i.

1.19% of the face value of each invoice purchased under the facility (each, a “Purchased Account”) (Basic Discount) computed on the Face Amount

After the 20th day from the date of invoice issuance, 0.59% per 10 days or any part thereof that an invoice remains outstanding, through the 90th day computed on the Face Amount.

(a)

Seller is duly incorporated and in good standing in its jurisdiction of incorporation or formation and in those jurisdictions in which Seller conducts business, and Seller shall remain so during the term of this Agreement;

(b)

Seller is properly licensed and authorized to operate its business as currently conducted. The primary business of the Seller is the provision of telecommunication services and/or equipment. All license numbers issued to the Seller by any Governmental Authority are set forth on Schedule 5(b) and the Seller has complied in all material respects with all applicable laws, rules, regulations, orders and related customer contracts and all restrictions contained in any agreement or instrument binding on or affecting the Seller, and has and maintains all permits, licenses, certifications, authorizations, registrations, approvals and consents of governmental authorities or any other party necessary for the business of the Seller and each of its subsidiaries;;

(c)

Seller is the sole and absolute owner of the Accounts and has the full legal right to make said sale, assignment and transfer and to grant to Purchaser a security interest in the Accounts and the other items comprising the Collateral and Seller represents and warrants that the services they are providing are in compliance with the tariffs and relevant orders filed with or issued by the appropriate regulatory agency.

(d)

Seller’s sale, transfer or assignment of the Account does not conflict with the terms of any other agreement or instrument to which Seller is a party, does not require the consent of any third party, and does not violate with any applicable law, rule or regulation. There are no procedures or investigations pending or threatened before any governmental authority (i) asserting the invalidity of such Account or customer contract; (ii) asserting the bankruptcy or insolvency of the related Account Debtor; (iii) seeking the payment of such Account or payment and performance of the related customer contract; or (iv) seeking any determination or ruling that might materially and adversely affect the validity or enforceability of such Account or the related customer contract;

(e)

Seller is fully authorized to enter into this Agreement and the other transaction documents ancillary hereto (each, a “Transaction Document”), and to perform hereunder and thereunder;

(f)

This Agreement and each other Transaction Document constitutes Seller’s legal, valid and binding obligation; (g) Seller is solvent.

(h)

The correct amount of each Account will be set forth on the Assignments;

(i)

Each Account is an accurate and undisputed statement of indebtedness from an Account Debtor for a sum certain, without offset or counterclaim and which is due and payable in ninety (90) days or less from invoice date and with respect to which Seller has filed appropriate liens, if available, in its name;

(j)

Each Account is an accurate statement of a bona fide sale, delivery and acceptance of merchandise or performance of service by Seller to an Account Debtor;

(k)

Seller does not own, control or exercise dominion in any way whatsoever, over the business of any Account Debtor;

(l)

All financial records, statements, books or other documents shown to AEC by Seller at any time either before or after the signing of this Agreement are true and accurate;

(m)

Seller will not under any circumstance or in any manner whatsoever, interfere with any of AEC’s rights under this Agreement and Seller has not done anything to impede or interfere with the collection by the Purchaser of the Purchased Accounts and shall not, without the Purchaser’s prior written consent, amend, waive or otherwise permit or agree to any deviation from the terms or conditions of any Purchased Account or any related customer agreement or contract which (i) may create an adverse claim with respect to any Account or (ii) would materially affect the ability of the Purchaser to act in its capacity as such;

(n)

Seller has not and will not, at any time, permit any lien, security interest or encumbrance to be created upon any of its accounts receivable and/or its inventory or other Collateral without the prior written consent of AEC except as specifically disclosed to AEC and permitted by AEC;

(o)

Seller will not change or modify the terms of the Accounts with any Account Debtor unless AEC first consents, in writing;

(p)

Seller will notify AEC, in writing, in advance of: any change in Seller’s place of business; Seller having or acquiring more than one place of business; any change in Seller’s chief executive office; loss or suspension of an permit or license required to operate Seller’s business and/or any change in the office or offices where Seller’s books and records concerning accounts receivable are kept;

(q)

Seller will immediately notify AEC of any proposed or actual change of the Seller’s and/or any Account Debtor’s identity, legal entity or corporate structure;

