Terms of Use

These Terms of Use (the "Agreement") are between you and Karat Financial Technologies Incorporated and its affiliates (collectively "Karat," "we," or "us"), concerning your use of (including any access to) the banking and other financial services we make available to you on our website located at: https://www.trykarat.com (the "Site") (together with the banking and other financial services, collectively the "Services").

By accessing or using our Services, or otherwise manifesting your assent to the Agreement, you signify that you have read, understood and agree to the Agreement and our collection, storage, use and disclosure of your personal information as described in the Privacy Policy located at:  www.trykarat.com/privacy-policy.

You also agree to receive all notices and other communications from us electronically. Subject to applicable law, Karat reserves the right to make unilateral modifications to these terms and will provide notice of these changes by posting an updated version here: www.trykarat.com/terms-of-use. "Company" or "you" means the legal entity or person that is using the Services. If you are the individual applying for the Account, you represent and warrant that you are an authorized representative of Company with the authority to bind Company to this Agreement ("Administrator"), and that you agree to this Agreement on Company’s behalf.

PLEASE READ THIS AGREEMENT CAREFULLY TO ENSURE THAT YOU UNDERSTAND EACH PROVISION. THIS AGREEMENT CONTAINS A MANDATORY INDIVIDUAL ARBITRATION AND CLASS ACTION/JURY TRIAL WAIVER PROVISION THAT REQUIRES THE USE OF ARBITRATION ON AN INDIVIDUAL BASIS TO RESOLVE DISPUTES, RATHER THAN JURY TRIALS OR CLASS ACTIONS.


1. Use of the Services

A. Eligibility

This is a contract between you and Karat. You must read and agree to this Agreement before using the Services. If you do not agree, you may not use the Services. You may only use the applicable Services if you are a legal entity formed and registered in the United States or an unincorporated business or sole proprietor and can form a binding contract with Karat. Individual consumers and companies organized and registered outside the United States are not permitted to use or attempt to open or use an Account or the Services. The Services may not be used for personal, family, or household purposes. Specific aspects of the Services may be subject to additional requirements, including you continuing to meet (in Karat’s sole discretion) Karat’s rating and evaluation requirements from time to time. You may only use the Services in compliance with this Agreement  and all applicable local, state, national, and international laws, rules and regulations. Any use of or access to the Services for consumer or non-commercial purposes or by any individual who is not your employee, contractor, agent, or other individual permitted to use the Services on your behalf (a  "User") is strictly prohibited and in violation of this Agreement.


B. Accessing the Services

Karat may allow you to register with us to access certain portions of the Service. To register with Karat, Company needs to provide information, including email address, personal information (e.g., street address, telephone number, date of birth, etc.) (collectively, "Company Information") and a self-selected password, in order to create an account (“Account”). Company Information may include your social media handles, registered business name and state of incorporation, the business address, ownership details, the nature of the business, and other business information we may request from time to time; the name, contact information, date of birth and Social Security number of Administrators, Users or beneficial owners, and other personal information; and a corporate registration certificate, proof of address, personal identification, and any other documentary information used to verify business and personal information. You acknowledge that you have obtained or will obtain appropriate consent and authorization of any person whose personal information you provide before sharing such data with us. Company authorizes Karat, directly or through third parties, to make inquiries or verify that any and all information Company provides to Karat is accurate and complete (for example, through social media or third party databases). Company specifically authorizes Karat to request a business or third party report that contains Company name and address. We provide Company Information to our Banking Providers and other third-party service providers to determine your eligibility for access to certain Services. We rely on the accuracy of the Company Information you provide us when opening and maintaining your Account, and you must keep this information up to date. You must promptly notify Karat regarding any material changes to information or circumstances that could affect your eligibility to continue to use the Services or the terms on which you use the Services. We may deny your application, suspend provision of such Services to you, or close your Account if Company Information is out of date, incomplete, or inaccurate.

You understand that Karat may use and analyze any information you provide or it collects about you in order to: (a) provide you with a better experience; (b) provide you with customized recommendations; (c) serve you targeted offers and advertisements; (d) run statistical analysis; and (e) aggregate your data and publish results in a way that cannot identify you individually.

You will grant (or procure the grant of) such access as Karat may require to connect to any appropriate data sources in order to supply the Services to you, including (without limit) any foreign exchange, bank, payment processing or e-commerce services. You will provide, and shall procure that any such third party provides, Karat with all necessary cooperation in connection with the same. The supply of the Services by Karat is conditional upon such access and cooperation.

Once Company’s request to register with Karat has been approved and Company has been provisioned an Account, Karat may grant Company or its Users with access to certain services and functionality that Karat may establish and maintain from time to time and in its sole discretion. Karat may maintain different types of accounts for different types of users. 


C.  Account Management and Security

You must specify at least one Administrator to manage your Account when submitting your application. Administrators can add, remove, or manage additional Administrators and Users; request and manage Cards for Users; request purchases of Receivables; view transactions and run reports; provide or update Company Information; connect third-party services and other accounts to your Account; and perform other tasks to manage your Account. You are responsible for any actions or failure to act on the part of Administrators or Users, or those using their credentials to access your Account. You are solely responsible for the activity that occurs on your Account, and you must keep your Account password secure. We encourage you to use “strong” passwords with your Account. You must notify Karat immediately of any breach of security or unauthorized use of your Account by emailing:  concierge@trykarat.com. Karat will not be liable for any losses caused by any unauthorized use of your Account. We may suspend access to your Account if we believe that your Account has been compromised. Company may never use another person’s account without permission. 

