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FILED: NEW YORK COUNTY CLERK 09/24/2019 03:06 PM INDEX NO. 650313/2019
NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 09/24/2019
EXHIBIT 1
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SUPREME COURT
COUNTY OF NEW YORK STATE OF NEW YORK
AMERICAN EXPRESS NATIONAL BANK, Index No.
Plaintiff,
- vs. -
SUMMONS
CLASSIC BRANDS, LLC, THE, Plaintiff s address:
4315 S. 2700 West
Salt Lake City, UT 84148
To: CLASSIC BRANDS, LLC, THE
C/O AGENT: SUNG HEE CHUN
1300 S SAN PEDRO STE 122
LOS ANGELES, CA 90015
YOU ARE HEREBY SUMMONED to answer the Compl±t in this action and to
serve a copy of your Answer on the attorneys for plaintiff within 20 days after the service of the
Sn.mmon, exclusive of the days of service (or within 30 days after the service is complete ifthis
summons is not personally delivered to you within the State of New York); and in case of your
failure to appear or answer, judgment will be taken against you by default for the relief
demanded herein. The basis of venue is the governing agreement.
DATED:
[ ] DANIEL MOKEN, ESQ.
19t} CARL ZAPFFE, ESQ.
[ ] TIFFANY MCAVOY, ESQ.
ZWICKER & ASSOCIATES, P.C.
A Law Firm Engaged in Debt Collection
100 CORPORATE WOODS, SUITE 230
ROCHESTER, NY 14623
Please send allresponses and mailings to the following:
30 Knightsbridge Road, Suite 525
Piscataway Twp., NJ 08854
(855)427-7433
LITIGATIONZAPC@ZWICKERPC.COM
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SUPREME COURT
COUNTY OF NEW YORK STATE OF NEW YORK
AMERICAN EXPRESS NATIONAL BANK, Index No.
Plaintiff, COMPLAINT
- vs. -
CLASSIC BRANDS, LLC, THE,
Defendant(s).
PLAINTIFF, by and through itsattorneys, Zwicker & Associates P.C., compli=ing of
Defendant(s), respectfully alleges upon information and belief.
FOR A FIRST CAUSE OF ACTION
1. Plaintiff is a National Bank located in Utah.
2. CLASSIC BRANDS, LLC, THE is a business entity.
3. Defendant/s) executed and delivered to the Plaintiff a Business Loan and Security
Agreement (hereinafter "Agreement"), a true and exact copy of which is appended hereto and
marked Exhibit A.
4. The Plaintiff disbursed funds to Defendant(s) pursuant to the terms of the Agreement.
5. Plaintiff notified Defendant(s) of the date of loan disburscment and maturity date by
providiñg Defendant(s) with a Maturity Date Notice, a true and exact copy of which is appended
hereto and marked Exhibit B.
6. Defendant(s) breached the Agreement by failing to make payments in accordance with the
terms of the Agreement.
7. The following identifies the loan that was disbursed by Plaintiff pursuant to the Agreement
and the balance due:
Account **8634 ($230,833.37)
8. Jurisdiction and venue are establislied pursuant to the Agree1ñeñt which provides that venue
for any litigation shall be an appropriate federal or state court located in the State of New York.
FOR AN ALTERNATIVE SECOND CAUSE OF ACTION
9. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 8.
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10. Plaintiff duly stated an acc0üñt to the Defandant(s) in the above amount and the same was
retained without objection.
11. By reason thereof, an account was taken and stated between the parties hereto.
WHEREFORE the Plaintiff,AMERICAN EXPRESS NATIONAL BANK, dcmañds
judgment against the Defendant(s), CLASSIC BRANDS, LLC, THE, for the sum of
plus the costs and disburs=n+= ofthis and for such other and further relief
$230,833.37, action,
as the Court deems just and proper.
DATED:
[ ] DANIEL MOKEN, ESQ.
pCARL ZAPFFE, ESQ.
] TIFFANY MCAVOY, ESQ.
ZWICKER & ASSOCIATES, P.C.
