This Non-Credit Recourse True Sale Factoring and Security Agreement (this “Agreement”) is entered into between SMARTTRUCKER, LLC (“Buyer”) and Seller (defined below).

BY ACCEPTING THIS AGREEMENT, EITHER BY CLICKING A BOX INDICATING YOUR ACCEPTANCE, SUBMITTING A PURCHASE REQUEST OR OTHER DOCUMENT  THAT REFERENCES THIS AGREEMENT, OR BY OTHERWISE AFFIRMATIVELY INDICATING YOUR ACCEPTANCE OF THIS AGREEMENT, YOU: (A) HEREBY AGREE TO THE TERMS OF THIS AGREEMENT ON BEHALF OF THE ORGANIZATION, COMPANY OR OTHER LEGAL ENTITY FOR WHICH YOU ACT (“SELLER”); AND (B) REPRESENT THAT YOU HAVE THE AUTHORITY TO BIND SELLER TO THIS AGREEMENT. IF YOU DO NOT HAVE SUCH AUTHORITY OR IF YOU DO NOT AGREE WITH THIS AGREEMENT, YOU MUST NOT ACCEPT THIS AGREEMENT AND MAY NOT SELL RECEIVABLES TO BUYER.

WHEREAS, from time to time solely and exclusively in Seller’s capacity as a Motor Carrier, Seller provides Load Services, which result in Receivables being owed to Seller; and

WHEREAS, Seller wishes to sell such Receivables to Buyer and Buyer wishes to purchase certain of such Receivables that qualify as Eligible Receivables from Seller, subject to the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants, terms, conditions, representations and warranties contained herein, and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Seller and Buyer agree as follows:

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1. Defined Terms

As used in this Agreement (including the recitals hereto), the following terms shall have the meanings specified below. Moreover, in the event any terms not defined below are capitalized, such terms shall have the meaning given to such terms under the Uniform Commercial Code (as adopted by the governing law, as amended, or, if not so defined, then as defined by Title 49 of the United States Code more specifically, as applicable, Chapters 131, 135, 139, 141,147 and 149 and all implementing regulations.

“Account Debtor” means, with respect to any Receivable, the person that is obligated to make payments in respect of such Receivable with respect to the applicable Load Services (including, without limitation, a Freight Broker, Consignee or any guarantor).

“Affiliate” or “Affiliated” means any person that, whether directly or indirectly, or through one or more intermediaries, controls, is controlled by, or is under common ownership or control of the Seller. In addition, each of the following shall be deemed Affiliated with Seller: Seller’s executive officers and directors; if Seller is a Corporation, each shareholder, that, directly or indirectly, owns or directs 20% or more of any class of voting securities; if Seller is a general and limited partnership, all general or limited partners, and if Seller is a limited liability company, all managers and members of the company, except that as to members, those to whom not less than ten percent (20%) of the profits and losses of the limited liability company are allocated on the basis of the agreed value of the contributions made by each member, as stated in the company's records.

“Agreement” has the meaning set forth in the preamble hereto.

“Approved Account Debtor” means each Account Debtor listed as an “Approved Account Debtor” on the Buyer’s platform, as such list may be modified from time to time by notice from Buyer to Seller. In respect to Buyer’s platform, this term may include the term Approved Obligor.

“Business Day” means a day that is not a Saturday, Sunday or United States federal holiday.

“Buyer” has the meaning set forth in the preamble hereto.

“Buyer’s Account” means the Depository Bank of Buyer specified in each Notice of Assignment.

“Collection Actions” has the meaning set forth in Section 11.

“Designated Account” means a Depository Bank account to which Buyer is authorized by Seller to cause Purchase Price payments to be made or transferred.

“Dilution” means, with respect to any Account, any contractual discount, adjustment, deduction, fees, or reduction that would have the effect of reducing the amount of part or all of such Account (except, in each case, to the extent resulting solely from an Insolvency Event of the applicable Account Debtor or the financial inability of the Account Debtor to pay such Account).

“Discount” means, with respect to any Account, the Net Face Value of such Account multiplied by the Discount Rate for the Account Debtor of such Account.

“Discount Rate” means, with respect to any Account Debtor, the rate reflected in the attached Offer Summary; provided that such rate for any Approved Account Debtor may be modified by Buyer from time to time on at least five (5) days’ written notice in accordance with the notice procedures set forth in Section 16.”

“Dispute” means, with respect to any Account, any dispute, deduction, claim, offset, defense, counterclaim, discount, allowance, right of recoupment, or warranty claim of any kind whatsoever, including, but not limited to, (i) any claims arising out of or relating to the provision of the Load Services, (ii) any dispute or claim pertaining to defective or damaged goods, shipping delays, or other shipping problems, or (iii) any other dispute or claim as to the price, terms, quantity, quality, or arising from any other possible defense to payment, regardless of whether the same is in an amount greater than, equal to or less than the Account concerned, regardless of whether the same is valid or bona fide; provided that, for the avoidance of doubt, in neither (i) Dilutions taken into account in determining the Purchase Price nor will (ii) disputes resulting solely from an Insolvency Event of the applicable Account Debtor or the financial inability of the Account Debtor to pay such Account constitute a Dispute as defined herein.

“Due Date” means, with respect to any Account, the date on which such Account becomes due and payable as set forth in the applicable Invoice or as otherwise determined in accordance with any agreement between the Seller and Account Debtor (without regard to any modification thereof after the date such Account is sold hereunder).