D. Fees

We do not currently charge any fees in relation to your Account or the Services. We may assess fees for some Services, including periodic fees, usage fees, service fees, and fees applicable to certain transactions in the future. We may also assess fees for late or failed payments, or misuse of your Account or the Services. We will disclose fees, if any, to you when you start using a Service or through the Site. We may update, add, or change fees upon 30 days' notice to you. Any accrued or incurred fees will be reflected on your statements.


E. Prohibitions

You agree that you will not: (a) use the Account or the Services for any purpose that is unlawful or prohibited by this Agreement; (b) use the Account or the Services for any personal, family, household, or other use that is not related to Company’s business purpose; (c) use the Account or the Services for the benefit of an individual, organization, country, or jurisdiction that is blocked or sanctioned by the United States, including those identified on any lists maintained by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or the U.S. Department of State; (d) use the Account or the Services for any third parties unaffiliated with Company; (e) use the Account or the Services to collect any market research for a competing business; (f) impersonate any person or entity or falsely state or otherwise misrepresent your affiliation with a person or entity; (g) interfere with or attempt to interrupt the proper operation of the Services through the use of any virus, device, information collection or transmission mechanism, software or routine, or access or attempt to gain access to any Karat IP, data, files, or passwords related to the Services through hacking, password or data mining, or any other means; (h) decompile, reverse engineer, or disassemble any software or other products or processes accessible through the Services; (i) circumvent, remove, alter, deactivate, degrade, or thwart any of the content protections in the Services; (j) use any robot, spider, scraper, or other automated means to access the Services for any purpose without our express written permission; provided, however, we grant the operators of public search engines permission to use spiders to copy materials from the public portions of the Services for the sole purpose of, and solely to the extent necessary for, creating publicly available searchable indices of the materials, but not caches or archives of such materials; and (k) take any action that imposes or may impose (in our sole discretion) an unreasonable or disproportionately large load on our technical infrastructure.



2. Our Proprietary Rights

Subject to the terms and conditions of this Agreement, you are hereby granted a non-exclusive, limited, non-transferable, freely revocable license to use the Services. Karat reserves all rights not expressly granted herein in the Services and the Karat IP (as defined below). Karat may terminate this license at any time for any reason or no reason. The Services and all materials therein or transferred thereby, including, without limitation, software, images, text, graphics, illustrations, logos, patents, trademarks, service marks, copyrights, photographs, audio, videos, music, and User Content belonging to other Users (the “Karat IP”), and all Intellectual Property Rights related thereto, are the exclusive property of Karat and its licensors. Except as explicitly provided herein, nothing in this Agreement shall be deemed to create a license in or under any such Intellectual Property Rights, and you agree not to sell, license, rent, modify, distribute, copy, reproduce, transmit, publicly display, publicly perform, publish, adapt, edit or create derivative works from any Karat IP. Use of the Karat IP for any purpose not expressly permitted by this Agreement is strictly prohibited. If you believe that any material on the Site infringes upon any copyright which you own or control, you may send a written notification of such infringement to concierge@trykarat.com.

You may choose to, or we may invite you to, submit comments or ideas about the Services, including without limitation about how to improve the Services or our products (“Feedback”). By submitting any Feedback, you agree that your disclosure is gratuitous, unsolicited and without restriction, and will not place Karat under any fiduciary or other obligation, and that we are free to use your Feedback without any additional compensation to you, or to disclose your Feedback on a non-confidential basis or otherwise to anyone. You further acknowledge that, by acceptance of your submission, Karat does not waive any rights to use similar or related ideas previously known to Karat, or developed by its employees, or obtained from sources other than you.

For the purposes of this Agreement, “Intellectual Property Rights” means all patent rights, copyright rights, mask work rights, moral rights, rights of publicity, trademark, trade dress and service mark rights, goodwill, trade secret rights and other intellectual property rights as may now exist or hereafter come into existence, and all applications thereof and registrations, renewals and extensions thereof, under the laws of any state, country, territory or other jurisdiction.



3. Site Data and Privacy

By using the Services, you grant Karat a non-exclusive, royalty-free, license during the Term to collect, use, disclose, combine, transmit, format, and display Company Information, personal information, and any other information submitted by Company through the Services (collectively, "User Content"), for the purposes provided in the Privacy Policy available at: www.trykarat.com/privacy-policy or as otherwise set forth in this Agreement. Additionally you grant Karat the right to aggregate data we collect from your use of the Services ("Site Data") and use such Site Data for our business purposes. You also acknowledge and agree that by using the Services, User Content and Site Data will be collected, used, transferred to and processed in the United States. Karat uses commercially reasonable physical, managerial, and technical safeguards to preserve the integrity and security of your Company Information and implement your privacy settings. However, we cannot guarantee that unauthorized third parties will never be able to defeat our security measures and use User Content for improper purposes. You acknowledge that you provide User Content at your own risk. Your sale of future accounts receivables to Karat and your use of the Cards is subject to our privacy policy and the privacy policies of our Banking Providers. You acknowledge that it is necessary for us to record and monitor, for quality assurance, training, risk management and/or collection purposes, any call that you place with us (or our agents, representatives, affiliates, third parties or anyone calling on our behalf) or that we (or our agents, representatives, affiliates, third parties or anyone calling on our behalf) place to you.



