FILED: QUEENS COUNTY CLERK 12/23/2016 03:41 PM INDEX NO. 715318/2016 NYSCEF DOC. NO. 10 RECEIVED NYSCEF: 12/23/2016 EXHIBIT F
LOAN AGREEMENT This loan agreement (the "Agreemenf') made as of the 7th day of January, 2014, by and among Kukla Cab Corp., a New York corporation with an address at 21-03 44th Avenue, Long Island City, New York 11101 (hereinafter referred to as "Borrower") and Capital One Taxi Medallion Finance, a trade name for Capital One Equipment Finance Corp., with an address at 275 Broadholfow Road, Melville, New York 11747 (hereinafter referred to as "Lender"). WITNESSETH: WHEREAS, Borrower presently owns two (2) New York City taxi medallion numbers 2N23 and 2N24, two (2) taxicab vehicles and accompanying taximeters and roof lights; and WHEREAS, Borrower has requested that Lender advance the sum of $1, 700,000.00 to Borrower lo be used by Borrower for business purposes including the refinancing of Borrower's debts; and WHEREAS, Lender is prepared to advance and lend the sum of $1,700,000.00 to Borrower on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the matters hereinabove set forth, and other promises and conditions hereinafter contained, the parties hereto agree as follows: 1. Lender agrees to advance and lend to Borrower, subject to the terms and conditions hereinafter set forth, the principal sum of $1, 700,000.00 (hereinafter referred to as the "Loan"}, to be repaid by Borrower with interest thereon computed at the rate of three and 00/100 percent (3.00%) per annum (which interest shall accrue on the basis of a 30 day month/360 day year). The Loan shall be payable in twenty four (24) equal monthly installments of interest only, each in the amount of $4,250.00, commencing March 1, 2014 and continuing on the same day of each succeeding month untif all monthly installments have been paid, as evidenced by the promissory note executed simultaneously herewith (hereinafter referred to as the "Note"). On February 1, 2016, there shall be a balloon payment of the unpaid principal balance of the Loan, plus any accrued interest thereon, provided all the monthly installments have been duly paid on their scheduled due dates in accordance with the terms of the Note. In addition, the approximate sum of $3,541.67 representing interest only shall be due and payable on the first day of the next month following the date of funding of the Loan. Each monthly installment under the Note shall be applied firs! to the payment of interest on the principal sum, or on so much thereof as shall from time to time remain unpaid and the balance, if any, to the payment of principal. The Note shall contain a provision that if there is a default in the payment of any one of the monthly
installments and should said default continue for a period of ten (1 O) days without cure, the entire Loan balance shall immediately become due and payable at the option of the Lender. Any monthly installment not paid within the ten (10) day period will be assessed a late charge of five percent (5.00%) of the unpaid monthly installment. In the event the outstanding principal balance of the Loan is equal to or greater than eighty percent (80%) of the combined value of New York City taxi medallion nos. 2N23 and 2N24, or any New York City taxi medallion thereafter acquired by Borrower, and all substitutions or replacements thereof, based upon a three (3) month moving average as reported by the New York City Taxi and Limousine Commission (the "TLC") or listed on the TLC's website, then upon ten (10) days written notice to Borrower from Lender, the Loan shall immediately begin amortizing on a twenty five (25) year schedule, with interest computed thereon at the rate stated herein, with equal monthly installments of principal and interest based upon such schedule to commence on the next scheduled payment date that is at least ten (10) days from the date of the aforesaid notice. Jn such event, Borrower agrees to make payments of principal and interest in conformity with such amortization and in conformity with Lender's directions. Failure to so comply will be deemed a material default hereunder and under the Note and all related Loan documents executed and delivered in connection with the Loan. In the event of such conversion to a principal and interest installment payment, the Note shall nonetheless mature on the originally scheduled maturity date on which date all outstanding principal on the Note, any accrued and unpaid interest thereon and/or other charges shall be due and payable in fufl to Lender. If at any point in time during the term of this Loan the TLC ceases to publish values for New York City taxi medallions, Lender will choose a new method of determining the average monthly price for said taxi medallions. 2. The Lender is authorized to disburse the proceeds of the Loan to any prior lienors, mortgagees, taxing authorities, governmental authorities, or any other parties who properly encumber the assets of Borrower, so as to make Lender the first mortgagee and lien holder on the assets of Borrower. 3. Borrower agrees to execute, simultaneously with this Agreement, and from lime to time thereafter, any and all documents required by Lender to perfect and/or continue Lender's security interests in any collateral to be given by Borrower to Lender and Lender may file UCC financing statements to perfect Lender's security interest from time to time. 4. Lender's obligations to make and fund the Loan to Borrower shall be conditioned upon the execution and/or delivery by Borrower to Lender in form and substance satisfactory to Lender, and its counsel, the following: (a) (b) the Note described in Paragraph 1 above; a duly executed security agreement by Borrower granting 2
