI to ACH Debit the specified remittances from the Borrower's bank account on a daily basis and will provide SFSI with all required access codes. Borrower understands that it is responsible for ensuring that the specified percentage to be debited by SFS remains in the account and will be held responsible for any fees incurred by SFSI resulting from a rejected ACH attempt or an event of default. (See Appendix A) SFSI is not responsible for any overdrafts or rejected transactions that may result from SFSI' ACH debiting the specified amounts under the terms of this agreement. SFSI will debit the specific daily amount every business day and upon receipt of the Borrower's monthly bank statements to reconcile the Borrower's account by either crediting or debiting the difference from or back to the Borrower's bank account so that the amount debited per month equals the specified percentage. It is solely the Borrower's responsibility to send all their bank statements and a missed month forfeits all future reconciliations. SFSI may, upon Borrower's request, extend the time for any payment due under this Agreement for such time as SFSI, in its sole discretion, deems appropriate. Notwithstanding anything to the contrary in this Agreement or any other agreement between SFSI and its Funders and Borrower, upon the occurrence of an Event of Default under Section 4 of the LOAN AGREEMENT TERMS AND CONDITIONS, the Specified Percentage shall equal 100%.

 

*** Obtaining another Cash Advance or similar financing, secured or unsecured during the performance of this agreement shall constitute an

Event of Default.***

	
Loan Amount: $28,500.00

	
Repayment Amount: $40,470.00

	
Specific Daily Repayment Amount: $165.00

THE TERMS, DEFINITIONS, CONDITIONS AND INFORMATION SET FORTH IN THE "LOAN AGREEMENT TERMS AND CONDITIONS", THE "SECURITY AGREEMENT AND GUARANTY", AND "ADMINISTRATIVE FORM" ARE HEREBY INCORPORATED IN AND MADE A PART OF THIS AGREEMENT.

 

	
MERCHANT #1

	 	 
	 	 	 
	
By Robert Switzer O1_SIG

	 	 /s/ Robert Switzer 
	
(Print Name and Title)

	 	
(Signature)

	 	 	 
	
MERCHANT #2

	 	 
	
By O2_SIG

	 	 
	
(Print Name and Title)

	 	
(Signature)

	 	 	 
	
OWNER/GUARANTOR #1

	 	 
	
By Robert Switzer O1_SIG

	 	  /s/ Robert Switzer 
	
(Print Name and Title)

	 	
(Signature)

	 	 	 
	
OWNER/GUARANTOR #2

	 	 
	
By O2_SIG

	 	 
	
(Print Name and Title)

	 	
(Signature)

	 	 	 
	
STRATEGIC FUNDING SOURCE, INC.

	 	 
	
By

	 	 
	
(Company Officer)

	 	
(Signature)

Each of above-signed Borrower and Owner/Guarantor represents that he or she is authorized to sign this Agreement for Borrower and that the information provided herein and in all of SFSI's forms is true, accurate and complete in all respects. SFSI may produce a monthly statement reflecting the delivery of the Specified Percentage of Receivables from Borrower via Bank.

ANY MISREPRESENTATION MADE BY BORROWER OR ANY OWNER/GUARANTOR IN CONNECTION WITH THIS AGREEMENT MAY CONSTITUTE A SEPARATE CAUSE OF ACTION FOR FRAUDULENT INDUCEMENT TO PROVIDE FINANCING.

SFS-California ACH Loan 1-25-2016 Page 1 of 8

Page 1 of 8

	
LOAN AGREEMENT TERMS AND CONDITIONS

	 	 	 	 	 
	
I. TERMS OF ENROLLMENT IN PROGRAM

	 	
1.8 No Liability. In no event will Bank or SFSI, nor

	 	
("Advisor"), provided such Advisor uses such

	
1.1 Borrower Deposit Agreement. Borrower shall

	 	
any of the Funders be liable for any claims asserted by

	 	
information solely for the purpose of advising

	
execute an agreement (the "Borrower Deposit

	 	
Borrower under any legal theory for lost profits, lost

	 	
Borrower and first agrees in writing to be bound by

	
Agreement") acceptable to SFS, with a Bank

	 	
revenues, lost business opportunities, exemplary,

	 	
the terms of this Section 1.13.

	
acceptable to SFS, to obtain electronic fund transfer

	 	
punitive, special, incidental, indirect or consequential

	 	
1.14 Publicity. Borrower and each Owner/Guarantor

	
services. Borrower shall provide SFS and/or its

	 	
damages, each of which is waived by Borrower and

	 	
authorizes SFSI to use its, his or her name in a listing

	
authorized agent with all of the information,

	 	
Owner/Guarantor.

	 	
of clients and in advertising and marketing materials.

	
authorizations and passwords necessary for verifying

	 	
1.9 Reliance on Terms. Section 1.1, 1.7, 1.8, 2.5, and

	 	
1.15 D/B/A's. Borrower hereby acknowledges and

	
Borrower's receivables, receipts and deposits into the

	 	
4.6 of this Agreement are agreed to for the benefit

	 	
agrees that SFSI may be using "doing business as" or

	
account. Borrower shall authorize SFS and/or it's

	 	
of Borrower, SFSI and its Funders and Bank, and

	 	
"d/b/a" names in connection with various matters

	
agent to deduct the amounts owed to SFS for the

	 	
notwithstanding the fact that Bank is not a party

	 	
relating to the transaction between SFSI and

	
Receipts as specified herein from settlement amounts

	 	
of this Agreement, Bank may rely upon their terms

	 	
Borrower, including the filing of UCC-1 financing

	
which would otherwise be due to Borrower from

	 	
and raise them as a defense in any action.

	 	
statements and other notices or filings.

	
electronic check transactions and to pay such amounts

	 	
1.10 Savings Clause. In no event shall the aggregate

	 	
II. REPRESENTATIONS, WARRANTIES AND

	
to SFS by permitting SFS to withdraw the specified

	 	
amount of interest charged or collected hereunder

	 	
COVENANTS Borrower and each Owner/Guarantor

	
percentages by ACH debiting of the account. The

	 	
exceed the highest rate permissible at law. In the

	 	
represents, warrants and covenants that as of this date

	
authorization shall be irrevocable without the written

	 	
event that a court determines that SFSI has charged or

	 	
and during the term of this Agreement:

	
consent of SFS.