4. Purchase of Receivables

A. General

Subject to and in accordance with the provisions of this Agreement, through and as part of the Services, you may request that Karat purchase your now existing and/or future accounts receivables related to your business (the “Receivables”) at an agreed-upon purchase amount (the “Payment Amount”) to be disbursed to you via the Karat Card. “Receivables” include current and all future payments made by cash, check, ACH, direct or pre-authorized debit, wire transfer, credit card, debit card, charge card or other form of payment related to your business.  The Payment Amount evidences a purchase of the Return Amount of Receivables and is not intended to be, nor will it be construed as, a loan from us to you.The amount of the Payment Amount we may provide to you is contingent on review by us of any factors we consider relevant, including, but with limitation, the accuracy of the information you provide, whether you have provided us access to your social media accounts and your Linked Bank Account (as defined below), established a direct deposit relationship between us and your Linked Bank Account, your repayment history with respect to any prior sales of Receivables to Karat, whether your Karat account is in good standing (if applicable), and our analysis of your income projections, the strength of your business, your ability to meet your obligations in this Agreement, and the purpose of the Payment Amount.  Each purchase of Receivables is a discrete transaction, and thus the Payment Amount offered by Karat will vary based on the status of these factors at the point in time at which you request that Karat purchase your Receivables.  We reserve the right to adjust eligibility criteria at any time in our sole discretion. We may request that you provide us with copies of, or access to, additional documents, materials and information to confirm the information you have provided or as part of underwriting the Receivables. If you are not willing to provide the requested information, or if the information is in our view insufficient or unsatisfactory, we reserve the right, in our sole and absolute discretion, to terminate this Agreement.

We reserve the right to decline to purchase any Receivables you offer to sell us or to revoke our acceptance of any such offer. No request to purchase Receivables is valid and binding upon us until we disburse the Payment Amount, which shall constitute our acceptance of your request. 

If Karat accepts your request, the Payment Amount, as agreed upon in written communication by Karat and you, shall be available as the Spend Limit on your Karat Card. 

Upon receipt of payment equal to the Payment Amount (the “Return Amount”), you may be eligible for, and may request, Karat to purchase subsequent Receivables. 

B. Sales and Purchase of Receivables

If we accept your request to purchase Receivables, we will pay you the Payment Amount, which will be disbursed to you via the Karat Card. You agree to sell to us, and we agree to purchase from you, all of your right, title, and interest in and to Receivables as provided in this Agreement. If, after we agree to purchase Receivables but before we fund the Payment Amount, you make payments on Receivables that we agreed to purchase from you and that remained undelivered, those payments will be deemed a partial payment of the Returned Amount under this Agreement. YOU UNDERSTAND AND AGREE THAT THIS IS A PURCHASE AND SALE TRANSACTION, NOT A LOAN. You agree to diligently engage in continuous activity that generates Receivables to be delivered in accordance with this Agreement.All transactions contemplated hereunder are solely for business purposes and not as a consumer for personal, family, household or investment purposes. You represent that you will only use the Payment Amount for the purchase of products or services necessary to operate your business. You will not direct or pay the Payment Amount, directly or indirectly, in any manner, to: (a) an affiliated or other non-arm’s length person (including yourself and your employees); or (b) any person or entity that is the target of any economic and trade sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department or other applicable jurisdictions.

1. Delivery of Receivables. 

Upon our payment of the Payment Amount or otherwise upon our initially making the amount of the Payment Amount available for your use with the Karat Card, (a) you sell, assign, and transfer to us, and we purchase from you, all of your right, title, and interest in or to the Return Amount and Receivables, and you will deliver on each Monthly Payment Date to us the Return Percentage of Receivables until we have received the Return Amount and any other amounts owed to us in accordance with this Agreement, and (b) you acknowledge that good, sufficient and valuable consideration has been received. 

You have and will maintain good, complete and marketable title to all Receivables, free and clear of any and all liabilities, liens, claims, charges, restrictions, conditions, options, rights, mortgages, security interests, equities, pledges and encumbrances of any kind or nature whatsoever or any other rights or interests that may be inconsistent with the transactions contemplated herewith, or adverse to our interests.

If you generate less Receivables than we anticipated or projected because your business has slowed down, or if the full Return Amount is not delivered because your business ceases operations in the ordinary course of business, and if you have not in any way otherwise breached this Agreement, you will deliver less than the Return Amount but may not be eligible for future sales of Receivables to Karat.

2. Procedures for Additional Purchases.You may also make requests for additional sale of Receivables after the Return Payment is made in full; provided, however, that Karat is under no obligation to purchase any Receivables. 

C. Representations, Warranties and Covenants of Company

For the term of this Agreement, you agree: (a) to conduct your business in good faith and use your best efforts to continue your business at least at its current level, to ensure that we obtain the Return Amount of Receivables from any platform on, or method with, which it is generated; (b) not to take any action to discourage us from receipt or collection of the Return Amount of Receivables, including disposing of assets used in the generation of Receivables, diverting Receivables or related funds to other bank accounts or platforms, or removing or changing any bank account or platform authorizations, log-in or access which you have provided to us (including usernames, password, email address or other log-in credentials); (c) not to enter into any cash advance, factoring or similar arrangement that relates to or involves your Receivables with any party other than us until the Return Amount of Receivables is delivered to us and any other amounts owed to us under this Agreement are paid to us; (d) not to enter into any loan agreement that is secured (without provision for release) by any Receivables; (e) to diligently continue engaging in activities that generate Receivables; (f) to comply with all laws, regulations, and other applicable requirements to the extent that such compliance is required in order for you to continue engaging in activities that generate Receivables; (g) that any representation, statement, certification, or information made or furnished to us by you or on your behalf, including information provided by you in our online forms and applications (including in connection with due diligence), is and will be true, accurate and complete; (h) to notify us immediately if we make a mistake in connection with the Payment Amount or your delivery of Receivables; (i) to return to us immediately any funds that we provided to you in error or that are subject to dispute; (j) to continue to share with us any banking, platform, account, data or other information we request related to Receivables; (k) that your execution and performance of this Agreement will not conflict with any other agreement you are a party to; and (l) that you have taken and will continue to take all measures necessary to attain and maintain eligibility to perform the services and activities you undertake to generate Receivables. 

