Preview
INDEX NO. 605157/2024
FILED: NASSAU COUNTY CLERK 03726/2024 09:47 AM
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024
ORDER TO SHOW CAUSE FOR PRELIMINARY INJUNCTION
EXHIBIT 1
INDEX NO. 605157/2024
NYSCEF DOC. NO. 5 RECEIVED NYSCEF 03/26/2024
SUPREME COURT OF THE STATE OF NEW YORK Index No.
COUNTY OF NASSAU Date Filed:
--.
WYNWOOD CAPITAL GROUP LLC, SUMMONS
Plaintiff, Basis of venue designated:
Contract
- against -
Plaintiff's address:
BLUE NILE ENTERPRISE LLC and 20200 W Dixie Highway
YOSEPH GIRMA TEKLEMARIAM, Miami, FL 33180
Defendants.
penne nn nnn nen nnn eee eee ene ne
To the above-named Defendants:
YOU ARE HEREBY SUMMONED to answer the Complaint in this action and to serve
a copy of your Answer, or if the Complaint is not served with this Summons, to serve a Notice of
Appearance, on the Plaintiff's attorneys within 20 days after service of this Summons, exclusive
of the day of service (or within 30 days after the service is completed if this 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 in the Complaint.
Dated: Garden City, New York GENE ROSEN’S LAW FIRM
March 25, 2024 A PROFESSIONAL CORPORATION
Attorneys for Plaintiff
By: LEE
Gene W. Rosen, Esq.
200 Garden City Plaza, Suite 405
Garden City, New York 11530
Tel (212) 529-3600 Ext. 101
Fax (347) 578-8793
Gene@GeneRosen.com
Defendants’ addresses:
Blue Nile Enterprise LLC Yoseph Girma Teklemariam
8088 Park Ln Apt 1502 8088 Park Ln Apt 1502
Dallas, TX 75231 Dallas, TX 75231
SEE COMPLAINT ANNEXED HERETO
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
--. X
WYNWOOD CAPITAL GROUP LLC, Index No.
Plaintiff, VERIFIED COMPLAINT
- against -
BLUE NILE ENTERPRISE LLC and
YOSEPH GIRMA TEKLEMARIAM,
Defendants.
penne nnn ene nnn nnn eee eee eee,
Plaintiff, by its attorneys, Gene Rosen’s Law Firm - A Professional Corporation, as and for
its complaint herein, alleges the following:
1 At all times hereinafter mentioned, Plaintiff was and still is a limited liability
company formed under the laws of the State of New York.
2 At all times hereinafter mentioned, upon information and belief, Defendant Blue
Nile Enterprise LLC (“Blue Nile’) was and still is a limited liability company formed under the
laws of the State of Texas.
3 At all times hereinafter mentioned, upon information and belief, Defendant Yoseph
Girma Teklemariam (“Teklemariam”) was and still is a resident of the State of Texas.
4 The parties entered into a written contract providing that any litigation between
them must be commenced and maintained in any Court located in the County of Nassau in the
State of New York. Exhibit “A” at {35 and G6.
AS AND FOR A FIRST CAUSE OF ACTION
(Breach of Contract Against Blue Nile)
5 Plaintiff and Blue Nile entered into a written contract, dated March 18, 2024, a copy
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of which is annexed hereto as Exhibit “A”, whereby Blue Nile sold Plaintiff $88,800.00
(“Purchased Amount”) of Blue Nile’s accounts, contract rights, and other obligations arising from
or relating to the payment of monies from Blue Nile’s customers and other third party payors
(“Receivables”) for the sum of $60,000.00 (“Purchase Price”), to be paid to Plaintiff from 4.14%
of Blue Nile’s revenue. Exhibit “A” at page 1.
6. Blue Nile agreed that in the event of its default under the contract, the full
uncollected Purchased Amount plus all fees due under the contract would become immediately
due and payable in full to Plaintiff. Exhibit “A” at ¥ 31.
7
Blue Nile agreed that if Plaintiff prevails in any litigation between the parties then
Blue Nile must pay Plaintiff prejudgment interest at a rate of 24% per annum. Exhibit “A” at
40.
8 Plaintiff paid the Purchase Price, less applicable contractual fees and deductions,
on March 19, 2024. A copy of the proof of funding is annexed hereto as Exhibit “B”.
9 Blue Nile breached the contract by defaulting on its representations and warranties
to Plaintiff under the contract and by preventing Plaintiff from collecting the Purchased Amount.
10. Plaintiff held Blue Nile in breach of contract on March 22, 2024.
11 The payment history for the contract is annexed hereto as Exhibit “C”.
12. Blue Nile owes Plaintiff $88,800.00 of the Purchased Amount.
13 Blue Nile owes Plaintiff $395.00 for a UCC fee under the contract. Exhibit “A” at
{2®.
14 Blue Nile owes Plaintiff $50.00 for a Not Sufficient Funds (“NSF”) fee under the
contract for an instance in which a debit by Plaintiff to Blue Nile’s bank account to collect
Receivables was blocked or rejected. Exhibit “A” at § 2(C).
-2-
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15. Blue Nile owes Plaintiff $2,500.00 for a Default Fee under the contract. Exhibit
“A” at | 2(D).
16. By reason of the foregoing, Plaintiff has been damaged by Blue Nile’s breach of
contract in the sum of $91,745.00 with 24% interest thereon from March 22, 2024.
AS AND FOR A SECOND CAUSE OF ACTION
(Attorney Fees Against Blue Nile)
17. Pursuant to the terms of the contract, Blue Nile agreed to pay Plaintiff's reasonable
attorneys’ fees. Exhibit “A” at ¥ 39.
AS AND FOR A THIRD CAUSE OF ACTION
(Breach of Guaranty Against Teklemariam)
18. Teklemariam executed a guarantee of performance of all the representations,
warranties, and covenants made by Blue Nile in the contract. Exhibit “A” at pages 12-16.
19. By reason of the guarantee, Teklemariam is obligated to Plaintiff in the sum of
$91,745.00 with 24% interest thereon from March 22, 2024.
AS AND FOR A FOURTH CAUSE OF ACTION
(Attorney Fees Against Teklemariam)
20. By reason of the guarantee, Teklemariam is obligated to pay Plaintiff's reasonable
attorneys’ fees. Exhibit “A” at § 39.
21. Pursuant to the terms of the guarantee, Teklemariam agreed to pay Plaintiff's
reasonable attorney’s fees. Exhibit “A” at § G10.
-3-
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DEMAND FOR RELIEF
WHEREFORE, Plaintiff demands judgment against Defendants, jointly and severally, on
the first and third causes of action in the sum of $91,745.00 with 24% interest thereon from March
22, 2024, and on the second and fourth causes of action in the sum of $22,936.25 or such other
amount as the Court deems just, together with the costs and disbursements of this action and any
such other and further relief as the Court deems just.
Dated: Garden City, New York
March 25, 2024
GENE ROSEN’S LAW FIRM
A PROFESSIONAL CORPORATION
Attorneys for Plaintiff
By: LEE
Gene W. Rosen, Esq.
200 Garden City Plaza, Suite 405
Garden City, New York 11530
Tel (212) 529-3600 Ext. 101
Fax (347) 578-8793
Gene@GeneRosen.com
-4-
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
wenn
nnn nennnnnee
WYNWOOD CAPITAL GROUP LLC, Index No.
Plaintiff, VERIFICATION
- against -
BLUE NILE ENTERPRISE LLC and
YOSEPH GIRMA TEKLEMARIAM,
Defendant
wenn nnn nennnnnee
SAM GROSS, duly affirmed, deposes and says:
I am an Authorized Representative of Wynwood Capital Group LLC; I have read the
foregoing complaint and know the contents thereof; that the same is true to my knowledge except
those matters herein stated to be alleged upon information and belief, and as to those matters I
believe them to be true. The grounds for my belief as to those matters herein not stated upon my
knowledge is based upon the records in my possession.
J affirm on this day of March 25, 2024, under the penalties of perjury under the laws of
New York, which may include a fine or imprisonment, that the foregoing is true, and I understand
that this document may be filed in an action or proceeding in a court of law.
ws OD
SAM GROSS
Authorized Representative
Wynwood Capital Group LLC
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COMPLAINT
EXHIBIT “A”
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+° WYNWOOD
Page 1 of 20 OQNoe GAPrTaL GRoup ver. 6/30/23
sS Simplified Business Funding
20200 W Dixie Highway, MIAMI, FL 33180
305-487-8858
STANDARD MERCHANT CASH ADVANCE AGREEMENT
This is an Agreement dated 03/18/2024 by and between WYNWOOD CAPITAL GROUP LLC (“WCG’), inclusive
of its successors and assigns, and each merchant listed below (“Merchant”).
