Purchase and Sale Agreement, dated as of February 14, 2019, by and between Guided Therapeutics, Inc. and Everest Business Funding

 

 

OFFER TO SELL AND PURCHASE PAYMENT RIGHTS

 

Seller hereby sells, assigns and transfers to Purchaser, without recourse, upon payment of the Purchase Price, the Purchased Amount of Future Receipts by delivering to Purchaser the Specified Percentage of the proceeds of each future sale by Seller. "Future Receipts" includes all payments made by cash, check, ACH or other electronic transfer, credit card, debit card, bank card, charge card (each such card shall be referred to herein as a "Credit Card") or other form of monetary payment in the ordinary course of Seller's business. BASED UPON SELLER'S CALCULATIONS AND EXPERIENCE IN OPERATING ITS BUSINESS, SELLER IS CONFIDENT THAT THE PURCHASE PRICE PAID BY PURCHASER IN EXCHANGE FOR THE PURCHASED AMOUNT OF FUTURE RECEIPTS WILL BE USED IN A MANNER THAT WILL BENEFIT SELLER'S CURRENT AND FUTURE BUSINESS OPERATIONS.

 

 

 

Seller shall (1) deposit all Future Receipts into only one bank account, which must be acceptable to and pre-approved by Purchaser (the "Account") and (2) instruct Seller's Credit Card processor, which processor must be acceptable to and pre-approved by Purchaser (the "Processor") who shall serve as Seller's sole Credit Card processor, to deposit all Credit Card receipts of Seller into the Account. Purchaser will debit the Daily Payment from the Account each Weekday (Monday -Friday). Seller authorizes Purchaser to initiate electronic checks or ACH debits from the Account equal to the Daily Payment each business day and will provide Purchaser with all required access codes. Seller understands that it is responsible for ensuring that the Daily Payment is available in the Account and will be responsible for any fees incurred by Purchaser resulting from a rejected electronic check or ACH debit attempt. Purchaser is not responsible for any overdrafts or rejected transactions that may result from Purchaser's debiting any amount authorized under the terms of this Agreement.

Purchaser Acknowledgement. There is no interest rate or payment schedule and no time period during which the Purchased Amount must be collected by Purchaser. Seller going bankrupt or going out of business, in and of itself, does not constitute a breach of this Agreement. Purchaser is entering into this Agreement knowing the risks that Seller's business may slow down or fail, and Purchaser assumes these risks based on Seller's representations warranties and covenants in this Agreement, which are designed to give Purchaser a reasonable and fair opportunity to receive the benefit of its bargain.

Seller's Right to Request a Reconciliation. The Daily Payment amount is intended to represent the Specified Percentage of Seller's Future Receipts. Seller may request that Purchaser reconcile Seller's actual receipts by either crediting or debiting the difference back to or from the Account so that the amount Purchaser debited in the most recent calendar month equaled the Specified Percentage of Future Receipts that Seller collected in that calendar month. Any reconciliation request must be: (1) in writing; (2) include a copy of Seller's bank statement for the calendar month at issue; and (3) be sent to Everest Business Funding at 5 West 37th Street, Suite 1100, New York NY 10018 within 30 days after the last day of the calendar month at issue. It is solely the Seller's responsibility to send a complete bank statement. Failure to send a written reconciliation request within 30 days after the last day of the calendar month at issue forfeits that month's reconciliation. Notwithstanding anything to the contrary in this Agreement or any other agreement between Purchaser and Seller, upon the occurrence of an Event of Default, the Specified Percentage shall equal 100%. A list of all fees applicable under this Agreement is contained in Appendix A.

 

THE "PAYMENT RIGHTS PURCHASE AND SALE AGREEMENT TERMS AND CONDITIONS" AND THE "PERFORMANCE GUARANTY" ARE All HEREBY INCORPORATED IN AND MADE A PART OF THIS PAYMENT RIGHTS PURCHASE AND SALE AGREEMENT.

 

 

 

 

Seller or any of its Owners for the purpose of this Agreement, and (ii) obtain credit reports, including consumer credit reports at any time now or for so long as Seller and/or Owners(s) continue to have any obligation owed to Purchaser as a consequence of this Agreement or for Purchaser’s ability to determine Seller's eligibility ty to enter into any future agreement with Purchaser.

