(a) Flexible Settlement Program. Buyer may make available to eligible Sellers an optional settlement program (the “Flexible Settlement Program”) with respect to Retail Installment Contracts purchased by Buyer under this Agreement. Under the Flexible Settlement Program, Seller may voluntarily elect to receive payment of all or a portion of the Purchase Price otherwise payable by Buyer for eligible Contracts on a date later than the date on which such amount would otherwise be payable under this Agreement and, in consideration for such election, may become eligible for the Flexible Settlement Benefit described below.
Capitalized terms used in this Addendum and not otherwise defined have the meanings given to them in the Agreement. For purposes of this Addendum, “Agreement” means the Retail Installment Sales Contract Purchase Agreement between Buyer and Seller, as amended from time to time; “Buyer” means Cherry Technologies Inc., its affiliates, or its successor or assign; “Seller” means the participating provider of Goods or Services; “Contract” means a Retail Installment Sales Contract purchased by Buyer pursuant to the Agreement; and “Customer” means the retail buyer under a Contract.
The Flexible Settlement Program applies solely to Contracts purchased by Buyer pursuant to this Agreement and does not apply to any transaction originated through a third-party financial institution or any other financing product offered, originated, purchased, serviced or administered by Buyer or any of its Affiliates.
(b) Purchase and Ownership of Contracts. Participation in the Flexible Settlement Program affects only the timing of Buyer's payment of the applicable Purchase Price and does not affect the sale, assignment, transfer or ownership of any Contract. Seller’s participation in the Flexible Settlement Program does not alter the regulatory characterization of any Contract as a retail installment sales contract under applicable state law, does not modify the terms of any Contract, and does not create any new obligation of, or confer any new right upon, the Customer. The Flexible Settlement Program is solely an arrangement between Seller and Buyer with respect to the timing of Buyer’s payment of the Purchase Price and has no effect on the rights, obligations, or remedies of the Customer under the Contract or under any applicable state retail installment sales act.
Each Contract will be sold, assigned and transferred to Buyer at the time otherwise provided in this Agreement, and Buyer will become the sole owner of such Contract at that time, regardless of whether Seller elects to participate in the Flexible Settlement Program or when the applicable Purchase Price is ultimately settled. For all purposes under this Agreement, the Contract will be treated as fully purchased and settled upon such sale, assignment and transfer, notwithstanding Seller's election to delay receipt of any portion of the Purchase Price. Seller's election to delay settlement does not affect the completion of the underlying transaction with the Customer.
The parties intend that the sale and assignment of each Contract constitutes a true sale and absolute transfer of ownership, and not a transfer for security or a pledge. Seller’s right to receive the Purchase Price (including any Flexible Settlement Amount) is a general unsecured contractual claim against Buyer and does not constitute a retained, residual, or beneficial interest, security interest, lien, priority right, or other proprietary interest in any Contract or in any Customer payment. Seller’s election to defer receipt of the Purchase Price does not alter the true-sale characterization of any Contract and shall not be construed as a retention of any legal or equitable interest in any Contract.
Seller acknowledges that Buyer’s right, title, and interest in each purchased Contract is intended to be, and shall be construed as being, absolute and irrevocable. In the event that, notwithstanding the intent of the parties, a court determines that the sale and assignment of a Contract does not constitute a true sale, Seller hereby grants to Buyer a first-priority security interest in each Contract and all proceeds thereof to secure Seller’s obligations under the Agreement and this Addendum. This grant of a security interest is intended as a protective measure only and shall not be construed as evidence that the transfer of any Contract is other than a true sale.
(c) Election to Delay Settlement. Notwithstanding the standard settlement timing otherwise provided in this Agreement, Seller may elect to have Buyer pay all or any portion of an eligible Purchase Price on a later date selected by Seller.
Any portion of an eligible Purchase Price for which Seller has elected to delay settlement is referred to as the “Flexible Settlement Amount.”
Seller may request settlement of all or any portion of its Flexible Settlement Amount at any time through the method made available by Buyer. The date on which an amount is settled in accordance with such request is the “Settlement Date.”
Seller is not required to maintain any Flexible Settlement Amount for a minimum period and may request settlement at any time, subject only to Buyer's ordinary processing procedures and any reasonable processing period disclosed to Seller.
Seller's election to participate in the Flexible Settlement Program constitutes Seller's agreement that Buyer may defer payment of the applicable Flexible Settlement Amount until Seller requests settlement in accordance with the Flexible Settlement Program.
(d) Flexible Settlement Benefit. In consideration for Seller's voluntary election to accept later payment of a Flexible Settlement Amount, Seller may earn a contractual fee credit (the “Flexible Settlement Benefit”).
