Exhibit 10.4

 

15 America Ave Suite 303, Lakewood, NJ 08701

(646) 437-6010

STANDARD MERCHANT CASH ADVANCE AGREEMENT

 

 

This is an Agreement dated 06/14/2023 by and between Slate Advance (“SA2”) and each merchant listed below

(“Merchant”).

Merchant’s Legal Name: EMMAUS MEDICAL, INC. and all entities listed on addendum - "MERCHANT LIST"

D/B/A: EMMAUS MEDICAL Fed ID #: 87-0419387

Type of Entity: Corporation

 

Business Address 21250 Hawthorne Boulevard City: Torrance State: CA Zip:90503

Contact Address City: State: Zip:

Email Address: Phone Telephone:

 

Purchase Price

This is the amount being paid to Merchant(s) for the Receivables Purchased Amount (defined below). This amount may be paid in installments if there is an Addendum stating that it will be paid in installments.

 

$618,000.00

Receivables Purchased Amount

This is the amount of Receivables (defined in Section 1 below) being sold. This amount may be sold in installments if there is an Addendum stating that it will be sold in installments.

 

 

$877,560.00

Specified Percentage

This is the percentage of Receivables (defined below) to be delivered until the Receivables Purchased Amount is paid in full.

 

 

25.00%

Net Funds Provided

This is the net amount being paid to or on behalf of Merchant(s) after deduction of applicable fees listed in Section 2 below. This amount may be paid in installments if there is an Addendum stating that it will be paid in installments.

 

$600,000.00

I have read and agree to the terms and conditions set forth above:

 

 

 

 

 

Name:

YUTAKA NIIHARA

Name:

 

Title:

 

Title:

 

Date:

06/14/2023

Date:

06/14/2023

 

 

 

 

 

Net Amount to Be Received Directly by Merchant(s)

This is the net amount being received directly by Merchant(s) after deduction of applicable fees listed in Section 2 below and the payment of any part of the Purchase Price elsewhere pursuant to any Addendum to this Agreement. This amount may be paid in installments if there is an Addendum stating that it will be paid in installments. If any deduction is being made from the Purchase Price to pay off another obligation by Merchant(s), then the Net Amount to be Received Directly by Merchant(s) is subject to change based on any change in the amount of the other obligation(s) to be paid off.

 

 

$600,000.00

Initial Estimated Payment

This is only applicable if an Addendum for Estimated Payments is being signed. This is the initial amount of periodic payments collected from Merchant(s) as an approximation of no more than the Specified Percentage of the Receivables and is subject to reconciliation as set forth in Section 4 below.

 

 

$33,752.31 per week

 

TERMS AND CONDITIONS

 

1.
Sale of Future Receipts. Merchant(s) hereby sell, assign, and transfer to SA2 (making SA2 the absolute owner) in consideration of the funds provided (“Purchase Price”) specified above, all of each Merchant’s future accounts, contract rights, and other obligations arising from or relating to the payment of monies from each Merchant’s customers and/or other third party payors (the “Receivables”, defined as all payments made by cash, check, credit or debit card, electronic transfer, or other form of monetary payment in the ordinary course of each merchant’s business), for the payment of each Merchant’s sale of goods or services until the amount specified above (the “Receivables Purchased Amount”) has been delivered by Merchant(s) to SA2. Each Merchant hereby acknowledges that until the Receivables Purchased Amount has been received in full by SA2, each Merchant’s Receivables, up to the balance of the Receivables Purchased Amount, are the property of SA2 and not the property of any Merchant. Each Merchant agrees that it is a fiduciary for SA2 and that each Merchant will hold Receivables in trust for SA2 in its capacity as a fiduciary for SA2.

The Receivables Purchased Amount shall be paid to SA2 by each Merchant irrevocably authorizing only one depositing account acceptable to SA2 (the “Account”) to remit the percentage specified above (the “Specified Percentage”) of each Merchant’s settlement amounts due from each transaction, until such time as SA2 receives payment in full of the Receivables Purchased Amount. Each Merchant hereby authorizes SA2 to ACH debit the specified remittances and any applicable fees listed in Section 2 from the Account on a daily basis as of the next business day after the date of this Agreement and will provide SA2 with all required access codes and monthly bank statements. Each Merchant understands that it will be held responsible for any fees resulting from a rejected ACH attempt or an Event of Default (see Section 2). SA2 is not responsible for any overdrafts or rejected transactions that may result from SA2’s ACH debiting the Specified Percentage amounts under the terms of this Agreement.

 

2.
Additional Fees. In addition to the Receivables Purchased Amount, each Merchant will be held responsible to SA2 for the following fees, where applicable:
A.
$18,000.00 - to cover underwriting and the ACH debit program, as well as related expenses. This will be deducted from payment of the Purchase Price.
B.
Wire Fee ‐ Merchant(s) shall receive funding electronically to the Account and will be charged $50.00 for a Fed Wire or $0.00 for a bank ACH. This will be deducted from payment of the Purchase Price.
C.
Blocked Account/Default ‐ $2,500.00 ‐ If SA2 considers an Event of Default to have taken place under Section

32.