You are, and after giving effect to this Agreement, you will be solvent. There are no actions, suits or proceedings by or before any arbitrator, court or governmental authority pending or threatened against you. You and any individuals executing this Agreement on your behalf authorize us, our agents, contractors and representatives and any credit reporting agency engaged by us to (i) investigate any references given or any other statements, information or data obtained from or about you for any purpose related to this Agreement and (ii) pull credit reports in connection with your eligibility to receive a Payment Amount, and at any time thereafter, so long as Receivables equal to the Return Amount have not been delivered to us, any obligation to us remains outstanding, or we are making a determination of your eligibility to enter into any other agreement with us.

You will not sell, dispose, assign, transfer or otherwise convey all or substantially all of your business or assets without first either (a) obtaining our prior written consent (which may include requiring you to obtain the written agreement of the purchaser or transferee assuming all of your obligations under this Agreement pursuant to documentation and terms satisfactory to us) or (b) paying in full the undelivered portion of the Return Amount of Receivables and any other amounts you owe us under this Agreement.

D. Repayment of the Purchase Price

On a monthly basis, on no later than the first (1st) business day of the month (“Monthly Payment Date”), you are required to remit 25% (the “Return Percentage”) of Receivables, until we have received the Return Amount and any other accounts owed to us in accordance with this Agreement.  You may choose to remit a higher percentage of your Receivables.  Your eligibility for any subsequent sale of Receivables hereunder is conditioned on full payment of any outstanding Return Amount and subject to Karat’s approval.  Without limiting the generality of your liability, you shall remit payment monthly as instructed in the applicable invoice or via deduction from your Linked Bank Account (as further described in Section 4(E) below). If the full Return Amount is never remitted because your business goes bankrupt or otherwise ceases operations in the ordinary course of business, and you have not breached this Agreement, you will not owe anything to Karat and will not be in breach of or default under this Agreement (see Section 4(F) for a description of events that trigger default under this Agreement).

Karat has no obligation to enter into subsequent agreements with you to purchase your Receivables if you (i) become insolvent or generally fail to pay your debts as they become due, or (ii) file a voluntary petition (or have an involuntary petition filed against you) in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other similar relief.


E. Linked Bank Account

You agree that all Receivables generated by your business will be deposited in the Linked Bank Account. You agree to instruct your payment processor to deposit all payments it processes for you into the Linked Bank Account. You agree not to change your Linked Bank Account or payment processor without our advance written consent. You will provide us with read-only access codes to your Linked Bank Account and agree not to change them without our advance written consent. We may access your Linked Bank Account, including to assess the amount of Receivables you have generated and to debit your Linked Bank Account. You will provide us any information we request to conduct this assessment. You understand that we would not make the Payment Amount without you providing the irrevocable debit authorization set forth below.

You hereby authorize Karat to deduct from one or more bank accounts provided by you (individually and collectively, “Linked Bank Account”) using the services of Modern Treasury, Inc. (“Modern Treasury”) or Plaid Inc. (“Plaid”), in Karat’s sole discretion, the Return Percentage of Receivables on or around the Monthly Payment Date until the full Return Amount is repaid to Karat. You understand that it is your responsibility to ensure that the Return Percentage of Receivables and any other amounts you owe us are always available in your Linked Bank Account. You are solely responsible for any fees or charges incurred from overdrafts or rejected transactions. If a transaction is rejected we may debit the Linked Bank Account again until the transaction is completed. You represent that the Linked Bank Account is used solely for business purposes. You understand this authorization will remain in effect and irrevocable. Karat may also terminate this authorization for any reason. If this authorization is terminated, you agree to make payments hereunder to Karat by other methods permitted by Karat. If the services of Plaid are used to process payments, you agree to abide by the End User Services Agreement of Plaid, available at https://plaid.com/legal/#end-user-services-agreement-us, and agree to the privacy policy of Plaid, available at https://plaid.com/legal/#end-user-privacy-policy. If the services of Modern Treasury are used to process payments, you agree to abide by the terms of service of Modern Treasury, available at https://www.moderntreasury.com/terms, and agree to the privacy policy of Modern Treasury, available at    https://www.moderntreasury.com/privacy. In the event Karat issues an invoice to you instead of deducting the applicable amount from your Linked Bank Account, you shall pay such invoice in accordance with the terms of this Agreement and the terms set forth in the invoice.

F. Events of Default

An event of default (each, an “Event of Default”) will occur if any of the following events occurs:

(a)failure to pay when due any amounts required to be paid by you under this Agreement (e.g., the Monthly Payment Date);

(b)Your breach of any representation or warranty in this Agreement;

(c)Your failure to satisfy any covenant or perform any obligation in this Agreement; or

(d)there exists or occurs any event or condition which Karat in good faith believes impairs, or is substantially likely to impair, the prospect of payment or performance by you.


G. Remedies

Upon the occurrence of an Event of Default as defined above, Karat may declare the entire unpaid Return Amount to be immediately due and payable. Karat may suspend or terminate any obligation it may have hereunder to make additional purchases of your Receivables.