The Flexible Settlement Benefit will be calculated by reference to (i) the applicable Flexible Settlement Amount, (ii) the period during which payment of that amount is delayed, and (iii) the applicable Flexible Settlement Rate.
The “Flexible Settlement Rate” means the rate established by Buyer and disclosed in writing to Seller before Seller’s election to participate in the Flexible Settlement Program takes effect. Buyer may express the Flexible Settlement Rate on an annualized basis solely as a calculation methodology for determining the amount of the Flexible Settlement Benefit.
The Flexible Settlement Rate is not an interest rate payable on a deposit or account, and the Flexible Settlement Benefit does not constitute interest, investment income or a return on funds deposited or invested with Buyer. Seller acknowledges that the Flexible Settlement Program is a commercial settlement arrangement between Buyer and Seller.
The Flexible Settlement Program, including the Flexible Settlement Benefit, does not constitute the offer or sale of a security under applicable federal or state securities law.
The Flexible Settlement Benefit and the Flexible Settlement Rate arise solely from the arrangement between Buyer and Seller described in this Addendum. Neither the Flexible Settlement Benefit, the Flexible Settlement Rate, nor Seller’s participation in the Flexible Settlement Program is reflected in, or affects, any disclosure made to the Customer or any term of a Contract.
(e) Monthly Accrual and Credit. The Flexible Settlement Benefit will accrue on a daily basis with respect to the Flexible Settlement Amount then subject to delayed settlement. Buyer will calculate the Flexible Settlement Benefit attributable to each applicable daily period based on the Flexible Settlement Rate and the Flexible Settlement Amount eligible for the benefit during such period.
If Seller requests settlement of all or a portion of a Flexible Settlement Amount, the Flexible Settlement Benefit will cease to accrue with respect to the amount being settled as of the applicable Settlement Date. Any Flexible Settlement Benefit earned before the applicable Settlement Date will remain available to Seller in accordance with this Section.
Buyer may display accrued, earned, available or applied Flexible Settlement Benefits in Seller's account or portal for informational and administrative purposes.
At least monthly while Seller has an outstanding Flexible Settlement Amount, Buyer will provide Seller with a written or electronic statement showing (i) each outstanding Flexible Settlement Amount, (ii) the Flexible Settlement Benefit accrued and available with respect to each such amount, and (iii) any Flexible Settlement Benefit or other credit applied during the applicable statement period.
(f) Application of Flexible Settlement Benefit. Each Flexible Settlement Benefit earned by Seller constitutes a contractual credit in favor of Seller. Buyer may apply the Flexible Settlement Benefit as a credit or setoff against Transaction Fees or a cash credit at the time of settlement. The credit will accrue and apply on a Contract-by-Contract basis and will be settled on a net basis when the applicable Flexible Settlement Amount attributable to the relevant Contract is settled. Earned credit will not accrue additional credit on the outstanding amount. If a refund is issued with respect to all or a portion of the Purchase Price attributable to a Contract, the credit accrued with respect to the refunded portion, or with respect to the entire Contract in the case of a full refund, will be removed and will no longer be outstanding.
Unless Buyer expressly agrees otherwise in writing, a Flexible Settlement Benefit:
1. will not increase the Purchase Price or Flexible Settlement Amount;
2. may not be withdrawn, transferred, assigned or redeemed
3. does not constitute funds owned by Seller and held by Buyer; and
4. may be realized only through its application against amounts due and owing from Seller to Buyer.
(g) Settlement. Seller may request settlement at any time of either (i) all Flexible Settlement Amounts subject to the Flexible Settlement Program or (ii) the Flexible Settlement Amount attributable to one or more individual Contracts.
Following Seller's request, Buyer will pay the applicable Flexible Settlement Amount in accordance with Buyer's settlement processing procedures, which may take up to nine (9) business days from the date of Seller's settlement request.
(h) No Deposit or Investment Account. The Flexible Settlement Program is an alternative contractual settlement arrangement under this Agreement. Seller is agreeing to a later date for payment of amounts Buyer otherwise owes Seller in connection with Buyer's purchase of Contracts. Flexible Settlement Amounts are not insured by the Federal Deposit Insurance Corporation or any other governmental or private insurer. Buyer is not required to segregate or separately maintain cash or other assets corresponding to any Flexible Settlement Amount.
Seller is not depositing or transferring money to Buyer by participating in the Flexible Settlement Program, and Buyer is not maintaining an account for the custody or investment of Seller funds.
The Flexible Settlement Program is not a deposit account, savings account, investment account, custodial account, escrow account or other financial account. No Flexible Settlement Amount is held by Buyer in trust or for the benefit of Seller, and Seller does not acquire any ownership interest in any particular funds or assets of Buyer as a result of participating in the Flexible Settlement Program.
