Preview
FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024
DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024
STANDARD
MERCHANT
CASH ADVANCE
AGREEMENT.
LINCOLN FUNDING SOLUTIONS LTD.
2248 Broadway #1212 2389 Main St. STE 100
New York, NY 10024 Glastonbury, CT 06033
Support@lincolnfunding.com
(866) 500-3676
FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024
DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024
STANDARD MERCHANT CASH ADVANCE AGREEMENT
This is a Standard Merchant Cash Advance Agreement (“Agreement”) dated August 2nd, 2022, by and between Lincoln Funding Solutions Ltd,
a Delaware LTD (together with its successors and/or assigns, “Purchaser”) and each Merchant and Guarantor listed below (“Merchant”).
MERCHANT INFORMATION:
Merchant’s Legal Name (“Merchant”):
TOMMY KHOI NGUYEN
DBA Name:
JUSTIN NAIL & SPA
Tax ID:
Type of Entity:
SOLE PROPRIETOR
Physical Address: 3346 S 6TH AVE STE 160 TUCSON AZ 85713
PRINCIPAL(S) INFORMATION:
Name of Principal (1):
TOMMY KHOI NGUYEN
Address: 5294 E AGAVE VISTA DR TUCSON AZ 85756
SSN:
Name of Principal (2):
Address:
SSN:
KEY TERMS:
Purchase Price:
The dollar amount Purchaser is paying for the Amount Sold. $10,000
Amount Sold:
The dollar value of the Future Receivables being sold. $14,900
Specified Percentage:
The percentage of Receivables (defined below) to be delivered monthly 15%
until the Purchased Receivables Amount is paid in full.
Collected Amount:
The amount of funds arising from Future Receipts that Merchant $200 DAILY PAYMENT (M-F)
authorizes Purchaser to collect each business day or week.
Processing Fee:
10% OF PURCHASE PRICE
Pg. 2 Please initial here on behalf of Merchant: X _______________
FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024
DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024
STANDARD MERCHANT CASH ADVANCE AGREEMENT
This Standard Merchant Cash Advance Agreement (the “Agreement”) by and between
Lincoln Funding Solutions Ltd (the “Purchaser”) and TOMMY KHOI NGUYEN with
its primary place of business located at 3346 S 6TH AVE STE 160 TUCSON AZ 85713 (the “Merchant”)
and TOMMY KHOI NGUYEN with their personal residence at 5294 E AGAVE VISTA DR TUCSON AZ 85756 (the
“Guarantor”) (collectively, the “Seller”), is entered into on the 2ND of AUGUST , 2022 (the
“Effective Date”).
WHEREAS, the purpose of this Agreement is to set forth the terms and conditions in relation to the purchase of
future receivables from the Seller;
WHEREAS, the Seller is entering into this Agreement voluntarily and has had ample opportunity to review this
Agreement prior to executing it;
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein and for other
valuable consideration, the sufficiency of which is agreed to by the parties hereto, the Purchaser and the Seller
(collectively, the Parties”), hereby agree as follows:
I. BASIC TERMS AND DEFINITIONS.
a. “Applicable Fees”: all initial costs and fees that Seller agrees to pay to the Purchaser as consideration.
The total sum of the Applicable Fees shall be deducted from the Purchase Price prior to Seller receiving
the funds from the Purchase Price (as defined below);
b. “Bank Holiday”: Business Days (as defined below) in which major banks are closed for business;
c. “Business Day”: Monday through Friday, with the exception of bank holidays;
d. “Daily Receipts”: the amount of Future Receipts (as defined below) received by Seller on a daily basis;
e. “Effective Date”: the date set forth in the preamble of this Agreement;
f. “Future Receipts”: all of the Seller’s receipts of monies for the sale of its goods and services after the
Effective Date of this Agreement;
g. “Net Funding”: the consideration transferred to Seller after the Applicable Fees and Origination Fees
(as defined below) are deducted;
h. “Obligations”: the terms and conditions the Purchaser is bound to under this Agreement;
i. “Origination Fee”: the agreed upon fee between the Seller and a third-party Broker, which shall be
deducted from the Net Funding (as defined below);
j. “Parties”: collectively, the Purchaser, Merchant, Personal Guarantor and Seller;
k. “Prior Balance”: Outstanding balance on a previous executed Agreement between the Parties;
l. “Purchased Amount”: the total amount of the Specified Percentage of the Future Receipts that the
Seller shall be under obligated to deliver and pay to the Purchaser;
m. “Purchase Price”: the total amount that the Purchase has agreed to pay for the Purchased Amount;
n. “Scheduled Remittance”: the fixed amount that the Parties agree to be a good faith approximation of
the Specified Percentage (as defined below) of the Seller’s Daily Receipts. Scheduled Remittance shall
begin on the next business day after the Purchase Price is paid and be processed daily. In the event
a Scheduled Remittance is due on a banking holiday, Purchaser shall schedule an additional payment
on the previous business day prior to said banking holiday;
o. “Specified Percentage”: [ 15% ] of each and every sum from sales made by the Seller of Future Receipts.
II. TERM. This Agreement does not have a fixed duration and shall expire upon the date when the Purchased
Amount and all other sums due to the Purchaser are paid in full (“Expiration Date”).
Pg. 3 Please initial here on behalf of Merchant: X _______________
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III. SALE OF PURCHASED FUTURE RECEIPTS. Seller hereby irrevocably assigns, transfers, and
conveys onto Purchaser all of the Seller’s right, title and interest in the Specified Percentage of the Future
Receipts until the Purchased Amount shall have been delivered by Seller to Purchaser (“Purchased Future
Receipts”).
This sale of the Purchased Future Receipts is made without express or implied warranty to Purchaser of
collectability of the Purchased Future Receipts by Purchaser and without recourse against Seller and/or
Guarantor(s), except as specifically set forth in this Agreement. By virtue of this Agreement, Seller
transfers to Purchaser full and complete ownership of the Purchased Future Receipts and Seller retains no legal
or equitable interest therein.
IV. PAYMENT OF PURCHASE PRICE. As good faith consideration, Purchaser agrees to pay to
Seller the Purchase Price, less any Applicable Fees, Prior Balance (if applicable) and Origination Fees, upon
execution of this Agreement.
V. USE OF PURCHASE PRICE. Seller hereby acknowledges and understands that: (i) Purchaser’s ability to
collect the Purchased Amount (or any portion thereof) shall be contingent upon Seller’s continued operation
of its business and successful generation of the Future Receipts until the Purchased Amount is delivered to
Purchaser in full; and (ii) in the event of decreased efficiency or total failure of Seller’s business, Purchaser’s
receipt of the full or any portion of the Purchased Amount may be delayed indefinitely. Based upon the
forgoing, Seller agrees to use the Purchase Price exclusively for the benefit and advancement of Seller’s
business operations and for no other purpose.
VI. INITIAL DAILY INSTALLMENTS OF PURCHASED AMOUNTS. The Purchased Amount shall
be delivered by the Seller to the Purchaser daily in the amount of the Initial Daily Installment on each Business
Day commencing on the Effective Date. In the event a Scheduled Remittance is due on a Bank Holiday in
which Purchaser’s ACH processor does not process payments, Purchaser shall schedule an additional ACH
payment on the Business Day immediately preceding said Bank Holiday.
VII. APPROVED BANK ACCOUNT AND CREDIT CARD PROCESSOR(S). During the term of this
Agreement, the Seller shall: (i) deposit all Future Receipts into one (and only one) bank account, which shall
be preapproved by the Purchaser (the “Approved Bank Account”); (ii) use one (and only one) credit card
processor, which shall be preapproved by the Purchaser (the “Approved Processor”); and (iii) deposit all credit
card receipts into the Approved Bank Account. In the event the Approved Bank Account or Approved
Processor shall become unavailable or shall cease to operate during the term of this Agreement, Seller shall
arrange for another Approved Bank Account or Approved Processor within twenty-four (24) hours.
VIII. AUTHORIZATION TO DEBIT APPROVED BANK ACCOUNT. The Seller hereby authorizes the
Purchaser to initiate electronic payments or ACH debits from the Approved Bank Account in the amount of
the Initial Daily Installment on each Business Day commencing on the Effective Date until the Purchaser
receives the full Purchased Amount. The Parties agree that the Seller shall provide Purchaser with all access
code(s) for the Approved Bank Account and provide continuous access to the Approved Bank Account.
