Preview
INDEX NO. 157918/2015
FILED: NEW YORK COUNTY CLERK 08/03/2015 09:47 AM
NYSCEF DOC. NO. 1 RECEIVED NYSCEF 08/03/2015
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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STRATEGIC FUNDING SOURCE, INC., Date Filed:
Plaintiff, SUMMONS
- against- Plaintiff's Place of Business:
120 West 45th Street
NEOH BEST BARBECUE 1, LLC d/b/a New York, New York 10036
DICKEY’S BARBECUE PIT and
BURT JACKSON, Plaintiff designates New York
County as the place of trial. Venue
Defendants. is based upon Plaintiff's place of
a a eas eee x business and pursuant to Agreement.
TO THE ABOVE-NAMED DEFENDANT(S):
YOU ARE HEREBY SUMMONED to appear in the Supreme Court of the City of New
York , County of New York at the office of the Clerk of said county at 60 Centre Street, New York,
New York 10013, and to answer the Complaint in this action and serve a copy of your Answer or, if
the Complaint is not served with the Summons, to serve a Notice of Appearance, on the plaintiff's
attorney within 20 days after the service of this Summons, exclusive of the day of service; or within
30 days after the service is complete if this Summons is not personally delivered to you within the
State of New York. 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: New York, New York
July g » 2015 ))
Jennifer Ballard, Esq.
By:
Fae TOF Plaintiff ?
(0 West 45th Street
lew York, New York-10036
Tel: (212) 354-1400
Fax: (800) 581-3615
NEOH Best Barbecue 1, LLC d/b/a
Dickey’s Barbecue Pit
9434 Mentor Avenue
Mentor, OH 44060
Burt Jackson
7105 Brakeman Road
Leroy, OH 44077
SUPREME COURT OF THE STATE OF NEW YORK
Index No.:
COUNTY OF NEW YORK
stint tetris eaten en teen carer —X Date Filed:
STRATEGIC FUNDING SOURCE, INC.,
VERIFIED COMPLAINT
Plaintiff,
Plaintiff's Place of Business:
- against- 120 West 45th Street
New York, New York 10036
NEOH BEST BARBECUE 1, LLC d/b/a
DICKEY’S BARBECUE PIT and Plaintiff designates New York
BURT JACKSON, County as the place of trial. Venue
is based upon Plaintiff's place of
Defendants. business and pursuant to Agreement.
Plaintiff, Strategic Funding Source, Inc., by its attorney, Jennifer Ballard, Esq., complaining
of the Defendants NEOH Best Barbecue 1, LLC d/b/a Dickey’s Barbecue Pit and Burt Jackson,
alleges upon information and belief, as follows:
PARTIES
Plaintiff, Strategic Funding Source, Inc. (“SFS” or “Plaintiff’) is a New York Corporation
with its principal place of business at 120 West 45th Street, New York, New York 10036.
Upon information and belief, Defendant NEOH Best Barbecue 1, LLC d/b/a Dickey’s
Barbecue Pit, (“Dickey’s Barbecue Pit”) is a limited liability company and existing under the
laws of the state of Ohio, with a last known address of 9434 Mentor Avenue, Mentor, OH
44060.
Defendant Burt Jackson (“Jackson”) is a natural person, the owner and guarantor of
defendant Dickey’s Barbecue Pit, and upon information and belief, at all times hereinafter
mentioned, was and is a resident of the State of Ohio, residing at 38 Johnston Row NW,
Leroy, OH 44077.
Dickey’s Barbecue Pit and Jackson are hereinafter referred to collectively as “Defendants”.
Defendants have consented to the jurisdiction of this Court pursuant to the Agreements
referenced below.
FACTUAL ALLEGATIONS
By way of two separate Merchant Cash Advance Agreements for the Purchase and Sale of
Future Receivables dated May 29, 2014 (Contract #526751) and August 19, 2014 (Contract
#479203), (the “Agreements”) Plaintiff purchased $73,575.00 of Dickey’s Barbecue Pit’s
future credit card receivables generated in the course of its business (the “Receivables”).
True and accurate copies of the Agreements are annexed hereto as “Exhibit A”.
By August 22, 2014, Plaintiff paid Dickey’s Barbecue Pit the amount of $52,500.00 as the
agreed upon purchase price for the Receivables.
Plaintiff was to collect 20% (Contract #526751) and 28% (Contract #479203) of the daily
batch amount of receivables collected by Dickey’s Barbecue Pit, from Dickey’s Barbecue
Pit’s credit card processor. Agreements pg. 1, line 22, and pg. 3, sec. 2.7.
As noted in the Agreements, a primary condition of this transaction was that Dickey’s
Barbecue Pit was to use a single, specified third-party credit card processor, to be designated
by the parties (the “Processor’”). Agreements pg. 1, lines 15-20 & pg. 2, sec. 2.5.
10 Any changes of the Processor were to be made only with the express written consent of
Plaintiff. Agreements pg. 2, sec. 2.5.
11 Additionally, Dickey’s Barbecue Pit made numerous warranties, representations and
covenants within Section 2 of the Agreements including, inter ali,
a. To provide to Plaintiff an accurate representation of the financial state of the business
and to proactively and continually apprise Plaintiff of any material adverse changes
thereto.
b. To settle or “batch out” its credit card receipts with the Processor on a daily basis.
c. Not to change the credit card Processor through which credit cards accepted by
Dickey’s Barbecue Pit in course of its business are settled without Plaintiff's written
consent.
12, In direct contradiction of the afore-mentioned warranties, representations and covenants, by
June 22, 2015, Dickey’s Barbecue Pit diverted its Receivables to a non-designated and
unauthorized credit card processor.
13 As a result, Plaintiff has been unable to collect its daily percentage of Receivables purchased
from Dickey’s Barbecue Pit, since the date of said diversion.
14. Of the $73,575.00 of Receivables purchased, Dickey’s Barbecue Pit has delivered a total of
$29,796.86 in Receivables to Plaintiff, leaving a balance of $43,778.14, of Receivables
outstanding under the Agreements.
15 Moreover, Sections 3.5 and 3.6 of the Agreements provide for $7,500.00 in “Processor
Change” and “Default” fees per Agreement to be applied to defendant’s balance in the event
Dickey’s Barbecue Pit made an unauthorized change of its credit card processor.
16 The combined sum of outstanding Receivables due to Plaintiff and the processor change fee,
provide for a total balance of $58,778.14 due and owing to Plaintiff.
17. Moreover, defendant Jackson executed a personal guaranty of Dickey’s Barbecue Pit’s full
performance of all terms and obligations under the Agreements. “Guaranty” annexed to
Agreements as pgs. 6 & 7.
18 Nevertheless, Jackson has not fulfilled his obligation as guarantor, to cure the debt owed to
Plaintiff, in light of Dickey’s Barbecue Pit’s default.
19. Whereas, Defendants are jointly and severally liable to Plaintiff for the amount of
$58,778.14, pursuant to the Agreements, plus costs, and interest from June 22, 2015, the date
of default, through entry of judgment herein.
AS AND FOR A FIRST CAUSE OF ACTION
AGAINST DEFENDANT DICKEY’S BARBECUE PIT:
(Breach of Contract)
20. Plaintiff repeats and reaffirms the allegations contained in paragraphs “1” through “19” as
though fully set forth herein at length.
21 The Agreements provide that Dickey’s Barbecue Pit shall be in default of the Agreements if,
inter ali, it breaches any of the terms, covenants or conditions contained therein or makes any
representation or warranty proving to have been incorrect, false or misleading. Agreements
Section 3.1(a) and (b).
22 As a result of Dickey’s Barbecue Pit’s breach of the terms and Section 2 provisions set forth
above, Dickey’s Barbecue Pit has defaulted under the Agreements.
23 Section 3.2, the Agreements provide that in the event of a default, all future Receivables
purchased by Plaintiff shall immediately become due and owing to Plaintiff.
24. Further, Section 3.2 of the Agreements provide that in the event of a default under the
Agreements, Plaintiff shall have the right to enforce its rights and remedies by suit in equity
or action by law.
25 No Receivables have been transmitted to Plaintiff since June 22, 2015, leaving a balance of
Receivables as of this date in the amount of $43,778.14. Further as stated above, a fee of
$7,500.00 per Agreement is to apply to the balance due in the event Dickey’s Barbecue Pit
changed credit card processors.
26 By reason of the foregoing, Dickey’s Barbecue Pit is liable to SFS in the amount of
$58,778.14, plus costs and interest at the statutory rate from June 22, 2015, through the entry
of judgment herein.
AS AND FOR A SECOND CAUSE OF ACTION
AGAINST DEFENDANT DICKEY’S BARBECUE PIT:
(Account Stated)
27 Plaintiff repeats and reaffirms the allegations contained in paragraphs “1” through “26”
above as though fully set forth herein at length.
28. SFS periodically mailed notices to Dickey’s Barbecue Pit reflecting the current balance due
and demanding payment of the same (“Statements of Account”).