Lender a security interest in all of its taxicab vehicles, including taximeters and roof lights and its New York City taxi medallions, to establish Lender's security interest in and to such items of collateral and such other collateral as may be described therein; (c) evidence from the New York City Taxi and Limousine Commission of Borrower's ownership of its duly licensed taxi medallions and taxicab vehicles used in connection therewith; (d) UCC financing statements (which Lender is authorized to file) and, at Lender's option, Department of Motor Vehicles forms duly executed and in. recordable form for filing by Lender, to perfect Lender's security interest in the collateral; (e) affidavits of confession of judgment from Borrower and all guarantors to be retained by Lender pending default by Borrower or any guarantor(s) in any of the terms, covenants and conditions of this Agreement or collateral documents executed in connection with the Loan, in which event Lender may enter said confessions of judgment in any court of competent jurisdiction;, (f) proof that Borrower has obtained automobile liability insurance including excess coverage in the sum of not less than $100,000.00/$300,000.00 for the taxicab vehicles owned by it and if and to the extent required by Lender from time to time, fire, theft, and property damage insurance on the taxicab vehicles which insurance shall name Lender or its assignee as loss payee and shall provide that the coverage shall not be modified or cancelled without thirty (30) days prior notice by the insurer to the loss payee; (g) with respect to the insurance coverage described by Paragraph (f), Borrower specifically agrees and understands that in the event of cancellation of its statutory or excess insurance coverage, it will within live (5) days prior to the day of cancellation, obtain new coverage for the taxicab vehicle(s). In the event Borrower fails to obtain new coverage, then Borrower will within seventy-two (72) hours of receipt of notice of cancellation by its carrier remove the license plates from said vehicle(s) and turn same into the New York State Department of Motor Vehicles. Any failure to obtain new coverage within the five (5) days shall constitute a default under this Agreement and the Note; 3
(h) (i) (j) (k) (I) at the option of Lender, life insurance on the life of any guarantor of the Borrower's obligation hereunder in an amount not less than the balance of the Loan due to Lender with Lender as named beneficiary, which life insurance Borrower agrees to keep in full force and effect at all times that it has any obligations under this Agreement; all of the required insurance hereinabove described shall be issued by companies authorized and licensed to do business in the State of New York; and personal and unconditional guarantys of payment of all obligations due to Lender from Borrower, to be executed by all officers and stockholders of Borrower. unconditional guarantys of payment of all obligations due to Lender from Borrower, to be executed by Executive Owners Holding Corp. ("EOHC") assignment by Borrower to Lender of Borrower's rights, title and interest in and to a certain taxi medallion lease agreement between Borrower and EOHC, which lease agreement shall require monthly payments to Borrower from the lessee thereunder in the minimum amount of four thousand dollars ($4,000.00) per taxi medallion during the term of this Loan. 5. Borrower warrants, represents and agrees as follows: (a) that Borrower has the full right, power and authority to enter into and perform the terms of this Agreement; that none of the terms or conditions of this Agreement or the security agreement of even date herewith are in violation of any provisions of any other agreement to which Borrower is a party; (b) to hold and save Lender free and harmless from any causes of actions, claims, damages and liabilities of a contractual or tax nature due to the acts of Borrower, and to provide counsel, at its own expense, to defend Lender against any such claim; (c) that until the debt to Lender is repaid, Borrower will keep the taxicab vehicles and medallions owned by Borrower free and clear of ail liens, charges, encumbrances, taxes, assessments and claims and to keep such taxicab vehicles in good repair and condition; 4
(d) to give Lender immediate notice, in writing, at Lender's designated address, within ten (10) days of obtaining any replacements of the taxicab vehicles and medallions, roof lights or meters, and cause to be executed appropriate documents so that such replacements shall be secured in accordance with this Agreement and the security agreement of even date; (e) to obtain all medallion renewals, auto use tax permits, vehicle registrations and any other required licenses and permits; (f) to operate the taxicab vehicles and medallions strictly in accordance with the rules and regulations governing such operations as have been or may be promulgated from time to time by the New York City Taxi and Limousine Commission or any other appropriate governmental body having jurisdiction over such operations; (g) to promptly pay all fines, penalties or assessments which may be imposed or assessed by reason of Borrower's operation of the taxicab vehicles and medallions; and make available to Lender on 48 hours notice at Lender's place of business or at the office of Lender's accountant, its books and records, including the documents and