IX. FEES ASSOCIATED WITH DEBITING APPROVED BANK ACCOUNT. All fees, charges and
expenses incurred by either Party due to rejected electronic checks, failed ACH debit attempts, overdrafts or
rejections by Seller’s banking institution shall be the sole responsibility of the Seller.
Pg. 4 Please initial here on behalf of Merchant: X _______________
FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024
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X. RECONCILIATION.
a. Seller’s Right for Reconciliation. The Parties each acknowledge and agree that:
i. If at any time during the term of this Agreement Seller shall experience unforeseen decreases to their
Daily Receipts, the Seller shall have the right, at its sole and absolute discretion, to request a
modification to their Scheduled Remittance.
ii. Such modification to their Scheduled Remittance (the “Reconciliation”) shall be performed by the
Purchaser within five (5) Business Days following the written request by Seller for said
Reconciliation.
b. Reconciliation Procedure.
i. Seller shall submit a written request for Reconciliation via email to Support@lincolnfunding.com
with the subject line, “REQUEST FOR RECONCILIATION”;
ii. Said written request shall include a copy of the Seller’s most recent bank statement and credit card
processing statement;
iii. The Purchaser shall have five (5) Business Days to review the Request for Reconciliation.
c. Warranties. The Seller shall have the right to request Reconciliation as many times during the term of
this Agreement as it deems proper. Nothing set forth in this Agreement shall be deemed to provide the
Seller with the right to interfere with the Purchaser’s right and ability to debit the Approved Bank
Account while the request for Reconciliation is pending or until the Purchased Amount is collected by
the Purchaser in full; or modify the amount of the Initial Daily Installment for any calendar month
without prior approval of all Parties.
XI. SELLER’S RIGHT TO ACCELERATE REMITTANCE OF THE OUTSTANDING PORTION OF
THE PURCHASED AMOUNT OF FUTURE RECEIPTS (“OUTSTANDING PAFR”).
a. Seller shall have the right, at any time after receipt of the Purchase Price and upon obtaining Purchaser’s
prior written consent to accelerate the delivery of the undelivered portion of the Purchased Amount of
Future Receipts (the “Outstanding PAFR”) so long as:
i. the Outstanding PAFR is paid in full;
ii. such notice shall be in writing stating the exact amount due and delivery date of payment; and
iii. Initial Daily Installments continue as scheduled until the Outstanding PAFR is paid to the Purchaser.
b. Upon proper delivery of the Outstanding PAFR to Purchaser and written confirmation by Purchaser,
Seller’s obligations to the Purchaser shall be deemed completed and fulfilled.
XII. PURCHASER’S RIGHTS AND OBLIGATIONS UPON RECEIPT OF OUTSTANDING PAFR.
a. Purchaser shall notify the Approved Bank Account and cease Initial Daily Installments or Adjusted Daily
Installment payments to Purchaser’s bank account within three (3) business days.
b. In the event Purchaser shall receive Initial Daily Installments or Adjusted Daily Installments after the
Accelerated Delivery Date, Purchaser shall immediately:
i. Return to Seller the total sum of the Initial Daily Installments or Adjusted Daily Installment payments
received after the delivery of the Outstanding PAFR to Purchaser; or
ii. Apply the total sum of the Initial Daily Installments or Adjusted Daily Installments received by
Purchaser after the Accelerated Delivery Date toward Seller’s outstanding financial obligations to
Purchaser existing as of the Accelerated Delivery Date.
Pg. 5 Please initial here on behalf of Merchant: X _______________
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c. Seller acknowledges and agrees that the Purchaser shall have the right to apply the total sum of the Initial
Daily Installments or Adjusted Daily Installments received by the Purchaser after the Accelerated
Delivery Date toward Seller’s outstanding financial obligations between the Parties.
XIII. RISK SHARING ACKNOWLEDGMENTS AND ARRANGEMENTS. The Parties each
herebyacknowledge and agree that:
a. The Purchased Future Receipts represent a portion of Seller’s Future Receipts.
b. This Agreement consummates the sale of the Purchased Future Receipts at a discount, not the borrowing
of funds by the Seller from Purchaser. Purchaser does not charge the Seller and will not collect from the
Seller any interest on the monies used by the Purchaser for the purchase of the Purchased Future
Receipts.
c. The period of time that it will take the Purchaser to collect the Purchased Amount is not fixed, is
unknown to both Parties at this time and will depend on the success of the Seller’s business.
d. The amount of the Initial Daily Installment is calculated based upon the information concerning an
average amount of Daily Receipts collected by the Seller’s business immediately prior to the Effective
Date of this Agreement, as well as representations regarding the Seller’s estimated Future Receipts
provided by the Seller to the Purchaser.
e. The amount of Seller’s future Daily Receipts may increase or decrease over time.
f. Seller may not be in breach or in default of this Agreement in the event the full Purchased Amount is
not remitted because the Seller’s business went bankrupt or otherwise ceased operations in the
ordinarycourse of business.
EXCEPTION: Seller will be deemed in breach or in default if the Seller’s business goes bankrupt or
ceases operations due to the Seller’s willful or negligent mishandling of its business or Seller
purposefully failing to comply with the obligations or this Agreement.
g. The Purchaser agrees to purchase the Purchased Future Receipts knowing the Seller’s business may slow
down or fail.
h. The Purchasers assumes the risk based exclusively upon the information provided to it by the Seller and
is detrimentally relying on the Seller’s representations, warranties and covenants contained in this
Agreement.
i. The Purchaser hereby acknowledges and agrees that Seller may be excused from performing its
obligations under this Agreement in the event Seller’s business ceases its operations exclusively due to
the following (collectively, the “Valid Excuses”):
i. Adverse business conditions that occurred for reasons outside of Seller’s control and are not due to
Seller’s willful or negligent mishandling of its business;
ii. Loss of the premises where the business operates due to force majeure, provided that the Seller does
not continue or resume business operations in another location;
iii. Seller’s bankruptcy, so long as the Seller did not fraudulently, willfully, or negligently refuse to
disclose proper documentation to the Purchaser prior to the execution of this Agreement; or
iv. Force majeure.
j. The Purchaser reserves the right to apply monies received pursuant to this Agreement first toward any
fees and then toward the Purchased Amount.
k. The Parties agree that the Purchase Price is paid to the Seller in consideration for the acquisition of the
Purchased Future Receipts and that payment of the Purchase Price by the Purchaser is not intended to
be, nor shall it be construed as a loan from the Purchaser to the Seller that requires absolute and
unconditional repayment on a specified maturity date. The Purchaser’s ability to receive the Purchased
Amount is conditional upon the performance of the Seller’s business.
Pg. 6 Please initial here on behalf of Merchant: X _______________
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l. In the event a court shall determine that the Purchaser has charged or received interest hereunder in
excess of the highest rate allowed by law, the rate of such interest received by the Purchaser shall
automatically be reduced to the maximum rate permitted by applicable law and the Purchaser shall
promptly refund to the Seller any excess interest remitted.
XIV. APPLICABLE FEES. The Parties acknowledge the Applicable Fees were agreed upon prior to the Seller
entering into this Agreement, were subject to arms-length negotiations between the Parties and a detailed list
of the Applicable Fees is set forth in Exhibit A of this Agreement.
XV. ORIGINATION FEE. To the extent that the Seller has agreed to a Broker Fee with a third-party broker,
the Seller hereby requests and agrees for the Purchaser to withhold the Broker Fee from the Purchase Price
and for the Purchaser to pay the third-party broker directly as per the directive in Rider 3.
XVI. NO OTHER REDUCTIONS OF PURCHASE PRICE. The Seller hereby:
a. Agrees to pay the Applicable Fee, the Prior Balance and the Origination Fee (collectively, the “Closing
Costs”) in full;
b. Authorizes the Purchaser to apply a portion of the Purchase Price due to the Seller toward satisfaction of
the Seller’s obligation to pay the Closing Costs by deducting them from the Purchase Price prior to
delivering it to the Seller;
c. Agrees that deduction of the Closing Costs from the Purchase Price shall not be deemed a reduction of
the Purchase Price.