	 	
received interest hereunder in excess of the highest

	 	
2.1 Financial Condition and Financial Information.

	
1.2 Term of Agreement. This Agreement shall have a

	 	
applicable rate, the rate in effect hereunder shall

	 	
Its financial statements, copies of which have been

	
term of one year. Upon the expiration of the term, this

	 	
automatically be reduced to the maximum rate

	 	
furnished to SFSI, and future statements which will be

	
Agreement shall automatically renew for successive

	 	
permitted by applicable law and SFSI shall promptly

	 	
furnished hereafter at the request of SFSI, fairly

	
one-year terms, provided, however, that during the

	 	
refund to Borrower any interest received by SFSI in

	 	
represent the financial condition of Owner/Guarantor

	
renewal term(s) Borrower may terminate this

	 	
excess of the maximum lawful rate, it being intended

	 	
and Borrower at such dates, and since those dates

	
Agreement upon ninety days' prior written notice

	 	
that Borrower not pay or contract to pay, and that

	 	
there has been no material adverse change, financial

	
(effective upon receipt) to SFSI. The termination of

	 	
SFSI not receive or contract to receive, directly or

	 	
or otherwise, in such condition, operation or

	
this Agreement shall not affect Borrower's

	 	
indirectly in any manner whatsoever, interest in excess

	 	
ownership of Borrower. Borrower has a continuing,

	
responsibility to satisfy all outstanding obligations

	 	
of that which may be paid by Borrower under

	 	
affirmative obligation to advise SFSI of any material

	
(including the Loan Amount and accrued interest) to

	 	
applicable law.

	 	
adverse change in its financial condition, operation or

	
SFSI at the time of termination.

	 	
1.11 Power of Attorney. Borrower irrevocably appoints

	 	
ownership. Borrower's failure to do so is a material

	
1.3 Additional Loans. SFSI reserves the right to

	 	
SFSI as its agent and attorney-in-fact with full

	 	
breach of this Agreement.

	
rescind the offer to make additional loans hereunder,

	 	
authority to take any action or execute any instrument

	 	
2.2 Governmental Approvals. Borrower is in

	
in its sole discretion.

	 	
or document to settle all obligations due to SFSI from

	 	
compliance and shall comply with all laws and has

	
1.4 Bridge Account. Borrower may be required to open

	 	
Bank, or upon the occurrence of an Event of Default

	 	
valid permits, authorizations and licenses to own,

	
a new bank account into which the Specified

	 	
under Section 4 hereof, to settle all obligations due to

	 	
operate and lease its properties and to conduct the

	
Percentage of the settlement amounts will be

	 	
SFSI from Borrower, under this Agreement, including

	 	
business in which it is presently engaged.

	
deposited (the "Bridge Account"). Borrower

	 	
without limitation (i) to obtain and adjust insurance;

	 	
2.3 Authorization. Borrower, and the person(s) signing

	
appoints SFSI as "Acting Agent" over the Bridge

	 	
(ii) to collect monies due or to become due under or in

	 	
this Agreement on behalf of Borrower, have full

	
Account, and shall instruct the Bank to designate

	 	
respect of any of the Collateral (as defined in the

	 	
power and authority to execute this Agreement and to

	
the Bridge Account as the depository account for

	 	
Security Agreement and Guaranty); (iii) to receive,

	 	
incur and perform the obligations under this

	
all transactions. Borrower assumes all

	 	
endorse and collect any checks, notes, drafts,

	 	
Agreement, all of which have been duly authorized.

	
responsibility for all fees, costs, charge-backs or

	 	
instruments, documents or chattel paper in connection

	 	
2.4 Insurance. Borrower will maintain businessinterruption

	
suspicious items processed through the Bridge

	 	
with clause (i) or clause (ii) above; (iv) to sign

	 	
insurance naming SFSI as loss payee and

	
Account (see "Miscellaneous Service Fees"

	 	
Borrower's name on any invoice, bill of lading, or

	 	
additional insured in amounts and against risks as are

	
paragraph 3.7) Borrower agrees to maintain a

	 	
assignment directing customers or account debtors to

	 	
satisfactory to SFSI and shall provide SFSI proof of

	
minimum balance in the Bridge Account (the

	 	
make payment directly to SFSI; and (v) to file any

	 	
such insurance upon request.

	
"Minimum Balance") equal to the per-month

	 	
claims or take any action or institute any proceeding

	 	
2.5 Borrower Processing Agreement and

	
average of all fees charged to Borrower by Bank,

	 	
which SFSI may deem necessary for the collection of

	 	
Arrangements. Without SFSI's prior written consent,

	
averaged over a six-month period.

	 	
any of the unpaid Repayment Amount from the

	 	
Borrower will not (i) change the card Bank through

	
1.5 Financial Condition. Owner/Guarantor and

	 	
Collateral, or otherwise to enforce its rights with

	 	
which the major cards are settled from Bank to

	
Borrower authorize SFSI, its agents and

	 	
respect to payment of the Repayment Amount.