“Eligible Receivable” means a Receivable of an Account Debtor that is an Approved Account Debtor and with respect to which the representations and warranties in Section 6 are true and correct which representations and warranties may be presumed as such by Buyer without having to conduct any independent investigation.

“Exposed Payments” – means Proceeds of Receivables, including all Proceeds of Collateral, received by Buyer that may subject Buyer to an avoidance claim under Title 11 of the United States Bankruptcy Code.

“Freight Broker” means a person, other than a Motor Carrier or an employee or agent of a Motor Carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by a Motor Carrier for compensation as provided by 49 USCS §13102.

“Freight Forwarder” means a person holding itself out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation and in the ordinary course of its business-- (A) assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments; (B) assumes responsibility for the transportation from the place of receipt to the place of destination; and (C) uses for any part of the transportation a carrier subject to jurisdiction under this subtitle.

“Insolvency Event” means, with respect to any Account Debtor, such Account Debtor (i) is dissolved (other than pursuant to a consolidation, amalgamation or merger); or (ii) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; or (iii) makes a general assignment, arrangement or composition with or for the benefit of its creditors; or (iv) institutes or has instituted against it a proceeding seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any applicable law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of thirty (30) days, or any of the actions sought in such proceeding (including the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or such Account Debtor shall take any action to authorize any of the actions set forth above in this clause.

“Invoice” means all forms, information and documentation as required by Buyer in its discretion necessary to support the documents that evidence or are intended to evidence the terms of sale in connection with Load Services including the pick-up, transportation and delivery of a Load which include a legible Bill of Lading, an itemized freight bill or Invoice, rate confirmation sheet, any Freight Broker or Motor Carrier agreement, delivery order or similar documentation, together with the applicable Proof of Delivery, or such additional tangible or electronically stored information that Buyer elects to receive to substantiate the bona fides of a Receivable. 

“Load” means freight transported by Seller pursuant to a Bill of Lading or other form of agreement or document evidencing Seller’s taking receipt and physical possession of Goods for shipment and evidencing a consignor (e.g., Shipper) who qualifies as an Account Debtor.

“Load Services” means the transportation of Loads.

“Losses” means any claims, liabilities, losses, damages, costs or expenses, including reasonable attorneys’ fees and disbursements, other dispute resolution expenses and costs of collection; provided that, and for the avoidance of doubt, the term “Losses” does not include any credit related losses that may apply to a Account from time to time after it is sold under this Agreement.

“Motor Carrier” means a Registered Organization that provides motor vehicle transportation for compensation and includes a private motor carrier as defined by 49 U.S.C § 13102(15) and all Registered Organizations transporting property by motor vehicle when the transportation is encompassed with 49 U.S. C. § 13501. This term includes neither Freight Brokers nor Freight Forwarder.

“Net Face Value” means, with respect to any Account, the face amount of the Account, net of any Dilutions specifically taken into account in determining the Purchase Price for such Account as of the applicable Purchase Date.

“Notice of Assignment” means all forms of tangible and electronic communications , as approved by Buyer in a form and content in Buyer’s discretion, intended to satisfy the requirements of Cal. Com. Code § 9406 and that the Seller, or the Buyer, as an assignee of the Seller’s rights to receive payment of an Account, jointly or individually use to provide notice to an Account Debtor of the transfer to the Buyer of Seller’s contractual rights in connection with all Load Services.

“Objection” has the meaning set forth in Section 8.

“Proof of Delivery” means, with respect to any Load, or Load Services evidence (including any customary documents and/or signatures) that such Load has been delivered in accordance with the terms of the applicable agreement between the Seller and the Account Debtor.

“Purchase Date” means, with respect to any Purchased Receivable, the date on which Buyer deposits the Purchase Price therefor in the Designated Account.

“Purchase Price” means, with respect to any Receivable, the Net Face Value of the Account minus any applicable Discount.

“Purchase Request” means a notice offering to sell Eligible Receivables to the Buyer, delivered to the Buyer via the Buyer’s platform.

“Purchased Receivable” means a Receivable purchased by Buyer in accordance with the terms and conditions hereof; provided that a Receivable purchased hereunder and subsequently repurchased by Seller pursuant to the terms and conditions hereof shall, upon receipt by Buyer of the Repurchase Amount therefor, cease to be a Purchased Receivable but which remains a Receivable subject to Buyer’s Security Interest rights as provided in Section 3.

“Receivable” means Seller’s rights to receive payment from an Account Debtor (or any affiliate thereof that has undertaken to make payment) in respect of a bona fide obligation of the Account Debtor arising out of Seller’s provision of Load Services, in each case as evidenced by an Invoice.

“Repurchase Event” means, with respect to any Purchased Receivable, (i) any representation or warranty made by Seller in Section 6 with respect to such Purchased Receivable shall be inaccurate, incorrect or untrue on any date as of which it is made or deemed to be made, or (ii) a Dispute arises with respect to such Purchased Receivable.

“Repurchase Notice” has the meaning set forth in Section 8.

“Seller” has the meaning set forth in the preamble hereto.

“Seller’s Account” means the Depository Bank account designated as such by written notice from Buyer to Seller (including via the Buyer’s platform), or such other account as may be agreed in writing between Buyer and Seller from time to time to which all payments owing to Seller shall be made.

“Specified Approved Account Debtor” means each Account Debtor designated as such on the Buyer’s platform, as such designation may be modified from time by notice from Seller to Buyer.  As set forth in Section 2.1, Seller shall offer all Eligible Receivables with respect to each Specified Approved Account Debtor for sale to Buyer.