A Law Firm Engaged in Debt Collection
100 CORPORATE WOODS, SUITE 230
ROCHESTER, NY 14623
Please send allresponses and mailings to the following:
30 Knightsbridge Road, Suite 525
Piscataway Twp., NJ 08854
(855)427-7433
LITIGATIONZAPC@ZWICKERPC.COM
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EXHIBIT A
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~
BUSINESS LOAN AND SECURITY AGREEMENT
[Agreement/Finance JD ¹ ~634- [
This --:l==:: Loan and SecurityA —.==.=.".: (this
"~Aeement ) datedJune 13 20)S is betweeaAmerican
Lender" the' Borrower"
Bapress Natlonal Bank ( ) and r listed
below ( ).
Business LegalName: CLASSIC BRANDS, LLC, THE
".-„—.-
D/B/A: OWLFISH State of
sn don/Organization: CA
Type of entity(checkone): p sole proprietorship K other
Physicaladdress: 1202 S Mateo St
City: LOS ANGELS State: CA Zip: 90021
Mailing address. 1202 S Mateo St
City: LOS ANGELS State: CA Zip: 90021
Date businessstarted(mm/yy): 03/15 FederalJD or SS¹:
Merchant 0 ~8634 Contact name: Sunghee Chun
Position: Officer(CEO, CFO, President,VP, etc.) Phone: 2134891770 Fax.
~
E-mail:tcbowlf"hQ~ -'.corn
Web Site: www.owlfish.corn
Bank
ABA
name:
(Bank
BANK
Routing)
OF HOPE
Number: ~ DDA (Bmk Accouat) Number:
$250,000.00 ——
—
Loan: R -.—.
Rate: 11 /o
This Agreement requires Borrower to pay Lender certain feesand charges.These fees and charges include,but are not
limitedto,a Loan Fee equal to 11% of theoriginalprincipal balance of theLoan, as wellas thoseother fees describedin
Section7.3 below.
~ ~
M' "
Bank name: Wells Fargo Bank, N.A. City: =p"'gs State: ¹.
I)ttf'""=s
ABA (Bank Routing)Number: DDA (Bark Account) Number:
De~"' "youu"
1. Parties '"= . InthisA==-:===-::-.', the
words your receiptof theLoan forthese or any otherreasons you
and'~our" "we",mus" andmour"
refertoBorrower. The words agree that there will be no adverse consequence to us.
"
referto Lender snd itssuccessors or assigns,a--4 -'--a
any However, ifthe principalamount of theLoan, the Loan Fee
ee" ~~"usm¹u due
A~sst ss deftnedinSection 13. and allother under thisAgreement (such sum
" Balance"
2. EffectiveDate Term. The term of thisAgreement (the the "Outstandin ) have been paid prior to the
Term" e-.-w.—
) beginson the date we accept itatour home officein Maturity Date, and you have done z~.s, else you are
the StateofUtah by sending you the Loan (the"EffectiveDate requiredto do underthisAgreement, at yourelectionand with
"),and ends on the second auniversaryafierthe disbursement 10 days priorsigned noticetous, theTerm willend and you
Date"
f theinitial
Loan {the "~Maturi ). You understand snd wig have no futther ="':.'-::=to us under thisAgreement
agree thatwe are notrequired to sendyou theLoan untilyou (other than those ==" that survive
-"'-'g expressly the
have m"oum" " us with all documents and met all e.='""'"" or "-=..='=="':=:
of thisAgreement pursuant to the
fully
conditionsrequiredby thisAgreement. Ifthereis a delayin terms hereof).
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3. Loan. Subject to Section2, we agree tolend to you the ANY CIRCUMSTANCE WHATSOEVER, AND THAT
Loan in an aggregate amount equal tothe amount set forthin SUCH OBLIGATIONS SHALL NOT BE AFFECTED
Section B hereto. We will notify you as provided in this BY ANY COUNTERCLAIM, SET-OFF,
"
Agreement of the date of Loan disbursement (the RECOUPMENT, OFFSET, DEFENSE OR OTHER
Disbursement Date") and Maturity Date spplicableto this . ALLEGEDRIGHT AGAINST US.
Agreement; you and we agreethatthe DisbursementDate and 7. Method ofRepayment.