	 	
another card Bank; (ii) permit any event to occur that

	
representatives and any credit reporting agency

	 	
1.12 Protection of Information. Borrower and each

	 	
could cause diversion of any of Borrower's card

	
engaged by SFSI, to investigate their creditworthiness,

	 	
person signing this Agreement on behalf of Borrower

	 	
transactions from Bank to another Bank; (iii) change

	
financial responsibility and history, and they agree to

	 	
and/or as Owner/Guarantor, in respect of himself or

	 	
its arrangements with Bank or amend the Borrower

	
provide SFSI any financial statements, tax returns,

	 	
herself personally, authorizes SFSI to disclose to any

	 	
Processing Agreement in any way that is adverse to

	
references, or other financial information, as SFSI

	 	
third party information concerning Borrower's and

	 	
SFSI; (iv) add card processing terminals; (v) use

	
deems necessary prior to or after execution of this

	 	
each Owner's/Guarantor's credit standing (including

	 	
multiple card processing terminals; (vi) change its

	
Agreement. A photocopy of this authorization will be

	 	
credit bureau reports that SFSI obtains) and business

	 	
financial institution or bank account(s) (including the

	
deemed as acceptable for release of credit and

	 	
conduct. Borrower and each Owner/Guarantor hereby

	 	
Bridge Account); (vii) take any other action that could

	
financial information. Borrower and Owner/Guarantor

	 	
waives to the maximum extent permitted by law any

	 	
have any adverse effect upon Borrower's obligations

	
authorize SFSI to update their credit and financial

	 	
claim for damages against SFSI or any of its affiliates

	 	
under this Agreement; or (viii) take any action, fail to

	
profile from time to time in the future, as SFSI deems

	 	
and Funders relating to any (i) investigation

	 	
take any action, or offer any incentive—economic or

	
appropriate. An investigative or consumer report may

	 	
undertaken by or on behalf of SFSI as permitted by

	 	
otherwise—the result of which will be to discourage

	
be made in connection with this Agreement.

	 	
this Agreement or (ii) disclosure of information as

	 	
the use of cards that are settled through Bank, or to

	
1.6 Transactional History. Borrower authorizes their

	 	
permitted by this Agreement.

	 	
induce any customers to pay for Borrower's services

	
Bank to provide SFSI with Borrower's banking

	 	
1.13 Confidentiality. Borrower understands and agrees

	 	
with any means other than cards that are settled

	
history.

	 	
that the terms and conditions of the products and

	 	
through Bank, or permit any event to occur that could

	
1.7 Indemnification. Borrower and each

	 	
services offered by SFSI, including this Agreement,

	 	
have an adverse effect on the use, acceptance, or

	
Owner/Guarantor jointly and severally indemnify and

	 	
the Security Agreement and Guaranty and any other

	 	
authorization of cards for the purchase of Borrower's

	
hold harmless Bank, its officers, directors and

	 	
SFSI documents (collectively, "Confidential

	 	
services and products. Any such change, action or

	
shareholders against all losses, damages, claims,

	 	
Information") are proprietary and confidential

	 	
inaction shall be a material breach of this Agreement.

	
liabilities and expenses (including reasonable

	 	
information of SFSI. Accordingly unless disclosure is

	 	
2.6 Change of Name, Location or Jurisdiction of

	
attorney's fees) incurred by Bank resulting from (a)

	 	
required by law or court order, Borrower shall not

	 	
Organization. Borrower will not conduct Borrower's

	
claims asserted by SFSI for monies owed to SFSI

	 	
disclose Confidential Information to any person other

	 	
businesses under any name other than as disclosed to

	
from Borrower and (b) actions taken by Bank in

	 	
than an attorney, accountant, financial advisor or

	 	
the Bank and SFSI, change any of its places of

	
reliance upon information or instructions provided by

	 	
employee of Borrower who needs to know such

	 	
business, or change its jurisdiction of organization.

	
SFSI.

	 	
information for the purpose of advising Borrower

	 	 

 

 

Page 2 of 8

 

	
2.7 Daily Batch Out. Borrower will batch out receipts

	
2.18 Use of Proceeds. Borrower will conduct its

	
Court and execute thereon; and (v) SFSI may exercise

	
with the Bank on a daily basis.

	
business and use the Loan Amount in the ordinary

	
its rights under the Assignment of Lease. All rights,

	
2.8 Estoppel Certificate. Borrower will at any time,

	
course of its business, consistent with past practice.

	
powers and remedies of SFSI in connection with this

	
and from time to time, upon at least one (1) day's

	
2.19 Accuracy of Information. All information

	
Agreement and the Security Agreement and Guaranty

	
prior notice from SFSI to Borrower, execute,

	
provided by Borrower and each Owner/Guarantor to

	
may be exercised at any time by SFSI after the

	
acknowledge and deliver to SFSI and/or to any other

	
SFSI herein, in the Security Agreement and Guaranty,

	
occurrence of an Event of Default, are cumulative and

	
person, firm or corporation specified by SFSI, a

	
and in all other SFSI forms is true, accurate and

	
not exclusive, and shall be in addition to any other

	
statement certifying that this Agreement is unmodified

	
complete in all respects.

	
rights, powers or remedies provided by law or equity.

	
and in full force and effect (or, if there have been

	
III. EVENTS OF DEFAULT AND REMEDIES

	
3.3 Costs. Borrower and Owner/Guarantor shall pay to

	
modifications, that the same is in full force and effect

	
3.1 Events of Default. The occurrence of any of the

	
SFSI all reasonable costs associated with (a) a breach

	
as modified and stating the modifications) and stating

	
following events shall constitute an "Event of

	
by Borrower or Owner/Guarantor of the

	
the dates which the Repayment Amount or any portion

	
Default" hereunder: (a) Borrower or Owner/Guarantor

	
representations, warranties and covenants in this

	
thereof has been repaid.

	
violates any term, covenant or condition in this

	
Agreement and the Security Agreement and Guaranty

	
2.9 No Bankruptcy or Insolvency. As of the date of

	
Agreement or the Security Agreement and Guaranty;

	
and the enforcement thereof, and (b) the enforcement

	
this Agreement, Borrower. and Guarantors represent

	
(b) any representation or warranty by Borrower or

	
of SFSI's remedies set forth in Section 3.2 above,

	
that they are not Insolvent and have not filed any

	
Owner/Guarantor in this Agreement or the Security

	
including but not limited to court costs and attorneys'

	
petition for bankruptcy protection under Title 11 of

	
Agreement and Guaranty shall prove to have been

	
fees.

	
the United States Code and there has been no

	
incorrect, incomplete, false or misleading in any

	
3.4 Required Notifications. Borrower and

	
involuntary petition brought or pending against

	
material respect when made; (c) Borrower or

	
Owner/Guarantor are required to give SFSI

	
Borrower. Borrower further warrants that it does not

	
Owner/Guarantor admits its inability to pay its debts,

	
written notice within 24 hours of any filing by

	
anticipate filing any such bankruptcy petition and it

	
or makes a general assignment for the benefit of

	
Borrower or Owner/Guarantor under Title 11 of

	
does not anticipate that an involuntary petition will be

	
creditors; or any proceeding shall be instituted by or

	
the United States Code. Borrower is required to

	
filed against it.