XVII. REPRESENTATIONS, WARRANTIES & COVENANTS. The Seller represents and warrants that as of
the Effective Date and during the term of this Agreement:
a. Financial Condition and Financial Information. The Seller’s bank and financial statements furnished
to the Purchaser, along with any future statements which may be furnished hereafter, fairly represent the
financial condition of the Seller on the date the statements are issued. Prior to the execution of this
Agreement, there has been no material adverse changes, financial or otherwise, in the operation or
ownership of the Seller. The Seller has a continuing, affirmative obligation to advise the Purchaser of
any material adverse change in its financial condition, operation, or ownership and/or banking log-in
credentials. The Purchaser may request the Seller’s bank statements at any time until the Purchased
Future Receipts are remitted to the Purchaser and the Seller shall provide such information to the
Purchaser within five (5) business days. The Seller’s failure to provide such information or blocking
access to the Approved Bank Account is deemed a material breach of this Agreement.
b. Governmental Approvals. The Seller is in compliance and shall remain in compliance with all
applicable laws and has the proper valid permits, authorizations, and licenses to own, operate and lease
its properties and to conduct the business in which its presently engaged.
c. Good Standing. The Seller is a corporation/limited liability company/limited partnership/or other
type of entity (“business entity”) that is in good standing and duly incorporated or otherwise organized
and validly existing under the laws of its jurisdiction of incorporation or organization, and has the full
power and authority necessary to carry its business as it is now being conducted. In the event the business
entity is dissolved for any reason, the Seller shall advise the Purchaser within five (5) business days
prior to the dissolution for any reason. This Agreement shall remain in full effect despite the dissolution
of the business entity and any subsequent business entities formed by the Seller(s) may be responsible
for the Purchased Future Receipts.
Pg. 7 Please initial here on behalf of Merchant: X _______________
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d. Authorization. The Seller represents they have all requisite power to execute, delivery and perform this
Agreement and consummate the transactions contemplated hereunder. The Seller also represents and
warrants that entering into this Agreement will not result in the breach, violation or default under any
other agreement or instrument by which the Seller is bound; nor are any statutes, rules, regulations,
orders or other laws to which the Seller is subject to. The Seller further represents and warrants that
entering into this Agreement does not require the obtaining of any consent, approval, permit or license
from any governmental authority having jurisdiction over the Seller. All organization and other
proceedings required to be taken by the Seller to authorize the execution, delivery and performance of
this Agreement have already been taken. The Personal Guarantor signing this Agreement on behalf of
the Sellers has full power and authority to bind the Seller to perform its obligations under this Agreement.
e. Accounting Records and Tax Returns. The Seller will treat the receipt of the Purchase Price and
payment of the Purchased Amount in a manner evidencing sale of its future receipts in its accounting
records and tax returns and further agrees that the Purchaser is entitled to audit the Seller’s accounting
records and tax returns upon reasonable notice in order to verify compliance. The Seller hereby waives
any rights of privacy, confidentiality or taxpayer privilege in any litigation or arbitration arising out of
this Agreement in which the Seller asserts that this transaction is anything other than a sale of future
receipts.
f. Taxes; Workers Compensation Insurance. The Seller has paid and will continue to promptly pay, when
due, all taxes, including, without limitation, income, employment, sales and use taxes imposed upon the
Seller’s business by law. The Seller further asserts they will maintain workers compensation insurance
required by applicable governmental authorities.
g. No Diversion of Future Receipts. The Seller shall not allow any event to occur that would cause a
diversion of any portion of the Seller’s Future Receipts from the Approved Bank Account or Approved
Processor without the Purchaser’s written permission.
h. Change of Name of Location. The Seller, any successor-in-interest of the Seller and the
Guarantor shall not conduct Seller’s business under any name other than those disclosed to the Approved
Processor and the Purchaser. The Seller shall not change or transfer ownership or change its place of
business without obtaining prior written consent of the Purchaser.
i. Prohibited Business Transactions. The Seller shall not: transfer or sell all or substantially all of its
assets without first obtaining prior written consent of the Purchaser.
j. No Closing of the Business. The Seller will not sell, dispose, transfer or otherwise convey all or
substantially all of its business or assets without first: (i) obtaining the express prior written consent of
the Purchaser; and (ii) upon obtaining written consent, providing the Purchaser with a copy of the
executed Agreement between the Seller and the third-party. The Seller agrees that until the Purchaser
shall receive the Purchased Amount in full, the Seller will not voluntarily close its business either
temporarily for repairs, renovations, or any other purpose; or permanently. In the event repairs or
renovations are required as per legal authorities having jurisdiction over the Seller’s business or such
closing is necessitated by circumstances outside of the Seller’s reasonable control, the Seller shall
provide the Purchaser with written notice as soon as the Seller is aware.
Pg. 8 Please initial here on behalf of Merchant: X _______________
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k. No Pending Bankruptcy. As of the Effective Date, the Seller is not insolvent, has not filed, does not
contemplate filing any petition for bankruptcy protection. There has been no involuntary bankruptcy
petition brought or pending against the Seller. The Seller represents that it has not consulted with a
bankruptcy attorney on the issue of filing bankruptcy or some other insolvency proceeding within six
months immediately preceding the Effective Date of this Agreement.
l. Unencumbered Future Receipts. The Seller has and will continue to have good, complete and
marketable title to all Future Receipts, 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 other than by virtue of
entering into this Agreement. Seller specifically warrants and represents that it is not currently bound by
the terms of any future receivables or factoring agreement which may encumber in any way the Future
Receipts.
m. No Stacking. The Seller shall not enter into any third-party agreement which may encumber on the
Future Receipts purchased by the Purchaser.
n. Business Purpose. The Seller is entering into this Agreement solely for business purposes and not as
a consumer for personal, family or household purposes.
o. No Default Under Contracts with Third-Parties. The Seller’s execution and/or performance of its
obligations under this Agreement will not cause or create an event of default by the Seller under any
contract in which Seller is or may be a party to.
p. Right of Access. The Seller hereby grants the Purchaser the right to enter, without prior notice, the
premises of the Seller’s business for the purpose of inspecting or checking the Seller’s transaction
processing terminals to ensure the terminals are properly programmed to submit and/or batch Seller’s
daily receipts to the Approved Processor and to ensure that the Seller has not violated any provisions
of this Agreement. The Seller hereby grants the Purchaser access to the Seller’s employees, records and
allother items located at the Seller’s place of business during the term of this Agreement. Seller hereby
agrees to provide the Purchaser any and all information concerning the Seller’s business operations,
banking relationships, names and contact information of the Seller’s suppliers, vendors and landlord(s)
and allows the Purchaser to contact said third-parties at any time.
q. Phone Recordings. The Parties agree that any call between the Parties and its owners, managers,
employees, and agents may be recorded and/or monitored. The Seller acknowledges and agrees that
the Seller may be contacted by the Purchaser or any of their authorized representatives at any time
regarding the performance of the Seller’s obligations pursuant to this Agreement. The Seller further
acknowledgesand agrees they will not claim that such communications are unsolicited or inconvenient.
r. Authorized Representative. The Parties agree and acknowledge the signatories to this Agreement are
authorized to make managerial and financial decisions on behalf of the Seller with respect to this
Agreement and have such knowledge, experience, and skill in financial and business matters, thus having
the capability of evaluating the merits and risks of this Agreement.
s. Attorney Representation. The Sellers acknowledge and agree that they have read and fully understand
the content of this Agreement; had the opportunity to consult with Seller’s own counsel in connection
with entering into this Agreement; and have made sufficient inquiries to determine this Agreement is
fair and reasonable to the Seller.
Pg. 9 Please initial here on behalf of Merchant: X _______________
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t. No Additional Fees Charged. The Parties agree other than the Closing Costs, if any, the Purchaser
is not charging any additional fees to the Seller.
XVIII. PLEDGE OF SECURITY
a. Pledge. As security for the prompt and complete payment and performance of any and all
liabilities, obligations, covenants or agreements of the Seller pursuant to this Agreement (collectively,
the “Obligations”), the Seller hereby pledges, assigns and hypothecates to the Purchaser (the “Pledge”)
and grants to the Purchaser a continuing, perfected and first priority lien upon and security interest in all
of the Seller’s rights, titles and interest in all accounts, including, but not limited to: deposit accounts,
accounts receivables, other receivables, chattel paper, documents, equipment, general intangibles,
instruments and inventory (collectively, the “Collateral”), whether now existing or hereinafter acquired.