records required to be kept by Borrower, according to the New York City Taxi and Limousine Commission's regulations; to fully cooperate with its insurance carrier in the reporting, investigating and defense of any accident claim in which Borrower, or the taxicab vehicles and medauions owned by Borrower may be involved; (h) in the event of default by Borrower in the payment of any installments when due under the Note, or failure of performance of any of the conditions or obligations placed upon Borrower under this Agreement, the Note, the security agreement or any other document executed in connection with the Loan, or upon the default by any borrower or guarantor under the terms of certain loans by and between Lender and the entities listed on Schedule "A" annexed hereto (the "Other Entities"), then in any of such events, Lender shall be entitled to take immediate physical possession of the taxicab vehicles and medallions owned by Borrower and accelerate all obligations so that the same shall become immediately due and payable in full, without presentation, protest, dishonor, or further demand or notice, all of which are expressly waived by Borrower, and Lender may exercise any remedy it has upon any such default granted pursuant to the aforesaid documents, this Agreement, any other document or agreement between Lender and Borrower, or as may otherwise be granted to Lender pursuant to any applicable law; (i) if Borrower fails to maintain any insurance required to be maintained pursuant to this Agreement, then, Lender, at its option, shall have the right to procure such insurance and to add such cost thereof plus interest at the rate set forth in the Note, to the installment next becoming due under the Note, which amount Borrower agrees to pay Lender upon demand; 5
(j) Borrower shall not create, incur or permit to be created or incurred any subordinate mortgages, security interests, liens or encumbrances against its medallions or other collateral without Lender's prior consent; (k) that Borrower will pay all indebtedness due under the Loan in accordance with the Note, and will strictly abide by all terms, covenants, agreements and conditions set forth in this Agreement, the Note, the security agreement and all other documents executed in connection with the Loan. (I) to cause Queens Medallion Funding LLC or Queens Medallion Leasing!nc. or EOHC to maintain a depository relationship with Capital One Bank, and to maintain with Capital One Bank a compensating minimum balance of $1,000,000.00 for the term of the Loan, whi,ch minimum balance shall be established prior to Lender funding the Loan. (m) to maintain, and cause EOHC to maintain, a minimum Debt Service Coverage (defined herein) ratio of 1.2 to 1.0. Debt Service Coverage shahbe defined as earnings before interest, taxes, depreciation and amortization ("EBITDA") generated from the collateral set forth in the Security Agreement, or in any security agreement given as security for any guaranty hereof, over the monthly principal and/or interest payment amounts due herein or due in connection with any other loan to which Borrower or EOHC are a party. (n) to maintain, and cause EOHC to maintain a minimum Fixed Charge Coverage (defined herein) ratio of 1.0 to 1.0. Fixed Charge Coverage shall be defined as EBITDA generated from the collateral set forth in the Security Agreement, or in any security agreement given as security for any guaranty hereof, minus unfinanced capital expenditures, minus taxes paid, minus distributions, minus loans due from shareholders in the form of a loan or notes receivable, over the monthly principal and/or interest payment amounts due herein or due in connection with any other loan to which Borrower or EOHC are a party. (o) that any existing or future debt of Borrower (including loans to shareholders) or EOHC, excluding any debts to Lender, shall be subordinated to Borrower's debt to Lender; (p) that in the event EOHC suffers a net loss for any of fiscal years 2013 through 2015 (and each year thereafter if the Loan's maturity is extended), said loss shall constitute a default under this Agreement and the Note; (q) to pledge any existing or future notes receivables to Lender. 6
following: (r) to furnish to Lender or cause to be furnished to Lender the i) Within one hundred fifty (150) days after fiscal year end 2013 and each year thereafter during the term of the Loan, certified public accountant reviewed annual financial statements of EOHC (compliant under GAAP standards); ii) Within sixty (60) days after fiscal year end 2013 and semiannually thereafter during the term of the Loan, EOHC's six-month company prepared financial statements (due February 28 and August 31 of each year); iii) Each individual guarantor's personal financial statement prepared on Lender's standard form, together with all applicable schedules and attachments, to be delivered concurrently with the corporate financial statements referred to in Section 5(r)(i and ii) herein; iv) Within thirty (30) days after the date of filing same with the Internal Revenue Service, signed copies of Borrower's and each guarantor's federal tax returns, together with all applicable schedules and attachments; v) Borrower's tax returns must reflect gross receipts of an amount no less than $48,000.00 per year per taxi medallion; vi) necessary. Such other financial reporting requirements as Lender deems 6. Borrower warrants, represents and agrees that it has the full right, power and authority to enter into and perform the terms of this Agreement; that none of the terms or conditions of this Agreement are in violation of any provision of any agreement to which it is a party, or to which it is bound. 