Merchant's Legal Name: BLUE NILE ENTERPRISE LLC
DIBIA: Fed 1D +:
Type of Entity: Limited Liability Company
Business Address: 8088 PARK LN APT 1502 City: Dallas State: T™X Zip: 75231
Contact Address: 8088 PARK LN APT 1502 City: Dallas State: TX Zip: 75231
Email Address: Ee Phone Number:
Purchase Price
This is the amount being paid to Merchant(s) for the Receivables Purchased Amount $60,000.00
(defined below). This amount may be paid in installments if there is an Addendum
stating that it will be paid in installments.
Receivables Purchased Amount
This is the amount of Receivables (defined in Section 1 below) being sold. This amount $88,800.00
may be sold in installments if there is an Addendum stating that it will be sold in
installments.
Specified Percentage
4.14%
This is the percentage of Receivables (defined below) to be delivered until the
Receivables Purchased Amount is paid in full.
Initial Estimated Payment
This is the initial amount of periodic payments collected from Merchant(s) as an
$1,110.00 per day
approximation of no more than the Specified Percentage of the Receivables and is
subject to reconciliation as set forth in Section 4 below.
| have read and agree to the terms and conditions set forth above:
A
Name and Title: YOSEPH GIRMA_ TEKLEMARIAM, Owner Date:
03/18/2024
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Page 2 of 20
STANDARD MERCHANT CASH ADVANCE AGREEMENT
TERMS AND CONDITIONS
1. Sale of Future Receipts. Merchant(s) hereby sell, assign, and transfer to WCG (making WCG the absolute
owner) in consideration of the funds provided (“Purchase Price”) specified above, all of each Merchant's future accounts,
contract rights, and other obligations arising from or relating to the payment of monies from each Merchant's customers
and/or other third party payors (the “Receivables”, defined as all payments made by cash, check, credit or debit card,
electronic transfer, or other form of monetary payment in the ordinary course of each merchant's business), for the
payment of each Merchant's sale of goods or services until the amount specified above (the “Receivables Purchased
Amount”) has been delivered by Merchant(s) to WCG. Each Merchant hereby acknowledges that until the Receivables
Purchased Amount has been received in full by WCG, each Merchant's Receivables, up to the balance of the Receivables
Purchased Amount, are the property of WCG and not the property of any Merchant. Each Merchant agrees that it is a
fiduciary for WCG and that each Merchant will hold Receivables in trust for WCG in its capacity as a fiduciary for WCG.
The Receivables Purchased Amount shall be paid to WCG by each Merchant irrevocably authorizing only one
depositing account acceptable to WCG (the “Account”) to remit the percentage specified above (the “Specified
Percentage”) of each Merchant’s settlement amounts due from each transaction, until such time as WCG receives
payment in full of the Receivables Purchased Amount. Each Merchant hereby authorizes WCG to ACH debit in one or
more ACH transactions the specified remittances and any applicable fees listed in Section 2 from the Account on a daily
basis (unless a different frequency is provided for herein) as of the next business day after the date of this Agreement and
will provide WCG with all required access codes and monthly bank statements. Each Merchant understands that it will be
held responsible for any fees resulting from a rejected ACH attempt or an Event of Default (see Section 2). WCG is not
responsible for any overdrafts or rejected transactions that may result from WCG's ACH debiting the Specified
Percentage amounts under the terms of this Agreement. Each Merchant acknowledges and agrees that until the amount
of the Receivables collected by WCG exceeds the amount of the Purchase Price, WCG will be permitted not to treat any
amount collected under this Agreement as profit for taxation and accounting purposes.
2. Additional Fees. In addition to the Receivables Purchased Amount, each Merchant will be held responsible to
WCG for the following fees, where applicable:
A. $6,000.00 - to cover underwriting, the ACH debit program, and expenses related to the procurement and
initiation of the transactions encompassed by this Agreement. This will be deducted from payment of the Purchase Price.
B. Wire Fee - Merchant(s) shall receive funding electronically to the Account and will be charged $50.00 for a Fed
Wire or $0.00 for a bank ACH. This will be deducted from payment of the Purchase Price.
C. NSF/Rejected ACH Fee - $50.00 for each time an ACH debit to the Account by WCG is returned or otherwise
rejected. No Merchant will be held responsible for such a fee if any Merchant gives WCG notice no more than one
business day in advance that the Account will have insufficient funds to be debited by WCG and no Merchant is otherwise
in default of the terms of the Agreement. Each such fee may be deducted from any payment collected by WCG or may be
collected in addition to any other payment collected by WCG under this Agreement.
D. Default Fee - $2,500.00 - if an Event of Default has taken place under Section 30.
E. UCC Fee - $395.00 — to cover WCG filing a UCC-1 financing statement to secure its interest in the
Receivables Purchased Amount. A $395.00 UCC termination fee will be charged if a UCC filing is terminated.
F. - compliance with applicable disclosure requirements. This will be deducted from payment of the Purchase
Price.
G. Court costs, arbitration fees, collection agency fees, attorney fees, expert fees, and any other expenses
incurred in litigation, arbitration, or the enforcement of any of WCG's legal or contractual rights against each Merchant
and/or each Guarantor, if required, as explained in other Sections of this Agreement.
3. Estimated Payments. Instead of debiting the Specified Percentage of Merchant's Receivables, WCG may
instead debit an “Estimated Payment” from the Account every day. The Estimated Payment is intended to be an
approximation of no more than the Specified Percentage. The initial amount of the Estimated Payment is $1,110.00,
subject to reconciliation as set forth in Section 4. Notwithstanding any provision herein to the contrary, WCG is permitted
to debit the Account to make up for a previous Estimated Payment that was not debited because WCG was closed that
day, to make up for any previous Estimated Payment that was not collected because the debit did not clear for any
reason, to collect any amount due resulting from a reconciliation as set forth in Section 4, to collect any of the fees listed
in Section 2, or to collect any amount due as a result of an Event of Default defined in Section 30.
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STANDARD MERCHANT CASH ADVANCE AGREEMENT
4. Reconciliations. Any Merchant may contact WCG's Reconciliation Department to request that WCG conduct a
reconciliation in order to ensure that the amount that WCG has collected equals the Specified Percentage of
Merchant(s)’s Receivables under this Agreement. A request for a reconciliation by any Merchant must be made by giving
written notice of the request to WCG or by sending an e-mail to Reconciliations@Wynwoodcapitalgroup.com stating that a
reconciliation is being requested. In order to effectuate the reconciliation, any Merchant must produce with its request any
and all statements covering the period from the date of this Agreement through the date of the request for a reconciliation
and, if available, the login and password for the Account. WCG will complete each reconciliation requested by any
Merchant within two business days after receipt of proper notice of a request for one accompanied by the information and
documents required for it. WCG may also conduct a reconciliation on its own at any time by reviewing Merchant(s)'s
Receivables covering the period from the date of this Agreement until the date of initiation of the reconciliation, each such
reconciliation will be completed within two business days after its initiation, and WCG will give each Merchant written
notice of the determination made based on the reconciliation within one business day after its completion. If a
reconciliation determines that WCG collected more than it was entitled to, then WCG will credit to the Account all amounts
to which WCG was not entitled and, if there is an Estimated Payment, decrease the amount of the Estimated Payment so
that it is consistent with the Specified Percentage of Merchant(s)’s Receivables from the date of the Agreement through
the date of the reconciliation. If a reconciliation determines that WCG collected less than it was entitled to, then WCG will
debit from the Account all additional amounts to which WCG was entitled and, if there is an Estimated Payment, increase
the amount of the Estimated Payment so that it is consistent with the Specified Percentage of Merchant(s)’s Receivables
from the date of the Agreement through the date of the reconciliation. Nothing herein limits the amount of times that a
reconciliation may be requested or conducted.