“Taxes” has the meaning set forth in Section 12.

“Tribunal” means and includes any court of law or alternative dispute resolution process as is more fully described in section 21.

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2. Purchase and sale

2.1. Offer.

During the term of this Agreement, no later than one Business Day after obtaining a Proof of Delivery with respect to the applicable Load:

• for each Eligible Receivable payable by a Specified Approved Account Debtor, Seller shall submit a Purchase Request to Buyer in respect of such Eligible Account; and

• for each Eligible Receivable payable by an Approved Account Debtor that is not a Specified Approved Account Debtor, Seller may submit a Purchase Request to Buyer in respect of such Eligible Receivable.

The delivery or submission of such Purchase Request shall be, and be deemed for all purposes hereunder as, an offer by Seller to sell the Eligible Receivable(s) included therein to Buyer.  Any Purchase Request delivered after 2:00 p.m. San Francisco time on any Business Day shall be deemed delivered on the next Business Day.

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2.2. Acceptance.

Buyer, at its option, may accept the Purchase Request by purchasing the offered Eligible Receivable(s) on or before 3:00 p.m. San Francisco time on the Business Day following the delivery of a Purchase Request (the “Acceptance Deadline”), by depositing the Purchase Price therefor in the Seller’s Account.

2.3. Rejection.

If Buyer has not deposited the Purchase Price with respect to an offered Receivable on or prior to the Acceptance Deadline, the offer evidenced by the Purchased Request shall be deemed not accepted by Buyer and rescinded by the Seller.

2.4. Receivables purchase.

The Seller hereby agrees that, simultaneously with Buyer’s deposit in the Seller’s Account of the Purchase Price, Seller shall have sold, transferred, conveyed, and assigned to Buyer all of Seller’s right, title, and interest in and to the related Receivable.  No further writing shall be necessary to evidence such transfer of ownership.  Without limiting the foregoing, Seller (x) agrees to sign all such other documents, and take all such further actions, as Buyer may reasonably request from time to time to evidence this transfer of ownership; and (y) agrees to provide Buyer with the applicable Account Debtor’s contact information.  Seller further agrees that, prior to the first sale of Receivables with respect to any Account Debtor, Seller shall execute and deliver to Buyer the Notice of Assignment, with respect to such Account Debtor and Seller hereby irrevocably and unconditionally authorizes Buyer, in Buyer’s name and in Buyer’s discretion, by Buyer and  Seller jointly, to deliver such Notice of Assignment to such Account Debtor and to otherwise contact the Account Debtor and notify the Account Debtor of Seller’s assignment of all rights to receive payment of the Receivable and that all payments must be made solely and exclusively to Buyer in order for the Account Debtor to discharge the debt owed on such Receivable.

3. True sale; security interest

The parties hereto agree that each purchase and sale of Receivables under this Agreement is intended to be an absolute and irrevocable transfer constituting a “true sale” for all purposes, including but not limited to bankruptcy purposes, without credit-recourse by Buyer against Seller for any Insolvency Event. The parties hereto have structured the transactions contemplated by this Agreement as a sale, and each party hereto agrees to treat each such transaction as a “true sale” for all purposes under applicable law and accounting principles, including, without limitation, in their respective books, records, computer files, tax returns (federal, state and local), regulatory and governmental filings (and shall reflect such sale in their respective financial statements). Seller will advise all persons inquiring about the ownership of the Receivables that all Purchased Receivables have been sold to Buyer. Against the possibility that, contrary to the mutual intent of the parties the purchase of any Purchased Receivable is not characterized as a sale by any applicable Tribunal, Seller hereby grants to Buyer a Security Interest in respect to both the interest acquired by Buyer as an ownership interest in the Purchase Receivables and in addition a Security Interest in and to all of Seller’s Accounts and General Intangibles as well as all Proceeds thereof (“Collateral”) to secure the payment and performance of Seller’s monetary and non-monetary obligations hereunder. The grant of a Security Interest herein is a supplemental protection to Buyer and is not meant to negate or adversely affect in any way the intended true sale of the Purchased Receivables by Seller to Buyer and the fact that the parties intend for the Purchased Receivables to be assets of Buyer. Buyer is hereby authorized to file UCC financing statements with respect to the true sale transactions contemplated hereunder, and the Security Interests granted herein, together with any continuations and amendments relating thereto.

4. Servicing of purchased receivables.  

4.1. Servicing by Buyer

All Purchased Receivables will be serviced, collected, and administered by Buyer or its designee, with full right to take any action in doing so, including changing the terms of any Purchased Receivables.  Seller agrees to promptly provide Buyer any assistance that Buyer requests regarding servicing, collecting, and administering any Purchased Receivables and facilitating payment of any Purchased Receivables.