The Purchaser reserves the right to file a UCC-1 lien at any time during the course of this Agreement.
b. Termination of the Pledge. Upon the payment in full of the Obligations by the Seller, the security
interest in the Collateral pursuant to this Pledge shall automatically terminate without any further act of
either Party and all rights to the Collateral shall revert back to the Seller. Upon Seller’s request, the
Purchaser will execute, acknowledge, and deliver such satisfactions, releases and termination statements,
in writing.
c. Representations. The Seller hereby represents and warrants to the Purchaser that the execution,
delivery and performance by the Seller of this Pledge, and the remedies in respect to the Collateral under
this Pledge:
i. Are duly authorized;
ii. Do not require the approval of any governmental authority or any other third-party;
iii. Do not and shall not violate or result in the breach of any provision of law or regulation, any order or
decree of any court or other governmental authority; or
iv. Do not violate, result in the breach of or constitute a default under, or conflict with any indenture,
mortgage, deed of trust, agreement, or any other instrument to which the Seller is a party or by which
any of the Seller’s assets are bound.
d. Further Assurances. Upon the request of the Purchaser, the Seller, at its sole cost and expense, shall
execute and deliver all such further UCC-1s, continuation statements, assurances and assignments of the
Collateral and any other documents the Purchaser may request in order to more fully effectuate the
purposes of this Pledge and the assignment of the Collateral to obtain the full benefits of this Pledge and
the rights and powers herein created.
XIX. DEFAULTS AND REMEDIES.
a. Events of Default. The Seller is deemed to have constituted an “Event of Default” if:
i. The Seller shall violate any term, condition or covenant in this Agreement governing the Seller’s
obligations of timely delivery of the Initial Daily Installments or Adjusted Daily Installments to the
Purchaser;
ii. The Seller shall violate any term, condition, or covenant in this Agreement in regard to any other
sums due for any reason whatsoever other than as the result of the Seller’s business ceasing its
operations exclusively due to any of the Valid Excuses;
iii. Seller knowingly or willfully provides incorrect, false or misleading information to the Purchaser at
any time;
iv. The Seller shall violate any term, condition or covenant in this Agreement;
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v. The Seller uses multiple depository accounts without obtaining prior written consent of the Purchaser;
vi. The Seller fails to deposit any portion of its Future Receipts into the Approved Bank Account;
vii. The Seller changes the Approved Bank Account or Approved Processor without obtaining prior
written consent of the Purchaser;
viii. The Seller interferes with the Purchaser’s collection of the Initial Daily Payments or Adjusted Daily
Payments, including, but not limited to the Seller interfering with ACH Payments;
ix. Two (2) or more ACH transactions attempted by the Purchaser are rejected by the Seller’s Bank;
x. The Seller takes on additional financing (known as “Stacking”) at any time after the Effective Date
and prior to the final payment pursuant to this Agreement; or
xi. The Guaranty shall for any reason cease to be in full force and effect.
b. Seller’s Obligations Upon Default. Upon occurrence of any Event of Default due to the Seller’s breach
of its obligations under this Agreement, the Seller shall immediately deliver to the Purchaser the entire
unpaid portion of the Purchased Amount. The Seller shall also pay to the Purchaser any reasonable
expenses incurred by the Purchaser in connection with recovering the monies due to the Purchaser
pursuant to this Agreement, including, without limitation, the cost of retaining collection firms and
reasonable attorneys’ fees and disbursements (collectively, “Reasonable Damages”). The Parties agree
the Reasonable Damages are either Twenty-Five Percent (25%) of the undelivered portion of the
Purchased Amount upon the occurrence of an event of default, or Twenty-Five Hundred Dollars
($2,500.00), whichever is greater. The entire sum due shall bear simple interest from the Default Date
until it is paid in full, at a rate of Nine Percent (9%) per annum, with interest accruing daily.
c. Remedies. Upon the Seller’s default, the Purchaser may immediately proceed to protect and enforce its
rights under this Agreement by:
i. Enforcing its rights as a creditor, including, but not limited to, notifying any account debtor(s) of the
Seller’s of the Purchaser’s security interest;
ii. Enforcing the provisions of the Personal Guarantee of Performance against the Guarantor(s) without
first seeking recourse from the Seller for the full balance owed at the time of default, plus applicable
fees and costs;
iii. Notifying the Seller’s credit card processor of this Agreement and to direct such credit card processor
to make payments directly to the Purchaser of any and all amounts received by said credit card
processor on behalf of the Seller;
iv. Commencing a lawsuit, whether for specific performance of any covenant, agreement or other
provision contained herein, or to enforce the discharge of the Seller’s obligations hereunder, or any
other legal or equitable right or remedy;
v. In case any Event of Default occurs and it is not waived, the Purchaser will be entitled to the issuance
of an injunction, restraining order, or any other equitable relief in Purchaser’s favor, subject to
court approval, restraining the Seller’s accounts and/or receivables up to the amount due to the
Purchaser as a result of the Event of Default and the Seller will be deemed to have consented to the
granting of an application for the same to any court of competent jurisdiction without any prior
notice to the Sellers and without the Purchaser being required to furnish a bond or other undertaking
in connectionwith the application;
vi. In case the Guarantor’s obligations become due hereunder and are not waived, the Purchaser will
be entitled to the issuance of an injunction, restraining order, or other equitable relief in the
Purchaser’s favor, subject to court approval, restraining the Seller and Guarantor’s accounts and/or
receivables up to the amount due to the Purchaser as a result of the Event of Default, and the Seller
and Guarantor, each, in their individual capacities, will be deemed to have consented to the granting
of an application for the same to any court of competent jurisdiction, without any prior notice to the
Seller or Guarantor and without the Purchaser being required to furnish a bond or other undertaking
in connection with the application.
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d. Power-of-Attorney. The Seller irrevocably appoints the Purchaser and its representatives as its agents
and attorneys-in-fact with the full authority to take any action or execute any instrument or document:
(i) to settle all obligations due to the Purchaser from any credit card processor and/or account debtor(s)
of the Seller; (ii) upon occurrence of an Event of Default, to perform any and all obligations of the Seller
under this Agreement to protect the value of the Collateral by obtaining the required insurance; (iii) to
collect monies due or to become due under or in respect of any of the Collateral; (iv) to receive, endorse
and collect any checks, notes, drafts, instruments, documents or chattel paper in connection with this
Agreement; (v) to sign the Seller’s name on any invoice, bill of lading, or assignment directing customers
or account debtors (collectively, “Account Debtors”) to make payment directly to the Purchaser; and (vi)
to file any claims or take any action or institute any proceeding which the Purchaser may deem necessary
for the collection of any of the unpaid Purchased Amount from the Collateral, or otherwise enforce its
rights with respect to the collection of the Purchased Amount.
XX. MISCELLANEOUS
a. Seller Deposit Agreement. The Seller shall execute an agreement with the Purchaser that shall
authorize the Purchaser to arrange for electric fund transfers and/or ACH Payments of the Initial Daily
Installments or Adjusted Daily Installments from the Approved Bank Account. The Seller shall provide
the Purchaser and/or its authorized agent with all the information, authorizations, and passwords
necessary to verify the Seller’s receivables, receipts and deposits in the Approved Bank Account. The
Seller shall authorize the Purchaser and/or its agent to deduct the payments daily to Purchaser. The
authorization shall be irrevocable until such time when the Seller shall have satisfied its obligations
under this Agreement.
b. Indemnification. The Seller and its Guarantor(s) jointly and severally indemnify and hold harmless
to the fullest extent permitted by law the Approved Processor, any ACH processor, customer and/or
Account Debtors of the Seller, their officers, directors and shareholders against any and all losses,
damages, claims, liabilities and expenses incurred by the ACH processor, customer, and/or Account
Debtors of the Seller resulting from claims asserted by the Purchaser for monies owed to the Purchaser
from the Seller and actions taken by any ACH Processor, customer and/or Account Debtor of the
Sellerin reliance upon the information or instructions provided by the Purchaser.
c. No Liability. In no event shall the Purchaser be liable for any claims asserted by the Seller or its
Guarantor under any legal theory for lost profits, lost revenues, lost business opportunities, exemplary,
punitive, special, incidental, indirect or consequential damages, each of which is hereby knowingly and
voluntarily waived by the Seller and Guarantor.
d. Modifications; Agreements. No modification, amendment, waiver, or consent of any provision
of this Agreement shall be effective unless the same shall be in writing and signed by both Parties.
e. Assignments. The Purchaser may assign, transfer, or sell its rights or delegate its duties hereunder,
either in whole or in part, without prior notice to the Seller. The Seller may not assign its rights or
obligations under this Agreement without obtaining Purchaser’s prior written consent. The Purchaser
reserves the right to deny such consent.
f. Notices. Unless different means of delivering notices are set forth, all notices, requests, consent,
demands and other communications hereunder shall be delivered via certified mail, return receipt
requested, to the respective Parties at the addresses listed in the preamble of this Agreement.