5. Merchant Deposit Agreement. Merchant(s) shall appoint a bank acceptable to WCG, to obtain electronic fund
transfer services and/or “ACH” payments. Merchant(s) shall provide WCG and/or its authorized agent with all of the
information, authorizations, and passwords necessary to verify each Merchant's Receivables. Merchant(s) shall authorize
WCG and/or its agent(s) to deduct the amounts owed to WCG for the Receivables as specified herein from settlement
amounts which would otherwise be due to each Merchant and to pay such amounts to WCG by permitting WCG to
withdraw the Specified Percentage by ACH debiting of the account. The authorization shall be irrevocable as to each
Merchant absent WCG's written consent until the Receivables Purchased Amount has been paid in full or the Merchant
becomes bankrupt or goes out of business without any prior default under this Agreement.
6. Term of Agreement. The term of this Agreement is indefinite and shall continue until WCG receives the full
Receivables Purchased Amount, or earlier if terminated pursuant to any provision of this Agreement. The provisions of
Sections 1, 2, 3, 4, 5, 6, 7, 9, 10, 12, 13, 14, 15, 16, 17, 18, 22, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39,
40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, and 52 shall survive any termination of this Agreement.
7. Ordinary Course of Business. Each Merchant acknowledges that it is entering into this Agreement in the
ordinary course of its business and that the payments to be made from each Merchant to WCG under this Agreement are
being made in the ordinary course of each Merchant's business.
8. Financial Condition. Each Merchant and each Guarantor (Guarantor being defined as each signatory to the
Guarantee of this Agreement) authorizes WCG and its agent(s) to investigate each Merchant's financial responsibility and
history, and will provide to WCG any bank or financial statements, tax returns, and other documents and records, as WCG
deems necessary prior to or at any time after execution of this Agreement. A photocopy of this authorization will be
deemed as acceptable for release of financial information. WCG is authorized to update such information and financial
profiles from time to time as it deems appropriate.
9. Monitoring, Recording, and Electronic Communications. WCG may choose to monitor and/or record
telephone calls with any Merchant and its owners, employees, and agents. By signing this Agreement, each Merchant
agrees that any call between WCG and any Merchant or its representatives may be monitored and/or recorded. Each
Merchant and each Guarantor grants access for WCG to enter any Merchant's premises and to observe any Merchant's
premises without any prior notice to any Merchant at any time after execution of this Agreement.
WCG may use automated telephone dialing, text messaging systems, and e-mail to provide messages to
Merchant(s), Owner(s) (Owner being defined as each person who signs this Agreement on behalf of a Merchant), and
Guarantor(s) about Merchant(s)’s account. Telephone messages may be played by a machine automatically when the
telephone is answered, whether answered by an Owner, a Guarantor, or someone else. These messages may also be
recorded by the recipient’s answering machine or voice mail. Each Merchant, each Owner, and each Guarantor gives
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STANDARD MERCHANT CASH ADVANCE AGREEMENT
WCG permission to call or send a text message to any telephone number given to WCG in connection with this
Agreement and to play pre-recorded messages and/or send text messages with information about this Agreement and/or
any Merchant's account over the phone. Each Merchant, each Owner, and each Guarantor also gives WCG permission to
communicate such information to them by e-mail. Each Merchant, each Owner, and each Guarantor agree that WCG will
not be liable to any of them for any such calls or electronic communications, even if information is communicated to an
unintended recipient. Each Merchant, each Owner, and each Guarantor acknowledge that when they receive such calls or
electronic communications, they may incur a charge from the company that provides them with telecommunications,
wireless, and/or Internet services, and that WCG has no liability for any such charges.
10. Accuracy of Information Furnished by Merchant and Investigation Thereof. To the extent set forth
herein, each of the parties is obligated upon his, her, or its execution of the Agreement to all terms of the Agreement.
Each Merchant and each Owner signing this Agreement represent that he or she is authorized to sign this Agreement for
each Merchant, legally binding said Merchant to its obligations under this Agreement and that the information provided
herein and in all of WCG’s documents, forms, and recorded interview(s) is true, accurate, and complete in all respects.
WCG may produce a monthly statement reflecting the delivery of the Specified Percentage of Receivables from
Merchant(s) to WCG. An investigative report may be made in connection with the Agreement. Each Merchant and each
Owner signing this Agreement authorize WCG, its agents and representatives, and any credit-reporting agency engaged
by WCG, to (i) investigate any references given or any other statements obtained from or about each Merchant or any of
its Owners for the purpose of this Agreement, and (ii) pull credit report at any time now or for so long as any Merchant
and/or Owners(s) continue to have any obligation to WCG under this Agreement or for WCG's ability to determine any
Merchant's eligibility to enter into any future agreement with WCG. Any misrepresentation made by any Merchant or
Owner in connection with this Agreement may constitute a separate claim for fraud or intentional misrepresentation.
Authorization for soft pulls: Each Merchant and each Owner understands that by signing this Agreement, they are
providing ‘written instructions’ to WCG under the Fair Credit Reporting Act, authorizing WCG to obtain information from
their personal credit profile or other information from Experian, TransUnion, and Equifax. Each Merchant and each
Guarantor authorizes WCG to obtain such information solely to conduct a pre-qualification for credit.
Authorization for hard pulls: Each Merchant and each Owner understands that by signing this Agreement, they
are providing ‘written instructions’ to WCG under the Fair Credit Reporting Act, authorizing WCG to obtain information
from their personal credit profile or other information from Experian, TransUnion, and Equifax. Each Merchant and each
Guarantor authorizes WCG to obtain such information in accordance with a merchant cash advance application.
11. Transactional History. Each Merchant authorizes its bank to provide WCG with its banking and/or credit card
processing history.
12. Indemnification. Each Merchant and each Guarantor jointly and severally indemnify and hold harmless each
Merchant's credit card and check processors (collectively, “Processor”) and Processor’s officers, directors, and
shareholders against all losses, damages, claims, liabilities, and expenses (including reasonable attorney and expert
fees) incurred by Processor resulting from (a) claims asserted by WCG for monies owed to WCG from any Merchant and
(b) actions taken by any Processor in reliance upon information or instructions provided by WCG.
13. No Liability. In no event will WCG be liable for any claims asserted by any Merchant under any legal theory
for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect, or
consequential damages, each of which is waived by each Merchant and each Guarantor.
14. Sale of Receivables. Each Merchant and WCG agree that the Purchase Price under this Agreement is in
exchange for the Receivables Purchased Amount and that such Purchase Price is not intended to be, nor shall it be
construed as a loan from WCG to any Merchant. WCG is entering into this Agreement knowing the risks that each
Merchant's business may decline or fail, resulting in WCG not receiving the Receivables Purchased Amount. Any
Merchant going bankrupt, going out of business, or experiencing a slowdown in business or a delay in collecting
Receivables will not on its own without anything more be considered a breach of this Agreement. Each Merchant agrees
that the Purchase Price in exchange for the Receivables pursuant to this Agreement equals the fair market value of such
Receivables. WCG has purchased and shall own all the Receivables described in this Agreement up to the full
Receivables Purchased Amount as the Receivables are created. Payments made to WCG in respect to the full amount of
the Receivables shall be conditioned upon each Merchant's sale of products and services and the payment therefor by
each Merchant's customers in the manner provided in this Agreement. Each Merchant and each Guarantor acknowledges
that WCG does not purchase, sell, or offer to purchase or sell securities and that this Agreement is not a security, an offer
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STANDARD MERCHANT CASH ADVANCE AGREEMENT
to sell any security, or a solicitation of an offer to buy any security. Although certain jurisdictions require the disclosure of
an Annual Percentage Rate or APR in connection with this Agreement, those disclosures do not change the fact that the
transaction encompassed by this Agreement is not a loan and does not have an interest rate. If a court or arbitrator
determines that WCG has charged or received interest under this Agreement in excess of the highest rate permitted by
applicable law, then the rate in effect under this Agreement will automatically be reduced to the maximum rate permitted
by applicable law and WCG will promptly refund to Merchant(s) any amount received by WCG that would otherwise be
considered interest in excess of the maximum lawful rate, with it being intended that Merchant(s) not pay or contract to
pay and that WCG not receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may be paid by Merchant(s) or received by WCG under applicable law.