4.2. Seller obligations

Seller covenants and agrees (i) not to change the payment instructions set forth in the Notice of Assignment delivered to an Account Debtor while any Purchased Receivable remains outstanding, or during the term of this Agreement whichever is later; and (ii) to take any and all other commercially reasonable actions, including, but not limited to, such commercially reasonable actions as may be requested by the Buyer from time to time, to ensure that all amounts owing under the Purchased Receivables will be deposited exclusively to the Buyer’s Account; (iii) reasonably cooperate with the Buyer in the defense or prosecution of any litigation or proceeding at any time commenced against or by Buyer relating to any Purchased Receivable.  If any payment by an Approved Account Debtor of any amount owing under any Purchased Receivable is not paid to the Buyer’s Account but is instead received by Seller directly, if payment is in tangible form (e.g., check) then such payment and all remittance information shall be sent, in kind, to Buyer or Buyer’s Account. If payment is made electronically, (e.g. ACH or Wire), the funds paid shall be transferred to Buyer’s Account. Seller shall hold such funds in trust (as provided by Cal. Prob. Code § 15200, Cal. Civ. Code § 2224 or any other statutory or common law basis) as the Buyer’s exclusive property, shall safeguard such funds for the benefit of the Buyer, and shall promptly, and in any event within two (2) Business Days, transfer such funds to Buyer or Buyer’s Account. If Seller does not transfer such funds to Buyer’s Account within two (2) Business Days, Buyer is entitled to exercise any of the Collection Actions, as defined in Section 11 below.

4.3. Unidentified collections

If any payment is received by Seller or by Buyer from an Approved Account Debtor, and such payment is not identified by such Approved Account Debtor as relating to a particular Account or Purchased Receivable and cannot otherwise be reasonably identified as relating to a particular Account or Purchased Receivable, such payment shall be applied first to the unpaid Receivables that are Purchased Receivables of such Approved Account Debtor in chronological order (beginning with the oldest unpaid Purchased Receivable of such Approved Account Debtor), and then to Receivables that are not Purchased Receivables of such Approved Account Debtor, also in chronological order. To the extent the preceding sentence results in collections received by Seller being deemed collections on a Purchased Receivable, Seller shall promptly, and in any event within two (2) Business Days, deposit such collections into the Buyer’s Account.  If Seller does not transfer such funds to Buyer’s Account within two (2) Business Days, Buyer is entitled to exercise any of the Collection Actions, as defined in Section 11 below. Nothing contained in this section is intended by the Parties to adversely effect the true sale notice of the relationship.

4.4. Return of collections

If following receipt of any payment by Buyer which is deemed to be collections on a Purchased Receivable, such payment is identified by Seller to the satisfaction of Buyer as being payment on a Account which is not a Purchased Receivable, then the Buyer shall promptly repay such amount to the Seller, in immediately available funds, to the Seller’s Account.  Alternatively, if the Buyer determines in its sole discretion that the Account qualifies as an Eligible Account, Buyer may request that the Seller submit the requisite  documentation to complete the purchase of said Receivable.

5. General representations and warranties

Seller makes the following representations and warranties to Buyer on a continuing basis:

• Seller’s execution, delivery, and performance of this Agreement have been authorized by all necessary corporate action and does not violate applicable law or the provisions of any agreement by which Seller is bound;

• this Agreement constitutes the legal, valid, and binding agreement by Seller enforceable in accordance with its terms;

• Seller and all of its employees, contractors, and agents have all licenses, registrations, and authorizations required to conduct its and their businesses;

• Seller is not and will not be insolvent or unable to pay its debts, nor could Seller be deemed by a court to be unable to pay its debts, all within the meaning of the law in the jurisdiction of its organization, nor will Seller become so in consequence of entering into this Agreement and/or its sale of Receivables to Buyer hereunder; 

• any information, materials, data, content, or documents that Seller directly or indirectly provides to Buyer are true, correct, and complete;

• Seller is not be maintained by or Affiliated with any entity that is or may be in violation of 49 C.F.R. 386.73 (i.e., commonly known as a reincarnated Motor Carrier);

• Seller, whether or not requested by Buyer, shall notify, and provide Buyer full access to any Account Debtor portal or payment system. If Seller refuses or does not notify Buyer, Buyer, in its discretion, shall have the right to withhold payment of any Purchase Price. In the event that Seller is not registered as an authorized user in connection with any website portal established by an Account Debtor, upon Buyer’s request, Seller shall promptly register and give prompt notice of such registration to Buyer, or, alternatively, Seller irrevocably authorizes Buyer to register on Seller’s behalf;

• Seller will not knowingly accept for transportation any freight that has been what is commonly known in the transportation industry as “double brokered”, nor will Seller attempt to or actually “double broker” or “shadow tender” any freight. Seller will not Freight Broker or Motor Carrier interline any Load tendered to Seller as an initial Motor Carrier to another Motor Carrier unless supported by a written trip-lease, subhauler or of the like agreement acceptable to Buyer in its discretion;

• Seller has provided cargo insurance as well as the form BMC-32 Endorsement in amounts not less than as required by federal law.  Seller has not applied for nor obtained authority from the Federal Motor Carrier Safety Administration to be self-insured unless Seller advises Buyer, in writing, to the contrary, and if so, Seller has filed Forms BMC-82 and BMC-83 bonds for public liability and cargo liability; and

Seller has neither received within the preceding twelve (12) months any unsatisfactory rating from the Federal Motor Carrier Safety Administration, nor has Seller been assessed any penalties under the Uniform Financial Assessment system.  Seller has not been ordered to pay any civil penalties imposed by the Federal Motor Carrier Safety Administration within the preceding twelve (12) months.