(r)

A notification letter from Seller and/or all invoices will state on their face that the Accounts represented thereby have been assigned to AEC and are to be paid directly to AEC; and

(s)

No Account shall be on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, offset, barter, consignment or any other repurchase or return basis;

(t)

Upon three (3) Business Days’ written notice by Seller to Purchaser, and automatically, without notice, after an Event of Default, Seller shall not, without the prior written consent of Purchaser in each instance, (a) grant any extension of time for payment of any of its Accounts, (b) compromise or settle any of its Accounts for less than the full amount thereof, (c) release in whole or in part any Payor, or (d) grant any credits, discounts, allowances, deductions, return authorizations or the like with respect to any of the Accounts.

(u)

From time to time as requested by Purchaser, at the sole expense of Seller, Purchaser or its designee shall have access, during reasonable business hours if prior to an Event of Default and at any time if on or after an Event of Default, to all premises where Collateral is located for the purposes of inspecting (and removing, if after the occurrence of an Event of Default) any of the Collateral, including Seller’s books and records, and Seller shall permit Purchaser or its designee to make copies of such books and records or extracts therefrom as Purchaser may request. Without expense to Purchaser, Purchaser may use any of Seller’s personnel, equipment, including computer equipment, programs, printed output and computer readable media, supplies and premises for the collection of Accounts and realization on other Collateral as Purchaser, in its Discretion, deems appropriate. Seller hereby irrevocably authorizes all accountants and third parties to disclose and deliver to Purchaser at Seller’s expense all financial information, books and records, work papers, management reports and other information in their possession relating to Seller.

(v)

The Seller will furnish to the Purchaser, in form and substance satisfactory to the Purchaser:

a.

as soon as possible after the end of each fiscal year of the Seller, and in any event within 90 days thereafter, a complete copy of the Seller’s financial statements, including (i) the balance sheet as of the close of the fiscal year, and (ii) the income statement for such year, together with a statement of cash flows;

b.

as soon as possible after the end of each fiscal quarter of the Seller, and in any event within 30 Days thereafter, a complete copy of the Seller’s quarterly financial statements and other business records;

c.

within thirty (30) Days of Seller having filed any Federal or State income tax return, a copy of such return including all schedules and attachments thereto;

d.

at the time of delivery of each of the financial statements required, a certificate signed by a responsible officer of the Seller and in form and substance satisfactory to the Purchaser to the effect that the representations and warranties set forth in Section 5 are true as of the date of the certificate and that no default or Event of Default has occurred and is continuing (or if any default or Event of Default has occurred and is continuing, setting forth the steps being taken to remedy it); and

e.

On a monthly basis, no later than 5 days after the end of each month, customer traffic and other statistics and other operational information as Purchaser shall reasonably request

Before sending any Invoice to an Account Debtor, Seller shall mark same with the following notice, or such notice of assignment as may be required by Purchaser:

 

 

(x)

Seller shall keep proper books of record and accounts, including proof of mechanics lien filing on each job, in accordance with sound and accepted accounting practices, which books shall at all times be open to inspection by Purchaser.

(y)

Seller shall pay when due all payroll and other taxes, and shall provide proof thereof to Purchaser in such form as Purchaser shall reasonably require. In furtherance thereof, Seller shall execute and deliver any agreement or other document that is required by the IRS, the state taxing authorities or any payroll company in order give Purchaser the right to obtain copies of Seller’s payroll and other tax records

(z)

Seller and its parent, Cuentas, Inc. shall collectively maintain a minimum cash balance on deposit in its operating bank account of no less than Fifty Thousand ($50,000) Dollars at all times.

Seller shall not create, incur, assume or permit to exist any lien upon or with respect to any assets in which Purchaser now or hereafter holds a security interest.

Seller (i) shall not take any action which could result in a change in control of Seller, (ii) shall not sell, exchange, transfer or otherwise convey all or substantially all of Seller’s assets to any other Person regardless of whether such Person is affiliated or unaffiliated with Seller, and (iii) shall not commence any action or take any step with respect to, and shall not approve any plan of, any liquidation or dissolution of Seller, in each case without Purchaser’s prior written consent. For purposes of this Agreement, the term, “Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, joint venture, limited liability company, government or political subdivision or agency thereof, or any other entity. Notwithstanding sub paragraph (i) above, the sale by Seller’s parent of equity interests as part of a public ‘up-listing’ or general raising of equity shall not be deemed a change of control so long as the voting structure of Seller’s parent remains materially unchanged.