Maturity Date set forthin such notice (the "MaturityDate 7.1. Payment through Setdement Amounts.
Notice") constitutea part of and are incorporated into this (a) SettlementAmounts. For purposes hereof,
Amounts"
Agreement. "Settlement shallmean, forany applicable period,
4. IntentionallyOmitted. allproceeds, settlements,payments or other amounts with
5. Use of Loan Proceeds. You representto us and agree respectto allforms ofbank cardsand otherpayment devices
thatthe principal
amount of the Loan willbe usedfor business used by you for electronictransactions(whetheror notsuch
purposes only. Such business purposes would (by way of devices were in use when this Agreement was made),
illustration
and not limit".c:) typicallyinclude: (a) buying including credit, debit,charge, smart, cicet-cnic benefit
scrchandise, inventoryor related
goods you willrent orsellto transfer,contactlessand RFID-enabled cards (collectively,
your customers, (b)buying equipment or othergoods for use the "Cards")thatyou receive.
inyour business, (c) or
training otherservicesneeded by your (b) Repayment Rate. The initialRepayment Rate isset
business,and/or (d) making improvements to your business forthinSection B ofthisAgreement.
location(butnot to buy realestate).Yourepresentand warrant (c) Intendonally 0mitted.
thatyou willnot use any portion of the Loan to repay any (d) SettlementAmounts. We willreceive(through your
outstanding debt or satisfyany obligationto any of our Card Processor (as defined
below) in the Transfer
Account (as
affiliates,
L=cluding,without limitation,American Express defmed in Section 7.8 of thisAgreement)) the Scttic-:nt
Travel Related Services Company, Inc. ("AETRS"). Amounts. Subject to the terms and condi*iens of this
REGARDLESS OF ANYTHING ELSE STATED IN THIS Agreement and except as otherwiseprovided herein,we will
AGREEMENT, YOU ACKNOWLEDGE AND AGREE pay to youto the DesignatedAccount allSettlementAmounts
THAT: (A) YOU WILL USE THE PRINCIPAL AMOUNT receivedin theTransfer Account (subjectin allcasesto the
OF THE LOAN (AND THE GOODS OR SERVICES YOU Minimum Account Balance) less theRepayment Rate ofsuch
BUY WITH THE PRINCIPAL AMOUNT) SOLELY FOR SettlementAmounts; provided that,notwithstandinganything
BUSINESS PURPOSES AND NOT FOR CONSUMER, in this Agreement or your agreement with your Card
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES; (B) Processorto thecontrary,you acknowledge and agree that
(x)
YOU WILL NOT USE THE PRINCIPAL AMOUNT OF THE such amounts paid to you with respect to the Settlement
LOAN TO FUND D1VIDENDS OR DISTRIBUTIONS TO Amounts may be delayed by one (1)or more business days
YOUR SHAREHOLDERS, PARTNERS, MEMBERS OR and thatwe have no for
liability auch delay,(y)debitsfrom
OTHER OWNERS OF AN EQUITY INTEREST IN YOUR the Transfer Account made by your Card Processor may
BUSINESS; AND (C) THIS LOAN IS NOT A "CONSUMER reduce the funds available for payment of the Loans and
TRANSACTION"
AS DEFINED IN THE UN1FORM dist-ibutioñ
to you,and (z) we shallhave no for
liability any
COMMERCIAL CODE ("UCC"). failure,
refusal,ordelay ofany thirdparty processorto make
6. Promise to Pay. In exchange for us loaning you the payment into the Transfer Account. For purposes of this
you promise to us the principal Processor"
Loan, unconditio=¹1y pay Agreement, "Card means the thirdpartyacquirer
amount of theLoan, the Loan Fee and allotheramounts this or other serviceprovider that pays you the Settlement
Agreement requiresyou to pay.You agree tomake payments Amounts.
to us inthemanner statedin Section7 of thisAgreement. As (e) Amounts received in repayment of the Loan are not
part of your agreement to repay us without conditions,you subjectto a refund.