6. Representations and warranties concerning purchased receivables

With respect to each Purchased Receivable, Seller represents and warrants to Buyer that:  

• prior to the sale thereof hereunder, such Purchased Receivable is Seller’s exclusive property, free and clear of all Security Interests, consensual and/or statutorily created private or governmental liens or claims of any kind;

• without limiting the foregoing clause (i), all UCC termination statements necessary to evidence the release of any Security Interests, liens or claims against all Purchased Receivables and in all Collateral have been filed;

• such Purchased Receivable relates exclusively to the provision of Load Services and complies with all applicable legal requirements;

• such Purchased Receivable represents consideration for Load Services that have been provided by Seller in the ordinary course of business;

• to the best of Seller’s knowledge at the time of each Purchase Request and as of each Purchase Date, such Purchased Receivable constitutes a valid, binding, absolute and unconditional obligation of the relevant Account Debtor to pay the full amount of the Net Face Value of such Receivable;

• as of the Purchase Date, such Purchased Receivable s not the subject of any legal or arbitral proceeding;

• such Purchased Receivable has a Due Date that is no later than sixty (60) days from the date of the Proof of Delivery for such Purchased Receivable;

• to the best of Seller’s knowledge at the time of each Purchase Request and as of each Purchase Date the Account Debtor of such Purchased Receivable is not subject to an Insolvency Event;

• such Purchased Receivable is freely assignable or transferable (as applicable) and the provisions of this Agreement are effective to assign or transfer (as applicable) the relevant Account to Buyer;

• to the best of Seller’s knowledge at the time of each Purchase Request and as of each Purchase Date, Seller is unaware of any Disputes or Dilutions with respect to the Purchased Receivable, unless otherwise disclosed;

• Each invoice evidencing a Receivable offered to Buyer for sale will contain: the billed to party, the shipped to party, the rate to haul the freight, any advance amounts taken upon acceptance of the freight, and all other charges, including, but not limited to, any unloading fees, tolls, tarp charges and pallet exchanges;

• Each Receivable that Seller offers Buyer for sale represents property to be transported that has been delivered by a Shipper to the Seller which goods have been accepted by the Seller for immediate transportation.  All such shipping receipts or Bills of Lading to the shipper for the goods, and all Bills of Lading for interstate shipments shall be in a form and issued in compliance with the Federal Bills of Lading Act (49 U.S.C. § 80102) and 49 C.F.R. Part 373; and

• Seller will not offer any Receivable for purchase whereby any multi-model transaction involves a rail carrier to transport a trailer-on-a-flat car and in respect to which Seller engages or uses any additional Motor Carrier to take possession of the Load after delivery by rail.

7. Seller covenants

Seller covenants to Buyer as follows:

7.1. Books and records

Seller shall treat Buyer’s purchase of any Purchased Receivables hereunder as a sale for tax, accounting, and financial reporting purposes, and Seller’s books and records will reflect the sale of the Purchased Receivables to Buyer.

7.2. Further assurances

Seller shall take all actions reasonably requested by Buyer to preserve and protect Buyer’s right, title, and interest in and to any Purchased Receivables.

7.3. No impairment

Seller shall not take any action (including, but not limited to, placing or allowing placement of a lien or Security Interest on any Purchased Receivables) or make any omission that has, individually or in the aggregate, an adverse effect on any Purchased Receivables or on Buyer’s ability to collect on any Purchased Receivables.

7.4. No changes to receivables

After each Purchase Date, Seller shall take no action or authorize any arrangement that may have the effect of compromising or settling any Purchased Receivable or modify, alter, adjust or extend the terms of an Invoice including the Due Date thereof without the express written consent of Buyer, which consent may be withheld or delayed in Buyer’s sole discretion.

7.5. Compliance with laws

Seller shall comply with all relevant laws and regulations applicable to this Agreement, the Receivables, and all related transactions.

7.6. Changes in information

Seller shall not change its name, chief executive office, type of entity or jurisdiction of organization without providing Buyer at least thirty (30) days prior written notice.

8. Repurchase

Upon the occurrence of a Repurchase Event with respect to any Purchased Receivable, Buyer may require Seller to repurchase such Purchased Receivable by delivering a written notice (“Repurchase Notice”) thereof to Seller.  Following the receipt of such a notice, Seller shall promptly, and in any event within five (5) Business Days, repurchase the applicable Purchased Receivable by depositing the Net Face Value of the Purchased Receivable therefor into the Buyer’s Account. In Buyer’s sole discretion, Buyer may elect to give or authorize Seller to satisfy its repurchase obligations under this section by offering Buyer a new Eligible Receivable of a value equal to or greater than the Purchased Receivable subject to the Repurchase Notice.

If Seller disputes that a Repurchase Event has occurred or otherwise disagrees with the information set forth in the Repurchase Notice, Seller must notify Buyer in writing and provide Buyer with all factual information then available to Seller that supports such objection (“Objection”) within five (5) Business Days after Seller’s receipt of the applicable Repurchase Notice.

If, within five (5) Business Days after receiving a Repurchase Notice, Seller (a) has not deposited the Purchase Price with respect to the applicable Purchased Receivable(s) into the Buyer’s Account and (b) has not notified Buyer of an Objection with respect to such Repurchase Notice, then Buyer may take any Collection Actions (as defined below).

If Seller delivers to Buyer an Objection within five (5) Business Days after receiving a Repurchase Notice, then Buyer and Seller shall cooperate in good faith to resolve such Objection; provided that in the event that the Objection has not been resolved to Buyer’s satisfaction within 5 Business Days after Seller notifies Buyer thereof, then Buyer may take any Collection Actions to collect any unpaid amounts set forth in the disputed Repurchase Notice.