The Flexible Settlement Benefit is a contractual fee credit provided in connection with Seller's election to accept later settlement and is not interest payable on a deposit or account or earnings generated from the investment or use of Seller funds.
The parties acknowledge that the Flexible Settlement Program does not constitute a loan, extension of credit, or lending activity by Seller to Buyer or by Buyer to Seller. Seller is not advancing funds to Buyer; rather, Seller is voluntarily electing to defer receipt of amounts that Buyer owes to Seller under the Agreement. The Flexible Settlement Benefit is a contractual fee credit and is not interest on a loan or forbearance of money within the meaning of any applicable usury or lending statute.
(i) No Effect on Customer Obligations. Seller's participation in the Flexible Settlement Program affects solely the timing of Buyer's payment of the applicable Purchase Price to Seller and will have no effect on the underlying transaction with the Customer, the Customer's obligations under a Contract, the Customer's payment schedule or the amount owed by the Customer.
Once a Contract has been purchased by Buyer, Seller will treat the Customer's payment obligation to Seller with respect to the Goods or Services purchased under the Contract as fully satisfied through the sale of the Contract to Buyer, regardless of whether Buyer has paid the applicable Purchase Price to Seller or Seller has elected to delay settlement of any Flexible Settlement Amount.
Seller will not, as a result of Buyer's delayed payment of any Flexible Settlement Amount:
1. seek or require payment of the amount owed under the Contract from the Customer;
2. represent or imply that the Customer has not paid for the applicable Goods or Services;
3. delay, suspend, cancel, condition or refuse to provide Goods or Services that Seller is otherwise obligated to provide;
4. impose any additional fee, charge, penalty or other amount on the Customer;
5. otherwise treat the Customer differently or adversely affect the Customer's rights with respect to the underlying transaction; or
6. contact or communicate with the Customer regarding (i) Buyer’s delayed payment of any Flexible Settlement Amount, (ii) the Flexible Settlement Program, or (iii) Seller’s participation in the Flexible Settlement Program.
Seller acknowledges that its election to delay settlement is solely an arrangement between Seller and Buyer and does not create or modify any obligation of the Customer.
(k) Refunds, Repurchases, Chargebacks and Other Amounts Owed. Participation in the Flexible Settlement Program does not limit or otherwise modify any right of Buyer under this Agreement with respect to refunds, repurchases, chargebacks, adjustments, indemnification obligations, ACH debits, setoff, recoupment or any other amounts owed by Seller.
Buyer may apply any Flexible Settlement Amount otherwise payable to Seller, and any Flexible Settlement Benefit available to Seller, against amounts that Buyer is entitled to deduct, set off, recoup or otherwise recover from Seller pursuant to this Agreement.
Any breach by Seller of Section (i) or Section (j) of this Addendum shall entitle Buyer, in addition to any other remedies available under the Agreement or at law or in equity, to (i) immediately suspend Seller from the Flexible Settlement Program without prior notice and (ii) terminate Seller’s participation in the Flexible Settlement Program upon written notice. Buyer may, upon reasonable prior notice to Seller, audit Seller’s compliance with this Addendum, including by reviewing Seller’s policies, procedures, marketing materials, and records. Seller shall cooperate with any such audit and provide access to relevant materials within ten (10) business days of Buyer’s request.
(l) Regulatory Contingency. If any governmental authority or regulatory agency asserts or indicates that the Flexible Settlement Program may constitute deposit-taking activity, lending activity, the transmission of money, or the offer or sale of a security, or that any aspect of the Flexible Settlement Program requires a license, registration, or authorization not then held by Buyer, Buyer may, in its sole discretion, (i) modify the terms of the Flexible Settlement Program to the extent necessary to address such assertion, (ii) suspend the Flexible Settlement Program pending resolution, or (iii) discontinue the Flexible Settlement Program entirely. Buyer shall provide Seller with prompt written notice of any such action and shall settle all outstanding Flexible Settlement Amounts in accordance with Section (p) of this Addendum.
Each party shall promptly notify the other party in writing of any investigation, inquiry, or enforcement action by any federal or state regulatory authority relating to the Flexible Settlement Program or any related practice. The parties shall cooperate in good faith in responding to any such matter.
(m) Program Eligibility and Changes. Buyer may establish eligibility requirements and other reasonable conditions for participation in the Flexible Settlement Program. Buyer may also establish or modify the Flexible Settlement Rate, calculation methodology, maximum period for which a Flexible Settlement Benefit may accrue, processing periods, expiration periods applicable to unused Flexible Settlement Benefits, and other terms of the Flexible Settlement Program on a prospective basis; provided that Buyer will provide Seller at least thirty (30) days’ prior written notice of any material change to those terms.