YOU ACKNOWLEDGE AND AGREE
waive (both as to the original Loan and any renewal, THAT WEARE MAKING YOU A LOAN AND NOT AN
extension, refinancing or consolidation of the Loan): (a) OUTRIGHT PURCHASE OR DISCOUNTING OF
protest,demand and presentment: (b) notice of dishonor, RECE1VABLES. YOU MUST PAY US ALL AMOUNTS
protestor suit;
(c) allothernotices or requirementsnecessary DUE UNDER THIS AGREEMENT WHETHER OR
to hold you liablehereunder; and (d)allrights ofexempEon NOT THE SETTLEMENT AMOUNTS ARE ENOUGH
under theconed+=h or lawsof stateasto realorpersonal TO PAY THOSE AMOUNTS.
any
property. YOU AGREE THAT YOUR OBLIGATIONS 7.2. Scheduled Paymens; Due Date; Repayment Rate
UNDER THIS AGREEMENT ARE ABSOLUTE AND Adjustment.
UNCONDITIONAL, AND SHALL CONTINUE (a) We willapply an amount equal to theRepayment
IN FULL FORCE AND EFFECT REGARDLESS OF Rate of the Amounts
Settlement we receivein the Transfer
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Account pursuant to Section 7.1(d) "Loan
(callectively, (e) Itis possible
to calculate
an implicit
interest
ratebased
to thee-enata you owe us.We will upon the principal
amount of the Loan the dateand
Remittances") m±±±, advanced,
in accordancewith our customary pm::±mes, a loanaccount amount of paymentsreceivedwith respectto the Loanand the
inyour name in which we willrecord thedate and amount of Loan Fee or any other fees paid (the "Implicit Rate").
the Loan and the dateand amount of each payment inrespect However, thisAgreement does not have an interest
rate and
of the Loan (including all Loan Remittances); provided. you agree that, other than as provided in Section7.3 or
however, our failure
to recordthedate and amount of the Loan Section 15, we have no obligation to adjust either the
shallnot adversely affect us. Each month, we shall make Repayment Amount or amount of the Loan Fee ifyour
availableto you a statement thea. for the volume of Loan Remittancesis greater
or less than
what either
showing =ting
Loan made, and the payments made or credited in respect of us anticipated
at thetime we made thisAgreement. You
thereof.The monthly statements shallbe deemed correctand also aclGGwIcdge and agree that,ifyour volume of Loan
binding upon you in theabsence ofmanifest errorand shall Ra-lh-ces is greater
than what either
of us anticipated
at the
constitutean account statedbetween us and you unless we time we made thisAgreement or you incurfees,theeffective
receive a signed statementof your specific
exceptions thereto interest
rateunder thisAgreement may be higher than the
within thirty
(30)days aftersuch statementis receivedby you. Implicit
Rate.
Our records with respect to the loan account shall be 7.3. Fees. Subjectto Section15, upon theDisbursement
conclusive evidenceabsentmanifest errorof theamount of the Date, you agree we shallhave earned
fully a non--mad-hi-
Loan and other charges thereto and of payments applicable fee (the"Loan Fee") equal to 11% ofthe originalprincipal
thereto. balance ofthe Loan. The Loan Fee willbe payable upon the
(b) Unless accelerated pursuantto Section 9.2,the Loan, earliest
to occurof date upon
(a) the which the Loan is repaid
togetherwith theLoan Fees as described
in Section7.3, is due infull,
(b)the Maturity Date or (c)the date theamounts due
and payable in a-da-ce with the cmnulative payment under thisAgreement pursuant
are accelerated toSection9.2.
schedule (the"Payment Schedule")thatwillbe included in the Nee":"r:*.-;; the foregoing,provided that no Event of
Matarity Date Notice.The Payment Schedule contained inthe Default has occurred, ifthe Outstanding Balance has been
Maturity Date Notice constitutes
a partof and is incorporated repaidin fullwithin (i)360 days of the Disbursement Date,
into this Ag=cment An ee+ir=etedcuisalative payment you willreceivea rebateequal to 25% ofthe Loan Fee; or(ii)
schedule isattached heretoas Schedule A. For the avoidance 540 days ofthe Disbursement Date, you willreceivea rebate
of doubt, the cumulative payment schedule set forth in equalto 10% of the LoanFee.