Notwithstanding the above, if the Buyer, in connection with a Repurchase Notice, has a reasonable basis to believe that the Seller has engaged in any fraudulent or deceptive conduct, including a willful and material breach of this Agreement, made intentional misrepresentations, or has an active contract with another factoring provider, Buyer may proceed with the Collection Actions outlined in Section 11 immediately, and is not required to provide five (5) days notice to Seller.

9. Indemnification

Seller shall indemnify, defend, and hold Buyer harmless against any Losses incurred by Buyer arising out of or relating to a breach by Seller of any of Seller’s representations, warranties, covenants, or agreements contained in this Agreement.

10. Dilutions

In the event any Dilution occurs with respect to a Purchased Receivable that was not specifically included in the determination of the Net Face Value for the calculation of the applicable Purchase Price, Buyer shall be entitled to send a written Repurchase Notice, as outlined in Section 8 for payment of an amount equal to the amount of the dilution.  Seller shall pay the amount of such Dilution to Buyer within five (5) Business Days of receiving the Repurchase Notice.   If Seller does not transfer such funds to Buyer’s Account within five (5) Business Days, Buyer is entitled to exercise any of the Collection Actions, as defined in Section 11 below.

11. Amounts Owed to Buyer; ACH Authorization and Book Transfers

Seller hereby authorizes Buyer to take any of the following actions (“Collection Actions”) to collect amounts owed by Seller to Buyer under this Agreement: (1) offset such amounts against any Purchase Price(s) payable by Buyer to Seller with respect to future purchases of Receivables, (2) collect such amounts from any Receivables that Seller has linked to Buyer’s platform, (3) file a claim against Seller’s financial responsibility bond required of Motor Carriers pursuant to Title 49 of the United States Code, or (4) pursue any other remedies available under applicable law.

Seller hereby authorizes Buyer to initiate Automated Clearing House (ACH) transfers and Book Transfers (the movement of funds from one deposit account to another) from any accounts that Seller has linked to Buyer’s platform to collect amounts owed by Seller under this Agreement, including, without limitation, (a) any unpaid funds owed to Buyer pursuant to Sections 4.2 or 4.3; (b) any repurchase price owed pursuant to a Repurchase Notice in accordance with Section 8; and (c) any Dilution payments payable pursuant to Section 10.  Buyer may collect partial payments for unpaid amounts from any such linked account.  Any collection of a partial payment is not a waiver of Buyer’s rights and will not satisfy Seller’s obligation to pay outstanding amounts in full.

12. Taxes

Seller shall pay, and indemnify and hold Buyer harmless from and against any taxes that may at any time be asserted in respect of the purchase transactions hereunder (including any sales, occupational, excise, gross receipts, personal property, privilege or license taxes, stamp duties or any withholdings (“Taxes”), but not including taxes imposed upon Buyer with respect to its overall net income) and costs, expenses and reasonable counsel fees in defending against the same, whether arising by reason of the acts to be performed by Seller hereunder or otherwise. If Seller or the applicable Account Debtor shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder (i) the sum payable shall be increased as may be necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this paragraph), Buyer receives an amount equal to the sum it would have received had no such deductions been made, (ii) Seller shall make such deductions (unless the Account Debtor has made such deductions) and (iii) Seller shall pay (unless the Account Debtor shall have paid) the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.  Seller shall timely pay all federal, state and local taxes and provide written proof thereof to Buyer upon request.

13. Termination

13.1 Termination and Effect of Termination.

 Either party hereto may cause the termination of this Agreement for any reason upon thirty (30) days prior written notice to the other party (collectively “Termination Date”).  Buyer may immediately terminate this Agreement either with or without any notice, if Seller breaches or fails to perform any of its obligations under this Agreement collectively.  Upon the Termination Date, Seller shall no longer offer Receivables for sale to Buyer and Buyer will no longer purchase Receivables from Seller, however, any termination will not affect in any way Buyer’s rights with respect to transactions that occurred before such termination nor Buyer’s continuing Security Interest in the Collateral until such time as all of Seller’s monetary and non-monetary obligations are fully satisfied. Moreover, Buyer shall have no duty to file, and Seller shall have not authority to have filed, any Financing Statement terminating the effectiveness of Buyer’s Security Interest in the Collateral or ownership right in the Purchased Receivables.

13.2 Exposed Payments.

Upon the Termination Date of this Agreement and in addition to any other obligations owing, Seller shall pay to Buyer (or Buyer may retain in a non-segregated non-interest-bearing account) an amount equal to the total of all Exposed Payments (the “Preference Reserve”). Buyer may charge the Preference Reserve with the amount of each Exposed Payment that Buyer pays to any bankruptcy estate of an Account Obligor that made the Exposed Payment on account of a claim asserted under the Bankruptcy Code. Buyer shall, from time to time, refund to Seller that portion of the Preference Reserve for which a claim under the Bankruptcy Code can no longer be asserted due to the passage of the statute of limitations, settlement with the bankruptcy estate of the Account Obligor or otherwise.

14. Survival

All covenants made herein shall continue in full force and effect so long as any Purchased Receivable remains outstanding.  All indemnity obligations and all limitation of liability provisions contained in this Agreement shall survive and remain in full force and effect notwithstanding termination of this Agreement.