	
against Borrower or Owner/Guarantor seeking to

	
give SFSI seven days' written notice prior to the

	
2.10 Other Financing . Borrower shall not enter into

	
adjudicate it bankrupt or insolvent, or seeking

	
closing of any sale of all or substantially all of the

	
any arrangement, agreement or commitment that

	
reorganization, arrangement, adjustment, or

	
Borrower's assets or stock. Borrower is required

	
relates to or involves Receipts, whether in the form of

	
composition of it or its debts; (d) Owner/Guarantor

	
to give SFSI fourteen days' written notice prior to

	
a purchase (such as a merchant cash advance) or a

	
sends a notice of termination of the Security

	
the suspension, dissolution or terminations its

	
loan against, or the sale or purchase of credits against,

	
Agreement and Guaranty; (e) Borrower suspends,

	
business.

	
any Receipts, cash deposits or future card or mobile

	
dissolves or terminates its business; (f) Borrower sells

	
3.5 Default Fee. Upon the Occurrence of any Event of

	
payment sales with any party other than SFSI without

	
all or substantially all of its assets; (g) Borrower

	
Default, and written notice to Borrower thereof,

	
its written permission.

	
makes or sends notice of any intended bulk sale or

	
Borrower shall pay to SFSI a default fee ("Default

	
2.11 Unencumbered Receipts. Borrower has good and

	
transfer by Borrower; (h) Borrower performs any act

	
Fee") of $2,500. This Default Fee shall be payable on

	
marketable title to all Receipts, free and clear of any

	
that encumbers the cash flow of the business placing

	
demand and stand in addition to any other fees or

	
and all liabilities, liens, claims, changes, restrictions,

	
undue stress on the viability of the operations and

	
penalties outlined within this Agreement, the Security

	
conditions, options, rights, mortgages, security

	
reduces the value of the Collateral or the security

	
Agreement or Guaranty.

	
interests, equities, pledges and encumbrances of any

	
interest granted in the Collateral under the Security

	
3.6 Bank Change Fee. Borrower shall pay to SFSI

	
kind or nature whatsoever or any other rights or

	
Agreement and Guaranty;; (i) Owner/Guarantor

	
$5,000.00 in the event that Borrower (i) uses multiple

	
interests that may be inconsistent with the transactions

	
performs any act that reduces the value of the

	
Bank accounts for deposits without the prior written

	
contemplated with, or adverse to the interests of,

	
Additional Collateral (as defined in the Security

	
consent of SFSI, or (ii) changes its Bank without the

	
SFSI.

	
Agreement and Guaranty) or the security interest

	
prior written consent of SFSI. Such Bank Change Fee

	
2.12 Business Purpose. Borrower is a valid business in

	
granted in the Additional Collateral under the Security

	
(i) shall be due and payable to SFSI on demand, (ii) is

	
good standing under the laws of the jurisdictions in

	
Agreement and Guaranty; (j) Borrower or

	
not exclusive of, and is cumulative with, any other fee

	
which it is organized and/or operates, and Borrower is

	
Owner/Guarantor performs any act that reduces the

	
or amount paid or payable to SFSI by Borrower

	
entering into this Agreement for business purposes

	
value of the Cross-Collateral (as defined in the

	
pursuant to this Agreement or the Security Agreement

	
and not as a consumer for personal, family or

	
Security Agreement and Guaranty); (k) Borrower or

	
and Guaranty; and (iii) shall not be construed as a

	
household purposes.

	
any Owner/Guarantor files any petition for bankruptcy

	
waiver of any Event of Default hereunder or under the

	
2.13 Default Under Other Contracts. Borrower's

	
under the United States code or an involuntary

	
Security Agreement and Guaranty or as otherwise

	
execution of or performance under this Agreement

	
petition for bankruptcy has been brought or is pending

	
operating to reduce or limit SFSI's rights or remedies

	
will not cause or create an event of default by

	
against Borrower or any Owner/Guarantor; or (l)

	
provided for hereunder, under the Security Agreement

	
Borrower under any contract with another person or

	
Borrower or Owner/Guarantor defaults under any of

	
and Guaranty or at law or in equity.

	
entity.

	
the terms, covenants and conditions of any other

	
3.7 Miscellaneous Service Fees. Borrower shall pay

	
2.14 Delivery of Confession of Judgment. Upon

	
agreement with SFSI including those with affiliated /

	
certain fees for services related to the origination and

	
execution of this Agreement, Borrower shall deliver to

	
associated businesses.

	
maintenance of accounts which may include but not

	
SFSI an executed Confession of Judgment, in the

	
3.2 Remedies. Upon the occurrence of an Event of

	
be limited to: Borrowers funding is done

	
form provided by SFSI, in favor of SFSI and its

	
Default that is not waived pursuant to Section 4.4

	
electronically to their designated bank account and

	
Funders in the amount of the Loan Amount.

	
hereof, SFSI may proceed to protect and enforce its

	
charged a fee of $35.00 for a Fed Wire or $15.00 for

	
2.15 Delivery of Assignment of Lease. Borrower and

	
rights or remedies by suit in equity or by action at law,

	
an ACH. The fee for underwriting and origination is

	
Owner/Guarantor authorize SFSI to receive pertinent

	
or both, whether for the specific performance of any

	
paid from the funded amount in accordance with the

	
information regarding the commercial lease for the

	
covenant, agreement or other provision contained

	
schedule below. If Borrower is utilizing a Bridge /

	
physical location of Borrower's business (the

	
herein, or to enforce the discharge of Borrower's and

	
Control Account, there is an upfront fee of $395.00

	
"Premises") from any applicable leasing company and

	
Owner's/Guarantor's obligations hereunder, under the

	
for the bank fees and administrative costs of

	
or agent. Upon execution of this Agreement,

	
Security Agreement and Guaranty, or pursuant to any

	
maintaining such account for each financing

	
Borrower shall deliver to SFSI an executed

	
other legal or equitable right or remedy. Upon SFSI's

	
agreement with Borrower. Fund transfers from

	
Assignment of Lease covering the Premises in favor

	
notice to Borrower of any Event of Default, the entire

	
Bridge / Control Accounts to Borrower's operating

	
of SFSI.