Seller shall not issue Invoices through any other Person other than Seller without Purchaser’s prior written consent, and Seller shall not divert or otherwise transfer all or any portion of any Purchase Price paid to Seller by Purchaser to any other Person.

Seller shall not, either directly or indirectly, now or in the future, sell, transfer, assign or pledge any Accounts to any Person other than Purchaser, or create, assume or incur any additional indebtedness, or become liable, whether as endorser, guarantor, surety or otherwise, for any additional indebtedness or obligation without the prior written consent of the Purchaser.

Notwithstanding Seller’s obligation to pay the Misdirected Payment Fee (as defined in Section 24) , if ever Seller receives any check(s), note(s), draft(s), monies or other instruments for the payment of money (i) on account of a Purchased Account (a “Misdirected Payment”), or (ii) after an Event of Default, any payment of account of any Account (a “Post-Default Payment”), Seller shall hold such Misdirected Payment or Post-Default Payment in trust for the benefit of Purchaser, and Seller shall promptlyremit such Misdirected Payment or Post-Default Payment to Purchaser in good funds on the banking Day immediately following Seller’s receipt of such Misdirected Payment or Post-Default Payment , but in any event in not more than 3 Business Days with respect to a Misdirected Payment and 1 Business Day with respect to a Post-Default Payment, (and Seller shall endorse any checks issued in Seller’s name). SELLER ACKNOWLEDGES THAT THE PURCHASED ACCOUNTS SHALL BE SOLELY THE PROPERTY OF PURCHASER, AND THAT SELLER’S FAILURE TO PAY OVER SUCH MISDIRECTED PAYMENTS AND/OR DEFAULT PAYMENTS WITHIN ONE BANKING DAY TO PURCHASER SHALL BE A DEFAULT HEREUNDER AND FURTHERMORE SHALL CAUSE SELLER TO FORFEIT ANY RIGHTS IT MAY HAVE WITH RESPECT TO ANY OTHER PAYMENTS DUE OR TO BECOME DUE TO SELLER UNDER THIS AGREEMENT.

(ff)

Avoidance Claims are defined as any claim that any payment received by Purchaser is avoidable under the Bankruptcy Code or any other debtor relief statute.

a.

Seller shall indemnify Purchaser from any loss arising out of the assertion of any Avoidance Claim, other than such claims that relate to Purchased Accounts that are owed by an Account Debtor which was Insolvent at the time the subject payment was received by Purchaser, and shall pay to Purchaser on demand the amount thereof.

b.

Seller shall notify Purchaser within two (2) business days of it becoming aware of the assertion of an Avoidance Claim.

c.

This provision shall survive termination of this Agreement.

Seller shall grant AEC direct and perpetual view and report-generation access to Seller’s account on the Corex system and other informational systems used by Seller in tracking, accounting for and computing customer usage and invoices and such access shall be available to AEC at all times;

All systems, reporting software, circuit and system information portals used by Seller will be made available to AEC for verification of invoice purposes and is, and will remain, accurate within industry standard tolerances. At Seller’s expense, AEC may require third-party confirmation of the accuracy of such reporting and monitoring systems.

(a)