ANY MISREPRESENTATION MADE BY SELLER OR OWNER IN CONNECTION WITH THIS AGREEMENT MAY CONSTITUTE A SEPARATE CAUSE OF ACTION FOR FRAUD, INTENTIONAL MISREPRESENTATION AND/OR UNJUST ENRICHMENT IN WHICH EVENT PURCHASER WILL BE ENTITLED TO THE RECOVERY OF NOT ONLY ITS LOSSES BUT ALSO ALL OF ITS COSTS AND EXPENSES AND ITS REASONABLE LEGAL FEES.

 

PAYMENT RIGHTS PURCHASE AND SALE AGREEMENT TERMS AN D CONDITIONS

I. TERMS OF ENROLLMENT IN PROGRAM

(b) Bank Holidays and Other Exceptions. Purchaser will debit the Daily Payment each Weekday on which the Bank is open and able to process ACH transactions. On the Weekday immediately following any Weekday or Weekdays on which the Bank was not open to process ACH transactions, Purchaser will debit the designated account for an amount equal to the sum of: (i) the Daily Payment amount due on that Weekday, plus (ii) the Daily Payment amount due on the preceding Weekday when the Bank was not open or could not process ACH transactions.

Accounting Records. and Place of Business. Purchaser or its designated representatives and agents shall have the right during Seller's normal business hours and at any other reasonable time to examine the interior and exterior of any of Seller's places of business. Purchaser may examine, among other things, whether Seller) has a place of business that is separate from any personal residence, (b) is open for business, and (c) has sufficient inventory to conduct Seller's business. When performing an examination, Purchaser may photograph the interior and exterior of any of Seller's places of business, including any signage, and may photograph any Owner. Purchaser or any of its agents shall have the right to inspect, audit, check, and make extracts from any copies of the books, records, journals, orders, receipts, correspondence that relate to Seller's accounts or other transactions between the parties thereto and the general financial condition of Seller and Purchaser may remove any of such records temporarily for the purpose of having copies made thereof. Purchaser shall have the right to hire a Certified Public Accountant, licensed in the state where the business is located to perform analysis of the accounting records for the purpose of determining if the Specified Percentage of receipts has been made available for remittance to Purchaser. Seller hereby agrees to fully cooperate with such analysis upon the request of Purchaser.

1.8 Power of Attorney. Seller irrevocably appoints Purchaser as its agent and attorney-in-fact with full authority to take any action or execute any instrument or document to settle all obligations due to Seller from any bank or Processor, or in the case of an occurrence of an Event of Default under Section 3 hereof, to Purchaser under this Agreement, including without limitation (i) to obtain and adjust insurance; (ii) to collect monies due or to become due under or in respect of any of the Purchased Amount; (iii) to receive, endorse and collect any checks, notes, drafts, instruments, documents or chattel paper in connection with clause 0) or clause (ii) above; (iii) to sign Seller's name on any invoice, bill of lading, or assignment directing customers or account debtors to make payment directly to Purchaser; (iv) to file any claims or take any action or institute any proceeding that Purchaser may deem necessary for the collection of any of the unpaid Purchased Amount, or otherwise to enforce its rights with respect to payment of the Purchased Amount. I n connection therewith, all costs, expenses and fees, including legal fees, shall be payable by and from Seller and Purchaser is authorized to use Seller's funds to pay for same; and (v) Purchaser shall have the right, without waiving any of its rights and remedies and without notice to Seller or any Owner/Guarantor, to notify any Credit Card processor of the sale of Future Receipts and re-direct the remittance of da i I y settlements to a n account of Purchaser 's choosing in order to settle all obligations due to Purchaser under this Agreement.

 

 

1.14 Financing Statements. Seller hereby authorizes Purchaser to file one or more financing statements in order to give

notice that the Purchased Amount of Future Receipts is the sole property of Purchaser. Each such filing may state that

such sale is intended to be a sale and not an assignment for security and may state that the Seller is prohibited from

obtaining any financing that impairs the value of the Future Receipts or Purchaser's right to collect same. Seller authorizes

Purchaser to apply amounts received from Seller to costs incurred by Purchaser associated with the filing, amendment or

termination of any such filings.