	
Repayment amount and unpaid fees not already paid

	
bank account will be charged $10.95 per month via

	
2.16 Sale of Business. Borrower shall not sell, dispose,

	
to SFSI shall become immediately due and payable to

	
ACH. This fee will continue if the bridge account

	
transfer or otherwise convey its business or assets

	
SFSI. In addition, upon an Event of Default (i) SFSI

	
remains open after the RTR is paid. Borrower will be

	
without (i) the express prior written consent of SFSI,

	
may enforce the provisions of the Security Agreement

	
charged $50.00 for each change of its operating bank

	
and (ii) the written agreement of any purchaser or

	
and Guaranty against the Borrower and

	
account once active with SFSI. Any administrative

	
transferee assuming all of Borrower's obligations

	
Owner/Guarantor; (ii) SFSI may enforce its security

	
adjustments associated with changes to the Specified

	
under this Agreement pursuant to documentation

	
interest in the Collateral, the Additional Collateral and

	
Percentage will incur a fee of $75.00 per occurrence.

	
satisfactory to SFSI.

	
the Cross-Collateral; (iii) SFSI may debit Borrower's

	
(All fees are subject to change)

	
2.17 Bridge Account. Borrower will not take any

	
depository accounts wherever situated by means of

	 
	
action to cause the Specified Percentage of the

	
ACH debit or facsimile signature on a computergenerated

	 
	
settlement amounts to be settled or delivered to any

	
check drawn on Borrower's bank account or

	
INITIALS:  RS

	
account other than the Bridge Account. Borrower will

	
otherwise; (iv) SFSI may enter the Confession of

	 
	
maintain a Minimum Balance in the Bridge Account.

	
Judgment as a judgment with the appropriate Clerk of

	
IV. MISCELLANEOUS

Page 3 of 8

	
4.1 Modifications; Agreements. No modification,

	 	
Agreement and Guaranty with or without prior written

	 	
AND SHALL BE INTERPRETED IN THE

	
amendment, waiver or consent of any provision of this

	 	
notice to Borrower and Owner/Guarantor. SFSI's

	 	
BROADEST WAY THE LAW WILL ALLOW.

	
Agreement or the Security Agreement and Guaranty

	 	
Funders shall be third party beneficiaries of all such

	 	
Covered claims

	
shall be effective unless the same shall be in writing

	 	
agreements. This Agreement and the Security

	 	
· You or we may arbitrate any claim, dispute or

	
and signed by SFSI.

	 	
Agreement and Guaranty shall be governed by and

	 	
controversy between you and us arising out of or

	
4.2 Assignment. Borrower acknowledges and

	 	
construed in accordance with the laws of the State of

	 	
related to your account, a previous related account

	
understands that SFSI is acting on its own behalf and

	 	
California, without regards to any applicable

	 	
or our relationship (called "Claims").

	
as the administrator and lead investor for a group of

	 	
principals of conflicts of law. Any suit, action or

	 	
· If arbitration is chosen by any party, neither

	
independent co- investors a list of which can be

	 	
proceeding arising hereunder or under the Security

	 	
you nor we will have the right to litigate that

	
provided to Borrower after funding and upon written

	 	
Agreement and Guaranty, or the interpretation,

	 	
Claim in court or have a jury trial on that

	
notice to SFSI. SFSI may assign, transfer or sell its

	 	
performance or breach hereof or thereof, shall, if SFSI

	 	
Claim.

	
rights to receive the Loan Amount and any accrued but

	 	
so elects, be instituted in any court sitting in Los

	 	
· Except as stated below, all Claims are subject to

	
unpaid interest or delegate its duties hereunder, either

	 	
Angeles County, State of California (the "Acceptable

	 	
arbitration, no matter what legal theory they're

	
in whole or in part.

	 	
Forums"). Borrower and Owner/Guarantor agree that

	 	
based on or what remedy (damages, or injunctive

	
4.3 Notices. All notices, requests, consent, demands and

	 	
the Acceptable Forums are convenient to them, and

	 	
or declaratory relief) they seek, including Claims

	
other communications hereunder and under the

	 	
submits to the jurisdiction of the Acceptable Forums

	 	
based on contract, tort (including intentional tort),

	
Borrower Security Agreement and Guaranty shall be

	 	
and waives any and all objections to jurisdiction or

	 	
fraud, agency, your or our negligence, statutory or

	
delivered by ordinary mail, effective upon mailing, to

	 	
venue. Should such proceeding be initiated in any

	 	
regulatory provisions, or any other sources of law;

	
the respective parties to this Agreement and the

	 	
other forum, Borrower and Owner/Guarantor waive

	 	
Claims made as counterclaims, cross-claims, thirdparty

	
Security Agreement and Guaranty at the addresses set

	 	
any right to oppose any motion or application made

	 	
claims, interpleaders or otherwise; Claims

	
forth in this Agreement and shall become effective

	 	
by SFSI to transfer such proceeding to an Acceptable

	 	
made regarding past, present, or future conduct;

	
only upon receipt. The Parties hereto may also send

	 	
Forum.

	 	
and Claims made independently or with other

	
such notices, requests, consent, demands and other

	 	
4.8 Survival of Representation, etc. All

	 	
claims. This also includes Claims made by or

	
communications via facsimile ("FAX") or electronic

	 	
representations, warranties and covenants herein and

	 	
against anyone connected with us or you or

	
mail ("Email") at such FAX numbers and email

	 	
in the Security Agreement and Guaranty shall survive

	 	
claiming through us or you, or by someone making

	
addresses communicated by the parties hereto in

	 	
the execution and delivery of this Agreement and the

	 	
a claim through us or you, such as a co-applicant,

	
writing.