To the extent permitted by law, you waive any rights to presentment, demand, protest, or notice of any kind in connection with this Agreement. No failure or delay on the part of Karat in exercising any right, power, or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided herein are cumulative and not exclusive of any other rights or remedies provided at law or in equity.


H. Reimbursement for Chargeback Fees

If you dispute a legitimate repayment charge in connection with charges on your Karat Card and your dispute claim is successful for any reason, you will be responsible for any dispute fees charged to Karat by your financial institution in addition to the repayment of the Return Amount. In such case, we may seek immediate repayment as provided in Section 4(D) for an amount equal to the Return Amount and any dispute fees charged to Karat.


I. Other

All payments due under this Agreement shall be made in U.S. Dollars using the payment methods set forth herein. If applicable, the Parties will cooperate reasonably in completing and filing documents required under the provisions of any applicable tax law or under any other applicable law in connection with the making of any required tax payment or withholding payment, or in connection with any claim to a refund of or credit for any such payment.

5. Karat Card

The Karat Card (the “Karat Card”), provided by one of our financial institution providers (each a “Banking Provider”), may be provided to you to receive Payment Amounts. The Karat Card is subject to the terms and conditions of the Cardholder Agreement. You may only use the Karat Card pursuant to the terms of this Agreement, the Stripe Spend Card Agreement and the Stripe Spend Card User Terms related to the Karat Card (together the “Cardholder Agreement”). You agree to the terms and conditions of the Cardholder Agreement available at    https://stripe.com/issuing/legal that are applicable to Authorized Users (as defined in the Cardholder Agreement). Karat may authorize you to transact business using the Karat Card as an Authorized User (as defined in the Cardholder Agreement). Your Karat Card is commercial in nature, and you acknowledge and understand that certain consumer protection laws (including the Electronic Funds Transfer Act or Regulation E) and consumer-specific rules (including NACHA rules specific to consumers) do not apply to your Karat Card and any transactions on your Karat Card.

You acknowledge and agree that the Karat Card is subject to rules and restrictions imposed by us, including with respect to withdrawal and spending rights. For your convenience, and without prejudicing any of our rights to receive the Return Percentage of Receivables and the Return Amount described herein, you may choose not to spend the entire amount of the Payment Amount on a single day.

You acknowledge and agree that the value available to you in your Karat Card Account is limited to the spend limit of your Karat Card Account as displayed in your Account dashboard (the “Spend Limit”), which will never exceed the Payment Amount. Nevertheless, if any transactions cause the current spend in your Karat Card Account as displayed in your Account dashboard (the “Current Spend”) to exceed your Spend Limit, including any purchase transactions where the retailer or merchant does not request authorization, you shall remain fully liable to us for the amount of any excess Current Spend and any corresponding transaction fees. You agree to pay us promptly for the excess Current Spend. We reserve the right to obtain the repayment directly from your Linked Bank Account (as defined below). We may also cancel your Karat Card Account. To the extent allowed by applicable law, you are responsible for the reasonable costs we incur in collecting amounts owed by you to us under this Agreement, including reasonable attorneys’ fees and costs.

Notwithstanding anything to the contrary, you agree that you shall be liable for any breach of the Cardholder Agreement and shall indemnify and hold harmless Karat and its affiliates, and the officers, directors, members, employees, representatives, shareholders, agents and attorneys of such entities from and against any and all claims, actions, liability, judgments, damages, costs and expenses, including reasonable attorneys’ fees (collectively, “Losses”), that may arise from (i) your actions or omissions in connection with the Karat Card, (ii) your breach of any terms of the Cardholder Agreement or this Agreement, (iii) any loss or theft of, or fraudulent transactions related to, the Karat Card, or (iv) your actions or omissions. You shall immediately destroy or return the Karat Card to Karat and cease using the Karat Card upon Karat’s request.

6. Third-Party Services, Links and Information

Using Modern Treasury and/or Plaid’s technology provides an easy way for you to connect your bank account and other financial accounts to Karat’s software applications in order to streamline your funding application or transfer money from/to Karat. While connecting your account(s), we urge you to review Plaid’s  End User Privacy Policy, End User Services Agreement, Cookie Policy, and  Privacy Policy and/or Modern Treasury’s Terms of Service and Privacy Policy.

As part of your Account application, you are required to submit your social media handles. We use Phyllo Inc. (“Phyllo”) to connect to your social media accounts to collect data to facilitate or enable the Services, such as the collection and verification of income and work details, fan following and engagement metrics directly from the creator platforms. By applying for an Account, you hereby agree to connect us to your social media accounts using Phyllo and to our using the data you grant us access to for purposes of providing the Services to you.

The Services may contain links to third-party materials that are not owned or controlled by Karat. Karat does not endorse or assume any responsibility for any such third-party services, information, materials, products, or Services. If you access a third-party website, application or service from the Services, you do so at your own risk, and you understand that this Agreement and Karat’s Privacy Policy do not apply to your use of such third-party services. You expressly relieve Karat from any and all liability arising from your use of any third-party websites, applications, services, or content.



7. Additional Services

As part of our Services, we may provide you with analysis or estimates. Any such information is illustrative and for informational purposes only. We base our analysis and estimates on certain assumptions and data that might be available to us. Our analysis and estimates are uniquely ours and are not endorsed by any third-party partner. Furthermore, any analysis or estimate is determined by our own proprietary methodology. As such, we may change, alter, or modify any methodology at any time and elect to emphasize, ignore, or alter certain factors in our sole and absolute discretion.