I have read and agree to the terms and conditions set forth above:

 

 

 

 

 

Name:

YUTAKA NIIHARA

Name:

 

Title:

 

Title:

 

Date:

06/14/2023

Date:

06/14/2023

 

 

 

 

 

D.
UCC Fee ‐ $195.00 – to cover SA2 filing a UCC-1 financing statement to secure its interest in the Receivables

Purchased Amount. A $195.00 UCC termination fee will be charged if a UCC filing is terminated.

E.
Court costs, arbitration fees, collection agency fees, attorney fees, expert fees, and any other expenses incurred in litigation, arbitration, or the enforcement of any of SA2’s legal or contractual rights against each Merchant and/or each Guarantor, if required, as explained in other Sections of this Agreement.

 

3.
Cap on Collection of the Receivables Purchased Amount. The amount that SA2 will collect from Merchant(s) towards the Receivables Purchased Amount during any specific week will be capped at $33,752.31 (the

 

 

“Cap”). If the Specified Percentage of all Receivables for a specific week is less than the Cap, then in addition to the Specified Percentage of Receivables for that week, SA2 will be permitted to collect any Receivable it did not previously collect due to the Cap such that the total amount collected during that week does not exceed the Cap. The Cap is not applicable to make up for a business day on which SA2 is closed and does not ACH debit the Account, to subsequent attempts to collect a rejected or blocked ACH payment, to debit any amount due pursuant to a reconciliation as set forth in Section 4, for the collection of any of the fees listed in Section 2, or if any Event of Default listed in Section 32 is considered by SA2 to have taken place.

 

4.
Reconciliations. Any Merchant may request that SA2 conduct a reconciliation in order to ensure that the amount that SA2 has collected equals the Specified Percentage of Merchant(s)’s Receivables under this Agreement. A request for a reconciliation by any Merchant must be made by giving written notice of the request to SA2 or by sending an e-mail to stating that a reconciliation is being requested. In order to effectuate the reconciliation, any Merchant must produce with its request the login and password for the Account and any and all statements covering the period from the date of this Agreement through the date of the request for a reconciliation. SA2 will complete each reconciliation requested by any Merchant within two business days after receipt of proper notice of a request for one accompanied by the information and documents required for it. SA2 may also conduct a reconciliation on its own at any time by reviewing Merchant(s)’s Receivables covering the period from the date of this Agreement until the date of initiation of the reconciliation, each such reconciliation will be completed within two business days after its initiation, and SA2 will give each Merchant written notice of the determination made based on the reconciliation within one business day after its completion. If a reconciliation determines that SA2 collected more than it was entitled to, then SA2 will credit to the Account all amounts to which SA2 was not entitled. If a reconciliation determines that SA2 collected less than it was entitled to, then SA2 will debit from the Account all additional amounts to which SA2 was entitled. Nothing herein limits the amount of times that a reconciliation may be requested or conducted.

 

5.
Prepayments. Although there is no obligation to do so, any Merchant may prepay any amount towards the Receivables Purchased Amount. There will be no penalty for any prepayment made by any Merchant. Any Merchant may elect to terminate this Agreement by prepaying SA2 the amount of the balance of the Receivables Purchased Amount at that time.

 

6.
Merchant Deposit Agreement. Merchant(s) shall appoint a bank acceptable to SA2, to obtain electronic fund transfer services and/or “ACH” payments. Merchant(s) shall provide SA2 and/or its authorized agent with all of the information, authorizations, and passwords necessary to verify each Merchant’s Receivables. Merchant(s) shall authorize SA2 and/or its agent(s) to deduct the amounts owed to SA2 for the Receivables as specified herein from settlement amounts which would otherwise be due to each Merchant and to pay such amounts to SA2 by permitting SA2 to withdraw the Specified Percentage by ACH debiting of the account. The authorization shall be irrevocable absent SA2’s written consent.

 

7.
Term of Agreement. The term of this Agreement is indefinite and shall continue until SA2 receives the full Receivables Purchased Amount, or earlier if terminated pursuant to any provision of this Agreement. The provisions of

I have read and agree to the terms and conditions set forth above:

 

 

 

 

 

Name:

YUTAKA NIIHARA

Name:

 

Title:

 

Title:

 

Date:

06/14/2023

Date:

06/14/2023

 

 

 

 

 

Sections 4, 6, 7, 8, 10, 11, 13, 14, 15, 17, 18, 19, 22, 23, 27, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45,

46, 47, 48, 49, 50, 51, 52, 53, 54, and 55 shall survive any termination of this Agreement.

 

8.
Ordinary Course of Business. Each Merchant acknowledges that it is entering into this Agreement in the ordinary course of its business and that the payments to be made from each Merchant to SA2 under this Agreement are being made in the ordinary course of each Merchant’s business.