29. Dickey’s Barbecue Pit received and accepted these Statements of Account without timely
objection, protest, or dispute.
30. The last Statements of Account were mailed to Dickey’s Barbecue Pit on or around April 27,
2015.
31 By reason of the foregoing, an account has been stated between SFS and Dickey’s Barbecue
Pit, in the sum of $58,778.14.
AS AND FOR A THIRD CAUSE OF ACTION
AGAINST DEFENDANT JACKSON:
(Breach of Guaranty)
32 Plaintiff repeats and reaffirms the allegations contained in paragraphs “1” to “31” above as
though fully set forth herein at length.
33. In connection with the Agreements, Jackson made and delivered to SFS a separately
executed, written personal guaranty of Dickey’s Barbecue Pit’s performance of all
representations, warranties and covenants under the Agreements, Said guaranty states, inter
ali, : “The undersigned Guarantor(s) hereby guarantys...Merchant’s payment and
performance of all of the representations, warranties, covenants made by Merchant in this
Agreement...as ... may be renewed, amended, extended or otherwise modified...”
Agreements pgs. 6 & 7.
34 Pursuant to the guaranty, Plaintiff has the right to enforce its rights under the Agreements
severally against Jackson in the event of Dickey’s Barbecue Pit’s default. Agreements pg. 6.
35 Dickey’s Barbecue Pit failed to perform under the terms and conditions of the Agreements,
rendering Jackson personally and fully liable for the balance of owed to Plaintiff.
36. Jackson, as guarantor of Dickey’s Barbecue Pit’s performance, and having failed to render
payment of the full balance due and owing SFS as of the date herein, is currently in default of
the Agreements’ guaranty.
37. By reason of the foregoing, Jackson is liable to SFS in the sum of $58,778.14 plus costs, and
interest at the statutory rate from June 22, 2015 through the entry of judgment herein.
AS AND FOR A FOURTH CAUSE OF ACTION
AGAINST DEFENDANTS DICKEY’S BARBECUE PIT AND JACKSON, JOINTLY AND
SEVERALLY:
(Attorney’s Fees)
38. Plaintiff repeats and reaffirms the allegations contained in paragraphs “1” to “37” above as
though fully set forth herein at length.
39 Section 3.3 of the Agreements provides that in addition to all payments owed under the
Agreements, Dickey’s Barbecue Pit and Jackson as guarantors agree to pay all costs
associated with a default and the enforcement of remedies thereof, including but not limited
to, court costs and disbursements and attorney’s fees.
40. As a result of this litigation, Plaintiff is at risk of incurring expenses including attorneys’
fees, which cannot be finally determined at this date but which will be capable of
determination at such time as judgment may be entered herein.
41 By reason of the foregoing, Defendants are jointly and severally liable to SFS for SFS’s
expenses in regard to this litigation, including costs, disbursements and attorneys’ fees, in
such amount as may be determined.
WHEREFORE, Plaintiff demands judgment:
a) Onthe FIRST CAUSE OF ACTION against Dickey’s Barbecue Pit in the sum of $58,778.14,
plus interest at the statutory rate from June 22, 2015 through the entry of the judgment herein;
b) On the SECOND CAUSE OF ACTION against Dickey’s Barbecue Pit in the sum of $58,778.14,
plus costs, and interest at the statutory rate from June 22, 2015 through the entry of the judgment
herein;
°) On the THIRD CAUSE OF ACTION against Jackson in the sum of $58,778.14, plus interest at
the statutory rate from June 22, 2015 through the entry of the judgment herein;
d) On the FOURTH CAUSE OF ACTION against Dickey’s Barbecue Pit and Jackson, jointly and
severally, awarding SFS costs and expenses, together with attorney’s fees incurred in prosecuting
this action in an amount to be determined by the Court, and;
e) For such other and further relief as this court may deem just and proper.
Dated: New York, New York
JulV3{_, 2015 )
Jennifer Ballard, Esq.
\
By.
Jenifer Ballard, Esq..
hA ttorneyferBallard,
for Plaintiff
120 West 45th Street~---
New York, New York 10036
Tel: (212) 354-1400
Fax:(800) 581-3615
VERIFICATION
STATE OF NEW YORK }
} ss.:
COUNTY OF NEW YORK}
David Wolfson, first being duly sworn, says that he is employed as the Vice President of Risk
Management and Asset Recovery of Strategic Funding Source, Inc., that he has read the Verified
Complaint and knows the contents thereof; that the same is true to his own knowledge, except as to
those matters therein stated to be upon information and belief and as to those matters, he believes
them to be true.
Sworn to before me
2;
This. teYIyt) day of July, 2015
| (ee LZt
( 1
i -
baba Wolfson,
Vice President of Risk Management
and Asset Recovery,
Strategic Funding Source Inc.
EXHIBIT “A”
DocuSign Envelope ID: F96D68D0-59F 0-4E1C-AEDE-DE6CEEB360B3
ZL Contract# 526751
Sales Parmer: Whitefish
STRATEGIC
Venture
FUNDING
MERCHANT CASH ADVANCE AGREEMENT
Agreement dated May 29 2014 between Strategic Funding Source Inc. (“SESI”) and the merchant listed below (“theMerchant”).
(Month) (Day) (Year)
MERCHANT INFORMATIO!
Merchant's Legal Name: NEOH Best Barbecue 1, LLC
D/B/A: Dickey’s Barbecue Pit State of Incorporation/organization: OH
‘Type of entity:() (X_) Limited Liability Company( ) Limited Partnership (
Corporation ) Limited Liability Partnership ( ) Sole Proprietor
Physical Address: 9434 MENTOR AVE City: MENTOR State: OH Zip: 44060
Mailing Address: City: State: Zip:
Date business started (mn/yy): 06/12 Federal ID#
Monthly Total Sales Monthly Card Sales Monthly Cash Sales
URCHASE AND SALE OF FUTURE RECEIPTS
Merchant hereby sells, assigns and transfers to SFSI, as the lead purchaser for itself and other participants, (making SFSI and all other participants the absolule owner) in
consideration of the purchase price specified below (the “Purchase Price"), all of Merchant’s future accounts, contract rights and other rights to payment arising from or
relating to the use by Merchant's customers of cash, credit cards, charge cards, debit cards, prepaid cards, mobile payments and other similar payment methods in the
ordinary course of Merchant’s business (the "Receipts”) for the payment of Merchant’ sale of goods or rendition of services until the purchased amount specified below (the
‘Purchased Amount”) has been delivered by Merchant to SFSI, provided that the Purchase Price, the Specified Percentage (as defined below) and/or the Purchased Amount
“Purchased Amount
may be adi ced by SFSI and Merchant in writing if one or more card processing conditions are not satisfied.
The Purchased Amount shall be paid to SFSI by Merchant 1 using and irrevocably authorizing only one card processor acceptable to SFSI (“Processor”) to remit to or for the
benefit of SFSI the percentage specified below (the “Specified Percentage") of Merchant's settlement amounts due from each card issuer with respect to the Receipts, until
such time as SFSI receives payment in full of the Purchascd Amount, Furthermore Merchant will not enter into another cash advance agreement or any other type of
factoring agreement, or any other type of credivdebit card processing during the term of this contract. Notwithstanding anything to the contrary in this Agreement or any
other agreement between SFSI and Merchant, upon the occurrence of an Event of Default under Section 3 of the MERCHANT CASH ADVANCE AGREEMENT TERMS
AND CONDITIONS, the Specified Percentage shall equal 100%.
Purchase Price: $32,500.01 Specified Percentage: 20% Receipts Purchased Amount: $45,175.00
‘THE TERMS, DEFINITIONS, CONDITIONS AND INFORMATION SET FORTH IN THE “MERCHANT CASH ADVANCE AGREEMENT TERMS AND
CONDITIONS”, THE “MERCHANT SECURITY AGREEMENT AND GUARANTY” AND THE “ADMINISTRATIVE FORM” EACH OF WHICH IS
ATTACHED HERETO, ARE HEREBY INCORPORATED IN AND MADE A PART OF THIS AGREEMENT.
MERCHANT #t
By Burt Jackson
(Print Name and Title)
MERCHANT #3
y
(Print Name and Title)
OWNER/GUARANTOR #1
By Burt Jacksoi
(Print Name)
OWNER/GUARANTOR #2
By
(Print Name) (Signature)
\TRATEGIC FUNDING SOURCE, INC.
By Associate Name
(Stategic Punding Sor ke, Ine. Officer) s ignature)
of Merchant represents that he or she is authorized to sign this Agreement on behalf of Merchant, and each person signing this,
Each person signing this Agreement on behalf
of Merchant and/or as Owner/Guacantor represents that the information provided herein and in all of SFSI's forms is true, accurate and complete in all
Agreement on behalf
respects. SFSI may produce a monthly statement reflecting the delivery of the Specified Percentage of Receipts from Merchant to SFSI and its participants via Processor.