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g. Waiver Remedies. The Parties agree and acknowledge the Purchaser reserves any rights pursuant to
this Agreement.
h. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns.
i. Governing Law, Venue and Jurisdiction. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, except that Merchant shall not have
the right to assign its rights hereunder or any interest herein without the prior written consent of
Purchaser which consent may be withheld in Purchaser’s sole discretion. This Agreement shall be
governed by and construed in accordance with the laws of the State of Connecticut. Any suit, action or
proceeding arising hereunder, or the interp
Preview
FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 STANDARD MERCHANT CASH ADVANCE AGREEMENT. LINCOLN FUNDING SOLUTIONS LTD. 2248 Broadway #1212 2389 Main St. STE 100 New York, NY 10024 Glastonbury, CT 06033 Support@lincolnfunding.com (866) 500-3676 FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 STANDARD MERCHANT CASH ADVANCE AGREEMENT This is a Standard Merchant Cash Advance Agreement (“Agreement”) dated August 2nd, 2022, by and between Lincoln Funding Solutions Ltd, a Delaware LTD (together with its successors and/or assigns, “Purchaser”) and each Merchant and Guarantor listed below (“Merchant”). MERCHANT INFORMATION: Merchant’s Legal Name (“Merchant”): TOMMY KHOI NGUYEN DBA Name: JUSTIN NAIL & SPA Tax ID: Type of Entity: SOLE PROPRIETOR Physical Address: 3346 S 6TH AVE STE 160 TUCSON AZ 85713 PRINCIPAL(S) INFORMATION: Name of Principal (1): TOMMY KHOI NGUYEN Address: 5294 E AGAVE VISTA DR TUCSON AZ 85756 SSN: Name of Principal (2): Address: SSN: KEY TERMS: Purchase Price: The dollar amount Purchaser is paying for the Amount Sold. $10,000 Amount Sold: The dollar value of the Future Receivables being sold. $14,900 Specified Percentage: The percentage of Receivables (defined below) to be delivered monthly 15% until the Purchased Receivables Amount is paid in full. Collected Amount: The amount of funds arising from Future Receipts that Merchant $200 DAILY PAYMENT (M-F) authorizes Purchaser to collect each business day or week. Processing Fee: 10% OF PURCHASE PRICE Pg. 2 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 STANDARD MERCHANT CASH ADVANCE AGREEMENT This Standard Merchant Cash Advance Agreement (the “Agreement”) by and between Lincoln Funding Solutions Ltd (the “Purchaser”) and TOMMY KHOI NGUYEN with its primary place of business located at 3346 S 6TH AVE STE 160 TUCSON AZ 85713 (the “Merchant”) and TOMMY KHOI NGUYEN with their personal residence at 5294 E AGAVE VISTA DR TUCSON AZ 85756 (the “Guarantor”) (collectively, the “Seller”), is entered into on the 2ND of AUGUST , 2022 (the “Effective Date”). WHEREAS, the purpose of this Agreement is to set forth the terms and conditions in relation to the purchase of future receivables from the Seller; WHEREAS, the Seller is entering into this Agreement voluntarily and has had ample opportunity to review this Agreement prior to executing it; NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein and for other valuable consideration, the sufficiency of which is agreed to by the parties hereto, the Purchaser and the Seller (collectively, the Parties”), hereby agree as follows: I. BASIC TERMS AND DEFINITIONS. a. “Applicable Fees”: all initial costs and fees that Seller agrees to pay to the Purchaser as consideration. The total sum of the Applicable Fees shall be deducted from the Purchase Price prior to Seller receiving the funds from the Purchase Price (as defined below); b. “Bank Holiday”: Business Days (as defined below) in which major banks are closed for business; c. “Business Day”: Monday through Friday, with the exception of bank holidays; d. “Daily Receipts”: the amount of Future Receipts (as defined below) received by Seller on a daily basis; e. “Effective Date”: the date set forth in the preamble of this Agreement; f. “Future Receipts”: all of the Seller’s receipts of monies for the sale of its goods and services after the Effective Date of this Agreement; g. “Net Funding”: the consideration transferred to Seller after the Applicable Fees and Origination Fees (as defined below) are deducted; h. “Obligations”: the terms and conditions the Purchaser is bound to under this Agreement; i. “Origination Fee”: the agreed upon fee between the Seller and a third-party Broker, which shall be deducted from the Net Funding (as defined below); j. “Parties”: collectively, the Purchaser, Merchant, Personal Guarantor and Seller; k. “Prior Balance”: Outstanding balance on a previous executed Agreement between the Parties; l. “Purchased Amount”: the total amount of the Specified Percentage of the Future Receipts that the Seller shall be under obligated to deliver and pay to the Purchaser; m. “Purchase Price”: the total amount that the Purchase has agreed to pay for the Purchased Amount; n. “Scheduled Remittance”: the fixed amount that the Parties agree to be a good faith approximation of the Specified Percentage (as defined below) of the Seller’s Daily Receipts. Scheduled Remittance shall begin on the next business day after the Purchase Price is paid and be processed daily. In the event a Scheduled Remittance is due on a banking holiday, Purchaser shall schedule an additional payment on the previous business day prior to said banking holiday; o. “Specified Percentage”: [ 15% ] of each and every sum from sales made by the Seller of Future Receipts. II. TERM. This Agreement does not have a fixed duration and shall expire upon the date when the Purchased Amount and all other sums due to the Purchaser are paid in full (“Expiration Date”). Pg. 3 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 III. SALE OF PURCHASED FUTURE RECEIPTS. Seller hereby irrevocably assigns, transfers, and conveys onto Purchaser all of the Seller’s right, title and interest in the Specified Percentage of the Future Receipts until the Purchased Amount shall have been delivered by Seller to Purchaser (“Purchased Future Receipts”). This sale of the Purchased Future Receipts is made without express or implied warranty to Purchaser of collectability of the Purchased Future Receipts by Purchaser and without recourse against Seller and/or Guarantor(s), except as specifically set forth in this Agreement. By virtue of this Agreement, Seller transfers to Purchaser full and complete ownership of the Purchased Future Receipts and Seller retains no legal or equitable interest therein. IV. PAYMENT OF PURCHASE PRICE. As good faith consideration, Purchaser agrees to pay to Seller the Purchase Price, less any Applicable Fees, Prior Balance (if applicable) and Origination Fees, upon execution of this Agreement. V. USE OF PURCHASE PRICE. Seller hereby acknowledges and understands that: (i) Purchaser’s ability to collect the Purchased Amount (or any portion thereof) shall be contingent upon Seller’s continued operation of its business and successful generation of the Future Receipts until the Purchased Amount is delivered to Purchaser in full; and (ii) in the event of decreased efficiency or total failure of Seller’s business, Purchaser’s receipt of the full or any portion of the Purchased Amount may be delayed indefinitely. Based upon the forgoing, Seller agrees to use the Purchase Price exclusively for the benefit and advancement of Seller’s business operations and for no other purpose. VI. INITIAL DAILY INSTALLMENTS OF PURCHASED AMOUNTS. The Purchased Amount shall be delivered by the Seller to the Purchaser daily in the amount of the Initial Daily Installment on each Business Day commencing on the Effective Date. In the event a Scheduled Remittance is due on a Bank Holiday in which Purchaser’s ACH processor does not process payments, Purchaser shall schedule an additional ACH payment on the Business Day immediately preceding said Bank Holiday. VII. APPROVED BANK ACCOUNT AND CREDIT CARD PROCESSOR(S). During the term of this Agreement, the Seller shall: (i) deposit all Future Receipts into one (and only one) bank account, which shall be preapproved by the Purchaser (the “Approved Bank Account”); (ii) use one (and only one) credit card processor, which shall be preapproved by the Purchaser (the “Approved Processor”); and (iii) deposit all credit card receipts into the Approved Bank Account. In the event the Approved Bank Account or Approved Processor shall become unavailable or shall cease to operate during the term of this Agreement, Seller shall arrange for another Approved Bank Account or Approved Processor within twenty-four (24) hours. VIII. AUTHORIZATION TO DEBIT APPROVED BANK ACCOUNT. The Seller hereby authorizes the Purchaser to initiate electronic payments or ACH debits from the Approved Bank Account in the amount of the Initial Daily Installment on each Business Day commencing on the Effective Date until the Purchaser receives the full Purchased Amount. The Parties agree that the Seller shall provide Purchaser with all access code(s) for the Approved Bank Account and provide continuous access to the Approved Bank Account. IX. FEES ASSOCIATED WITH DEBITING APPROVED BANK ACCOUNT. All fees, charges and expenses incurred by either Party due to rejected electronic checks, failed ACH debit attempts, overdrafts or rejections by Seller’s banking institution shall be the sole responsibility of the Seller. Pg. 4 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 X. RECONCILIATION. a. Seller’s Right for Reconciliation. The Parties each acknowledge and agree that: i. If at any time during the term of this Agreement Seller shall experience unforeseen decreases to their Daily Receipts, the Seller shall have the right, at its sole and absolute discretion, to request a modification to their Scheduled Remittance. ii. Such modification to their Scheduled Remittance (the “Reconciliation”) shall be performed by the Purchaser within five (5) Business Days following the written request by Seller for said