15. Power of Attorney. Each Merchant irrevocably appoints WCG as its agent and attorney-in-fact with full
authority to take any action or execute any instrument or document to settle all obligations due to WCG for the benefit of
each Merchant and only in order to prevent the occurrence of an Event of Default (as described in Section 30). If an Event
of Default takes place under Section 30, then each Merchant irrevocably appoints WCG as its agent and attorney-in-fact
with full authority to take any action or execute any instrument or document to settle all obligations due to WCG from each
Merchant, including without limitation (i) to collect monies due or to become due under or in respect of any of the
Collateral (which is defined in Section 29); (ii) to receive, endorse and collect any checks, notes, drafts, instruments,
documents, or chattel paper in connection with clause (i) above; (iii) to sign each Merchant's name on any invoice, bill of
lading, or assignment directing customers or account debtors to make payment directly to WCG; and (iv) to file any claims
or take any action or institute any proceeding which WCG may deem necessary for the collection of any of the unpaid
Receivables Purchased Amount from the Collateral, or otherwise to enforce its rights with respect to payment of the
Receivables Purchased Amount.
16. Protections Against Default. The following Protections 1 through 6 may be invoked by WCG, immediately
and without notice to any Merchant if any Event of Default listed in Section 30 has occurred.
Protection 1: The full uncollected Receivables Purchased Amount plus all fees due under this Agreement may
become due and payable in full immediately.
Protection 2. WCG may enforce the provisions of the Guarantee against Guarantor.
Protection 3. WCG may enforce its security interest in the Collateral identified in Section 29.
Protection 4. WCG may proceed to protect and enforce its rights and remedies by litigation or arbitration.
Protection 5. WCG may debit any Merchant’s depository accounts wherever situated by means of ACH debit or
electronic or facsimile signature on a computer-generated check drawn on any Merchant's bank account or otherwise, in
an amount consistent with the terms of this Agreement.
Protection 6. WCG will have the right, without waiving any of its rights and remedies and without notice to any
Merchant and/or Guarantor, to notify each Merchant's credit card and/or check processor and account debtor(s) of the
sale of Receivables hereunder and to direct such credit card processor and account debtor(s) to make payment to WCG
of all or any portion of the amounts received by such credit card processor and account debtor(s) on behalf of each
Merchant. Each Merchant hereby grants to WCG aan irrevocable power-of-attorney, which power-of-attorney will be
coupled with an interest, and hereby appoints WCG and its representatives as each Merchant's attorney-in-fact to take
any and all action necessary to direct such new or additional credit card and/or check processor and account debtor(s) to
make payment to WCG as contemplated by this Section.
17. Protection of Information. Each Merchant and each person signing this Agreement on behalf of each
Merchant and/or as Owner, in respect of himself or herself personally, authorizes WCG to disclose information concerning
each Merchant, Owner and/or Guarantor’s credit standing and business conduct to agents, affiliates, subsidiaries, and
credit reporting bureaus. Each Merchant, Guarantor, and Owner hereby waives to the maximum extent permitted by law
any claim for damages against WCG or any of its affiliates relating to any (i) investigation undertaken by or on behalf of
WCG as permitted by this Agreement or (ii) disclosure of information as permitted by this Agreement.
18. Confidentiality. Each Merchant understands and agrees that the terms and conditions of the products and
services offered by WCG, including this Agreement and any other WCG documents (collectively, “Confidential
Information”) are proprietary and confidential information of WCG. Accordingly, unless disclosure is required by law or
court order, Merchant(s) shall not disclose Confidential Information of WCG to any person other than an attorney,
accountant, financial advisor, or employee of any Merchant who needs to know such information for the purpose of
advising any Merchant (“Advisor”), provided such Advisor uses such information solely for the purpose of advising any
Merchant and first agrees in writing to be bound by the terms of this Section 18.
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19. DIBIAs. Each Merchant hereby acknowledges and agrees that WCG may be using “doing business as” or “d/
b/a” names in connection with various matters relating to the transaction between WCG and each Merchant, including the
filing of UCC-1 financing statements and other notices or filings.
20. Financial Condition and Financial Information. Each Merchant represents, warrants, and covenants that its
bank and financial statements, copies of which have been furnished to WCG, and future statements which will be
furnished hereafter at the request of WCG, fairly represent the financial condition of each Merchant at such dates, and
that since those dates there have been no material adverse changes, financial or otherwise, in such condition, operation,
or ownership of any Merchant. Each Merchant has a continuing affirmative obligation to advise WCG of any material
adverse change in its financial condition, operation, or ownership that may have an effect on any Merchant's ability to
generate Receivables or perform its obligations under this Agreement.
21. Governmental Approvals. Each Merchant represents, warrants, and covenants that it is in compliance and
shall comply with all laws and has valid permits, authorizations, and licenses to own, operate, and lease its properties and
to conduct the business in which it is presently engaged.
22. Authorization. Each Merchant represents, warrants, and covenants that it and each person signing this
Agreement on behalf of each Merchant has full power and authority to incur and perform the obligations under this
Agreement, all of which have been duly authorized.
23. Electronic Check Processing Agreement. Each Merchant represents, warrants, and covenants that it will
not, without WCG's prior written consent, change its Processor, add terminals, change its financial institution or bank
account, or take any other action that could have any adverse effect upon any Merchant's obligations under this
Agreement.
24. Change of Name or Location. Each Merchant represents, warrants, and covenants that it will not conduct its
business under any name other than as disclosed to WCG or change any place(s) of its business without giving prior
written notice to WCG.
25. No Bankruptcy. Each Merchant represents, warrants, and covenants that as of the date of this Agreement, it
does not contemplate and has not filed any petition for bankruptcy protection under Title 11 of the United States Code and
there has been no involuntary petition brought or pending against any Merchant. Each Merchant further warrants that it
does not anticipate filing any such bankruptcy petition and it does not anticipate that an involuntary petition will be filed
against it.
26. Unencumbered Receivables. Each Merchant represents, warrants, and covenants that it has good,
complete, and marketable title to all Receivables, free and clear of any and all liabilities, liens, claims, changes,
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 this Agreement or adverse to the interests
of WCG, other than any for which WCG has actual or constructive knowledge or inquiry notice as of the date of this
Agreement.
27. Stacking. Each Merchant represents, warrants, and covenants that it will not enter into with any party other
than WCG any arrangement, agreement, or commitment that relates to or involves the Receivables, whether in the form
of a purchase of, a loan against, collateral against, or the sale or purchase of credits against Receivables without the prior
written consent of WCG.
28. Business Purpose. Each Merchant represents, warrants, and covenants that it is a valid business in good
standing under the laws of the jurisdictions in which it is organized and/or operates, and each Merchant is entering into
this Agreement for business purposes and not as a consumer for personal, family, or household purposes.
29. Security Interest. To secure each Merchant’s performance obligations to WCG under this Agreement and
any future agreement with WCG, each Merchant hereby grants to WCG a security interest in collateral (the “Collateral”),
that is defined as collectively: (a) all accounts, including without limitation, all deposit accounts, accounts -receivable, and
other receivables, as those terms are defined by Article 9 of the Uniform Commercial Code (the “UCC”), now or hereafter
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STANDARD MERCHANT CASH ADVANCE AGREEMENT
owned or acquired by any Merchant; and (b) all proceeds, as that term is defined by Article 9 of the UCC. The parties
acknowledge and agree that any security interest granted to WCG under any other agreement between any Merchant or
Guarantor and WCG (the “Cross-Collateral”) will secure the obligations hereunder and under this Agreement. Negative
Pledge: Each Merchant agrees not to create, incur, assume, or permit to exist, directly or indirectly, any lien on or with
respect to any of the Collateral or the Cross-Collateral, as applicable.
Each Merchant agrees to execute any documents or take any action in connection with this Agreement as WCG
deems necessary to perfect or maintain WCG’s first priority security interest in the Collateral and the Cross-Collateral,
including the execution of any account control agreements. Each Merchant hereby authorizes WCG to file any financing
statements deemed necessary by WCG to perfect or maintain WCG'’s security interest, which financing statements may
contain notification that each Merchant has granted a negative pledge to WCG with respect to the Collateral and the
Cross-Collateral, and that any subsequent lienor may be tortiously interfering with WCG's rights. Each Merchant shall be
liable for and WCG may charge and collect all costs and expenses, including but not limited to attorney fees, which may
be incurred by WCG in protecting, preserving, and enforcing WCG's security interest and rights. Each Merchant further
acknowledges that WCG may use another legal name and/or D/B/A or an agent when designating the Secured Party
when WCG files the above-referenced financing statement(s).