ANY MISREPRESENTATION MADE BY MERCHANT OR ANY OWNER/GUARANTOR IN CONNECTION WITH THIS AGREEMENT MAY
CONSTITUTE A SEPARATE CAUSE OF ACTION FOR FRAUD OR INTENTIONAL MISREPRESENTATION.
SFS-MA 12-01-13 Page 1 of 7
DocuSign Envelope ID: F96D68D0-59F
0-4E 1C-AEDE-DE6CEEB360!
MERCHANT SASH ADVANCE AGR 1 TERMS AND CONDITIONS
J. TERMS OF ENROLLMENT IN PROGRAM Agreement or (ii) disclosure of information as
asserted by Merchant under any legal theory for lost
1.1 Merchant Cash Advance Agreement. These profits, lost revenues, lost business opportunities, permitted by this Agreement.
exemplary, punitive, special, incidental, indirect or 1,13 Confidentiality. Merchant understands and agrees
terms and conditions shall be incorporated in and made
a part of the attached Merchant Cash Advance consequential damages, each of which is waived by that the terms and conditions of the products and
‘Agreement (such Merchant Cash Advance Agreement, Merchant and each Owner/Guarantor. services offered by SFSI, including this Agreement, the
as supplemented by these terms and conditions, this 1.9 Re ice on Terms. Sections 1.2, 1.7, 1.8, 2.5, Merchant Security Agreement and Guaranty and any
“Agreement’). and 4.6 hereof are agreed to for the benefit of other documents executed in connection with such
1.2 Merchant Processing Agreement, Merchant shall Merchant, SFSI_ (and it’s Participants) and agreements or related to such agreements (collectively,
execute an agreement (the “Merchant Processing Processor, and notwithstanding the fact that “Confidential Information”) are proprietary and
Agreement") acceplable to SFSI, with a card processor Processor is not a party to this Agreement, confidential information of SFSI. Accordingly, unless
acceptable to SFSI, to obtain card processing services. Processor may rely upon their terms and raise them disclosure is required by law or court order, Merchant
Merchant shall authorize Processor to deduct the as a defense in any action. shall not disclose Confidential Information to any
amounts owed to SFSI for the Receipts as specified 1,10 Sale of Receipts. Merchant and SFSI intend that person other than an attorney, accountant, financial
herein from settlement amounts which would otherwise the transfer of the interest in the Receipts from advisor or employee of Merchant who needs to know
be due to Merchant from Processor card transactions Merchant to SFSI constitute a sale, and not a loan, for such information for the purpose of advising Merchant
and to pay such amounts to SESI purstant to SFSI’s all purposes. Merchant agrees that the Purchase Price CA e")s provided such Advisor uses such
instructions to Processor. The authorization shall be equals the fair market value of such interest. If, information solely for the purpose of advising
irrevocable without the written consent of SFSI. notwithstanding such intent, such transfer is not Merchant and first agrees in writing to not disclose
Processor may rely upon the instructions of SFSI, deemed to constitute a sale, Merchant hereby grants to Confidential Information to any person in accordance
without any independent verification, in making such SFSI a security interest in all right, title and interest of with the terms of this Section 1.13.
deductions and payments, and Merchant waives any Merchant in and to the Receipts, which security interest 1.14 Publicity, Merchant and each Owner/Guarantor
claims for damages it may have against Processor in shall secure the payment of the Purchased Amount and authorize SFSI to use their respective names in a listing
connection with such acts unless such damages were all other obligations of Merchant under this Agreement. of clients and in advertising and marketing materials.
due to Processor’s failure to follow SFSI's instructions. In no event shall the aggregate of all amounts deemed 1,15 D/B/A’s, Merchant and each Owner/Guarantor
1.3 Purchase Price Reduction. SFSI may, in its sole interest hereunder and charged or collected hereunder hereby acknowledge and agree thal SFSI may be using
iscretion, reduce the Purchase Price if one or more exceed the highest rate permissible at law. In the event “doing business as” or “d/b/a” names in connection
card processing conditions are not satisfied. that a court determines that SFST has charged or with various matters relating to the transaction between
1.4 Bridge / Control Account, Merchant may be received interest hereunder in excess of the highest SFSI and Merchant, including the filing of UCC-1
required to open a new bank account into which 100% appl ible rate, the rate in effect hercunder shall financing statements and other notices or filings.
of the settlement amounts will be deposited and the automatically be reduced to the maximum rate 1,16 Financial Information. Merchant and each
Specified Percentage collected by SFSI (the “Bridge / permitted by applicable law and SFST shall promptly Owner/Guarantor shall provide to SFSI upon request
Control_Account”). Merchant appoints SFSI as refund to Merchant any interest received by SFSI in copies of financial statements representing the financial
“Acting Agent” over the Bridge / Control Account, excess of the maximum lawful rate, it being intended condition of Merchant and/or such Owner/Guarantor.
and shall instruct Processor fo di nate the Bridge/ that Merchant not pay or contract to pay, and that SFST
Control Account as the deposit account for all of not receive or contract to receive, directly or indirectly UI. REPRESENTATIONS, WARRANTIES AND
Merchant’s customers’ card transactions. Merchant in any manner whatsoever, interest in excess of that COVENANTS
assumes all responsibility for all fees, costs, charge which may be paid by Merchant under applicable law. Merchant and cach Owner/Guarantor each represents,
backs or suspicious items processed through the Merchant hereby authorizes SFSI to file any financing, warrants and covenants that as of the date of this
Bridge / Control Account (see “Miscellaneous Service statements deemed necessary by SFSI to perfect or Agreement and on each date during the term of this
Fees” paragraph 3.7). Merchant agrees to maintain a ‘maintain SFSI's interest in the Reccipts. ‘Agreement:
minimum balance in the Bridge / Control Account 1.11 Power of Attorney. Merchant irrevocably 2.1 Financial Condition and Financial Information.
(the “Minimum Balance") equal to the per-month appoints SFST and any assignee of SFSI as its agent Is financial statements, copies of which have been
average of all fees charged to Merchant by and altorney-in-fact with full authority to take any furnis ed to SFSI, and any financial statements
Processor, averaged over a six-month period. action or execute any strument or document to settle furnis ed to SFSI hereafter, fairly represent the
1.5 Financial Condition. Merchant and each all obligations due to 1 from Processor, or upon the financial ndition of Merchant and each
Owner/Guarantor authorize SFSI, its agents and oceurrence of an Event of Default under Section 3.1 Owner/Guarantor at such dates, and since those dates
representatives, and any credit reporting agency hereof, to settle all obligations due to SFSI from there has been no material adverse change, financial or
‘engaged by SFSI, to investigate their ereditworthiness, Merchant, under this Agreement, inchiding without otherwise, in such condition or in the operation or
financial responsibility and history, and they agree to limitation (i) to obtain and adjust insurance; (i owner: ip of Merchant. Merchant has a continuing,
provide SFSI any financial statements, tax returns, collect monies due or to become due under or in affirmative obligation to advise SFST of any material
references, or other credit or financial information as respect of any of the Collateral (as defined in the adverse change in its financial condition, operation or
SFSI deems necessary prior to or aller execution of this, Merchant Security Agreement and Guaranty); (iii) to ownership.
‘Agreement. A photocopy of this authorization will be receive, endorse and collect any checks, notes, drafts, 2.2 Governmental Approvals. Merchant is and will
deemed as acceptable for release of credit and financial instraments, documents or chattel paper in connection remai in compliance with all laws and has valid
information. Merchant and each Owner/Guarantor with clause (i) or clause (i above; (iv) to sign permits, authorizations and licenses to own, operate
authorize SFSI to update their credit and financial Merchant’s name on any invoice, bill of lading, or and lea: its properties and to conduct the business in
profile from time to time in the future, as SFSI deems assignment directing customers or account debtors to which it is presently engaged.
appropriate, An investigative or consumer report may make payment directly to SPST; and (v) to file any 2.3 Authorization. Merchant, and the person(s)
be made or obtained in connection with this Agreement. claims or take any action or institute any proceeding signing this Agreement on behalf of Merchant, have
1.6 ‘Transactional History. Merchant authorizes which SFSI may deem necessary for the collection of full power and authority to execute this Agreement and
Processor and each of Merchant's banks to provide any unpaid Purchased Amount from the Collateral, or to incur and perform the obligations under this
SFSI upon request with Merchant's card history or otherwise to enforce its rights with respect to payment Agreement, all of which have been duly authorized,
bank statements, as applicable. of the Purchased Amount. 2.4 Insurance. Merchant has and will maintain
17 Indem: tio Merchant and each 1.12. Protection of Information. Merchant and each busines interruption insurance naming SFSI as loss
Owner/Guarantor jointly and severally indemnify and person signing this Agreement on behalf of Merchant payee and additional insured in such amounts and
hold harmless Processor, its officers, directors and and/or as Owner/Guarantor, in respect of himself or against such risks as are satisfactory to SFSI and shal!