Reconciliation. b. Reconciliation Procedure. i. Seller shall submit a written request for Reconciliation via email to Support@lincolnfunding.com with the subject line, “REQUEST FOR RECONCILIATION”; ii. Said written request shall include a copy of the Seller’s most recent bank statement and credit card processing statement; iii. The Purchaser shall have five (5) Business Days to review the Request for Reconciliation. c. Warranties. The Seller shall have the right to request Reconciliation as many times during the term of this Agreement as it deems proper. Nothing set forth in this Agreement shall be deemed to provide the Seller with the right to interfere with the Purchaser’s right and ability to debit the Approved Bank Account while the request for Reconciliation is pending or until the Purchased Amount is collected by the Purchaser in full; or modify the amount of the Initial Daily Installment for any calendar month without prior approval of all Parties. XI. SELLER’S RIGHT TO ACCELERATE REMITTANCE OF THE OUTSTANDING PORTION OF THE PURCHASED AMOUNT OF FUTURE RECEIPTS (“OUTSTANDING PAFR”). a. Seller shall have the right, at any time after receipt of the Purchase Price and upon obtaining Purchaser’s prior written consent to accelerate the delivery of the undelivered portion of the Purchased Amount of Future Receipts (the “Outstanding PAFR”) so long as: i. the Outstanding PAFR is paid in full; ii. such notice shall be in writing stating the exact amount due and delivery date of payment; and iii. Initial Daily Installments continue as scheduled until the Outstanding PAFR is paid to the Purchaser. b. Upon proper delivery of the Outstanding PAFR to Purchaser and written confirmation by Purchaser, Seller’s obligations to the Purchaser shall be deemed completed and fulfilled. XII. PURCHASER’S RIGHTS AND OBLIGATIONS UPON RECEIPT OF OUTSTANDING PAFR. a. Purchaser shall notify the Approved Bank Account and cease Initial Daily Installments or Adjusted Daily Installment payments to Purchaser’s bank account within three (3) business days. b. In the event Purchaser shall receive Initial Daily Installments or Adjusted Daily Installments after the Accelerated Delivery Date, Purchaser shall immediately: i. Return to Seller the total sum of the Initial Daily Installments or Adjusted Daily Installment payments received after the delivery of the Outstanding PAFR to Purchaser; or ii. Apply the total sum of the Initial Daily Installments or Adjusted Daily Installments received by Purchaser after the Accelerated Delivery Date toward Seller’s outstanding financial obligations to Purchaser existing as of the Accelerated Delivery Date. Pg. 5 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 c. Seller acknowledges and agrees that the Purchaser shall have the right to apply the total sum of the Initial Daily Installments or Adjusted Daily Installments received by the Purchaser after the Accelerated Delivery Date toward Seller’s outstanding financial obligations between the Parties. XIII. RISK SHARING ACKNOWLEDGMENTS AND ARRANGEMENTS. The Parties each herebyacknowledge and agree that: a. The Purchased Future Receipts represent a portion of Seller’s Future Receipts. b. This Agreement consummates the sale of the Purchased Future Receipts at a discount, not the borrowing of funds by the Seller from Purchaser. Purchaser does not charge the Seller and will not collect from the Seller any interest on the monies used by the Purchaser for the purchase of the Purchased Future Receipts. c. The period of time that it will take the Purchaser to collect the Purchased Amount is not fixed, is unknown to both Parties at this time and will depend on the success of the Seller’s business. d. The amount of the Initial Daily Installment is calculated based upon the information concerning an average amount of Daily Receipts collected by the Seller’s business immediately prior to the Effective Date of this Agreement, as well as representations regarding the Seller’s estimated Future Receipts provided by the Seller to the Purchaser. e. The amount of Seller’s future Daily Receipts may increase or decrease over time. f. Seller may not be in breach or in default of this Agreement in the event the full Purchased Amount is not remitted because the Seller’s business went bankrupt or otherwise ceased operations in the ordinarycourse of business. EXCEPTION: Seller will be deemed in breach or in default if the Seller’s business goes bankrupt or ceases operations due to the Seller’s willful or negligent mishandling of its business or Seller purposefully failing to comply with the obligations or this Agreement. g. The Purchaser agrees to purchase the Purchased Future Receipts knowing the Seller’s business may slow down or fail. h. The Purchasers assumes the risk based exclusively upon the information provided to it by the Seller and is detrimentally relying on the Seller’s representations, warranties and covenants contained in this Agreement. i. The Purchaser hereby acknowledges and agrees that Seller may be excused from performing its obligations under this Agreement in the event Seller’s business ceases its operations exclusively due to the following (collectively, the “Valid Excuses”): i. Adverse business conditions that occurred for reasons outside of Seller’s control and are not due to Seller’s willful or negligent mishandling of its business; ii. Loss of the premises where the business operates due to force majeure, provided that the Seller does not continue or resume business operations in another location; iii. Seller’s bankruptcy, so long as the Seller did not fraudulently, willfully, or negligently refuse to disclose proper documentation to the Purchaser prior to the execution of this Agreement; or iv. Force majeure. j. The Purchaser reserves the right to apply monies received pursuant to this Agreement first toward any fees and then toward the Purchased Amount. k. The Parties agree that the Purchase Price is paid to the Seller in consideration for the acquisition of the Purchased Future Receipts and that payment of the Purchase Price by the Purchaser is not intended to be, nor shall it be construed as a loan from the Purchaser to the Seller that requires absolute and unconditional repayment on a specified maturity date. The Purchaser’s ability to receive the Purchased Amount is conditional upon the performance of the Seller’s business. Pg. 6 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 l. In the event a court shall determine that the Purchaser has charged or received interest hereunder in excess of the highest rate allowed by law, the rate of such interest received by the Purchaser shall automatically be reduced to the maximum rate permitted by applicable law and the Purchaser shall promptly refund to the Seller any excess interest remitted. XIV. APPLICABLE FEES. The Parties acknowledge the Applicable Fees were agreed upon prior to the Seller entering into this Agreement, were subject to arms-length negotiations between the Parties and a detailed list of the Applicable Fees is set forth in Exhibit A of this Agreement. XV. ORIGINATION FEE. To the extent that the Seller has agreed to a Broker Fee with a third-party broker, the Seller hereby requests and agrees for the Purchaser to withhold the Broker Fee from the Purchase Price and for the Purchaser to pay the third-party broker directly as per the directive in Rider 3. XVI. NO OTHER REDUCTIONS OF PURCHASE PRICE. The Seller hereby: a. Agrees to pay the Applicable Fee, the Prior Balance and the Origination Fee (collectively, the “Closing Costs”) in full; b. Authorizes the Purchaser to apply a portion of the Purchase Price due to the Seller toward satisfaction of the Seller’s obligation to pay the Closing Costs by deducting them from the Purchase Price prior to delivering it to the Seller; c. Agrees that deduction of the Closing Costs from the Purchase Price shall not be deemed a reduction of the Purchase Price. XVII. REPRESENTATIONS, WARRANTIES & COVENANTS. The Seller represents and warrants that as of the Effective Date and during the term of this Agreement: a. Financial Condition and Financial Information. The Seller’s bank and financial statements furnished to the Purchaser, along with any future statements which may be furnished hereafter, fairly represent the financial condition of the Seller on the date the statements are issued. Prior to the execution of this Agreement, there has been no material adverse changes, financial or otherwise, in the operation or ownership of the Seller. The Seller has a continuing, affirmative obligation to advise the Purchaser of any material adverse change in its financial condition, operation, or ownership and/or banking log-in credentials. The Purchaser may request the Seller’s bank statements at any time until the Purchased Future Receipts are remitted to the Purchaser and the Seller shall provide such information to the Purchaser within five (5) business days. The Seller’s failure to provide such information or blocking access to the Approved Bank Account is deemed a material breach of this Agreement. b. Governmental Approvals. The Seller is in compliance and shall remain in compliance with all applicable laws and has the proper valid permits, authorizations, and licenses to own, operate and lease its properties and to conduct the business in which its presently engaged. c. Good Standing. The Seller is a corporation/limited liability company/limited partnership/or other type of entity (“business entity”) that is in good standing and duly incorporated or otherwise organized and validly existing under the laws of its jurisdiction of incorporation or organization, and has the full power and authority necessary to carry its business as it is now being conducted. In the event the business entity is dissolved for any reason, the Seller shall advise the Purchaser within five (5) business days prior to the dissolution for any reason. This Agreement shall remain in full