30. Events of Default. An “Event of Default” may be considered to have taken place if any of the following occur:
(1) Any representation or warranty by any Merchant to WCG proves to have been made intentionally false or
misleading in any material respect when made;
(2) Any Merchant causes any ACH debit to the Account by WCG to be blocked or stopped without providing any
advance written notice to WCG with an alternative method for WCG to collect the blocked or stopped payment, which
Preview
INDEX NO. 605157/2024 FILED: NASSAU COUNTY CLERK 03726/2024 09:47 AM NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 ORDER TO SHOW CAUSE FOR PRELIMINARY INJUNCTION EXHIBIT 1 INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF 03/26/2024 SUPREME COURT OF THE STATE OF NEW YORK Index No. COUNTY OF NASSAU Date Filed: --. WYNWOOD CAPITAL GROUP LLC, SUMMONS Plaintiff, Basis of venue designated: Contract - against - Plaintiff's address: BLUE NILE ENTERPRISE LLC and 20200 W Dixie Highway YOSEPH GIRMA TEKLEMARIAM, Miami, FL 33180 Defendants. penne nn nnn nen nnn eee eee ene ne To the above-named Defendants: YOU ARE HEREBY SUMMONED to answer the Complaint in this action and to serve a copy of your Answer, or if the Complaint is not served with this Summons, to serve a Notice of Appearance, on the Plaintiff's attorneys within 20 days after service of this Summons, exclusive of the day of service (or within 30 days after the service is completed if this 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 in the Complaint. Dated: Garden City, New York GENE ROSEN’S LAW FIRM March 25, 2024 A PROFESSIONAL CORPORATION Attorneys for Plaintiff By: LEE Gene W. Rosen, Esq. 200 Garden City Plaza, Suite 405 Garden City, New York 11530 Tel (212) 529-3600 Ext. 101 Fax (347) 578-8793 Gene@GeneRosen.com Defendants’ addresses: Blue Nile Enterprise LLC Yoseph Girma Teklemariam 8088 Park Ln Apt 1502 8088 Park Ln Apt 1502 Dallas, TX 75231 Dallas, TX 75231 SEE COMPLAINT ANNEXED HERETO INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU --. X WYNWOOD CAPITAL GROUP LLC, Index No. Plaintiff, VERIFIED COMPLAINT - against - BLUE NILE ENTERPRISE LLC and YOSEPH GIRMA TEKLEMARIAM, Defendants. penne nnn ene nnn nnn eee eee eee, Plaintiff, by its attorneys, Gene Rosen’s Law Firm - A Professional Corporation, as and for its complaint herein, alleges the following: 1 At all times hereinafter mentioned, Plaintiff was and still is a limited liability company formed under the laws of the State of New York. 2 At all times hereinafter mentioned, upon information and belief, Defendant Blue Nile Enterprise LLC (“Blue Nile’) was and still is a limited liability company formed under the laws of the State of Texas. 3 At all times hereinafter mentioned, upon information and belief, Defendant Yoseph Girma Teklemariam (“Teklemariam”) was and still is a resident of the State of Texas. 4 The parties entered into a written contract providing that any litigation between them must be commenced and maintained in any Court located in the County of Nassau in the State of New York. Exhibit “A” at {35 and G6. AS AND FOR A FIRST CAUSE OF ACTION (Breach of Contract Against Blue Nile) 5 Plaintiff and Blue Nile entered into a written contract, dated March 18, 2024, a copy INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 of which is annexed hereto as Exhibit “A”, whereby Blue Nile sold Plaintiff $88,800.00 (“Purchased Amount”) of Blue Nile’s accounts, contract rights, and other obligations arising from or relating to the payment of monies from Blue Nile’s customers and other third party payors (“Receivables”) for the sum of $60,000.00 (“Purchase Price”), to be paid to Plaintiff from 4.14% of Blue Nile’s revenue. Exhibit “A” at page 1. 6. Blue Nile agreed that in the event of its default under the contract, the full uncollected Purchased Amount plus all fees due under the contract would become immediately due and payable in full to Plaintiff. Exhibit “A” at ¥ 31. 7 Blue Nile agreed that if Plaintiff prevails in any litigation between the parties then Blue Nile must pay Plaintiff prejudgment interest at a rate of 24% per annum. Exhibit “A” at 40. 8 Plaintiff paid the Purchase Price, less applicable contractual fees and deductions, on March 19, 2024. A copy of the proof of funding is annexed hereto as Exhibit “B”. 9 Blue Nile breached the contract by defaulting on its representations and warranties to Plaintiff under the contract and by preventing Plaintiff from collecting the Purchased Amount. 10. Plaintiff held Blue Nile in breach of contract on March 22, 2024. 11 The payment history for the contract is annexed hereto as Exhibit “C”. 12. Blue Nile owes Plaintiff $88,800.00 of the Purchased Amount. 13 Blue Nile owes Plaintiff $395.00 for a UCC fee under the contract. Exhibit “A” at {2®. 14 Blue Nile owes Plaintiff $50.00 for a Not Sufficient Funds (“NSF”) fee under the contract for an instance in which a debit by Plaintiff to Blue Nile’s bank account to collect Receivables was blocked or rejected. Exhibit “A” at § 2(C). -2- INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 15. Blue Nile owes Plaintiff $2,500.00 for a Default Fee under the contract. Exhibit “A” at | 2(D). 16. By reason of the foregoing, Plaintiff has been damaged by Blue Nile’s breach of contract in the sum of $91,745.00 with 24% interest thereon from March 22, 2024. AS AND FOR A SECOND CAUSE OF ACTION (Attorney Fees Against Blue Nile) 17. Pursuant to the terms of the contract, Blue Nile agreed to pay Plaintiff's reasonable attorneys’ fees. Exhibit “A” at ¥ 39. AS AND FOR A THIRD CAUSE OF ACTION (Breach of Guaranty Against Teklemariam) 18. Teklemariam executed a guarantee of performance of all the representations, warranties, and covenants made by Blue Nile in the contract. Exhibit “A” at pages 12-16. 19. By reason of the guarantee, Teklemariam is obligated to Plaintiff in the sum of $91,745.00 with 24% interest thereon from March 22, 2024. AS AND FOR A FOURTH CAUSE OF ACTION (Attorney Fees Against Teklemariam) 20. By reason of the guarantee, Teklemariam is obligated to pay Plaintiff's reasonable attorneys’ fees. Exhibit “A” at § 39. 21. Pursuant to the terms of the guarantee, Teklemariam agreed to pay Plaintiff's reasonable attorney’s fees. Exhibit “A” at § G10. -3- INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 DEMAND FOR RELIEF WHEREFORE, Plaintiff demands judgment against Defendants, jointly and severally, on the first and third causes of action in the sum of $91,745.00 with 24% interest thereon from March 22, 2024, and on the second and fourth causes of action in the sum of $22,936.25 or such other amount as the Court deems just, together with the costs and disbursements of this action and any such other and further relief as the Court deems just. Dated: Garden City, New York March 25, 2024 GENE ROSEN’S LAW FIRM A PROFESSIONAL CORPORATION Attorneys for Plaintiff By: LEE Gene W. Rosen, Esq. 200 Garden City Plaza, Suite 405 Garden City, New York 11530 Tel (212) 529-3600 Ext. 101 Fax (347) 578-8793 Gene@GeneRosen.com -4- INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF 03/26/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU wenn nnn nennnnnee WYNWOOD CAPITAL GROUP LLC, Index No. Plaintiff, VERIFICATION - against - BLUE NILE ENTERPRISE LLC and YOSEPH GIRMA TEKLEMARIAM, Defendant wenn nnn nennnnnee SAM GROSS, duly affirmed, deposes and says: I am an Authorized Representative of Wynwood Capital Group LLC; I have read the foregoing complaint and know the contents thereof; that the same is true to my knowledge except those matters herein stated to be alleged upon information and belief, and as to those matters I believe them to be true. The grounds for my belief as to those matters herein not stated upon my knowledge is based upon the records in my possession. J affirm on this day of March 25, 2024, under the penalties of perjury under the laws of New York, which may include a fine or imprisonment, that the foregoing is true, and I understand that this document may be filed in an action or proceeding in a court of law. ws OD SAM GROSS Authorized Representative Wynwood Capital Group LLC INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 COMPLAINT EXHIBIT “A” INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 +° WYNWOOD Page 1 of 20 OQNoe GAPrTaL GRoup ver. 6/30/23 sS Simplified Business Funding 20200 W Dixie Highway, MIAMI, FL 33180 305-487-8858 STANDARD MERCHANT CASH ADVANCE AGREEMENT This is an Agreement dated 03/18/2024 by and between WYNWOOD CAPITAL GROUP LLC (“WCG’), inclusive of its successors and assigns, and each merchant listed below (“Merchant”). Merchant's Legal Name: BLUE NILE ENTERPRISE LLC DIBIA: Fed 1D +: Type of Entity: Limited Liability Company Business Address: 8088 PARK LN APT 1502 City: Dallas State: T™X Zip: 75231 Contact Address: 8088 PARK LN APT 1502 City: Dallas State: TX Zip: 75231 Email Address: Ee Phone Number: Purchase Price This is the amount being paid to Merchant(s) for the Receivables Purchased Amount $60,000.00 (defined below). This amount may be paid in installments if there is an Addendum stating that it will be paid in installments. Receivables Purchased Amount This is the amount of Receivables (defined in Section 1 below) being sold. This amount $88,800.00 may be sold in installments if there is an Addendum stating that it will be sold in installments. Specified Percentage 4.14% This is the percentage of Receivables (defined below) to be delivered until the Receivables Purchased Amount is paid in full. Initial Estimated Payment This is the initial amount of periodic payments collected from Merchant(s) as an $1,110.00 per day approximation of no more than the Specified Percentage of the Receivables and is subject to