sharcholders against all losses, damages, claims, herself personally, authori s SFSI to disclose to any provide SFSI proof of such insurance upon request.
liabilities and expenses (including reasonable third party information concerning Merchant's and 2.5 Merchant Processins ‘eement __and
attorney’s fees) incurred by Processor resulting from each Owner's/Guarantor’s credit standing (including Arrangements. Without SFSI’s prior written consent,
(a) claims asserted by SFSI for monies owed to SFSI credit bureau reports that SFSI obtains) and business Merchant will not: (i) change the card processor
from Merchant and (b) actions taken by Processor in conduct, Merchant and each Owner/Guarantor hereby through which the Receipts are settled from Processor
reliance upon information or instructions provided by waive lo the maximum extent permitted by law any to another card processor; (ii) permit any event to occur
SFSI. claim for damages against SFST or any of its affiliates that could cause diversion of any of Merchant's card
1.8 No Liability. In no event will Processor or SFST and participants relating to any (i) investigation transactions from Proce: xr to another processor; (iii)
(or any of the Participants) be liable for any claims: undertaken by or on behalf
of SFST as permitted by this change its arrangements with Processor or amend the
SFS-MA 12-01-13 Page 2 of 7
DocuSign Envelope ID: F96D68D0-59F0-4E1C-AEDE-DE6CEEB360B3
Merchant Processing Agreement in any way that is .14 Delivery of Confession of Judgment, Upon interest granted in the Additional Collateral under the
adverse to SFSI; (iv) add card processing terminals; (v) execution of this Agreement, Merchant shall, if Merchant Security Agreement and Guaranty; or (j)
use multiple catd processing terminals; (vi) change its requested by SFSI, deliver to SFSI an executed Merchant or any Owner/Guarantor files any petition for
financial institution or bank account(s) (including, if Confession of Judgment (the ‘onfession. of bankruptcy under the United States code or an
applicable, the Bridge/ Control Account); (vii) lake judgment”), in the form provided by SFST, in favor of involuntary petition for bankruptey has been brought or
any other action that could have any adverse eflect ‘SFSI in the amount of the Purchased Amount. is pending against Merchant or any Owner/Guarantor;
upon Merchant’s obligations under this Agreement or 2.15 Delivery of Assignment of Lease. Merchant and (k)Merchant or any Owner/Guarantor defaults under
SFSI’s interest in the Receipts; or (viii) take any action, each Owner/Guarantor authorize SFSI to receive any of the terms, covenants and conditions of any other
fail to take any action, or offer any incentive— pertinent information regarding the commercial lease agreement with SFSI including those with affiliated /
economic or otherwise—the result of which could be to for the physical location(s) of Merchant's business (the associated businesses.
discourage the use of cards that are settled through “Premises”) from any applicable leasing company and 3.2 Reme Upon the occurrence of an Event of
Processor, or to induce any customers to pay for ‘or agent. Merchant may be asked to deliver to SFSI an Default that is not waived pursuant to Scction 4.4
Merchant’s services with any means other than cards exeouted Assignment of Lease assigning all of hereof, SFSI on its own and on behalf of it’s
that are settled through Processor, or permit any event Merchant's right, title and interest in and to the Participants may proceed to protect and enforce its
to occur that could have an adverse effect on the use, Premises and under the lease for the Premises to SFSI rights or remedies by suil in equity or by action at law,
acceptance, or authorization of cards for the purchase (the ‘Assignment of Lease”). or both, whether for the specific performance of any
of Merchant's services and products. 2.16 Sale of Business. Merchant shall not sell, covenant, agreement or other provision contained
2.6 Change of Name or Location. Merchant will not dispose, transfer or otherwise convey its business or herein, or to enforce the performance of Merchant's
conduct its businesses under any name other than as assets without (i) the express prior written consent of and each Owner's/Guarantor’s obligations hereunder,
disclosed to Processor and SFSI or change any of its SFSI, and (ii) the written agrecment of any purchaser under the Merchant Security Agreement and Guaranty,
places of business. or transferee assuming all of Merchant's obligations ‘or pursuant to any other legal or equitable right or
2.7 Daily Batch Out. Merchant will batch out receipts under this Agreement pursuant to documentation remedy. Upon SFSI’s notice to Merchant of any Event
with Processor on a daily basis. satisfactory to SFSI. of Default, the entire Receipts Purchased Amount and
2.8 Estoppel Certificate. Merchant will at any time, 217 ridge mtrol_Account. If Merchant is unpaid fees not already paid to SFSI shall become
and from time (o time, upon at Least one (1) day's prior required to open a Bridge / Control Account, (i) immediately due and payable to SFSI. In addition,
notice from SFSI to Merchant, execute, acknowledge Merchant will not, unless otherwise directed in writing upon an Event of Default (i) SFSI may enforce the
and deliver to SFSI and/or to any other person, firm or by SFSI, take any action to cause the Specified provisions of the Merchant Security Agreement and
corporation specified by SFSI, a statement certifying Percentage of the settlement amounts to be settled or Guaranty against each Owner/Guarantor; (ii) SFSI may
that this Agreement is unmodified and in full force and delivered to any account other than the Bridge / enforce its security interest in the Collateral and
effect (or, if there have been modifications, that the ‘ontrol Account and (ii) Merchant will at afl times Additional Collateral; (iti) SPSI may debit Merchant's
same is full foree and effect as modified and stating maintain the Minimum Balance in the Bridge / Contral deposit accounts wherever situated by means of ACH
the modifications} and stating the dates on which the Account. debit or facsimile signature on a computer-generated
Purchased Aniount or any portion thereof has been 2.18 Use_of Proceeds, Merchant will conduct its check drawn on Merchant's bank account or otherwise;
paid. business and use the Purchase Price in the ordinary (iv) SPSI may enter the Confession of Judgment as a
2.9 No Bankeuptcy. Neither Merchant nor any cours of its business, consistent with past practice. judgment with the appropriate Clerk of Court and
Owner/Guarantor has filed any petition for bankruptey 2.19 Accurac of Information. All. information execute thereon; and (v) SFSI may exercise its rights
protection under Title 11 of the United States Code, no provided by Merchant and cach Owner/Guarantor to under the Assignment of Lease. All rights, powers and
involuntary petition for bankruptcy has been brought or SFSI herein, in the Merchant Security Agreement and remedies of SFSI in connection with this Agreement
is pending against Merchant or any Owner/Guarantor, Guaranty, and in all other documents executed in and the Merchant Security Agreement and Guaranty
neither Merchant nor any Owner/Guarantor has connection with such agreements or related to such may be exercised at any time by SFS! after the
admitted in writing its inability to pay its debts or made agreements is true, accurate and complete in all occurrence of an Event of Default, are cumulative and
a gencral assignment for the benefit of creditors, and no respects. not exclusive, and shall be in addition to any other
other proceeding has been instituted by or against rights, powers or remedies provided by law or equity.
Merchant or any Owner/Guarantor secking to IIL. EVENTS OF DEFAULT AND REMEDIES 3.3 Costs. Merchant and cach Owner/Guarantor shall
adjudicate it insolvent or seeking reorganization, 3.1 Events of Default, The occurrence of any of the pay to SFSI all costs reasonably incusred by SFSI in
arrangement, adjustment or composition of it or its following events shall constitute an “Event of Default” connection with (a) any Event of Default including.
debts. Merchant does not anticipate filing any such hereunder; (a) Merchant or any Owner/Guarantor without limitation any breach by Merchant or any
bankruptcy petition and is not aware and has no reason violates any term, covenant or condition in this ‘Owner/Guarantor of the representations, warranties and
to believe that any such bankruptey pet ion of other Agreement, the Merchant Security Agreement and covenants in this Agreement or the Merchant Security
proceeding will be filed or brought against it or any Guaranty or any other agreement with SFSI; (b) any Agrecment and Guaranty, and (b) the enforcement of
Owner/Guarantor. representation or warranty by Merchant or any SFSI’s remedies set forth in Section 3.2 hereof,
2,10 Other Financing. Merchant shall not enter into Owner/Guarantor in this Agreement, the Merchant including but not limited to court costs and attorneys?