Schedule A is onlyan estimate;you are obligatedtorepay the 7.4. IntentionallyOmitted.
Loan, together with the Loan Fees, in accordance with the 7.5. Contact With Card Processors. You hereby (a)
Payment Schedule thatwillbe provided to you in the
Maturity authorize us to contactyour Card Processor or any of your
Date Notice. In any month thatthe minimum e-=ustive past,present or futureprocessors to obtainany info*ma+ien
payment specifiedin the Payment Schedule (the "Minim= thatwe deem necessary or appropriateregardiñgany of your
Payment") fora given dateis notmet, the difference
between or their with
transactions such processors,(b)authorize us to
the Mi:±= Payment and the actualLoan Pa-i*-ces instruct
your Card Processors toadjustthe Rapayment Rate in
receivedas ofsuch date willbe deemed tobe past due.In the accordance with thisAg-e=2=± and (c)sn'he-is and direct
eventthat anyportion of theOü†±==Æng Balance become past such Card Processorsto provide us with allsuch infonnation
due, we may increasethe Repayment Rate to 100% untilno at Borrower's expense and make any requested changesto the
portionof the OutstandingBalance is past
due. Repayment Rate.
the Balance Account"
(c) Upon the MaturityDate, Out•t=ading shall 7.6. DesignatedAccount The "Designated is
be immediately due and payable in full.Such
payment shallbe the bank accountinto which you receive SettlementAmounts
made promptly by a payment method of which we willnotify for Card transactions from your Card Processor. You
you. Thereafter,untilthe OutstandingBalance ispaid in full, -p-sent, warrantand agree that,
as ofthe EffectiveDate, the
the Repayment Rate will be increased to 100%, and your bank account listed
in SectionA of thisAgreement (a)was
obligationsunder thisAgreement shallcontinue in fullforce establishedforbusinesspurposes and continues to be usedfor
and effect. businesspurposes and (b) is the Designated Account. If
(d) After the ecc=ence and during the cstissce of an we or any ofour affiliates
transfer
to the DesignatedAccount,
Event of Default, we also willhave theright, but not the any otheraccount held byyou, or any accountheld by one of
Gbligation,in our sole credit judgment to increase the your owners, shareholders, partners,membcis, principals,
Repayment Rate,temporarily or p-manaa+ly. OUR RIGHTS officemfirectorsor employees (each,a "Principal"),any
funds
UNDER THIS SECTION 7.2(d)ARE IN ADDITION TO, thatshould have been appliedto theamounts due to us under
AND DO NOT LIMIT IN ANY WAY, OUR RIGHTS thisAgreement, or ifyou otherwisehave monies deposited in
AND REMEDIES UNDER SECTION 9.2. your or any Principal's
accountsthat otherwiseshouldhave
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amounts due to us underthis you "ML-ir.- Account Balance"). You agree that and all
been applied to Agreement, any
immediately shallpay or cause the Principalto pay tous all initial
SettlementAmounts received in theTransferAccount
such funds. shallbe used to satisfythe required Minimum Account
7.7. ThmsferAccount. Balance. Notwithstanding anything in thisAgreement to the
(a) You confirm thatyou have instructed,and shall contrary,you acknowledge and agree that ifthe amount of
cause, your Card Processors to immediately forward all TransferFunds on depositin the Transfer
Account at any time
SettlementAmounts to the Transfer
Account. We may transfer and from time to time does not meet or falls below the
the funds on deposit in the TransferAccount to an account Minimum Account Balance,the Loans and the amounts paid
owned by us and co-Wed with ow generalfunds and no to you with respectto the Settlement Amounts shall be
such ---+= shallbe deemed to be heldin trust
foryou. You suspended or terminated,at our unless and until
the
option,
hereby represent, warrant and agree that,all Settlement Minimum Account Balance in the Transfer Account is
Amounts shallimmediately be paidto the TransferAccount.If restored.Without limitingthe foregoing,upon demand by us,
you receiveany.S=++1ement Amounts, you shall,
promptly upon you shall deposit with us (for further distribüGunto the
receiptand inany event within one (1)business dayof receipt Transfer Account) additiuuà cash to restorethe w---
thereof, forward such Settlement Amount directlyto the Account Balance at any timeand fromtime to time.