15. Governing law

THIS AGREEMENT IS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES WILL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS.  THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING FROM OR RELATING TO THIS AGREEMENT, INCLUDING ITS FORMATION AND VALIDITY, SHALL BE SETTLED IN THE STATE OF CALIFORNIA.  YOU SUBMIT TO THE PERSONAL AND EXCLUSIVE JURISDICTION OF THE STATE COURTS AND FEDERAL COURTS LOCATED WITHIN SAN FRANCISCO COUNTY, CALIFORNIA FOR RESOLUTION OF ANY LAWSUIT OR COURT PROCEEDING PERMITTED UNDER THIS AGREEMENT.

16. Notices

All demands, notices, instructions, directions and communications to a party under this Agreement shall be in writing which may be transmitted and/or delivered electronically and shall be deemed to have been duly given if (a) sent by email to such party’s email address as provided during the sign-up process; or (b) submitted via the Buyer’s platform.  Such address may be modified from time to time by such party by written notice to the other party.

17. Amendments

All amendments and waivers to this Agreement must be in writing and signed by Seller and Buyer.    

18. Rights of set-off

None of Seller’s obligations hereunder shall be subject to, and Seller hereby expressly waives any right of recoupment, set-off, deduction, counterclaim or withholding against Buyer in respect to any monetary obligations owing to Buyer.  Buyer may by recoupment or set-off, seek payment for any amounts payable hereunder against any amounts payable by Seller to Buyer hereunder.

19. Counterparts; Electronic signatures

This Agreement shall be valid, binding, and enforceable against a party only when executed and delivered by an authorized individual on behalf of the party by means of (i) any electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law; (ii) an original manual signature; or (iii) a faxed, scanned, or photocopied manual signature.  Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature.  Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute one and the same instrument.

20. Miscellaneous

Seller may neither assign nor delegate any of its rights or duties under this Agreement without Buyer’s advance written consent, and any such assignment or delegation, or, attempted assignment or delegation by Seller without Buyer’s advance written consent is and will be null and void. Buyer may assign this Agreement or any Purchased Receivables without Seller’s consent. The provisions of this Agreement will inure to the benefit of, and be binding upon, the parties and their respective successors and permitted assigns. There are no intended third-party beneficiaries of this Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, both written and oral, with respect to the subject matter of this Agreement, and if any provision of this Agreement is found to be invalid or unenforceable, all other provisions will be enforced and construed as if the invalid provision were never a part of this Agreement.  The failure to enforce any provision of this Agreement will not be considered a waiver. Buyer shall not be liable for failure to perform or for delay in performance due to fire, flood, strike, or other labor difficulty, act of God, act of any governmental authority, riot, embargo, fuel or energy shortage, wrecks or delays in transportation, inability to obtain necessary labor, or materials from usual sources, or due to any cause beyond Buyer’s reasonable control. In the event of a delay in performance due to any such cause, the date of delivery or time for completion of performance will be extended by a period of time equal to the delay. The words “include” and “including” mean without limitation by reason of enumeration.

In the event, during the Term of this Agreement or while Seller remains liable to Buyer for any obligations under this Agreement, Seller’s principal(s), officer(s) or director(s) directly or in conjunction with any other person, causes to be formed a new entity or otherwise become associated with any newly formed or existing entity that provides Load Services, whether corporate, partnership, limited liability company or otherwise, such entity shall be deemed to have expressly assumed the obligations that Seller owes Buyer under this Agreement. With respect to each such entity, Buyer shall be deemed to have been granted an irrevocable power of attorney with authority to file a new UCC-1 Financing Statement naming such newly formed or existing entity as Debtor, and to have it filed with any and all appropriate secretaries of state or other UCC filing offices. Buyer shall be held harmless by Seller and its principals, officers or directors and be relieved of any liability as a result of Buyer’s filing of any such Financing Statement or the resulting perfection of its Collateral and Security Interests in such entity’s assets. In addition, Buyer shall have the right to notify such entity’s Account Debtors of Buyer’s rights, including without limitation, Buyer’s right to collect all Receivables, and to notify any creditor of such entity that Buyer has rights in such entity’s assets.

Any litigation, dispute, controversy, or claim between Seller and Buyer arising out of, under, or in connection with this Agreement or any other documents, instruments, or agreements related hereto, the rights and obligations of the parties hereto, the transactions related hereunder, and the relationships of the parties hereto shall be brought and maintained exclusively in a state or federal court in the County of San Francisco, State of California; provided, however, that nothing in this Agreement shall be deemed or operate to preclude Buyer from bringing suit or taking other legal action in any other jurisdiction that possesses subject matter or in personam jurisdiction in order to protect Buyer’s rights in the Purchased Receivables or the Collateral, as determined in the discretion of Buyer (the “Acceptable Forums”). Buyer hereby expressly waives any rights that Seller may have to object or challenge Buyer’s election to pursue litigation or legal proceedings in any other appropriate jurisdiction in order to protect Buyer’s rights under this Agreement.  Seller hereby expressly and irrevocably consents and submits to the jurisdiction of the Acceptable Forums for the purpose of any such litigation or legal proceeding as set forth above, and Seller hereby agrees that the Acceptable Forums have a reasonable relation to this Agreement and the transactions contemplated hereby. Seller hereby expressly and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to personam jurisdiction or venue of any such litigation or legal proceeding brought in any such court in the Acceptable Forums and any claim that any such litigation has been brought in an inconvenient forum or venue. Any suit, action or proceeding initiated by Seller outside the Acceptable Forums or request to transfer any suit, action or proceeding from an Acceptable Forum shall constitute an independent material breach of this Agreement for which Buyer may immediately recover, including all attorney’s fees.