any arrangement, agreement or commitment that Security Agreement and Guaranty or any other foes,
relates to or involves Receipts, whether in tbe form ofa agreement with SFSI shall prove to have been 3.4 Required Notifications. Merchant and each
incorrect, incomplete, false or misleading in any
purchase (such as a merchant cash advance) of, a loan Owner/Guarantor shall give SFSI written notice
material ‘respect when made; (c) Merchant or any
against, or the sale or purchase of credits against, any within 24 hours of any filing by Merchant or any
Receipts, cash deposits or future card or mobile Owner/Guarantor admits in writing its inability to pay Owner/Guarantor under Title 11 of the United
its debts, or makes a general assignment for the benefit
payment sales with any party other than SFSI without States Code ar of the occurrence of any other event
its written permission. of creditors; or any proceeding shall be instituted by or described in Section 3.1(c) hereof. Merchant shall
2.11 Unencumbered Receipts. Merchant has good and against Merchant or any Owner/Guarantor seeking to give SFSI seven days’ written notice prior to the
adjudicate it bankrupt or insolvent, or secking
markelable title to all Receipts, free and clear of any closing of any sale of all or substantially all of
reorganization,
and all liabilities, liens, claims, changes, restrict ns, arrangemen
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INDEX NO. 157918/2015 FILED: NEW YORK COUNTY CLERK 08/03/2015 09:47 AM NYSCEF DOC. NO. 1 RECEIVED NYSCEF 08/03/2015 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK sels aintein tineninterirtetinnineinnireni niin serine sieiteeneatatiainenanaaneX, Index No.: STRATEGIC FUNDING SOURCE, INC., Date Filed: Plaintiff, SUMMONS - against- Plaintiff's Place of Business: 120 West 45th Street NEOH BEST BARBECUE 1, LLC d/b/a New York, New York 10036 DICKEY’S BARBECUE PIT and BURT JACKSON, Plaintiff designates New York County as the place of trial. Venue Defendants. is based upon Plaintiff's place of a a eas eee x business and pursuant to Agreement. TO THE ABOVE-NAMED DEFENDANT(S): YOU ARE HEREBY SUMMONED to appear in the Supreme Court of the City of New York , County of New York at the office of the Clerk of said county at 60 Centre Street, New York, New York 10013, and to answer the Complaint in this action and serve a copy of your Answer or, if the Complaint is not served with the Summons, to serve a Notice of Appearance, on the plaintiff's attorney within 20 days after the service of this Summons, exclusive of the day of service; or within 30 days after the service is complete if this Summons is not personally delivered to you within the State of New York. 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: New York, New York July g » 2015 )) Jennifer Ballard, Esq. By: Fae TOF Plaintiff ? (0 West 45th Street lew York, New York-10036 Tel: (212) 354-1400 Fax: (800) 581-3615 NEOH Best Barbecue 1, LLC d/b/a Dickey’s Barbecue Pit 9434 Mentor Avenue Mentor, OH 44060 Burt Jackson 7105 Brakeman Road Leroy, OH 44077 SUPREME COURT OF THE STATE OF NEW YORK Index No.: COUNTY OF NEW YORK stint tetris eaten en teen carer —X Date Filed: STRATEGIC FUNDING SOURCE, INC., VERIFIED COMPLAINT Plaintiff, Plaintiff's Place of Business: - against- 120 West 45th Street New York, New York 10036 NEOH BEST BARBECUE 1, LLC d/b/a DICKEY’S BARBECUE PIT and Plaintiff designates New York BURT JACKSON, County as the place of trial. Venue is based upon Plaintiff's place of Defendants. business and pursuant to Agreement. Plaintiff, Strategic Funding Source, Inc., by its attorney, Jennifer Ballard, Esq., complaining of the Defendants NEOH Best Barbecue 1, LLC d/b/a Dickey’s Barbecue Pit and Burt Jackson, alleges upon information and belief, as follows: PARTIES Plaintiff, Strategic Funding Source, Inc. (“SFS” or “Plaintiff’) is a New York Corporation with its principal place of business at 120 West 45th Street, New York, New York 10036. Upon information and belief, Defendant NEOH Best Barbecue 1, LLC d/b/a Dickey’s Barbecue Pit, (“Dickey’s Barbecue Pit”) is a limited liability company and existing under the laws of the state of Ohio, with a last known address of 9434 Mentor Avenue, Mentor, OH 44060. Defendant Burt Jackson (“Jackson”) is a natural person, the owner and guarantor of defendant Dickey’s Barbecue Pit, and upon information and belief, at all times hereinafter mentioned, was and is a resident of the State of Ohio, residing at 38 Johnston Row NW, Leroy, OH 44077. Dickey’s Barbecue Pit and Jackson are hereinafter referred to collectively as “Defendants”. Defendants have consented to the jurisdiction of this Court pursuant to the Agreements referenced below. FACTUAL ALLEGATIONS By way of two separate Merchant Cash Advance Agreements for the Purchase and Sale of Future Receivables dated May 29, 2014 (Contract #526751) and August 19, 2014 (Contract #479203), (the “Agreements”) Plaintiff purchased $73,575.00 of Dickey’s Barbecue Pit’s future credit card receivables generated in the course of its business (the “Receivables”). True and accurate copies of the Agreements are annexed hereto as “Exhibit A”. By August 22, 2014, Plaintiff paid Dickey’s Barbecue Pit the amount of $52,500.00 as the agreed upon purchase price for the Receivables. Plaintiff was to collect 20% (Contract #526751) and 28% (Contract #479203) of the daily batch amount of receivables collected by Dickey’s Barbecue Pit, from Dickey’s Barbecue Pit’s credit card processor. Agreements pg. 1, line 22, and pg. 3, sec. 2.7. As noted in the Agreements, a primary condition of this transaction was that Dickey’s Barbecue Pit was to use a single, specified third-party credit card processor, to be designated by the parties (the “Processor’”). Agreements pg. 1, lines 15-20 & pg. 2, sec. 2.5. 10 Any changes of the Processor were to be made only with the express written consent of Plaintiff. Agreements pg. 2, sec. 2.5. 11 Additionally, Dickey’s Barbecue Pit made numerous warranties, representations and covenants within Section 2 of the Agreements including, inter ali, a. To provide to Plaintiff an accurate representation of the financial state of the business and to proactively and continually apprise Plaintiff of any material adverse changes thereto. b. To settle or “batch out” its credit card receipts with the Processor on a daily basis. c. Not to change the credit card Processor through which credit cards accepted by Dickey’s Barbecue Pit in course of its business are settled without Plaintiff's written consent. 12, In direct contradiction of the afore-mentioned warranties, representations and covenants, by June 22, 2015, Dickey’s Barbecue Pit diverted its Receivables to a non-designated and unauthorized credit card processor. 13 As a result, Plaintiff has been unable to collect its daily percentage of Receivables purchased from Dickey’s Barbecue Pit, since the date of said diversion. 14. Of the $73,575.00 of Receivables purchased, Dickey’s Barbecue Pit has delivered a total of $29,796.86 in Receivables to Plaintiff, leaving a balance of $43,778.14, of Receivables outstanding under the Agreements. 15 Moreover, Sections 3.5 and 3.6 of the Agreements provide for $7,500.00 in “Processor Change” and “Default” fees per Agreement to be applied to defendant’s balance in the event Dickey’s Barbecue Pit made an unauthorized change of its credit card processor. 16 The combined sum of outstanding Receivables due to Plaintiff and the processor change fee, provide for a total balance of $58,778.14 due and owing to Plaintiff. 17. Moreover, defendant Jackson executed a personal guaranty of Dickey’s Barbecue Pit’s full performance of all terms and obligations under the Agreements. “Guaranty” annexed to Agreements as pgs. 6 & 7. 18 Nevertheless, Jackson has not fulfilled his obligation as guarantor, to cure the debt owed to Plaintiff, in light of Dickey’s Barbecue Pit’s default. 19. Whereas, Defendants are jointly and severally liable to Plaintiff for the amount of $58,778.14, pursuant to the Agreements, plus costs, and interest from June 22, 2015, the date of default, through entry of judgment herein. AS AND FOR A FIRST CAUSE OF ACTION AGAINST DEFENDANT DICKEY’S BARBECUE PIT: (Breach of Contract) 20. Plaintiff repeats and reaffirms the allegations contained in paragraphs “1” through “19” as though fully set forth herein at length. 21 The Agreements provide that Dickey’s Barbecue Pit shall be in default of the Agreements if, inter ali, it breaches any of the terms, covenants or conditions contained therein or makes any representation or warranty proving to have been incorrect, false or misleading. Agreements Section 3.1(a) and (b). 22 As a result of Dickey’s Barbecue Pit’s breach of the terms and Section 2 provisions set forth above, Dickey’s Barbecue Pit has defaulted under the Agreements. 23 Section 3.2, the Agreements provide that in the event of a default, all future Receivables purchased by Plaintiff shall immediately become due and owing to Plaintiff. 24. Further, Section 3.2 of the Agreements provide that in the event of a default under the Agreements, Plaintiff shall have the right to enforce its rights and remedies by suit in equity or action by law. 25 No Receivables have been transmitted to Plaintiff since June 22, 2015, leaving a balance of Receivables as of this date in the amount of $43,778.14. Further as stated above, a fee of $7,500.00 per Agreement is to apply to the balance due in the event Dickey’s Barbecue Pit changed credit card processors. 26 By reason of the foregoing, Dickey’s Barbecue Pit is liable to SFS in the amount of $58,778.14, plus costs and interest at the statutory rate from June 22, 2015, through the entry of judgment herein. AS AND FOR A SECOND CAUSE OF ACTION AGAINST DEFENDANT DICKEY’S BARBECUE PIT: (Account Stated) 27 Plaintiff repeats and reaffirms the allegations contained in paragraphs “1” through “26” above as though fully set forth herein at length. 