The Flexible Settlement Rate and other material economic terms applicable to Seller's participation will be disclosed to Seller in writing before Seller’s election to participate in the Flexible Settlement Program takes effect.
Buyer may suspend, modify or discontinue the Flexible Settlement Program on a prospective basis upon at least thirty (30) days’ prior written notice to Seller. Unless otherwise disclosed to Seller, any such suspension, modification or discontinuation will not eliminate a Flexible Settlement Benefit already earned by Seller before the effective date of such action.
(n) Optional Participation. Participation in the Flexible Settlement Program is entirely optional. Seller may continue to receive settlement according to the standard settlement timing provided under this Agreement without participating in the Flexible Settlement Program.
Seller's decision not to participate, or to request settlement of any Flexible Settlement Amount, will not affect Seller's eligibility to submit otherwise eligible Contracts for purchase by Buyer under this Agreement.
(o) Nonpayment Risk. By electing to delay settlement of a Flexible Settlement Amount, Seller bears the risk that Buyer may be unable to pay such amount when Seller requests settlement.
Each Flexible Settlement Amount constitutes solely a general unsecured contractual obligation of Buyer to Seller. Seller does not obtain any security interest, lien, priority right or other proprietary interest in any funds or assets of Buyer. Buyer is not required to segregate or separately maintain funds or assets corresponding to any Flexible Settlement Amount and may use its cash and other assets in the ordinary course of its business.
Seller acknowledges that Buyer may become unable to satisfy its payment obligations. Buyer makes no representation or warranty regarding its financial condition or its ability to pay any Flexible Settlement Amount when due. If Buyer becomes insolvent, enters bankruptcy or other insolvency proceedings, or is otherwise unable to pay a Flexible Settlement Amount when due, Seller may be treated as a general unsecured creditor of Buyer and may lose some or all of the applicable Flexible Settlement Amount and any associated Flexible Settlement Benefit.
Seller acknowledges that it has been advised to consult with its own legal and financial advisors before electing to participate in the Flexible Settlement Program. Seller voluntarily accepts this risk when electing to delay settlement and may request settlement of its Flexible Settlement Amount in accordance with this Addendum.
(p) Termination and Wind-Down. Either Buyer or Seller may terminate its participation in the Flexible Settlement Program upon written notice to the other party. Termination will be effective on the date stated in the notice or, if no date is stated, upon receipt of the notice.
As of the effective date of termination, Seller may not elect to delay settlement of any additional Purchase Price under the Flexible Settlement Program. Buyer shall settle all outstanding Flexible Settlement Amounts within thirty (30) business days after the effective date, and any Flexible Settlement Benefits accrued through the effective date will be applied at that settlement in accordance with Section (f).
Any Flexible Settlement Benefit accrued or earned before the effective date of termination will survive termination and remain available for application in accordance with this Addendum. Termination of participation will not terminate the Agreement or affect the sale, assignment, transfer or ownership of any Contract or any Customer obligation. Sections (b), (d), (h), (i), (j), (k), (l), (o), (q), and (r) of this Addendum, and any accrued rights and obligations hereunder, shall survive the termination or expiration of Seller’s participation in the Flexible Settlement Program and the termination or expiration of the Agreement.
Seller may not assign or transfer its rights or obligations under this Addendum, or its participation in the Flexible Settlement Program, without Buyer’s prior written consent. Buyer may assign its rights and obligations under this Addendum in connection with any assignment of the Agreement or any sale, transfer, or other disposition of all or substantially all of Buyer’s assets or business, and any such assignee shall assume Buyer’s obligations under this Addendum, including the obligation to settle outstanding Flexible Settlement Amounts.
(q) Miscellaneous. This Addendum, together with the Agreement, constitutes the entire agreement between Buyer and Seller with respect to the Flexible Settlement Program and supersedes all prior or contemporaneous agreements, understandings and communications relating to that subject matter. Except as expressly modified by this Addendum, the Agreement remains in full force and effect.
If any provision of this Addendum is held to be invalid, illegal or unenforceable, that provision will be enforced to the maximum extent permitted by law and the remaining provisions will remain in full force and effect.
This Addendum is incorporated into and forms part of the Agreement. The parties’ execution of this Addendum or Seller’s written or electronic election to participate in the Flexible Settlement Program through a method made available by Buyer (including acceptance through an electronic platform, portal, or click-through mechanism) constitutes acceptance of this Addendum. No separate signature is required unless the Agreement or applicable law requires one, in which case this Addendum will be effective upon execution by authorized representatives of Buyer and Seller.