Our Services are intended to be utilized within the United States. We make no representations or warranties that the information, products, or services provided through our Services, or Karat IP, are appropriate for other jurisdictions. If necessary, we reserve the right to limit the availability of our Services to any person, geographic area, or jurisdiction, at any time and in our sole discretion.



8. Representations and Warranties; Indemnification

A. Representations and Warranties

You hereby represent, warrant, and covenant that:

1.You are a business entity that is organized, registered, and located in the United States;

2.You are validly existing and in good standing in your jurisdiction of organization;

3.You have the authority and the right to enter into this Agreement and to perform your obligations hereunder and that your obligations hereunder are not in conflict with any obligation you have to any third party;

4.Your entry into and performance under this Agreement shall not conflict with or cause a default under any other agreement to which you are a party, and you are not bound in any manner that would materially and adversely affect your ability to perform your obligations hereunder;

5.You have complied in all material respects with, and shall continue to comply in all material respects with, all applicable laws;

6.All information you provide to us is and will be current, accurate, and complete and fairly represents your financial condition, results of operations and cash flows at such dates, and since the dates therein, there has been no material adverse change in your business or its prospects or in your financial condition, results of operations, or cash flows;

7.You will use your Account exclusively for business purposes and not for any personal, family, or household use;

8.You have reviewed this Agreement and the terms, agreements, or policies incorporated by reference;

9.You own or have the necessary licenses, rights, consents, and permissions to all trademark, trade secret, copyright, or other proprietary, privacy, and publicity rights in and to your User Content and any other works that you incorporate into your User Content, and all the rights necessary to grant the licenses and permissions you grant hereunder;

10.Use of User Content in the manners contemplated in this Agreement shall not violate or misappropriate the intellectual property, privacy, publicity, contractual, or other rights of any third party; and

11.You shall promptly give written notice to Karat of any action, suit, investigation or proceeding pending or threatened against you.


B. Indemnity

You agree to defend, indemnify and hold harmless Karat and its subsidiaries, agents, licensors, managers, and other affiliated companies, and their employees, contractors, agents, officers and directors, our Banking Providers, and our third-party service providers, from and against any and all third-party claims, damages, obligations, losses, liabilities, costs or debt, and expenses (including but not limited to attorney’s fees) arising out of, related to, or resulting from: (a) your use of and access to the Services, including any data or content transmitted or received by you; (b) your violation of any term of this Agreement, including without limitation your breach of any of the representations and warranties above; (c) your violation of any third-party right, including without limitation any right of privacy or Intellectual Property Rights; (d) your violation of any applicable law, rule or regulation; (e) your intentional misconduct; or (f) any other party’s access and use of the Services with your username, password or other appropriate security code.



9. No Warranty

THE SERVICES ARE PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS. USE OF THE SERVICES IS AT YOUR OWN RISK. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE SERVICES ARE PROVIDED WITHOUT WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. NO ADVICE OR INFORMATION, WHETHER ORAL OR WRITTEN, OBTAINED BY YOU FROM KARAT OR THROUGH THE SERVICES WILL CREATE ANY WARRANTY NOT EXPRESSLY STATED HEREIN. WITHOUT LIMITING THE FOREGOING, KARAT, ITS SUBSIDIARIES, ITS AFFILIATES, AND ITS LICENSORS DO NOT WARRANT THAT THE INFORMATION PROVIDED TO YOU THROUGH THE SERVICES IS ACCURATE, RELIABLE OR CORRECT; THAT THE SERVICES WILL MEET YOUR REQUIREMENTS OR ARE SUITABLE OR FIT FOR PURPOSE; THAT THE SERVICES WILL BE AVAILABLE AT ANY PARTICULAR TIME OR LOCATION, UNINTERRUPTED OR SECURE; THAT ANY DEFECTS OR ERRORS WILL BE CORRECTED; OR THAT THE SERVICES ARE FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS. ANY CONTENT DOWNLOADED OR OTHERWISE OBTAINED THROUGH THE USE OF THE SERVICES IS DOWNLOADED AT YOUR OWN RISK AND YOU WILL BE SOLELY RESPONSIBLE FOR ANY DAMAGE TO YOUR COMPUTER SYSTEM OR MOBILE DEVICE OR LOSS OF DATA THAT RESULTS FROM SUCH DOWNLOAD OR YOUR USE OF THE SERVICES. KARAT DOES NOT WARRANT, ENDORSE, GUARANTEE, OR ASSUME RESPONSIBILITY FOR ANY PRODUCT OR SERVICE OFFERED BY A THIRD PARTY THROUGH THE SERVICES OR ANY HYPERLINKED WEBSITE OR SERVICE, AND KARAT WILL NOT BE A PARTY TO OR IN ANY WAY MONITOR ANY TRANSACTION BETWEEN YOU AND THIRD-PARTY PROVIDERS OF PRODUCTS OR SERVICES.