28. SFS periodically mailed notices to Dickey’s Barbecue Pit reflecting the current balance due and demanding payment of the same (“Statements of Account”). 29. Dickey’s Barbecue Pit received and accepted these Statements of Account without timely objection, protest, or dispute. 30. The last Statements of Account were mailed to Dickey’s Barbecue Pit on or around April 27, 2015. 31 By reason of the foregoing, an account has been stated between SFS and Dickey’s Barbecue Pit, in the sum of $58,778.14. AS AND FOR A THIRD CAUSE OF ACTION AGAINST DEFENDANT JACKSON: (Breach of Guaranty) 32 Plaintiff repeats and reaffirms the allegations contained in paragraphs “1” to “31” above as though fully set forth herein at length. 33. In connection with the Agreements, Jackson made and delivered to SFS a separately executed, written personal guaranty of Dickey’s Barbecue Pit’s performance of all representations, warranties and covenants under the Agreements, Said guaranty states, inter ali, : “The undersigned Guarantor(s) hereby guarantys...Merchant’s payment and performance of all of the representations, warranties, covenants made by Merchant in this Agreement...as ... may be renewed, amended, extended or otherwise modified...” Agreements pgs. 6 & 7. 34 Pursuant to the guaranty, Plaintiff has the right to enforce its rights under the Agreements severally against Jackson in the event of Dickey’s Barbecue Pit’s default. Agreements pg. 6. 35 Dickey’s Barbecue Pit failed to perform under the terms and conditions of the Agreements, rendering Jackson personally and fully liable for the balance of owed to Plaintiff. 36. Jackson, as guarantor of Dickey’s Barbecue Pit’s performance, and having failed to render payment of the full balance due and owing SFS as of the date herein, is currently in default of the Agreements’ guaranty. 37. By reason of the foregoing, Jackson is liable to SFS in the sum of $58,778.14 plus costs, and interest at the statutory rate from June 22, 2015 through the entry of judgment herein. AS AND FOR A FOURTH CAUSE OF ACTION AGAINST DEFENDANTS DICKEY’S BARBECUE PIT AND JACKSON, JOINTLY AND SEVERALLY: (Attorney’s Fees) 38. Plaintiff repeats and reaffirms the allegations contained in paragraphs “1” to “37” above as though fully set forth herein at length. 39 Section 3.3 of the Agreements provides that in addition to all payments owed under the Agreements, Dickey’s Barbecue Pit and Jackson as guarantors agree to pay all costs associated with a default and the enforcement of remedies thereof, including but not limited to, court costs and disbursements and attorney’s fees. 40. As a result of this litigation, Plaintiff is at risk of incurring expenses including attorneys’ fees, which cannot be finally determined at this date but which will be capable of determination at such time as judgment may be entered herein. 41 By reason of the foregoing, Defendants are jointly and severally liable to SFS for SFS’s expenses in regard to this litigation, including costs, disbursements and attorneys’ fees, in such amount as may be determined. WHEREFORE, Plaintiff demands judgment: a) Onthe FIRST CAUSE OF ACTION against Dickey’s Barbecue Pit in the sum of $58,778.14, plus interest at the statutory rate from June 22, 2015 through the entry of the judgment herein; b) On the SECOND CAUSE OF ACTION against Dickey’s Barbecue Pit in the sum of $58,778.14, plus costs, and interest at the statutory rate from June 22, 2015 through the entry of the judgment herein; °) On the THIRD CAUSE OF ACTION against Jackson in the sum of $58,778.14, plus interest at the statutory rate from June 22, 2015 through the entry of the judgment herein; d) On the FOURTH CAUSE OF ACTION against Dickey’s Barbecue Pit and Jackson, jointly and severally, awarding SFS costs and expenses, together with attorney’s fees incurred in prosecuting this action in an amount to be determined by the Court, and; e) For such other and further relief as this court may deem just and proper. Dated: New York, New York JulV3{_, 2015 ) Jennifer Ballard, Esq. \ By. Jenifer Ballard, Esq.. hA ttorneyferBallard, for Plaintiff 120 West 45th Street~--- New York, New York 10036 Tel: (212) 354-1400 Fax:(800) 581-3615 VERIFICATION STATE OF NEW YORK } } ss.: COUNTY OF NEW YORK} David Wolfson, first being duly sworn, says that he is employed as the Vice President of Risk Management and Asset Recovery of Strategic Funding Source, Inc., that he has read the Verified Complaint and knows the contents thereof; that the same is true to his own knowledge, except as to those matters therein stated to be upon information and belief and as to those matters, he believes them to be true. Sworn to before me 2; This. teYIyt) day of July, 2015 | (ee LZt ( 1 i - baba Wolfson, Vice President of Risk Management and Asset Recovery, Strategic Funding Source Inc. EXHIBIT “A” DocuSign Envelope ID: F96D68D0-59F 0-4E1C-AEDE-DE6CEEB360B3 ZL Contract# 526751 Sales Parmer: Whitefish STRATEGIC Venture FUNDING MERCHANT CASH ADVANCE AGREEMENT Agreement dated May 29 2014 between Strategic Funding Source Inc. (“SESI”) and the merchant listed below (“theMerchant”). (Month) (Day) (Year) MERCHANT INFORMATIO! Merchant's Legal Name: NEOH Best Barbecue 1, LLC D/B/A: Dickey’s Barbecue Pit State of Incorporation/organization: OH ‘Type of entity:() (X_) Limited Liability Company( ) Limited Partnership ( Corporation ) Limited Liability Partnership ( ) Sole Proprietor Physical Address: 9434 MENTOR AVE City: MENTOR State: OH Zip: 44060 Mailing Address: City: State: Zip: Date business started (mn/yy): 06/12 Federal ID# Monthly Total Sales Monthly Card Sales Monthly Cash Sales URCHASE AND SALE OF FUTURE RECEIPTS Merchant hereby sells, assigns and transfers to SFSI, as the lead purchaser for itself and other participants, (making SFSI and all other participants the absolule owner) in consideration of the purchase price specified below (the “Purchase Price"), all of Merchant’s future accounts, contract rights and other rights to payment arising from or relating to the use by Merchant's customers of cash, credit cards, charge cards, debit cards, prepaid cards, mobile payments and other similar payment methods in the ordinary course of Merchant’s business (the "Receipts”) for the payment of Merchant’ sale of goods or rendition of services until the purchased amount specified below (the ‘Purchased Amount”) has been delivered by Merchant to SFSI, provided that the Purchase Price, the Specified Percentage (as defined below) and/or the Purchased Amount “Purchased Amount may be adi ced by SFSI and Merchant in writing if one or more card processing conditions are not satisfied. The Purchased Amount shall be paid to SFSI by Merchant 1 using and irrevocably authorizing only one card processor acceptable to SFSI (“Processor”) to remit to or for the benefit of SFSI the percentage specified below (the “Specified Percentage") of Merchant's settlement amounts due from each card issuer with respect to the Receipts, until such time as SFSI receives payment in full of the Purchascd Amount, Furthermore Merchant will not enter into another cash advance agreement or any other type of factoring agreement, or any other type of credivdebit card processing during the term of this contract. Notwithstanding anything to the contrary in this Agreement or any other agreement between SFSI and Merchant, upon the occurrence of an Event of Default under Section 3 of the MERCHANT CASH ADVANCE AGREEMENT TERMS AND CONDITIONS, the Specified Percentage shall equal 100%. Purchase Price: $32,500.01 Specified Percentage: 20% Receipts Purchased Amount: $45,175.00 ‘THE TERMS, DEFINITIONS, CONDITIONS AND INFORMATION SET FORTH IN THE “MERCHANT CASH ADVANCE AGREEMENT TERMS AND CONDITIONS”, THE “MERCHANT SECURITY AGREEMENT AND GUARANTY” AND THE “ADMINISTRATIVE FORM” EACH OF WHICH IS ATTACHED HERETO, ARE HEREBY INCORPORATED IN AND MADE A PART OF THIS AGREEMENT. MERCHANT #t By Burt Jackson (Print Name and Title) MERCHANT #3 y (Print Name and Title) OWNER/GUARANTOR #1 By Burt Jacksoi (Print Name) OWNER/GUARANTOR #2 By (Print Name) (Signature) \TRATEGIC FUNDING SOURCE, INC. By Associate Name (Stategic Punding Sor ke, Ine. Officer) s ignature) of Merchant represents that he or she is authorized to sign this Agreement on behalf of Merchant, and each person signing this, Each person signing this Agreement on behalf of Merchant and/or as Owner/Guacantor represents that the information provided herein and in all of SFSI's forms is true, accurate and complete in all Agreement on behalf respects. SFSI may produce a monthly statement reflecting the delivery of the Specified Percentage of Receipts from Merchant to SFSI and its participants via Processor. ANY MISREPRESENTATION MADE BY MERCHANT OR ANY OWNER/GUARANTOR IN CONNECTION WITH THIS AGREEMENT MAY CONSTITUTE A SEPARATE CAUSE OF ACTION FOR FRAUD OR INTENTIONAL MISREPRESENTATION. SFS-MA 12-01-13 Page 1 of 7 DocuSign Envelope ID: F96D68D0-59F 0-4E 1C-AEDE-DE6CEEB360! MERCHANT SASH ADVANCE AGR 1 TERMS AND CONDITIONS J. TERMS OF ENROLLMENT IN PROGRAM Agreement or (ii) disclosure of information as asserted by Merchant under any legal theory for lost 1.1 Merchant Cash Advance Agreement. These profits, lost revenues, lost business opportunities, permitted by this Agreement. exemplary, punitive, special, incidental, indirect or 1,13 Confidentiality. Merchant understands and agrees terms and conditions shall be incorporated in and made a part of the attached Merchant Cash Advance consequential damages, each of which is waived by that the terms and conditions of the products and ‘Agreement (such Merchant Cash Advance Agreement, Merchant