	 	
Security Agreement and Guaranty and shall continue

	 	
authorized user, employee, agent, representative or

	
4.4 Waiver Remedies. No failure on the part of SFSI to

	 	
in full force until all obligations under this Agreement

	 	
an affiliated/parent/subsidiary company.

	
exercise, and no delay in exercising, any right under

	 	
and the Security Agreement and Guaranty shall have

	 	
Arbitration limits

	
this Agreement or the Security Agreement and

	 	
been satisfied in full and this Agreement and the

	 	
· Individual Claims filed in a small claims court are

	
Guaranty shall operate as a waiver thereof, nor shall

	 	
Security Agreement and Guaranty shall have

	 	
not subject to arbitration, as long as the matter

	
any single or partial exercise of any right under this

	 	
terminated.

	 	
stays in small claims court.

	
Agreement or the Security Agreement and Guaranty

	 	
4.9 Severability. In case any of the provisions in this

	 	
· We won't initiate arbitration to collect a debt from

	
preclude any other or further exercise thereof or the

	 	
Agreement or the Security Agreement and Guaranty is

	 	
you unless you choose to arbitrate or assert a

	
exercise of any other right. The remedies provided

	 	
found to be invalid, illegal or unenforceable in any

	 	
Claim against us. If you assert a Claim against us,

	
hereunder and under the Security Agreement and

	 	
respect, the validity, legality and enforceability of any

	 	
we can choose to arbitrate, including actions to

	
Guaranty are cumulative and not exclusive of any

	 	
other provision contained herein or therein shall not in

	 	
collect a debt from you. You may arbitrate on an

	
remedies provided by law or equity.

	 	
any way be affected or impaired.

	 	
individual basis Claims brought against you,

	
4.5 Solicitations. Borrower and each Owner/Guarantor

	 	
4.10 Entire Agreement. Any provision hereof and in the

	 	
including Claims to collect a debt.

	
authorizes SFSI and its affiliates to communicate

	 	
Security Agreement and Guaranty prohibited by law

	 	
· Claims brought as part of a class action, private

	
with, solicit and /or market to Borrower and each

	 	
shall be ineffective only to the extent of such

	 	
attorney general or other representative action can

	
Owner/Guarantor via regular mail, telephone, email

	 	
prohibition without invalidating the remaining

	 	
be arbitrated only on an individual basis. The

	
and facsimile in connection with the provision of

	 	
provisions hereof or thereof. This Agreement and the

	 	
arbitrator has no authority to arbitrate any claim on

	
goods or services by SFSI, its affiliates or any third

	 	
Security Agreement and Guaranty embody the entire

	 	
a class or representative basis and may award relief

	
party that SFSI shares, transfers, exchanges, discloses

	 	
agreement between Borrower, Owner/Guarantor and

	 	
only on an individual basis. If arbitration is

	
or provides information with and will hold SFSI, its

	 	
SFSI and supersede all prior agreements and

	 	
chosen by any party, neither you nor we may

	
affiliates and such third parties harmless against any

	 	
understandings relating to the subject matter hereof.

	 	
pursue a Claim as part of a class action or other

	
and all claims pursuant to the federal CAN-SPAM

	 	
4.11 JURY TRIAL WAIVER. TO THE EXTENT

	 	
representative action. Claims of 2 or more persons

	
ACT of 2003 (Controlling the Assault of Non-

	 	
PERMITTED BY APPLICABLE LAW, THE

	 	
may not be combined in the same arbitration.

	
Solicited Pornography and Marketing Act of 2003),

	 	
PARTIES HERETO WAIVE TRIAL BY JURY IN

	 	
However, applicants, co-applicants, authorized

	
the Telephone Consumer Protection Act (TCPA), and

	 	
ANY COURT IN ANY SUIT, ACTION OR

	 	
users on a single account and/or related accounts,

	
any and all other states of federal laws relating to

	 	
PROCEEDING ON ANY MATTER ARISING IN

	 	
or corporate affiliates are here considered as one

	
transmissions or solicitations by and any of the

	 	
CONNECTION WITH OR IN ANY WAY

	 	
person.

	
methods described above.

	 	
RELATED TO THE TRANSACTIONS OF

	 	
How arbitration works

	
4.6 Terminated Borrower File and Match File.

	 	
WHICH THIS AGREEMENT AND THE

	 	
· Arbitration shall be conducted by the American

	
Borrower expressly acknowledges that a Terminated

	 	
SECURITY AGREEMENT AND GUARANTY IS

	 	
Arbitration Association ("AAA") according to this

	
Borrower File ("TMF"), or any successor thereto, is

	 	
A PART OR THE ENFORECEMENT HEREOF

	 	
arbitration provision and the applicable AAA

	
maintained by MasterCard or VISA containing the

	 	
OR THEREOF. THE PARTIES HERETO

	 	
arbitration rules in effect when the claim is filed

	
business name and names and identification of

	 	
ACKNOWLEDGE THAT EACH MAKES THIS

	 	
("AAA Rules"), except where those rules conflict

	
principals of Borrowers which have been terminated

	 	
WAIVER KNOWINGLY, WILLINGLY AND

	 	
with this arbitration provision. You can obtain

	
for one or more of the reasons specified in

	 	
VOLUNTARILY AND WITHOUT DURESS, AND

	 	
copies of the AAA Rules at the AAA's website

	
MasterCard or VISA operating regulations. Such

	 	
ONLY AFTER EXTENSIVE CONSIDERATION

	 	
(www.adr.org) or by calling 800-778-7879. You or

	
reasons include, but are not limited to, fraud,

	 	
OF THE RAMIFICATIONS OF THIS WAIVER

	 	
we may choose to have a hearing, appear at any

	
counterfeit drafts, unauthorized transactions,

	 	
WITH THEIR ATTORNEYS.

	 	
hearing by phone or other electronic means, and/or

	
excessive charge-backs and retrieval requests, money

	 	
4.12. ARBITRATION. PLEASE READ THIS

	 	
be represented by counsel. Any in-person hearing

	
laundering, or where a high security risk exists.