10. Limitation of Liability

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL KARAT, ITS AFFILIATES, AGENTS, DIRECTORS, EMPLOYEES, SUPPLIERS OR LICENSORS BE LIABLE FOR ANY INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFITS, GOODWILL, USE, DATA OR OTHER INTANGIBLE LOSSES, ARISING OUT OF OR RELATING TO THE USE OF, OR INABILITY TO USE, THE SERVICES. UNDER NO CIRCUMSTANCES WILL KARAT BE RESPONSIBLE FOR ANY DAMAGE, LOSS OR INJURY RESULTING FROM HACKING, TAMPERING OR OTHER UNAUTHORIZED ACCESS OR USE OF THE SERVICES OR YOUR ACCOUNT OR THE INFORMATION CONTAINED THEREIN.TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, KARAT ASSUMES NO LIABILITY OR RESPONSIBILITY FOR ANY (I) ERRORS, MISTAKES, OR INACCURACIES OF CONTENT; (II) PERSONAL INJURY OR PROPERTY DAMAGE, OF ANY NATURE WHATSOEVER, RESULTING FROM YOUR ACCESS TO OR USE OF OUR SERVICES; (III) ANY UNAUTHORIZED ACCESS TO OR USE OF OUR SECURE SERVERS AND/OR ANY AND ALL PERSONAL INFORMATION STORED THEREIN; (IV) ANY INTERRUPTION OR CESSATION OF TRANSMISSION TO OR FROM THE SERVICES; (V) ANY BUGS, VIRUSES, TROJAN HORSES, OR THE LIKE THAT MAY BE TRANSMITTED TO OR THROUGH OUR SERVICES BY ANY THIRD PARTY; (VI) ANY ERRORS OR OMISSIONS IN ANY CONTENT OR FOR ANY LOSS OR DAMAGE INCURRED AS A RESULT OF THE USE OF ANY CONTENT POSTED, EMAILED, TRANSMITTED, OR OTHERWISE MADE AVAILABLE THROUGH THE SERVICES; AND/OR (VII) USER CONTENT OR THE DEFAMATORY, OFFENSIVE, OR ILLEGAL CONDUCT OF ANY THIRD PARTY. IN NO EVENT SHALL KARAT, ITS AFFILIATES, AGENTS, DIRECTORS, EMPLOYEES, SUPPLIERS, OR LICENSORS BE LIABLE TO YOU FOR ANY CLAIMS, PROCEEDINGS, LIABILITIES, OBLIGATIONS, DAMAGES, LOSSES OR COSTS IN AN AMOUNT EXCEEDING $100.00. THIS LIMITATION OF LIABILITY SECTION APPLIES WHETHER THE ALLEGED LIABILITY IS BASED ON CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY, OR ANY OTHER BASIS, EVEN IF KARAT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE FOREGOING LIMITATION OF LIABILITY SHALL APPLY TO THE FULLEST EXTENT PERMITTED BY LAW IN THE APPLICABLE JURISDICTION.



11. Term and Termination

This Agreement is effective when you start using our Services and continues until terminated by either you or us, or in accordance with the Account Agreements or as otherwise set forth in this Agreement (the "Term"). You may terminate this Agreement by paying all amounts you owe and providing notice to us; except that you will still be responsible for any charges, fees, fines, and other losses caused by your action or inaction prior to terminating this Agreement. We may terminate this Agreement, or suspend your Account, at any time for any reason by providing you notice.


12. Changes

This Agreement is effective as of the Last Modified date stated at the top. We may change this Agreement from time to time. Any such changes will be posted on the Site. By accessing the Services after we make any such changes to this Agreement, you are deemed to have accepted such changes. Please refer back to this Agreement on a regular basis.

We may add Services or modify existing Services at any time. Some of these Services will be subject to additional terms. You acknowledge and understand that in order to use certain Services, you must agree to the additional terms that we will provide separately from this Agreement, and which will be incorporated by reference and form a part of this Agreement.

We do not guarantee that each of the Services will always be offered to you, that they will be available to you, or that you will qualify or be able to utilize any particular Service. Services will change from time to time, and certain Services may be discontinued or others may be added.



13. Governing Law, Arbitration, and Class Action/Jury Trial Waiver

A. Governing Law

You agree that: (i) the Services shall be deemed solely based in California; and (ii) the Services shall be deemed passive ones that do not give rise to personal jurisdiction over us, either specific or general, in jurisdictions other than California. This Agreement shall be governed by the internal substantive laws of the State of California, without respect to its conflict of laws principles. The parties acknowledge that this Agreement evidences a transaction involving interstate commerce. Notwithstanding the preceding sentences with respect to the substantive law, any arbitration conducted pursuant to the terms of this Agreement shall be governed by the Federal Arbitration Act (9 U.S.C. §§ 1-16). You agree to submit to the personal jurisdiction of the federal and state courts located in Los Angeles County, California for any actions for which we retain the right to seek injunctive or other equitable relief in a court of competent jurisdiction to prevent the actual or threatened infringement, misappropriation or violation of our copyrights, trademarks, trade secrets, patents, or other intellectual property or proprietary rights, as set forth in the Arbitration provision below, including any provisional relief required to prevent irreparable harm. Subject to Section 13(B), you agree that the federal or state courts located in Los Angeles County, California are the proper forum for any appeals of an arbitration award or for trial court proceedings in the event that the Arbitration provision below is found to be unenforceable.