reconciliation as set forth in Section 4 below. | have read and agree to the terms and conditions set forth above: A Name and Title: YOSEPH GIRMA_ TEKLEMARIAM, Owner Date: 03/18/2024 INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 Page 2 of 20 STANDARD MERCHANT CASH ADVANCE AGREEMENT TERMS AND CONDITIONS 1. Sale of Future Receipts. Merchant(s) hereby sell, assign, and transfer to WCG (making WCG the absolute owner) in consideration of the funds provided (“Purchase Price”) specified above, all of each Merchant's future accounts, contract rights, and other obligations arising from or relating to the payment of monies from each Merchant's customers and/or other third party payors (the “Receivables”, defined as all payments made by cash, check, credit or debit card, electronic transfer, or other form of monetary payment in the ordinary course of each merchant's business), for the payment of each Merchant's sale of goods or services until the amount specified above (the “Receivables Purchased Amount”) has been delivered by Merchant(s) to WCG. Each Merchant hereby acknowledges that until the Receivables Purchased Amount has been received in full by WCG, each Merchant's Receivables, up to the balance of the Receivables Purchased Amount, are the property of WCG and not the property of any Merchant. Each Merchant agrees that it is a fiduciary for WCG and that each Merchant will hold Receivables in trust for WCG in its capacity as a fiduciary for WCG. The Receivables Purchased Amount shall be paid to WCG by each Merchant irrevocably authorizing only one depositing account acceptable to WCG (the “Account”) to remit the percentage specified above (the “Specified Percentage”) of each Merchant’s settlement amounts due from each transaction, until such time as WCG receives payment in full of the Receivables Purchased Amount. Each Merchant hereby authorizes WCG to ACH debit in one or more ACH transactions the specified remittances and any applicable fees listed in Section 2 from the Account on a daily basis (unless a different frequency is provided for herein) as of the next business day after the date of this Agreement and will provide WCG with all required access codes and monthly bank statements. Each Merchant understands that it will be held responsible for any fees resulting from a rejected ACH attempt or an Event of Default (see Section 2). WCG is not responsible for any overdrafts or rejected transactions that may result from WCG's ACH debiting the Specified Percentage amounts under the terms of this Agreement. Each Merchant acknowledges and agrees that until the amount of the Receivables collected by WCG exceeds the amount of the Purchase Price, WCG will be permitted not to treat any amount collected under this Agreement as profit for taxation and accounting purposes. 2. Additional Fees. In addition to the Receivables Purchased Amount, each Merchant will be held responsible to WCG for the following fees, where applicable: A. $6,000.00 - to cover underwriting, the ACH debit program, and expenses related to the procurement and initiation of the transactions encompassed by this Agreement. This will be deducted from payment of the Purchase Price. B. Wire Fee - Merchant(s) shall receive funding electronically to the Account and will be charged $50.00 for a Fed Wire or $0.00 for a bank ACH. This will be deducted from payment of the Purchase Price. C. NSF/Rejected ACH Fee - $50.00 for each time an ACH debit to the Account by WCG is returned or otherwise rejected. No Merchant will be held responsible for such a fee if any Merchant gives WCG notice no more than one business day in advance that the Account will have insufficient funds to be debited by WCG and no Merchant is otherwise in default of the terms of the Agreement. Each such fee may be deducted from any payment collected by WCG or may be collected in addition to any other payment collected by WCG under this Agreement. D. Default Fee - $2,500.00 - if an Event of Default has taken place under Section 30. E. UCC Fee - $395.00 — to cover WCG filing a UCC-1 financing statement to secure its interest in the Receivables Purchased Amount. A $395.00 UCC termination fee will be charged if a UCC filing is terminated. F. - compliance with applicable disclosure requirements. This will be deducted from payment of the Purchase Price. G. Court costs, arbitration fees, collection agency fees, attorney fees, expert fees, and any other expenses incurred in litigation, arbitration, or the enforcement of any of WCG's legal or contractual rights against each Merchant and/or each Guarantor, if required, as explained in other Sections of this Agreement. 3. Estimated Payments. Instead of debiting the Specified Percentage of Merchant's Receivables, WCG may instead debit an “Estimated Payment” from the Account every day. The Estimated Payment is intended to be an approximation of no more than the Specified Percentage. The initial amount of the Estimated Payment is $1,110.00, subject to reconciliation as set forth in Section 4. Notwithstanding any provision herein to the contrary, WCG is permitted to debit the Account to make up for a previous Estimated Payment that was not debited because WCG was closed that day, to make up for any previous Estimated Payment that was not collected because the debit did not clear for any reason, to collect any amount due resulting from a reconciliation as set forth in Section 4, to collect any of the fees listed in Section 2, or to collect any amount due as a result of an Event of Default defined in Section 30. INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 Page 3 of 20 STANDARD MERCHANT CASH ADVANCE AGREEMENT 4. Reconciliations. Any Merchant may contact WCG's Reconciliation Department to request that WCG conduct a reconciliation in order to ensure that the amount that WCG has collected equals the Specified Percentage of Merchant(s)’s Receivables under this Agreement. A request for a reconciliation by any Merchant must be made by giving written notice of the request to WCG or by sending an e-mail to Reconciliations@Wynwoodcapitalgroup.com stating that a reconciliation is being requested. In order to effectuate the reconciliation, any Merchant must produce with its request any and all statements covering the period from the date of this Agreement through the date of the request for a reconciliation and, if available, the login and password for the Account. WCG will complete each reconciliation requested by any Merchant within two business days after receipt of proper notice of a request for one accompanied by the information and documents required for it. WCG may also conduct a reconciliation on its own at any time by reviewing Merchant(s)'s Receivables covering the period from the date of this Agreement until the date of initiation of the reconciliation, each such reconciliation will be completed within two business days after its initiation, and WCG will give each Merchant written notice of the determination made based on the reconciliation within one business day after its completion. If a reconciliation determines that WCG collected more than it was entitled to, then WCG will credit to the Account all amounts to which WCG was not entitled and, if there is an Estimated Payment, decrease the amount of the Estimated Payment so that it is consistent with the Specified Percentage of Merchant(s)’s Receivables from the date of the Agreement through the date of the reconciliation. If a reconciliation determines that WCG collected less than it was entitled to, then WCG will debit from the Account all additional amounts to which WCG was entitled and, if there is an Estimated Payment, increase the amount of the Estimated Payment so that it is consistent with the Specified Percentage of Merchant(s)’s Receivables from the date of the Agreement through the date of the reconciliation. Nothing herein limits the amount of times that a reconciliation may be requested or conducted. 5. Merchant Deposit Agreement. Merchant(s) shall appoint a bank acceptable to WCG, to obtain electronic fund transfer services and/or “ACH” payments. Merchant(s) shall provide WCG and/or its authorized agent with all of the information, authorizations, and passwords necessary to verify each Merchant's Receivables. Merchant(s) shall authorize WCG and/or its agent(s) to deduct the amounts owed to WCG for the Receivables as specified herein from settlement amounts which would otherwise be due to each Merchant and to pay such amounts to WCG by permitting WCG to withdraw the Specified Percentage by ACH debiting of the account. The authorization shall be irrevocable as to each Merchant absent WCG's written consent until the Receivables Purchased Amount has been paid in full or the Merchant becomes bankrupt or goes out of business without any prior default under this Agreement. 6. Term of Agreement. The term of this Agreement is indefinite and shall continue until WCG receives the full Receivables Purchased Amount, or earlier if terminated pursuant to any provision of this Agreement. The provisions of Sections 1, 2, 3, 4, 5, 6, 7, 9, 10, 12, 13, 14, 15, 16, 17, 18, 22, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, and 52 shall survive any termination of this Agreement. 7. Ordinary Course of Business. Each Merchant acknowledges that it is entering into this Agreement in the ordinary course of its business and that the payments to be made from each Merchant to WCG under this Agreement are being made in the ordinary course of each Merchant's business. 