As a further inducement for AEC to enter into this Agreement, and as security for the prompt performance, observance and payment of all obligations owing by Seller to AEC, Seller hereby grants to AEC a continuing security interest in and lien upon the following (herein collectively referred to as the “Collateral”): all personal property and Fixtures in which Seller has an interest, now or hereafter existing or acquired, and wheresoever located, tangible or intangible, including, but not limited to, all present or hereafter existing or acquired Accounts, tools, Goods (including, without limitation, all Equipment), Inventory, raw materials, components, packaging, furniture, receivables, security agreements, mechanics liens, notes, bills, acceptances, Instruments, Deposit Accounts, Letter of Credit Rights, installment paper, Chattel Paper, Documents, certificates of deposit, tax refunds, insurance proceeds, Investment Property, Commercial Tort Claims, conditional sale or lease contracts, cash or cash equivalents, chattel mortgages or deeds of trust, General Intangibles, all intellectual property including, without limitation, patents, trademarks and copyrights (and applications for all of the foregoing), contract rights, and all other hypothecation, and promise or duty to pay money, now or hereafter owned or acquired by Seller (including, without limitation, all rights of Seller as an unpaid vendor), and all products, proceeds and collections thereof, all guarantees and other security therefor, and all right, title and interest of Seller in any returned, repossessed, rejected or unshipped goods, together with all of Seller’s books of accounts, ledger cards and records, all vehicles, all computer programs, software and systems owned or operated in connection therewith, all of the above accruing present and future advances and all proceeds, products, returns, add-ons, accessions, replacements and substitutions of and to pay any of the foregoing, and all proceeds of proceeds, and all property of Seller at any time in Purchaser’s possession.

(b)

As additional security for Seller’s obligations under this Agreement, Daniel Contreras and Orlando Taddeo (the “Guarantors”) shall execute and deliver a Validity Guaranty (the “Guaranty”) pursuant to which each shall guaranty all representations and warranties given by the Seller hereunder and in the other Transactions Documents, and the accuracy, truth and completeness of all such representations and warranties, and they shall also guaranty against the Seller’s bad acts, as set forth in the Guaranty.

(a)

Seller defaults in the payment of any obligations, or in the performance of any provision hereof, or of any of the other Transaction Documents now or hereafter entered into with Purchaser, or any warranty or representation contained herein proves to be false in any way, howsoever minor.

Seller breaches any representation, warranty or covenant hereof, including, without limitation, the covenant set forth in Section 5(ee) hereof pursuant to which Seller is obligated to promptly remit all Misdirected Payments and Post-Default Payments to Purchaser, and such failure remains uncured for five (5) days following Purchaser giving notice to Seller.

Seller or any Guarantor of the obligations becomes Insolvent, is unable to meet its debts as they mature, or files, or has filed against it, a petition for relief under the Bankruptcy Code, or any similar law granting relief from creditors, or Seller executes an assignment for benefit of its creditors, or a receiver, liquidator, conservator or similar functionary is appointed for Seller.

Any Guarantor fails to perform or observe any of such Guarantor’s obligations to Purchaser or shall notify Purchaser of its intention to rescind, modify, terminate or revoke any Guaranty of the obligations, or any such Guaranty shall cease to be in full force and effect for any reason whatever.

(e)

Seller voluntarily terminates all or a substantial part of its business.

(f)

A final judgment is entered against Seller or any Guarantor in an amount exceeding $50,000.00 and Seller or Guarantor, as the case may be, fails to stay execution within ten (10) Days of entry of the judgment.

(g)

Seller defaults on its payment obligations under any agreement with a third party.

(h)

Seller applies for dissolution or becomes dissolved.

(i)

A writ of garnishment or other writ or order is issued or entered with respect to Seller’s business assets.

Subject to the provisions contained herein, Purchaser for any reason, in good faith, deems itself insecure with respect to the prospect of repayment or performance of a material portion of the Obligations. For purposes of this sub-paragraph, materiality shall be defined as $200,000.00.

The termination of any Clearinghouse Agreement, if applicable, and/or any Carrier Agreement, Reciprocal Carrier Services Interconnect Agreement or Billing and Collection Agreement for any reason whatsoever absent the consummation of a substitute Clearinghouse Agreement, Carrier Agreement and/or Billing and Collections Agreement, as the case may be, and without the Seller’s prior written consent, and/or any invoice due and owing by the Seller relating to any Carrier Agreement, Clearinghouse Agreement or Billing and Collection Agreement has become more than THIRTY (30) days past due.

The Seller shall be in material violation or default of any regulation, requirement, citation, statute, mandate, notice or decree of a governmental authority and fail to remedy such violation within any available grace period, if any.

(a)

Without in any way limiting the terms and provisions of Section 5 hereinabove, AEC may, upon default by Seller and in its sole discretion, notify any Account Debtor to make payment on any of Seller’s open invoices to AEC; and

(b)

AEC, or any of its agents, may at any time verify the Accounts by any means deemed appropriate by AEC.