effect despite the dissolution of the business entity and any subsequent business entities formed by the Seller(s) may be responsible for the Purchased Future Receipts. Pg. 7 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 d. Authorization. The Seller represents they have all requisite power to execute, delivery and perform this Agreement and consummate the transactions contemplated hereunder. The Seller also represents and warrants that entering into this Agreement will not result in the breach, violation or default under any other agreement or instrument by which the Seller is bound; nor are any statutes, rules, regulations, orders or other laws to which the Seller is subject to. The Seller further represents and warrants that entering into this Agreement does not require the obtaining of any consent, approval, permit or license from any governmental authority having jurisdiction over the Seller. All organization and other proceedings required to be taken by the Seller to authorize the execution, delivery and performance of this Agreement have already been taken. The Personal Guarantor signing this Agreement on behalf of the Sellers has full power and authority to bind the Seller to perform its obligations under this Agreement. e. Accounting Records and Tax Returns. The Seller will treat the receipt of the Purchase Price and payment of the Purchased Amount in a manner evidencing sale of its future receipts in its accounting records and tax returns and further agrees that the Purchaser is entitled to audit the Seller’s accounting records and tax returns upon reasonable notice in order to verify compliance. The Seller hereby waives any rights of privacy, confidentiality or taxpayer privilege in any litigation or arbitration arising out of this Agreement in which the Seller asserts that this transaction is anything other than a sale of future receipts. f. Taxes; Workers Compensation Insurance. The Seller has paid and will continue to promptly pay, when due, all taxes, including, without limitation, income, employment, sales and use taxes imposed upon the Seller’s business by law. The Seller further asserts they will maintain workers compensation insurance required by applicable governmental authorities. g. No Diversion of Future Receipts. The Seller shall not allow any event to occur that would cause a diversion of any portion of the Seller’s Future Receipts from the Approved Bank Account or Approved Processor without the Purchaser’s written permission. h. Change of Name of Location. The Seller, any successor-in-interest of the Seller and the Guarantor shall not conduct Seller’s business under any name other than those disclosed to the Approved Processor and the Purchaser. The Seller shall not change or transfer ownership or change its place of business without obtaining prior written consent of the Purchaser. i. Prohibited Business Transactions. The Seller shall not: transfer or sell all or substantially all of its assets without first obtaining prior written consent of the Purchaser. j. No Closing of the Business. The Seller will not sell, dispose, transfer or otherwise convey all or substantially all of its business or assets without first: (i) obtaining the express prior written consent of the Purchaser; and (ii) upon obtaining written consent, providing the Purchaser with a copy of the executed Agreement between the Seller and the third-party. The Seller agrees that until the Purchaser shall receive the Purchased Amount in full, the Seller will not voluntarily close its business either temporarily for repairs, renovations, or any other purpose; or permanently. In the event repairs or renovations are required as per legal authorities having jurisdiction over the Seller’s business or such closing is necessitated by circumstances outside of the Seller’s reasonable control, the Seller shall provide the Purchaser with written notice as soon as the Seller is aware. Pg. 8 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 k. No Pending Bankruptcy. As of the Effective Date, the Seller is not insolvent, has not filed, does not contemplate filing any petition for bankruptcy protection. There has been no involuntary bankruptcy petition brought or pending against the Seller. The Seller represents that it has not consulted with a bankruptcy attorney on the issue of filing bankruptcy or some other insolvency proceeding within six months immediately preceding the Effective Date of this Agreement. l. Unencumbered Future Receipts. The Seller has and will continue to have good, complete and marketable title to all Future Receipts, 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 other than by virtue of entering into this Agreement. Seller specifically warrants and represents that it is not currently bound by the terms of any future receivables or factoring agreement which may encumber in any way the Future Receipts. m. No Stacking. The Seller shall not enter into any third-party agreement which may encumber on the Future Receipts purchased by the Purchaser. n. Business Purpose. The Seller is entering into this Agreement solely for business purposes and not as a consumer for personal, family or household purposes. o. No Default Under Contracts with Third-Parties. The Seller’s execution and/or performance of its obligations under this Agreement will not cause or create an event of default by the Seller under any contract in which Seller is or may be a party to. p. Right of Access. The Seller hereby grants the Purchaser the right to enter, without prior notice, the premises of the Seller’s business for the purpose of inspecting or checking the Seller’s transaction processing terminals to ensure the terminals are properly programmed to submit and/or batch Seller’s daily receipts to the Approved Processor and to ensure that the Seller has not violated any provisions of this Agreement. The Seller hereby grants the Purchaser access to the Seller’s employees, records and allother items located at the Seller’s place of business during the term of this Agreement. Seller hereby agrees to provide the Purchaser any and all information concerning the Seller’s business operations, banking relationships, names and contact information of the Seller’s suppliers, vendors and landlord(s) and allows the Purchaser to contact said third-parties at any time. q. Phone Recordings. The Parties agree that any call between the Parties and its owners, managers, employees, and agents may be recorded and/or monitored. The Seller acknowledges and agrees that the Seller may be contacted by the Purchaser or any of their authorized representatives at any time regarding the performance of the Seller’s obligations pursuant to this Agreement. The Seller further acknowledgesand agrees they will not claim that such communications are unsolicited or inconvenient. r. Authorized Representative. The Parties agree and acknowledge the signatories to this Agreement are authorized to make managerial and financial decisions on behalf of the Seller with respect to this Agreement and have such knowledge, experience, and skill in financial and business matters, thus having the capability of evaluating the merits and risks of this Agreement. s. Attorney Representation. The Sellers acknowledge and agree that they have read and fully understand the content of this Agreement; had the opportunity to consult with Seller’s own counsel in connection with entering into this Agreement; and have made sufficient inquiries to determine this Agreement is fair and reasonable to the Seller. Pg. 9 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 t. No Additional Fees Charged. The Parties agree other than the Closing Costs, if any, the Purchaser is not charging any additional fees to the Seller. XVIII. PLEDGE OF SECURITY a. Pledge. As security for the prompt and complete payment and performance of any and all liabilities, obligations, covenants or agreements of the Seller pursuant to this Agreement (collectively, the “Obligations”), the Seller hereby pledges, assigns and hypothecates to the Purchaser (the “Pledge”) and grants to the Purchaser a continuing, perfected and first priority lien upon and security interest in all of the Seller’s rights, titles and interest in all accounts, including, but not limited to: deposit accounts, accounts receivables, other receivables, chattel paper, documents, equipment, general intangibles, instruments and inventory (collectively, the “Collateral”), whether now existing or hereinafter acquired. The Purchaser reserves the right to file a UCC-1 lien at any time during the course of this Agreement. b. Termination of the Pledge. Upon the payment in full of the Obligations by the Seller, the security interest in the Collateral pursuant to this Pledge shall automatically terminate without any further act of either Party and all rights to the Collateral shall revert back to the Seller. Upon Seller’s request, the Purchaser will execute, acknowledge, and deliver such satisfactions, releases and termination statements, in writing. c. Representations. The Seller hereby represents and warrants to the Purchaser that the execution, delivery and performance by the Seller of this Pledge, and the remedies in respect to the Collateral under this Pledge: i. Are duly authorized; ii. Do not require the approval of any governmental authority or any other third-party; iii. Do not and shall not violate or result in the breach of any provision of law or regulation, any order or decree of any court or other governmental authority; or iv. Do not violate, result in the breach of or constitute a default under, or conflict with any indenture, mortgage, deed of trust, agreement, or any other instrument to which the Seller is a party or by which any of the Seller’s assets are bound. d. Further Assurances. Upon the request of the Purchaser, the Seller, at its sole cost and expense, shall execute and deliver all such further UCC-1s, continuation statements, assurances and