  

II. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS

 

other than as disclosed to Processor and Purchaser, nor will Seller change any of its places of business or the type of business without prior written consent by Purchaser. Seller will not sell, dispose, transfer or otherwise convey its business or assets without (i) the express prior written consent of Purchaser, and (ii) the written agreement of any purchaser or transferee assuming all of Seller's obligations under this Agreement pursuant to documentation satisfactory to Purchaser.

 

III. EVENTS OF DEFAULT AND REMEDIES

 

3.2 Remedies. If any Event of Default occurs, A Purchaser may proceed to protect and enforce its rights including, but not limited to, the following: & The Specified Percentage shall equal 100%. The full uncollected Purchased Amount plus all fees (including legal fees) due under this Agreement wiII become due and payable in full immediately.

 

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

 

IV. MISCELLANEOUS

 

4.10               Facsimile Acceptance. Facsimile signatures hereon shall be deemed acceptable for all purposes.

 

V. JURY TRIAL WAIVER.

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

 

 

VI. CLASS ACTION WAIVER.

PURCHASER, SELLER, AND EACH GUARANTOR ACKNOWLEDGE AND AGREE THAT THE AMOUNT AT ISSUE IN THIS TRANSACTION AND ANY DISPUTES THAT ARISE BETWEEN THEM ARE LARGE ENOUGH TO JUSTIFY DISPUTE RESO LUTI 0 NON AN IN DI VI DUAL BASI S. EACH PARTY HERETO WAI VES ANY RI GHT TO ASSERT ANY CLAI MS AGAI NST THE OTHER PARTY AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY. TO THE EXTENT EITHER PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST THE OTHER, THE PARTIES AGREE THAT:(I) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS' FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOT WITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT); AND (II) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION.

VII. ARBITRATION.

I F Purchaser, Seller or a Guarantor requests, the other party and the Guarantor(s) agree to arbitrate all disputes and claims arising out of or relating to this Agreement. I f a party or a Guarantor seeks to have a dispute settled by arbitration, that party or Guarantor must first s end to the other party, by certified ma i I, a written Notice of Intent to Arbitrate. I f the parties or the Guarantor(s) do not reach an agreement to resolve the claim within 30 days after the Notice is received, either party or the Guarantor(s) may commence an arbitration proceeding with the American Arbitration Association ("AAA"). Purchaser will promptly reimburse Seller or the Guarantor any arbitration filing fee, however, in the event that both the Seller and the Guarantor must pay filing fees, Purchaser will only reimburse the Seller's arbitration filing fee. Except as provided in the next sentence, Purchaser will pay all administration and arbitrator fees. If the arbitrator finds that either the substance of the claim raised by Seller or the Guarantor(s) or the relief sought by Seller or the Guarantor(s) is improper or not warranted, as measured by the standards set forth in Federal Rule of Procedure l1(b), then Purchaser will pay these fees only if required by the AAA Rules. If the arbitrator grants relief to the Seller or the Guarantor(s) that is equal to or greater than the value of what the Seller or the Guarantor(s) requested in the arbitration, Purchaser shall reimburse Seller or the Guarantor(s) for that person's reasonable attorneys' fees and expenses incurred for the arbitration. Seller and the Guarantor(s) agree that, by entering into this Agreement, they are waiving the right to trial by jury. EACH PARTY AND THE GUARANTOR(S) MAY BRING CLAIMS AGAINST ANY OTHER PARTY ONLY IN THEIR INDIVIDUAL CAPACITY, and not as a plaintiff or class member in any purported class or representative proceeding. Further, the parties and the Guarantor(s) agree that the arbitrator may not consolidate proceedings for more than one person's claims, and may not otherwise preside over any form of a representative or class proceeding, and that if this specific provision is found unenforceable, then the entirety of this arbitration clause shall be null and void. SELLER AND ANY G UARANTO R MAY 0 PT 0 UT 0 F TH I S CLAUS E. To opt out of this Arbitration CI a use, Seller and/or Guarantor may send Purchaser a notice that the Sell r or Guarantor does not want this clause to apply to this Agreement. For any opt-out to be effective, Seller and/or Guarantor must send an opt-out notice to the following address by registered mail, within 14 days after the date of this Agreement:

Customer Service Department Everest Business Funding 5 West 37th Street Suite 1100 New York, NY 10018

 

 

Personal Guaranty of Performance. EBF Partners, LLC d/b/a Everest Business Funding ("Purchaser") is buying the Purchased Amount of Future Receipts from the above-referenced Seller, knowing the risks that Seller's business may slow down or fail, and Purchaser assumes these risks based on Seller's representations, warranties and covenants in the Payment Rights Purchase and Sale Agreement (the "Agreement")' which are designed to give Purchaser a reasonable and fair opportunity to receive the benefit of its bargain. The undersigned Guarantor{s} hereby unconditionally guarantees to Purchaser, Seller's good faith, truthfulness and prompt and complete performance of a II of the representations, warranties, covenants made by Sell er in the Agreement as each may be renewed, amended, extended or otherwise modified (the "Guaranteed Obligations"). Guarantor's obligations are due a t the time of any Event of Default {a s defined in the Agreement}.

Guarantor Waivers. In the Event of Default, Purchaser may seek recovery from Guarantor for all of Purchaser's losses and damages by enforcement of Purchaser's rights under this Performance Guaranty without first seeking to obtain payment from Seller or any other guarantor, or any other guaranty.

Purchaser does not have to notify Guarantor of any of the following events and Guarantor will not be released from its obligations under the Agreement and this Performance Guaranty if it is not notified of: Ii} Seller's failure to pay timely any amount owed under the Agreement; Iii) any adverse change in Seller's financial condition or business;{iii} Purchaser's acceptance of the Agreement; and {iv} any renewal, extension or other modification of the Agreement or Seller's other obligations to Purchaser. In addition, Purchaser may take any of the following actions without releasing Guarantor from any of its obligations under the Agreement and this Performance Guaranty: {i}renew, extend or otherwise modify the Agreement or Seller's other obligations to Purchaser; and {ii} release Seller from its obligations to Purchaser. Guarantor shall not seek reimbursement from Seller or any other guarantor for any amounts paid by it under the Agreement or this Performance Guaranty. Guarantor permanently waives and shall not seek to exercise any of the following rights that it may have against Seller, or any other guarantor, for any amounts paid by it, or acts performed by it, under the Agreement or this Performance Guaranty: Ii} subrogation; Iii) reimbursement;{iii} performance; (iv) indemnification; or (v) contribution. I n the event that Purchaser must return any amount paid by Seller 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 the Agreement and this Performance Guaranty shall include that amount.

Guarantor Acknowledgement. Guarantor acknowledges that: {i} He / She / They understand the seriousness of the provisions of the Agreement, including the Jury TriaI Waiver and Arbitration sections, and this Performance Guaranty; (i i) He / She / They have had a full opportunity to consult with counsel of his / her /their choice; and (iii) He / She / They have consulted with counsel of hi s / her / their choice or have decided not to prevail himself / hers elf / themselves of that opportunity.

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

THE TERMS, DEFINITIONS, CONDITIONS AND INFORMATION SET FORTH IN THE PAYMENT RIGHTS PURCHASE AND SALE AGREEMENT, INCLUDING THE PAYMENT RIGHTS PURCHASE AND SALE AGREEMENT TERMS AND CONDITIONS, ARE HEREBY INCORPORATED IN AND MADE A PART OF THIS PERFORMANCE GUARANTY. CAPITALIZED TERMS NOT DEFINED IN THIS PERFORMANCE GUARANTY, SHALL HAVE THE MEANING SET FORTH IN THE PAYMENT RIGHTS PURCHASE AND SALE AGREEMENT, INCLUDING THE PAYMENT RIGHTS PURCHASE AND SALE AGREEMENT TERMS AND CONDITIONS.

MUST SIGN AS OWNER

 

 

/s/ John Edwin Imhoff

John Edwin Imhoff

Director

Guided Therapeutics, Inc.