Transfer Account in the form received, togetherwith any (c) You agree to reimburse us for allfees, costsand
necessary endorsements, in form and substance acceptableto expenses incurred by us in ccññccticñ with the Transfer
us. Untilso forwarded,such SettlementAmounts shallbe held Account relatedto a rejected
ACH transaction.
in trust for our benefit. For the avoidance of doubt, all (d) You hereby(i)authorizeus, or ourdesignee,to open
"
collectedand available funds in theTransfer Account (the an accountwith Wells Fargo Bank, N.A. titled
in our name,or
Transfer Funds") shallat all
times be under oursole deminion our designee for your benefit(the "TransferAccount") and
and control,and you shallhave no rightto withdraw,transfer, (ii)agreeto provide to us and Wells Fargo Bank, N.A. all
have controlover or otherwise
the use of have access to, either information,d~m=~* and agreements and take other
any
the TransferAccount or the TransferFunds at any time. No actions requiredby federal regulations,Wells Fargo Bank,
interestshallbe payable on theTransferFunds. You and each N.A. procedure or otherwiseto open the Transfer Account.
Signing Principal hereby irrevocably audicriza us (such For theevoid--ce ofdoubt, you shallhaveno rightto,or right
authoàa+ion being coupled with an interest)to debit or of ownership in,the TransferAccount or theTransferFunds
otherwise withdraw (viathe ACH system, electronic
checks, at any time.If thisAgreement isexecuted and deliveredby
wires or otherwise)any funds we are entitled
to receiveunder you and us prior
to the openingof the Transfer
Account and if
this Agreement from the Transfer Account upon the SettlementAccounts are notreceivedin theTransferAccount
occurrence of an Eventof Default.This =‡horizadan may not within 30 days of the date of this Agreement, then this
be revoked untilwe have received the entire
principalamount Agreement may be terminatedi===diately upon noticeby us
of theLoans, the LoanFees and any other amounts owed to us to you in accordance with the terms of thisAgreement and
under thisAgmeme-t and we have no further obligation upon such termination,the Outstanding Balance, ifany, is
hereunder to make Loans to you. You and each Signing i==ediately due and payable in fullin =.ccerdseewith the
Principal hereby further irrevocably authorize us (such terms ofthisAgreement.
authorizationbeing coupled with an interest)to apply any (e) Notwithstanding anything to thecontraryherein,you
funds we receive inthe TransferAccount to theamounts you agree thatnotices related to the TransferAccount may be
owe us in accordance with the terms and conditicñs of this provided to you by electronicmail atthe E-mail addressset
Agreement, and thisauthorizationmay not be revokeduntil
we forthabove.
have received the entireprincipalamount of the Loans, the 8. Prepayment. At any time,you may prepay, infullor in
Loan Fees and any otheramounts owed to us under this part,your ot"grics under thisAgreement. You may prepay
Agreement and we have no furtherobligation 1-a=dar to such obligationin fullby paying us an amount equal tothe
make Loans to you. Without limiting the generalityof the Outstanding Balance.
foregoing, you and each Signing Principal hereby 9. Default; Remedies.
acknowledge and agree that funds received in the Transfer 9.1. Events of Default. Each of the following shall
"Event Default"
Account may be applied to thechligatiõnsowed tous under constitutean of under this Agreement:(a)
thisAgreement in accordance with the terms set forth in with respectto yourbusiness, as of
(i) any measuring date, the
Section7.1 hereof. totalsalesfor anyrolling 12 month period ending duringthe
(b) The Settlement Amounts on depositin the Transfer Term isless thanor equal to 50% of thetotalsalesfor the
Account and ces±±g TransferFunds shallbe subjectat all prior 12 month period,and (ii)theratioof (a)Total Debt to
times toa reserveinan amount no less than[$0.00](as may be (b) EBITDAR, as of the last
day of eachcalendaryear,for the
adjustedfi·omtime to timeunderthisAgrcoment, the twelve month periodending on such date,is greater
than20.0
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to 1.0;(b)your Settlemen