8. Financial Condition. Each Merchant and each Guarantor (Guarantor being defined as each signatory to the Guarantee of this Agreement) authorizes WCG and its agent(s) to investigate each Merchant's financial responsibility and history, and will provide to WCG any bank or financial statements, tax returns, and other documents and records, as WCG deems necessary prior to or at any time after execution of this Agreement. A photocopy of this authorization will be deemed as acceptable for release of financial information. WCG is authorized to update such information and financial profiles from time to time as it deems appropriate. 9. Monitoring, Recording, and Electronic Communications. WCG may choose to monitor and/or record telephone calls with any Merchant and its owners, employees, and agents. By signing this Agreement, each Merchant agrees that any call between WCG and any Merchant or its representatives may be monitored and/or recorded. Each Merchant and each Guarantor grants access for WCG to enter any Merchant's premises and to observe any Merchant's premises without any prior notice to any Merchant at any time after execution of this Agreement. WCG may use automated telephone dialing, text messaging systems, and e-mail to provide messages to Merchant(s), Owner(s) (Owner being defined as each person who signs this Agreement on behalf of a Merchant), and Guarantor(s) about Merchant(s)’s account. Telephone messages may be played by a machine automatically when the telephone is answered, whether answered by an Owner, a Guarantor, or someone else. These messages may also be recorded by the recipient’s answering machine or voice mail. Each Merchant, each Owner, and each Guarantor gives INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 Page 4 of 20 STANDARD MERCHANT CASH ADVANCE AGREEMENT WCG permission to call or send a text message to any telephone number given to WCG in connection with this Agreement and to play pre-recorded messages and/or send text messages with information about this Agreement and/or any Merchant's account over the phone. Each Merchant, each Owner, and each Guarantor also gives WCG permission to communicate such information to them by e-mail. Each Merchant, each Owner, and each Guarantor agree that WCG will not be liable to any of them for any such calls or electronic communications, even if information is communicated to an unintended recipient. Each Merchant, each Owner, and each Guarantor acknowledge that when they receive such calls or electronic communications, they may incur a charge from the company that provides them with telecommunications, wireless, and/or Internet services, and that WCG has no liability for any such charges. 10. Accuracy of Information Furnished by Merchant and Investigation Thereof. To the extent set forth herein, each of the parties is obligated upon his, her, or its execution of the Agreement to all terms of the Agreement. Each Merchant and each Owner signing this Agreement represent that he or she is authorized to sign this Agreement for each Merchant, legally binding said Merchant to its obligations under this Agreement and that the information provided herein and in all of WCG’s documents, forms, and recorded interview(s) is true, accurate, and complete in all respects. WCG may produce a monthly statement reflecting the delivery of the Specified Percentage of Receivables from Merchant(s) to WCG. An investigative report may be made in connection with the Agreement. Each Merchant and each Owner signing this Agreement authorize WCG, its agents and representatives, and any credit-reporting agency engaged by WCG, to (i) investigate any references given or any other statements obtained from or about each Merchant or any of its Owners for the purpose of this Agreement, and (ii) pull credit report at any time now or for so long as any Merchant and/or Owners(s) continue to have any obligation to WCG under this Agreement or for WCG's ability to determine any Merchant's eligibility to enter into any future agreement with WCG. Any misrepresentation made by any Merchant or Owner in connection with this Agreement may constitute a separate claim for fraud or intentional misrepresentation. Authorization for soft pulls: Each Merchant and each Owner understands that by signing this Agreement, they are providing ‘written instructions’ to WCG under the Fair Credit Reporting Act, authorizing WCG to obtain information from their personal credit profile or other information from Experian, TransUnion, and Equifax. Each Merchant and each Guarantor authorizes WCG to obtain such information solely to conduct a pre-qualification for credit. Authorization for hard pulls: Each Merchant and each Owner understands that by signing this Agreement, they are providing ‘written instructions’ to WCG under the Fair Credit Reporting Act, authorizing WCG to obtain information from their personal credit profile or other information from Experian, TransUnion, and Equifax. Each Merchant and each Guarantor authorizes WCG to obtain such information in accordance with a merchant cash advance application. 11. Transactional History. Each Merchant authorizes its bank to provide WCG with its banking and/or credit card processing history. 12. Indemnification. Each Merchant and each Guarantor jointly and severally indemnify and hold harmless each Merchant's credit card and check processors (collectively, “Processor”) and Processor’s officers, directors, and shareholders against all losses, damages, claims, liabilities, and expenses (including reasonable attorney and expert fees) incurred by Processor resulting from (a) claims asserted by WCG for monies owed to WCG from any Merchant and (b) actions taken by any Processor in reliance upon information or instructions provided by WCG. 13. No Liability. In no event will WCG be liable for any claims asserted by any Merchant under any legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect, or consequential damages, each of which is waived by each Merchant and each Guarantor. 14. Sale of Receivables. Each Merchant and WCG agree that the Purchase Price under this Agreement is in exchange for the Receivables Purchased Amount and that such Purchase Price is not intended to be, nor shall it be construed as a loan from WCG to any Merchant. WCG is entering into this Agreement knowing the risks that each Merchant's business may decline or fail, resulting in WCG not receiving the Receivables Purchased Amount. Any Merchant going bankrupt, going out of business, or experiencing a slowdown in business or a delay in collecting Receivables will not on its own without anything more be considered a breach of this Agreement. Each Merchant agrees that the Purchase Price in exchange for the Receivables pursuant to this Agreement equals the fair market value of such Receivables. WCG has purchased and shall own all the Receivables described in this Agreement up to the full Receivables Purchased Amount as the Receivables are created. Payments made to WCG in respect to the full amount of the Receivables shall be conditioned upon each Merchant's sale of products and services and the payment therefor by each Merchant's customers in the manner provided in this Agreement. Each Merchant and each Guarantor acknowledges that WCG does not purchase, sell, or offer to purchase or sell securities and that this Agreement is not a security, an offer INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 Page 5 of 20 STANDARD MERCHANT CASH ADVANCE AGREEMENT to sell any security, or a solicitation of an offer to buy any security. Although certain jurisdictions require the disclosure of an Annual Percentage Rate or APR in connection with this Agreement, those disclosures do not change the fact that the transaction encompassed by this Agreement is not a loan and does not have an interest rate. If a court or arbitrator determines that WCG has charged or received interest under this Agreement in excess of the highest rate permitted by applicable law, then the rate in effect under this Agreement will automatically be reduced to the maximum rate permitted by applicable law and WCG will promptly refund to Merchant(s) any amount received by WCG that would otherwise be considered interest in excess of the maximum lawful rate, with it being intended that Merchant(s) not pay or contract to pay and that WCG not receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by Merchant(s) or received by WCG under applicable law. 15. Power of Attorney. Each Merchant irrevocably appoints WCG as its agent and attorney-in-fact with full authority to take any action or execute any instrument or document to settle all obligations due to WCG for the benefit of each Merchant and only in order to prevent the occurrence of an Event of Default (as described in Section 30). If an Event of Default takes place under Section 30, then each Merchant irrevocably appoints WCG as its agent and attorney-in-fact with full authority to take any action or execute any instrument or document to settle all obligations due to WCG from each Merchant, including without limitation (i) to collect monies due or to become due under or in respect of any of the Collateral (which is defined in Section 29); (ii) to receive, endorse and collect any checks, notes, drafts, instruments, documents, or chattel paper in connection with clause (i) above; (iii) to sign each Merchant's name on any invoice, bill of lading, or assignment directing customers or account debtors to make payment directly to WCG; and (iv) to file any claims or take any action or institute any proceeding which WCG may deem necessary for the collection of any of the unpaid Receivables Purchased Amount from the Collateral, or otherwise to enforce its rights with respect to payment of the Receivables Purchased Amount. 