B.   Arbitration

READ THIS SECTION CAREFULLY BECAUSE IT REQUIRES THE PARTIES TO ARBITRATE THEIR DISPUTES AND LIMITS THE MANNER IN WHICH YOU CAN SEEK RELIEF FROM KARAT. For any claim, dispute, or controversy with Karat (a "Claim"), you agree to first contact us at concierge@trykarat.com and attempt to resolve the dispute with us informally. In the unlikely event that Karat has not been able to resolve a dispute it has with you after sixty (60) days, such dispute will be finally and exclusively resolved by binding arbitration governed by the Federal Arbitration Act (“FAA”). Any election to arbitrate, at any time, shall be final and binding on the other party. NEITHER PARTY SHALL HAVE THE RIGHT TO LITIGATE SUCH CLAIM IN COURT OR TO HAVE A JURY TRIAL, EXCEPT EITHER PARTY MAY BRING ITS CLAIM IN ITS LOCAL SMALL CLAIMS COURT, IF PERMITTED BY THAT SMALL CLAIMS COURT RULES AND IF WITHIN SUCH COURT’S JURISDICTION. ARBITRATION IS DIFFERENT FROM COURT, AND DISCOVERY AND APPEAL RIGHTS MAY ALSO BE LIMITED IN ARBITRATION. All disputes will be resolved before a neutral arbitrator selected jointly by the parties, whose decision will be final, except for a limited right of appeal under the FAA. The arbitration shall be commenced and conducted by JAMS pursuant to its then current Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those rules, or, where appropriate, pursuant to JAMS’ Streamlined Arbitration Rules and Procedures. All applicable JAMS rules and procedures are available at the JAMS website www.jamsadr.com. Each party will be responsible for paying any JAMS filing, administrative, and arbitrator fees in accordance with JAMS rules. Judgment on the arbitrator’s award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. The arbitration may be conducted in person, through the submission of documents, by phone, or online. If conducted in person, the arbitration shall take place in Los Angeles County, California or as otherwise agreed between the parties. The parties may litigate in court to compel arbitration, to stay a proceeding pending arbitration, or to confirm, modify, vacate, or enter judgment on the award entered by the arbitrator. The parties shall cooperate in good faith in the voluntary and informal exchange of all non-privileged documents and other information (including electronically stored information) relevant to the Claim immediately after commencement of the arbitration. Nothing in this Section shall be deemed as preventing either party from seeking injunctive or other equitable relief from the courts as necessary to prevent the actual or threatened infringement, misappropriation, or violation of its data security, Intellectual Property Rights or other proprietary rights. Proceedings and information related to them will be maintained as confidential, including the nature and details of the Claim, evidence produced, testimony given, and the outcome of the Claim, unless such information was already in the public domain or was independently obtained. Company and Karat, and all witnesses, advisors,


C. Class Action Waiver

You agree that any arbitration or proceeding shall be limited to the Claims between us and you individually. To the full extent permitted by law: (i) no arbitration or proceeding shall be joined with any other; (ii) there is no right or authority for any Claim to be arbitrated or resolved on a class action basis or to utilize class action procedures; and (iii) there is no right or authority for any Claim to be brought in a purported representative capacity on behalf of the general public or any other persons. YOU AGREE THAT YOU MAY BRING CLAIMS AGAINST US ONLY IN YOUR INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING.



14. General

A. Assignment

This Agreement, and any rights and licenses granted hereunder, may not be transferred or assigned by you, but may be assigned by Karat without restriction. Any attempted transfer or assignment in violation hereof shall be null and void.


B. Notification Procedures and Changes to the Agreement

You consent to us providing notices to you under this Agreement electronically and understand that this consent has the same legal effect as a physical signature. We will provide notices to you electronically through your Account, and via text or SMS to the phone numbers provided to us by Administrators and Users. If you sign up to receive certain Karat notifications or information via text or SMS, you may incur additional charges from your wireless provider for these notices. You agree that you are solely responsible for any such charges. Notices affecting the terms of this Agreement will be sent to Administrators and are considered received 24 hours after they are sent. You understand that you may not use the Services unless you consent to receive notices from us electronically. You may only withdraw consent to receive notices electronically by closing your Account. Notices may include alerts about the Services, your Account, your Card(s), and your Monthly Payments and may provide Administrators and Users the ability to respond with information about transactions or your Account. Administrators and Users may disable notification preferences to limit the use of certain Service features or to decrease financial risks to the Company. Administrators and Users are required to maintain a regularly updated web browser, and computer and mobile device operating systems to receive notices correctly. Administrators and Users will be responsible for all costs imposed by internet or mobile service providers for sending or receiving notices electronically. Contact us immediately at: concierge@trykarat.com  if you are having trouble receiving notices from us. For further information, please review our Electronic Communications Agreement available here: www.trykarat.com/electronics-communications-agreement


C. Entire Agreement/Severability

This Agreement, together with any amendments and any additional agreements you may enter into with Karat in connection with the Services, shall constitute the entire agreement between you and Karat concerning your Account and the Services. If any provision of this Agreement is deemed invalid by a court of competent jurisdiction, the invalidity of such provision shall not affect the validity of the remaining provisions of this Agreement, which shall remain in full force and effect, except that in the event of unenforceability of the universal Class Action/Jury Trial Waiver, the entire arbitration agreement shall be unenforceable.


D.   No Waiver

No waiver of any term of this Agreement shall be deemed a further or continuing waiver of such term or any other term, and Karat’s failure to assert any right or provision under this Agreement shall not constitute a waiver of such right or provision.


E. Legal Orders

We may respond to and comply with any subpoenas, warrants, liens, or any other legal order we receive related to your use of the Services. We are not responsible to you for any losses you incur due to our response to such legal order. We may hold funds or provide information as required by the issuer of the legal order or take any other actions we believe are required of us under legal orders. Where permitted, we will provide you reasonable notice that we have received such an order.


F. Survival

Sections 1C (Account Management), 2 (Our Proprietary Rights), 3 (Site Data and Privacy), 4C (Representation, Warranties and Covenants of Company), 4D (Repayment of the Purchase Price), 4G (Remedies), 4H (Reimbursement for Chargeback Fese), 8 (Representations and Warranties; Indemnification), 9 (No Warranties), 10 (Limitation of Liability), 11(Term and Termination), 13 (Governing Law, Arbitration, and Class Action/Jury Trial Waiver), and this Section 14 (General), and any other provisions of this Agreement giving rise to continued obligations of the parties will survive termination of this Agreement.