and each Owner/Guarantor. services offered by SFSI, including this Agreement, the as supplemented by these terms and conditions, this 1.9 Re ice on Terms. Sections 1.2, 1.7, 1.8, 2.5, Merchant Security Agreement and Guaranty and any “Agreement’). and 4.6 hereof are agreed to for the benefit of other documents executed in connection with such 1.2 Merchant Processing Agreement, Merchant shall Merchant, SFSI_ (and it’s Participants) and agreements or related to such agreements (collectively, execute an agreement (the “Merchant Processing Processor, and notwithstanding the fact that “Confidential Information”) are proprietary and Agreement") acceplable to SFSI, with a card processor Processor is not a party to this Agreement, confidential information of SFSI. Accordingly, unless acceptable to SFSI, to obtain card processing services. Processor may rely upon their terms and raise them disclosure is required by law or court order, Merchant Merchant shall authorize Processor to deduct the as a defense in any action. shall not disclose Confidential Information to any amounts owed to SFSI for the Receipts as specified 1,10 Sale of Receipts. Merchant and SFSI intend that person other than an attorney, accountant, financial herein from settlement amounts which would otherwise the transfer of the interest in the Receipts from advisor or employee of Merchant who needs to know be due to Merchant from Processor card transactions Merchant to SFSI constitute a sale, and not a loan, for such information for the purpose of advising Merchant and to pay such amounts to SESI purstant to SFSI’s all purposes. Merchant agrees that the Purchase Price CA e")s provided such Advisor uses such instructions to Processor. The authorization shall be equals the fair market value of such interest. If, information solely for the purpose of advising irrevocable without the written consent of SFSI. notwithstanding such intent, such transfer is not Merchant and first agrees in writing to not disclose Processor may rely upon the instructions of SFSI, deemed to constitute a sale, Merchant hereby grants to Confidential Information to any person in accordance without any independent verification, in making such SFSI a security interest in all right, title and interest of with the terms of this Section 1.13. deductions and payments, and Merchant waives any Merchant in and to the Receipts, which security interest 1.14 Publicity, Merchant and each Owner/Guarantor claims for damages it may have against Processor in shall secure the payment of the Purchased Amount and authorize SFSI to use their respective names in a listing connection with such acts unless such damages were all other obligations of Merchant under this Agreement. of clients and in advertising and marketing materials. due to Processor’s failure to follow SFSI's instructions. In no event shall the aggregate of all amounts deemed 1,15 D/B/A’s, Merchant and each Owner/Guarantor 1.3 Purchase Price Reduction. SFSI may, in its sole interest hereunder and charged or collected hereunder hereby acknowledge and agree thal SFSI may be using iscretion, reduce the Purchase Price if one or more exceed the highest rate permissible at law. In the event “doing business as” or “d/b/a” names in connection card processing conditions are not satisfied. that a court determines that SFST has charged or with various matters relating to the transaction between 1.4 Bridge / Control Account, Merchant may be received interest hereunder in excess of the highest SFSI and Merchant, including the filing of UCC-1 required to open a new bank account into which 100% appl ible rate, the rate in effect hercunder shall financing statements and other notices or filings. of the settlement amounts will be deposited and the automatically be reduced to the maximum rate 1,16 Financial Information. Merchant and each Specified Percentage collected by SFSI (the “Bridge / permitted by applicable law and SFST shall promptly Owner/Guarantor shall provide to SFSI upon request Control_Account”). Merchant appoints SFSI as refund to Merchant any interest received by SFSI in copies of financial statements representing the financial “Acting Agent” over the Bridge / Control Account, excess of the maximum lawful rate, it being intended condition of Merchant and/or such Owner/Guarantor. and shall instruct Processor fo di nate the Bridge/ that Merchant not pay or contract to pay, and that SFST Control Account as the deposit account for all of not receive or contract to receive, directly or indirectly UI. REPRESENTATIONS, WARRANTIES AND Merchant’s customers’ card transactions. Merchant in any manner whatsoever, interest in excess of that COVENANTS assumes all responsibility for all fees, costs, charge which may be paid by Merchant under applicable law. Merchant and cach Owner/Guarantor each represents, backs or suspicious items processed through the Merchant hereby authorizes SFSI to file any financing, warrants and covenants that as of the date of this Bridge / Control Account (see “Miscellaneous Service statements deemed necessary by SFSI to perfect or Agreement and on each date during the term of this Fees” paragraph 3.7). Merchant agrees to maintain a ‘maintain SFSI's interest in the Reccipts. ‘Agreement: minimum balance in the Bridge / Control Account 1.11 Power of Attorney. Merchant irrevocably 2.1 Financial Condition and Financial Information. (the “Minimum Balance") equal to the per-month appoints SFST and any assignee of SFSI as its agent Is financial statements, copies of which have been average of all fees charged to Merchant by and altorney-in-fact with full authority to take any furnis ed to SFSI, and any financial statements Processor, averaged over a six-month period. action or execute any strument or document to settle furnis ed to SFSI hereafter, fairly represent the 1.5 Financial Condition. Merchant and each all obligations due to 1 from Processor, or upon the financial ndition of Merchant and each Owner/Guarantor authorize SFSI, its agents and oceurrence of an Event of Default under Section 3.1 Owner/Guarantor at such dates, and since those dates representatives, and any credit reporting agency hereof, to settle all obligations due to SFSI from there has been no material adverse change, financial or ‘engaged by SFSI, to investigate their ereditworthiness, Merchant, under this Agreement, inchiding without otherwise, in such condition or in the operation or financial responsibility and history, and they agree to limitation (i) to obtain and adjust insurance; (i owner: ip of Merchant. Merchant has a continuing, provide SFSI any financial statements, tax returns, collect monies due or to become due under or in affirmative obligation to advise SFST of any material references, or other credit or financial information as respect of any of the Collateral (as defined in the adverse change in its financial condition, operation or SFSI deems necessary prior to or aller execution of this, Merchant Security Agreement and Guaranty); (iii) to ownership. ‘Agreement. A photocopy of this authorization will be receive, endorse and collect any checks, notes, drafts, 2.2 Governmental Approvals. Merchant is and will deemed as acceptable for release of credit and financial instraments, documents or chattel paper in connection remai in compliance with all laws and has valid information. Merchant and each Owner/Guarantor with clause (i) or clause (i above; (iv) to sign permits, authorizations and licenses to own, operate authorize SFSI to update their credit and financial Merchant’s name on any invoice, bill of lading, or and lea: its properties and to conduct the business in profile from time to time in the future, as SFSI deems assignment directing customers or account debtors to which it is presently engaged. appropriate, An investigative or consumer report may make payment directly to SPST; and (v) to file any 2.3 Authorization. Merchant, and the person(s) be made or obtained in connection with this Agreement. claims or take any action or institute any proceeding signing this Agreement on behalf of Merchant, have 1.6 ‘Transactional History. Merchant authorizes which SFSI may deem necessary for the collection of full power and authority to execute this Agreement and Processor and each of Merchant's banks to provide any unpaid Purchased Amount from the Collateral, or to incur and perform the obligations under this SFSI upon request with Merchant's card history or otherwise to enforce its rights with respect to payment Agreement, all of which have been duly authorized, bank statements, as applicable. of the Purchased Amount. 