 

9.
Financial Condition. Each Merchant and each Guarantor (Guarantor being defined as each signatory to the Guarantee of this Agreement) authorizes SA2 and its agent(s) to investigate each Merchant’s financial responsibility and history, and will provide to SA2 any bank or financial statements, tax returns, and other documents and records, as SA2 deems necessary prior to or at any time after execution of this Agreement. A photocopy of this authorization will be

deemed as acceptable for release of financial information. SA2 is authorized to update such information and financial profiles from time to time as it deems appropriate.

 

10.
Monitoring, Recording, and Electronic Communications. SA2 may choose to monitor and/or record telephone calls with any Merchant and its owners, employees, and agents. By signing this Agreement, each Merchant agrees that any call between SA2 and any Merchant or its representatives may be monitored and/or recorded. Each Merchant and each Guarantor grants access for SA2 to enter any Merchant’s premises and to observe any Merchant’s premises without any prior notice to any Merchant at any time after execution of this Agreement.

SA2 may use automated telephone dialing, text messaging systems, and e-mail to provide messages to Merchant(s), Owner(s) (Owner being defined as each person who signs this Agreement on behalf of a Merchant), and Guarantor(s) about Merchant(s)’s account. Telephone messages may be played by a machine automatically when the telephone is answered, whether answered by an Owner, a Guarantor, or someone else. These messages may also be recorded by the recipient’s answering machine or voice mail. Each Merchant, each Owner, and each Guarantor gives SA2 permission to call or send a text message to any telephone number given to SA2 in connection with this Agreement and to play pre-recorded messages and/or send text messages with information about this Agreement and/or any Merchant’s account over the phone. Each Merchant, each Owner, and each Guarantor also gives SA2 permission to communicate such information to them by e-mail. Each Merchant, each Owner, and each Guarantor agree that SA2 will not be liable to any of them for any such calls or electronic communications, even if information is communicated to an unintended recipient. Each Merchant, each Owner, and each Guarantor acknowledge that when they receive such calls or electronic communications, they may incur a charge from the company that provides them with telecommunications, wireless, and/or Internet services, and that SA2 has no liability for any such charges.

 

11.
Accuracy of Information Furnished by Merchant and Investigation Thereof. To the extent set forth herein, each of the parties is obligated upon his, her, or its execution of the Agreement to all terms of the Agreement. Each Merchant and each Owner signing this Agreement represent that he or she is authorized to sign this Agreement for each Merchant, legally binding said Merchant to its obligations under this Agreement and that the information provided herein and in all of SA2’s documents, forms, and recorded interview(s) is true, accurate, and complete in all respects. SA2 may produce a monthly statement reflecting the delivery of the Specified Percentage of Receivables from Merchant(s) to SA2. An investigative report may be made in connection with the Agreement. Each Merchant and each Owner signing this Agreement authorize SA2, its agents and representatives, and any credit‐reporting agency engaged by SA2, to (i) investigate any references given or any other statements obtained from or about each Merchant or any of its Owners for the purpose of this Agreement, and (ii) pull credit report at any time now or for so long as any Merchant and/or Owners(s) continue to have any obligation to SA2 under this Agreement or for SA2’s ability to determine any Merchant’s eligibility to enter into any future agreement with SA2. Any misrepresentation made by any Merchant or Owner in connection with this Agreement may constitute a separate claim for fraud or intentional misrepresentation.

Authorization for soft pulls: Each Merchant and each Owner understands that by signing this Agreement, they are providing ‘written instructions’ to SA2 under the Fair Credit Reporting Act, authorizing SA2 to obtain information from their

I have read and agree to the terms and conditions set forth above:

 

 

 

 

 

Name:

YUTAKA NIIHARA

Name:

 

Title:

 

Title:

 

Date:

06/14/2023

Date:

06/14/2023

 

 

 

 

 

personal credit profile or other information from Experian, TransUnion, and Equifax. Each Merchant and each Guarantor authorizes SA2 to obtain such information solely to conduct a pre-qualification for credit.

Authorization for hard pulls: Each Merchant and each Owner understands that by signing this Agreement, they are providing ‘written instructions’ to SA2 under the Fair Credit Reporting Act, authorizing SA2 to obtain information from their personal credit profile or other information from Experian, TransUnion, and Equifax. Each Merchant and each Guarantor authorizes SA2 to obtain such information in accordance with a merchant cash advance application.

 

12.
Transactional History. Each Merchant authorizes its bank to provide SA2 with its banking and/or credit card processing history.

 

13.
Indemnification. Each Merchant and each Guarantor jointly and severally indemnify and hold harmless each Merchant’s credit card and check processors (collectively, “Processor”) and Processor’s officers, directors, and shareholders against all losses, damages, claims, liabilities, and expenses (including reasonable attorney and expert fees) incurred by Processor resulting from (a) claims asserted by SA2