assignments of the Collateral and any other documents the Purchaser may request in order to more fully effectuate the purposes of this Pledge and the assignment of the Collateral to obtain the full benefits of this Pledge and the rights and powers herein created. XIX. DEFAULTS AND REMEDIES. a. Events of Default. The Seller is deemed to have constituted an “Event of Default” if: i. The Seller shall violate any term, condition or covenant in this Agreement governing the Seller’s obligations of timely delivery of the Initial Daily Installments or Adjusted Daily Installments to the Purchaser; ii. The Seller shall violate any term, condition, or covenant in this Agreement in regard to any other sums due for any reason whatsoever other than as the result of the Seller’s business ceasing its operations exclusively due to any of the Valid Excuses; iii. Seller knowingly or willfully provides incorrect, false or misleading information to the Purchaser at any time; iv. The Seller shall violate any term, condition or covenant in this Agreement; Pg. 10 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 v. The Seller uses multiple depository accounts without obtaining prior written consent of the Purchaser; vi. The Seller fails to deposit any portion of its Future Receipts into the Approved Bank Account; vii. The Seller changes the Approved Bank Account or Approved Processor without obtaining prior written consent of the Purchaser; viii. The Seller interferes with the Purchaser’s collection of the Initial Daily Payments or Adjusted Daily Payments, including, but not limited to the Seller interfering with ACH Payments; ix. Two (2) or more ACH transactions attempted by the Purchaser are rejected by the Seller’s Bank; x. The Seller takes on additional financing (known as “Stacking”) at any time after the Effective Date and prior to the final payment pursuant to this Agreement; or xi. The Guaranty shall for any reason cease to be in full force and effect. b. Seller’s Obligations Upon Default. Upon occurrence of any Event of Default due to the Seller’s breach of its obligations under this Agreement, the Seller shall immediately deliver to the Purchaser the entire unpaid portion of the Purchased Amount. The Seller shall also pay to the Purchaser any reasonable expenses incurred by the Purchaser in connection with recovering the monies due to the Purchaser pursuant to this Agreement, including, without limitation, the cost of retaining collection firms and reasonable attorneys’ fees and disbursements (collectively, “Reasonable Damages”). The Parties agree the Reasonable Damages are either Twenty-Five Percent (25%) of the undelivered portion of the Purchased Amount upon the occurrence of an event of default, or Twenty-Five Hundred Dollars ($2,500.00), whichever is greater. The entire sum due shall bear simple interest from the Default Date until it is paid in full, at a rate of Nine Percent (9%) per annum, with interest accruing daily. c. Remedies. Upon the Seller’s default, the Purchaser may immediately proceed to protect and enforce its rights under this Agreement by: i. Enforcing its rights as a creditor, including, but not limited to, notifying any account debtor(s) of the Seller’s of the Purchaser’s security interest; ii. Enforcing the provisions of the Personal Guarantee of Performance against the Guarantor(s) without first seeking recourse from the Seller for the full balance owed at the time of default, plus applicable fees and costs; iii. Notifying the Seller’s credit card processor of this Agreement and to direct such credit card processor to make payments directly to the Purchaser of any and all amounts received by said credit card processor on behalf of the Seller; iv. Commencing a lawsuit, whether for specific performance of any covenant, agreement or other provision contained herein, or to enforce the discharge of the Seller’s obligations hereunder, or any other legal or equitable right or remedy; v. In case any Event of Default occurs and it is not waived, the Purchaser will be entitled to the issuance of an injunction, restraining order, or any other equitable relief in Purchaser’s favor, subject to court approval, restraining the Seller’s accounts and/or receivables up to the amount due to the Purchaser as a result of the Event of Default and the Seller will be deemed to have consented to the granting of an application for the same to any court of competent jurisdiction without any prior notice to the Sellers and without the Purchaser being required to furnish a bond or other undertaking in connectionwith the application; vi. In case the Guarantor’s obligations become due hereunder and are not waived, the Purchaser will be entitled to the issuance of an injunction, restraining order, or other equitable relief in the Purchaser’s favor, subject to court approval, restraining the Seller and Guarantor’s accounts and/or receivables up to the amount due to the Purchaser as a result of the Event of Default, and the Seller and Guarantor, each, in their individual capacities, will be deemed to have consented to the granting of an application for the same to any court of competent jurisdiction, without any prior notice to the Seller or Guarantor and without the Purchaser being required to furnish a bond or other undertaking in connection with the application. Pg. 11 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 d. Power-of-Attorney. The Seller irrevocably appoints the Purchaser and its representatives as its agents and attorneys-in-fact with the full authority to take any action or execute any instrument or document: (i) to settle all obligations due to the Purchaser from any credit card processor and/or account debtor(s) of the Seller; (ii) upon occurrence of an Event of Default, to perform any and all obligations of the Seller under this Agreement to protect the value of the Collateral by obtaining the required insurance; (iii) to collect monies due or to become due under or in respect of any of the Collateral; (iv) to receive, endorse and collect any checks, notes, drafts, instruments, documents or chattel paper in connection with this Agreement; (v) to sign the Seller’s name on any invoice, bill of lading, or assignment directing customers or account debtors (collectively, “Account Debtors”) to make payment directly to the Purchaser; and (vi) to file any claims or take any action or institute any proceeding which the Purchaser may deem necessary for the collection of any of the unpaid Purchased Amount from the Collateral, or otherwise enforce its rights with respect to the collection of the Purchased Amount. XX. MISCELLANEOUS a. Seller Deposit Agreement. The Seller shall execute an agreement with the Purchaser that shall authorize the Purchaser to arrange for electric fund transfers and/or ACH Payments of the Initial Daily Installments or Adjusted Daily Installments from the Approved Bank Account. The Seller shall provide the Purchaser and/or its authorized agent with all the information, authorizations, and passwords necessary to verify the Seller’s receivables, receipts and deposits in the Approved Bank Account. The Seller shall authorize the Purchaser and/or its agent to deduct the payments daily to Purchaser. The authorization shall be irrevocable until such time when the Seller shall have satisfied its obligations under this Agreement. b. Indemnification. The Seller and its Guarantor(s) jointly and severally indemnify and hold harmless to the fullest extent permitted by law the Approved Processor, any ACH processor, customer and/or Account Debtors of the Seller, their officers, directors and shareholders against any and all losses, damages, claims, liabilities and expenses incurred by the ACH processor, customer, and/or Account Debtors of the Seller resulting from claims asserted by the Purchaser for monies owed to the Purchaser from the Seller and actions taken by any ACH Processor, customer and/or Account Debtor of the Sellerin reliance upon the information or instructions provided by the Purchaser. c. No Liability. In no event shall the Purchaser be liable for any claims asserted by the Seller or its Guarantor under any legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect or consequential damages, each of which is hereby knowingly and voluntarily waived by the Seller and Guarantor. d. Modifications; Agreements. No modification, amendment, waiver, or consent of any provision of this Agreement shall be effective unless the same shall be in writing and signed by both Parties. e. Assignments. The Purchaser may assign, transfer, or sell its rights or delegate its duties hereunder, either in whole or in part, without prior notice to the Seller. The Seller may not assign its rights or obligations under this Agreement without obtaining Purchaser’s prior written consent. The Purchaser reserves the right to deny such consent. f. Notices. Unless different means of delivering notices are set forth, all notices, requests, consent, demands and other communications hereunder shall be delivered via certified mail, return receipt requested, to the respective Parties at the addresses listed in the preamble of this Agreement. Pg. 12 Please initial here on behalf of Merchant: X _______________ FILED: KINGS COUNTY CLERK 04/15/2024 04:34 PM INDEX NO. 510755/2024 DocuSign Envelope ID: 1071E56A-1391-4340-B6F7-1E0726CF0B61 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 04/15/2024 g. Waiver Remedies. The Parties agree and acknowledge the Purchaser reserves any rights pursuant to this Agreement. h. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. i. Governing Law, Venue and Jurisdiction. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, except that Merchant shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of Purchaser which consent may be withheld in Purchaser’s sole discretion. This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut. Any suit, action or proceeding arising hereunder, or the interp