16. Protections Against Default. The following Protections 1 through 6 may be invoked by WCG, immediately and without notice to any Merchant if any Event of Default listed in Section 30 has occurred. Protection 1: The full uncollected Receivables Purchased Amount plus all fees due under this Agreement may become due and payable in full immediately. Protection 2. WCG may enforce the provisions of the Guarantee against Guarantor. Protection 3. WCG may enforce its security interest in the Collateral identified in Section 29. Protection 4. WCG may proceed to protect and enforce its rights and remedies by litigation or arbitration. Protection 5. WCG may debit any Merchant’s depository accounts wherever situated by means of ACH debit or electronic or facsimile signature on a computer-generated check drawn on any Merchant's bank account or otherwise, in an amount consistent with the terms of this Agreement. Protection 6. WCG will have the right, without waiving any of its rights and remedies and without notice to any Merchant and/or Guarantor, to notify each Merchant's credit card and/or check processor and account debtor(s) of the sale of Receivables hereunder and to direct such credit card processor and account debtor(s) to make payment to WCG of all or any portion of the amounts received by such credit card processor and account debtor(s) on behalf of each Merchant. Each Merchant hereby grants to WCG aan irrevocable power-of-attorney, which power-of-attorney will be coupled with an interest, and hereby appoints WCG and its representatives as each Merchant's attorney-in-fact to take any and all action necessary to direct such new or additional credit card and/or check processor and account debtor(s) to make payment to WCG as contemplated by this Section. 17. Protection of Information. Each Merchant and each person signing this Agreement on behalf of each Merchant and/or as Owner, in respect of himself or herself personally, authorizes WCG to disclose information concerning each Merchant, Owner and/or Guarantor’s credit standing and business conduct to agents, affiliates, subsidiaries, and credit reporting bureaus. Each Merchant, Guarantor, and Owner hereby waives to the maximum extent permitted by law any claim for damages against WCG or any of its affiliates relating to any (i) investigation undertaken by or on behalf of WCG as permitted by this Agreement or (ii) disclosure of information as permitted by this Agreement. 18. Confidentiality. Each Merchant understands and agrees that the terms and conditions of the products and services offered by WCG, including this Agreement and any other WCG documents (collectively, “Confidential Information”) are proprietary and confidential information of WCG. Accordingly, unless disclosure is required by law or court order, Merchant(s) shall not disclose Confidential Information of WCG to any person other than an attorney, accountant, financial advisor, or employee of any Merchant who needs to know such information for the purpose of advising any Merchant (“Advisor”), provided such Advisor uses such information solely for the purpose of advising any Merchant and first agrees in writing to be bound by the terms of this Section 18. INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 Page 6 of 20 STANDARD MERCHANT CASH ADVANCE AGREEMENT 19. DIBIAs. Each Merchant hereby acknowledges and agrees that WCG may be using “doing business as” or “d/ b/a” names in connection with various matters relating to the transaction between WCG and each Merchant, including the filing of UCC-1 financing statements and other notices or filings. 20. Financial Condition and Financial Information. Each Merchant represents, warrants, and covenants that its bank and financial statements, copies of which have been furnished to WCG, and future statements which will be furnished hereafter at the request of WCG, fairly represent the financial condition of each Merchant at such dates, and that since those dates there have been no material adverse changes, financial or otherwise, in such condition, operation, or ownership of any Merchant. Each Merchant has a continuing affirmative obligation to advise WCG of any material adverse change in its financial condition, operation, or ownership that may have an effect on any Merchant's ability to generate Receivables or perform its obligations under this Agreement. 21. Governmental Approvals. Each Merchant represents, warrants, and covenants that it is in compliance and shall comply with all laws and has valid permits, authorizations, and licenses to own, operate, and lease its properties and to conduct the business in which it is presently engaged. 22. Authorization. Each Merchant represents, warrants, and covenants that it and each person signing this Agreement on behalf of each Merchant has full power and authority to incur and perform the obligations under this Agreement, all of which have been duly authorized. 23. Electronic Check Processing Agreement. Each Merchant represents, warrants, and covenants that it will not, without WCG's prior written consent, change its Processor, add terminals, change its financial institution or bank account, or take any other action that could have any adverse effect upon any Merchant's obligations under this Agreement. 24. Change of Name or Location. Each Merchant represents, warrants, and covenants that it will not conduct its business under any name other than as disclosed to WCG or change any place(s) of its business without giving prior written notice to WCG. 25. No Bankruptcy. Each Merchant represents, warrants, and covenants that as of the date of this Agreement, it does not contemplate and has not filed any petition for bankruptcy protection under Title 11 of the United States Code and there has been no involuntary petition brought or pending against any Merchant. Each Merchant further warrants that it does not anticipate filing any such bankruptcy petition and it does not anticipate that an involuntary petition will be filed against it. 26. Unencumbered Receivables. Each Merchant represents, warrants, and covenants that it has good, complete, and marketable title to all Receivables, free and clear of any and all liabilities, liens, claims, changes, 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 this Agreement or adverse to the interests of WCG, other than any for which WCG has actual or constructive knowledge or inquiry notice as of the date of this Agreement. 27. Stacking. Each Merchant represents, warrants, and covenants that it will not enter into with any party other than WCG any arrangement, agreement, or commitment that relates to or involves the Receivables, whether in the form of a purchase of, a loan against, collateral against, or the sale or purchase of credits against Receivables without the prior written consent of WCG. 28. Business Purpose. Each Merchant represents, warrants, and covenants that it is a valid business in good standing under the laws of the jurisdictions in which it is organized and/or operates, and each Merchant is entering into this Agreement for business purposes and not as a consumer for personal, family, or household purposes. 29. Security Interest. To secure each Merchant’s performance obligations to WCG under this Agreement and any future agreement with WCG, each Merchant hereby grants to WCG a security interest in collateral (the “Collateral”), that is defined as collectively: (a) all accounts, including without limitation, all deposit accounts, accounts -receivable, and other receivables, as those terms are defined by Article 9 of the Uniform Commercial Code (the “UCC”), now or hereafter INDEX NO. 605157/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/26/2024 Page 7 of 20 STANDARD MERCHANT CASH ADVANCE AGREEMENT owned or acquired by any Merchant; and (b) all proceeds, as that term is defined by Article 9 of the UCC. The parties acknowledge and agree that any security interest granted to WCG under any other agreement between any Merchant or Guarantor and WCG (the “Cross-Collateral”) will secure the obligations hereunder and under this Agreement. Negative Pledge: Each Merchant agrees not to create, incur, assume, or permit to exist, directly or indirectly, any lien on or with respect to any of the Collateral or the Cross-Collateral, as applicable. Each Merchant agrees to execute any documents or take any action in connection with this Agreement as WCG deems necessary to perfect or maintain WCG’s first priority security interest in the Collateral and the Cross-Collateral, including the execution of any account control agreements. Each Merchant hereby authorizes WCG to file any financing statements deemed necessary by WCG to perfect or maintain WCG'’s security interest, which financing statements may contain notification that each Merchant has granted a negative pledge to WCG with respect to the Collateral and the Cross-Collateral, and that any subsequent lienor may be tortiously interfering with WCG's rights. Each Merchant shall be liable for and WCG may charge and collect all costs and expenses, including but not limited to attorney fees, which may be incurred by WCG in protecting, preserving, and enforcing WCG's security interest and rights. Each Merchant further acknowledges that WCG may use another legal name and/or D/B/A or an agent when designating the Secured Party when WCG files the above-referenced financing statement(s). 30. Events of Default. An “Event of Default” may be considered to have taken place if any of the following occur: (1) Any representation or warranty by any Merchant to WCG proves to have been made intentionally false or misleading in any material respect when made; (2) Any Merchant causes any ACH debit to the Account by WCG to be blocked or stopped without providing any advance written notice to WCG with an alternative method for WCG to collect the blocked or stopped payment, which