2.4 Insurance. Merchant has and will maintain 17 Indem: tio Merchant and each 1.12. Protection of Information. Merchant and each busines interruption insurance naming SFSI as loss Owner/Guarantor jointly and severally indemnify and person signing this Agreement on behalf of Merchant payee and additional insured in such amounts and hold harmless Processor, its officers, directors and and/or as Owner/Guarantor, in respect of himself or against such risks as are satisfactory to SFSI and shal! sharcholders against all losses, damages, claims, herself personally, authori s SFSI to disclose to any provide SFSI proof of such insurance upon request. liabilities and expenses (including reasonable third party information concerning Merchant's and 2.5 Merchant Processins ‘eement __and attorney’s fees) incurred by Processor resulting from each Owner's/Guarantor’s credit standing (including Arrangements. Without SFSI’s prior written consent, (a) claims asserted by SFSI for monies owed to SFSI credit bureau reports that SFSI obtains) and business Merchant will not: (i) change the card processor from Merchant and (b) actions taken by Processor in conduct, Merchant and each Owner/Guarantor hereby through which the Receipts are settled from Processor reliance upon information or instructions provided by waive lo the maximum extent permitted by law any to another card processor; (ii) permit any event to occur SFSI. claim for damages against SFST or any of its affiliates that could cause diversion of any of Merchant's card 1.8 No Liability. In no event will Processor or SFST and participants relating to any (i) investigation transactions from Proce: xr to another processor; (iii) (or any of the Participants) be liable for any claims: undertaken by or on behalf of SFST as permitted by this change its arrangements with Processor or amend the SFS-MA 12-01-13 Page 2 of 7 DocuSign Envelope ID: F96D68D0-59F0-4E1C-AEDE-DE6CEEB360B3 Merchant Processing Agreement in any way that is .14 Delivery of Confession of Judgment, Upon interest granted in the Additional Collateral under the adverse to SFSI; (iv) add card processing terminals; (v) execution of this Agreement, Merchant shall, if Merchant Security Agreement and Guaranty; or (j) use multiple catd processing terminals; (vi) change its requested by SFSI, deliver to SFSI an executed Merchant or any Owner/Guarantor files any petition for financial institution or bank account(s) (including, if Confession of Judgment (the ‘onfession. of bankruptcy under the United States code or an applicable, the Bridge/ Control Account); (vii) lake judgment”), in the form provided by SFST, in favor of involuntary petition for bankruptey has been brought or any other action that could have any adverse eflect ‘SFSI in the amount of the Purchased Amount. is pending against Merchant or any Owner/Guarantor; upon Merchant’s obligations under this Agreement or 2.15 Delivery of Assignment of Lease. Merchant and (k)Merchant or any Owner/Guarantor defaults under SFSI’s interest in the Receipts; or (viii) take any action, each Owner/Guarantor authorize SFSI to receive any of the terms, covenants and conditions of any other fail to take any action, or offer any incentive— pertinent information regarding the commercial lease agreement with SFSI including those with affiliated / economic or otherwise—the result of which could be to for the physical location(s) of Merchant's business (the associated businesses. discourage the use of cards that are settled through “Premises”) from any applicable leasing company and 3.2 Reme Upon the occurrence of an Event of Processor, or to induce any customers to pay for ‘or agent. Merchant may be asked to deliver to SFSI an Default that is not waived pursuant to Scction 4.4 Merchant’s services with any means other than cards exeouted Assignment of Lease assigning all of hereof, SFSI on its own and on behalf of it’s that are settled through Processor, or permit any event Merchant's right, title and interest in and to the Participants may proceed to protect and enforce its to occur that could have an adverse effect on the use, Premises and under the lease for the Premises to SFSI rights or remedies by suil in equity or by action at law, acceptance, or authorization of cards for the purchase (the ‘Assignment of Lease”). or both, whether for the specific performance of any of Merchant's services and products. 2.16 Sale of Business. Merchant shall not sell, covenant, agreement or other provision contained 2.6 Change of Name or Location. Merchant will not dispose, transfer or otherwise convey its business or herein, or to enforce the performance of Merchant's conduct its businesses under any name other than as assets without (i) the express prior written consent of and each Owner's/Guarantor’s obligations hereunder, disclosed to Processor and SFSI or change any of its SFSI, and (ii) the written agrecment of any purchaser under the Merchant Security Agreement and Guaranty, places of business. or transferee assuming all of Merchant's obligations ‘or pursuant to any other legal or equitable right or 2.7 Daily Batch Out. Merchant will batch out receipts under this Agreement pursuant to documentation remedy. Upon SFSI’s notice to Merchant of any Event with Processor on a daily basis. satisfactory to SFSI. of Default, the entire Receipts Purchased Amount and 2.8 Estoppel Certificate. Merchant will at any time, 217 ridge mtrol_Account. If Merchant is unpaid fees not already paid to SFSI shall become and from time (o time, upon at Least one (1) day's prior required to open a Bridge / Control Account, (i) immediately due and payable to SFSI. In addition, notice from SFSI to Merchant, execute, acknowledge Merchant will not, unless otherwise directed in writing upon an Event of Default (i) SFSI may enforce the and deliver to SFSI and/or to any other person, firm or by SFSI, take any action to cause the Specified provisions of the Merchant Security Agreement and corporation specified by SFSI, a statement certifying Percentage of the settlement amounts to be settled or Guaranty against each Owner/Guarantor; (ii) SFSI may that this Agreement is unmodified and in full force and delivered to any account other than the Bridge / enforce its security interest in the Collateral and effect (or, if there have been modifications, that the ‘ontrol Account and (ii) Merchant will at afl times Additional Collateral; (iti) SPSI may debit Merchant's same is full foree and effect as modified and stating maintain the Minimum Balance in the Bridge / Contral deposit accounts wherever situated by means of ACH the modifications} and stating the dates on which the Account. debit or facsimile signature on a computer-generated Purchased Aniount or any portion thereof has been 2.18 Use_of Proceeds, Merchant will conduct its check drawn on Merchant's bank account or otherwise; paid. business and use the Purchase Price in the ordinary (iv) SPSI may enter the Confession of Judgment as a 2.9 No Bankeuptcy. Neither Merchant nor any cours of its business, consistent with past practice. judgment with the appropriate Clerk of Court and Owner/Guarantor has filed any petition for bankruptey 2.19 Accurac of Information. All. information execute thereon; and (v) SFSI may exercise its rights protection under Title 11 of the United States Code, no provided by Merchant and cach Owner/Guarantor to under the Assignment of Lease. All rights, powers and involuntary petition for bankruptcy has been brought or SFSI herein, in the Merchant Security Agreement and remedies of SFSI in connection with this Agreement is pending against Merchant or any Owner/Guarantor, Guaranty, and in all other documents executed in and the Merchant Security Agreement and Guaranty neither Merchant nor any Owner/Guarantor has connection with such agreements or related to such may be exercised at any time by SFS! after the admitted in writing its inability to pay its debts or made agreements is true, accurate and complete in all occurrence of an Event of Default, are cumulative and a gencral assignment for the benefit of creditors, and no respects. not exclusive, and shall be in addition to any other other proceeding has been instituted by or against rights, powers or remedies provided by law or equity. Merchant or any Owner/Guarantor secking to IIL. EVENTS OF DEFAULT AND REMEDIES 3.3 Costs. Merchant and cach Owner/Guarantor shall adjudicate it insolvent or seeking reorganization, 3.1 Events of Default, The occurrence of any of the pay to SFSI all costs reasonably incusred by SFSI in arrangement, adjustment or composition of it or its following events shall constitute an “Event of Default” connection with (a) any Event of Default including. debts. Merchant does not anticipate filing any such hereunder; (a) Merchant or any Owner/Guarantor without limitation any breach by Merchant or any bankruptcy petition and is not aware and has no reason violates any term, covenant or condition in this ‘Owner/Guarantor of the representations, warranties and to believe that any such bankruptey pet ion of other Agreement, the Merchant Security Agreement and covenants in this Agreement or the Merchant Security proceeding will be filed or brought against it or any Guaranty or any other agreement with SFSI; (b) any Agrecment and Guaranty, and (b) the enforcement of Owner/Guarantor. representation or warranty by Merchant or any SFSI’s remedies set forth in Section 3.2 hereof, 2,10 Other Financing. Merchant shall not enter into Owner/Guarantor in this Agreement, the Merchant including but not limited to court costs and attorneys? any arrangement, agreement or commitment that Security Agreement and Guaranty or any other foes, relates to or involves Receipts, whether in tbe form ofa agreement with SFSI shall prove to have been 3.4 Required Notifications. Merchant and each incorrect, incomplete, false or misleading in any purchase (such as a merchant cash advance) of, a loan Owner/Guarantor shall give SFSI written notice material ‘respect when made; (c) Merchant or any against, or the sale or purchase of credits against, any within 24 hours of any filing by Merchant or any Receipts, cash deposits or future card or mobile Owner/Guarantor admits in writing its inability to pay Owner/Guarantor under Title 11 of the United its debts, or makes a general assignment for the benefit payment sales with any party other than SFSI without States Code ar of the occurrence of any other event its written permission. of creditors; or any proceeding shall be instituted by or described in Section 3.1(c) hereof. Merchant shall 2.11 Unencumbered Receipts. Merchant has good and against Merchant or any Owner/Guarantor seeking to give SFSI seven days’ written notice prior to the adjudicate it bankrupt or insolvent, or secking markelable title to all Receipts, free and clear of any closing of any sale of all or substantially all of reorganization, and all liabilities, liens, claims, changes, restrict ns, arrangemen