21. Alternative Dispute Resolution Mechanism

Buyer shall be entitled to require that any controversy, claim, or breach arising out of or relating to this Agreement be resolved by final and binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules R-1 -- R-54. To the extent that this Agreement involves interstate commerce, the Federal Arbitration Act (9 U.S.C. § 1, et. seq.) shall apply and govern the interpretation and enforcement of this Agreement. The seat of arbitration shall only be in one of the Acceptable Forums and the arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association, effective September 1, 2022, (as may be amended) and the Procedures for Large, Complex Commercial Disputes shall apply only if the amount in dispute, based on the Demand for Arbitration, is equal to or greater than Two Hundred and Fifty Thousand Dollars ($250,000). Buyer shall, in its own business judgment, be entitled to obtain any provisional relief which may take the form of the form of prejudgment remedies, including, replevin, garnishment, attachment or the like within or without the arbitration proceeding without waiving its right to arbitration. The seat of arbitration and all oral hearings for the presentation of evidence or oral argument shall be conducted in San Francisco County, California. Any arbitration proceeding shall be conducted by one (1) arbitrator who has experience in financing or a similar area of expertise such as factoring. The arbitrator shall decide the substance of all claims in accordance with the choice of law as provided in this Agreement and honor all claims of privilege recognized by law. After demand for arbitration is made pursuant to the rules of the AAA, or applicable and governing law, barring extraordinary circumstances, for good cause, in the interests of justice, the final hearing of the arbitration proceeding shall be concluded within one hundred and twenty (120) days from the date the arbitrator is appointed. Failure to adhere to this time limit shall not constitute a basis for challenging the award. Any award shall be rendered within forty-five (45) days of the completion of the final hearing, unless, for good cause, extended by the arbitrator and upon request of any party any award shall include findings of fact and conclusion of law. The award rendered by the arbitrator shall be final and binding and judgment confirming the award may be entered in any court having jurisdiction and shall be brought exclusively in San Francisco County, California. Each party shall pay its pro-rata share of the expenses of the arbitrator. In the event that either of the parties fails to pay its pro-rata share of expenses, they shall be deemed to have defaulted, and the arbitrator may enter an award upon default against such party.  Notwithstanding anything to the contrary, Buyer shall be entitled to institute suit in order to obtain provisional relief in the form of prejudgment remedies, including, specific performance, replevin, garnishment, attachment or the like without being held to have waived its right to either compel arbitration or general judicial reference on all remaining issues and in such event any claim that Seller may wish to assert shall remain subject to arbitration or general judicial reference as provided below.  Nothing contained in this section shall be applicable to any claims brought by Buyer against an Account Debtor. The arbitrator shall not have the power to commit (a) errors of law or legal reasoning, (b) errors of fact, or (c) errors with regards to mixed questions of law and fact.  In addition, the arbitrator shall not reach factual conclusions unsupported by substantial evidence.  Furthermore, the arbitrator shall not have the power to render an award (a) not based on proper admissible evidence, (b) based on evidence not presented at the hearing, or (c) not in conformity with the substantive and procedural law of the State of California. In any arbitration arising out of or related to this agreement, the arbitrator is not empowered to award punitive or exemplary damages, except were permitted by statute, and the parties waive any right to recover any such damages. If the arbitrator exceeds any of the foregoing specific powers, the award may be vacated or corrected by filing either, as may be appropriate, an application to vacate or to modify or correct the award in one of the Acceptable Forums. The parties each acknowledge that the arbitration proceeding will require the payment of fees and costs to conduct the arbitration. The parties each agree to initially divide equally all arbitration fees and the compensation of the arbitrator(s).  Notwithstanding the foregoing, the parties each further acknowledge that the arbitrator(s) may decide that one party or the other is the prevailing party in which event the non-prevailing party will be obligated to reimburse the prevailing party for all the fees and costs imposed in connection with the arbitration. In the event that one of the parties fails or refuses to timely pay any required fees assessed by or due to the American Arbitration Association and if such party fails to make any such payment within 2 business days after receipt of 5-days written notice to pay made by the non-breaching party, the non-paying party shall be deemed to be in default of this section and the non-breaching party may, but shall not be required to, treat such non-payment as an irrevocable waiver by the breaching party of its right to compel or otherwise continue in arbitration as well as any other rights that may be available for such breach including but not limited to the entry of a default and the right to an award based on the same rules that apply to defaults under the Federal Rules of Civil Procedure. If for whatever reason, this arbitration provision proves unenforceable, the parties shall, at the option of either party, be entitled to proceed pursuant to California Code of Civil Procedure sections 638 and 641 through 645.1 or any successor statute thereto.

22. Class Action Waiver

The parties each agree that any proceeding, whether in arbitration or in court, will be conducted only on an individual basis and not in a class, consolidated or representative action. The parties agree to arbitrate solely on an individual basis, and that this Agreement does not permit class arbitration, or any claims brought as a plaintiff or class member in any class or representative arbitration proceeding. The arbitral tribunal may not consolidate more than one person's claims and may not otherwise preside over any form of a representative or class proceeding.

23. U.S. Patriot Act

Buyer notifies Seller that to the extent the requirements of the USA Patriot Act (Title III of Pub. Law 107-56 (signed into law October 26, 2001)) (the “US Patriot Act”) requires Buyer to obtain, verify and record information that identifies Seller, which information includes the name of Seller and other information that will allow Buyer to identify Seller in accordance with the US Patriot Act, Seller agrees to provide such information from time to time to Buyer, as applicable.