	 	
PROVISION OF THE AGREEMENT

	 	
will be held in the same city as the U.S. District

	
4.7 Binding Effect; Governing Law, Venue and

	 	
CAREFULLY. THIS SECTION PROVIDES THAT

	 	
Court closet to your billing address.

	
Jurisdiction. This Agreement and the Security

	 	
DISPUTES MAY BE RESOLVED BY BINDING

	 	
· Arbitration may be requested any time, even where

	
Agreement and Guaranty shall be binding upon and

	 	
ARBITRATION. ARBITRATION REPLACES

	 	
there is a pending lawsuit, unless a trial has begun

	
inure to the benefit of Borrower, Owner/Guarantor,

	 	
THE RIGHT TO GO TO COURT, HAVE A JURY

	 	
or a final judgment entered. Neither you nor we

	
SFSI (and it's Funders) and their respective

	 	
TRIAL OR INITIATE OR PARTICIPATE IN A

	 	
waive the right to arbitrate by filing or serving a

	
successors and assigns, except that Borrower and

	 	
CLASS ACTION. IN ARBITRATION, DISPUTES

	 	
complaint, answer, counterclaim, motion, or

	
Owner/Guarantor shall not have the right to assign

	 	
ARE RESOLVED BY AN ARBITRATOR, NOT A

	 	
discovery in a court lawsuit. To choose arbitration,

	
their rights hereunder, under the Security Agreement

	 	
JUDGE OR JURY. ARBITRATION

	 	
a party may file a motion to compel arbitration in a

	
and Guaranty or any interest herein or therein without

	 	
PROCEDURES ARE SIMPLER AND MORE

	 	
pending matter and/or commence arbitration by

	
the prior written consent of SFSI which consent may

	 	
LIMITED THAN IN COURT. THIS

	 	
submitting the required AAA forms and requisite

	
be withheld in SFSI's sole discretion. SFSI reserves

	 	
ARBITRATION PROVISION IS GOVERNED BY

	 	
filing fees to the AAA.

	
the rights to assign this Agreement and the Security

	 	
THE FEDERAL ARBITRATION ACT (FAA),

	 	 

 

 

Page 4 of 8

 

	
· The arbitration shall be conducted by a single

	 	
· We will pay your share of the

	 	
appeal is final. A final award is subject to judicial

	
arbitrator in accord with this arbitration provision

	 	
arbitration fee for an arbitration of Claims of $75,000 or

	 	
review as provided by applicable law.

	
and the AAA Rules, which may limit discovery.

	 	
less if they are unrelated to debt collection. Otherwise,

	 	
Survival and Severability of Terms

	
The arbitrator shall not apply any federal or state

	 	
arbitration fees will be allocated according to the

	 	
· This arbitration provision shall survive changes in

	
rules of civil procedure for discovery, but the

	 	
applicable AAA Rules. If we prevail, we may not

	 	
this Agreement and termination of the account or

	
arbitrator shall honor claims of privilege

	 	
recover our arbitration fees, unless the arbitrator decides

	 	
the relationship between you and us, including the

	
recognized at law and shall take reasonable steps

	 	
you Claim was frivolous. All parties are responsible for

	 	
bankruptcy of any party and any sale of your

	
to protect account information and other

	 	
their own attorney's fees, expert fees and any other

	 	
account, or amounts owed on your account, to

	
confidential information of either party if

	 	
expenses, unless the arbitrator awards such fees or

	 	
another person or entity. If any part of this

	
requested to do so. The arbitrator shall apply

	 	
expenses to you or us based on applicable law.

	 	
arbitration provision is deemed invalid or

	
applicable substantive law consistent with the FAA

	 	
The final award

	 	
unenforceable, the other terms shall remain in

	
and applicable statute of limitations, and may

	 	
· Any award by an arbitrator is final unless a party

	 	
force, except that there can be no arbitration of a

	
award damages or other relief under applicable

	 	
appeals it in writing to the AAA within 30 days of

	 	
class or representative Claim. This arbitration

	
law.

	 	
notice of the award. The arbitration appeal shall

	 	
provision may not be amended, severed or waived,

	
· The arbitrator shall make any award in writing

	 	
be determined by a panel of 3 arbitrators. The

	 	
except as provided in this Agreement or in a

	
and, if requested by you or us, may provide a brief

	 	
panel will consider all facts and legal issues anew

	 	
written agreement between you and us.

	
statement of the reasons for the award. An

	 	
based on the same evidence presented in the prior

	 	
4.13 Facsimile and PDF Acceptance. Facsimile and

	
arbitration award shall decide the rights and

	 	
arbitration, and will make decisions based on a

	 	
PDF signatures shall be deemed acceptable for all

	
obligations only of the parties named in the

	 	
majority vote. Arbitration fees for the arbitration

	 	
purposes.

	
arbitration, and shall not have any bearing on any

	 	
appeal shall be allocated according to the

	 	 
	
other person or dispute.

	 	
applicable AAA Rules. An award by a panel on

	 	
INITIALS: RS

	
Paying for arbitration fees

	 	 	 	 

 

 

Page 5 of 8

 

 

STRATEGIC FUNDING SOURCE, INC - SECURITY AGREEMENT AND GUARANTY

 

 

	
Borrower's Legal Name:  PURA NATURALS, INC.  

	 	 	 	 
	
D/B/A: Pura Naturals

	 	 	 	
State of Incorporation / Organization: CA 

	
Physical Address: 23101 Lake Center Dr Ste

	 	
 City: Lake Forest 

	 	
State: CA 

	 	
 Zip: 92630-2898

	
100

	 	 	 	 	 	 
	
Federal ID# 47-4164403 

	 	 	 	 	 	 

SECURITY AGREEMENT

Security Interest. To secure Borrower's payment and performance obligations to SFSI and its affiliates or Funders under the Loan Agreement (the "Loan Agreement"), Borrower hereby grants to SFSI a security interest in (a) all accounts, chattel paper, cash, deposit accounts, documents, equipment, general intangibles, instruments, inventory, or investment property, as those terms are defined in Article 9 of the Uniform Commercial Code of the State of California as amended (the "UCC"), now or hereafter owned or acquired by Borrower; and (b) all proceeds, as that term is defined in Article 9 of the UCC (a and b collectively, the "Collateral").

Cross-Collateral. To secure Guarantor's payment and performance obligations to SFSI (and its Funders) under this Security Agreement and Guaranty (the "Agreement"),

Guarantor hereby grants SFSI, for itself and its Funders, a security interest in ADVANCED INNOVATIVE RECOVERY TECHNOLOGIES, INC. (d/b/a AIRTech) (the "Additional Collateral"). Guarantor understands that SFSI will have a security interest in the aforesaid Additional Collateral upon execution of this Agreement. Borrower and Guarantor each acknowledge and agree that any security interest granted to SFSI under any other agreement between Borrower or Guarantor and SFSI (the "Cross- Collateral") will secure the obligations hereunder and under the Loan Agreement. Borrower and Guarantor each agrees to execute any documents or take any action in connection with this Agreement as SFSI deems necessary to perfect or maintain SFSI's first priority security interest in the Collateral, the Additional Collateral and the Cross-Collateral, including the execution of any account control agreements.

Borrower and Guarantor each hereby authorizes SFSI to file any financing statements deemed necessary by SFSI to perfect or maintain SFSI's security interest, which financing statement may contain notification that Borrower and Guarantor have granted a negative pledge to SFSI with respect to the Collateral, the Additional Collateral and the Cross-Collateral, and that any subsequent lender or lienor may be tortiously interfering with SFSI's rights. Borrower and Guarantor shall be liable for and SFSI may charge and collect all costs and expenses, including but not limited to attorney's fees, which may be incurred by SFSI in protecting, preserving and enforcing SFSI's security interest and rights.

Negative Pledge. Borrower and Guarantor each agrees not to create, incur, assume, or permit to exist, directly or indirectly, any additional cash advances, loans, lien on or with respect to any of the Collateral , the Additional Collateral or the Cross-Collateral, as applicable without written permission of SFSI..

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

Remedies. Upon any Event of Default, SFSI 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.

GUARANTY

Personal Guaranty. The undersigned Guarantor(s) hereby guarantees to SFSI, and its affiliates or Funders, Borrower's payment and performance of all of the representations, warranties, covenants made by Borrower in this Agreement and the Loan Agreement, as each agreement may be renewed, amended, extended or otherwise modified (the "Guaranteed Obligations"). Guarantor's obligations are due (i) at the time of any breach by Borrower of any representation, warranty, or covenant made by Borrower in this Agreement and the Loan Agreement, and (ii) at the time Borrower 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 Borrower seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, or composition of it or its debts.

Guarantor Waivers. In the event that Borrower fails to make a payment or perform any obligation when due under the Loan Agreement, SFSI may enforce its rights under this Agreement without first seeking to obtain payment from Borrower, any other guarantor, or any Collateral, Additional Collateral or Cross-Collateral SFSI may hold pursuant to this Agreement or any other guaranty.

SFSI does not have to notify Guarantor of any of the following events and Guarantor will not be released from its obligations under this Agreement if it is not notified of: (i) Borrower's failure to pay timely any amount owed under the Loan Agreement; (ii) any adverse change in Borrower's 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) SFSI's acceptance of this Agreement ; and (v) any renewal, extension or other modification of the Loan Agreement or Borrower's other obligations to SFSI. In addition, SFSI may take any of the following actions without releasing Guarantor from any of its obligations under this Agreement : (i) renew, extend or otherwise modify the Loan Agreement or Borrower's other obligations to SFSI; (ii) release Borrower from its obligations to SFSI; (iii) 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 (iv) 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 Guarantor to obtain reimbursement for payment under this Agreement. Until the Loan Amount plus any accrued but unpaid interest and Borrower's other obligations to SFSI under the Loan Agreement and this Agreement are paid in full, Guarantor shall not seek reimbursement from Borrower or any other guarantor for any amounts paid by it under this Agreement. Guarantor permanently waives and shall not seek to exercise any of the following rights that it may have against Borrower, any other guarantor, or any collateral provided by Borrower or any other guarantor, for any amounts paid by it, or acts performed by it, under this Agreement: (i) subrogation ; (ii) reimbursement; (iii) performance; (iv) indemnification; or (v) contribution. In the event that SFSI must return any amount paid by Borrower 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, Guarantor's obligations under this Agreement shall include that amount.

  

Guarantor Acknowledgement. Guarantor 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 counsel of his/her choice; and (iii) He/She has consulted with counsel of its choice or has decided not to avail himself/herself of that opportunity.

 

Page 6 of 8

 

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

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

MERCHANTS AND OWNERS/GUARANTORS ACKNOWLEDGE THAT THIS WRITING REPRESENTS THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO. IT IS UNDERSTOOD THAT ANY REPRESENTATIONS OR ALLEGED PROMISES BY INDEPENDENT BROKERS OR AGENTS OF ANY PARTY IF NOT INCLUDED IN THIS WRITTEN AGREEMENT ARE CONSIDERED NULL AND VOID. ANY MODIFICATION OR OTHER ALTERATION TO THE AGREEMENT MUST BE IN WRITING AND EXECUTED BY THE PARTIES TO THIS CONTRACT.

	
MERCHANT #1

	 	 
	 	 	 
	
By Robert Switzer O1_SIG

	 	 
	
(Print Name and Title)

	 	
(Signature)

	 	 	 
	
MERCHANT #2

	 	 
	
By O2_SIG

	 	 
	
(Print Name and Title)

	 	
(Signature)

	 	 	 
	
OWNER/GUARANTOR #1

	 	 
	
By Robert Switzer O1_SIG

	 	 
	
(Print Name and Title)

	 	
(Signature)

	 	 	 
	
OWNER/GUARANTOR #2

	 	 
	
By O2_SIG

	 	 
	
(Print Name and Title)

	 	
(Signature)

	 	 	 

 

 

 

 

 

 

Page 7 of 8

 

 

 

 

 

 

 

Page 8 of 8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00286-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00286-of-00352.parquet"}]]