7. Providing Borrower is not in default of any of the provisions of this Agreement or any instrument or other agreement executed pursuant to this Agreement, Lender shall not interfere with Borrower's continued use and possession of the medallions and taxicab vehicles referred to herein. The failure of Borrower to comply and conform with any of Borrower's obligations and warranties hereunder and under such other instruments and agreements executed pursuant to this Agreement, and if Borrower fails to cure such default within any applicable grace period, shall permit the Lender to avail itself of any and all remedies whether legal or equitable, including repossession of any collateral, all of which remedies shall be cumulative and without limitation thereto, and Lender may accelerate all the obligations of Borrower to Lender. 7
8. If, prior to the full payment of the obligations to Lender under this Agreement or any instrument or other agreement executed pursuant hereto, a petition in bankruptcy or insolvency or for an arrangement or for the appointment of a receiver or trustee of all or any portion of the property of Borrower be fifed by or against Borrower in any Court, pursuant to any statute either of the United States or any State of the United States, or if Borrower makes an assignment for the benefit of creditors, or if the ownership of the taxi medallions operated by Borrower is transferred by reason of the sale of assets, or otherwise, the entire unpaid principal balance of the Note issued pursuant hereto shall, at the option of Lender, immediately become due and payable, with all costs and expenses of collection, including attorneys' fees. 9. The parties hereto mutually agree that they shall waive a trial by jury in any action or proceeding brought by either of the parties against the other arising out of or in any way connected with this Agreement. The provisions of this Agreement and all instruments and other agreements executed pursuant hereto are several and in the event any provision hereof or thereof is invalid or contrary to law, then the same shall be null and void but the remaining provisions shall be binding among the parties. 1 O. Borrower represents that its officers have read the rules governing owners of public taxicabs and public coaches as are promulgated by the New York City Taxi and Limousine Commission, and represents that Borrower is familiar with them, is bound by them and will comply with those rules as presently existing and as amended in the future and such other and further rules, regulations and directives of said Commission; further Borrower understands that any failure on the part of Borrower to comply with those rules and regulations shall be deemed a default under this Agreement. 11. In the event Borrower has agreed to pay Lender a Loan origination fee in connection with this Loan transaction, Lender is authorized to deduct said sum from the amount due Borrower. 12. In the event the proceeds of the Loan are not funded on the date of this Agreement by Lender, Borrower shall receive a credit for the unearned portion of the interest covering the period during which said Loan proceeds were not advanced by Lender. 13. Borrower and each guarantor acknowledge that they have each been afforded lime to retain legal counsel to represent Borrower and the guarantors in this transaction. Borrower hereby authorizes Lender to pay Lender's attorney reasonable attorneys' fees for the preparation of this Agreement and attendance at the closing out of the Loan proceeds. 14. Borrower represents that its taxicab vehicle will be stored at 21-03 44th Avenue, Long Island City, New York 11101 and that Borrower wili immediately inform Lender, in writing, of any change in the above address. 8
15. All warranties, representations and conditions of the parties shall survive the closing. 16. It is understood and acknowledged by Borrower that all the terms and conditions of this transaction are set forth herein, that this Agreement represents the full understanding of the parties, that no oral representations have been made that are not set forth in writing, that if any oral representations have been made and are not specifically set forth herein, they are not binding on Lender, its agents, servants or employees and will not survive the execution of this Agreement. 17. All notices ;equired by this Agreement shall be in writing, signed by the party giving the same and shall be delivered in person, or sent by ordinary mail, with postage prepaid and addressed to each respective party's address as set forth in the heading of this Agreement, or as may subsequently be duly changed by written notice to the other party. 18. This Agreement, may not be changed orally, but only by an instrument in writing, fully executed by the party against whom the enforcement of such change is sought. 19. This Agreement shall bind and inure to the benefit of the parties hereto, their respective heirs, legal representatives, successors and permitted assigns, and shall be governed, construed and interpreted in accordance with the laws of the State of New York. 20. It is specifically agreed by and among the parties hereto that the rights accruing to Lender hereunder are assignable by Lender. Without limiting the generality of the foregoing, Lender may assign its rights in and to this Agreement, and/or the collateral and collateral security agreement, as Lender, in its sole discretion, may deem fit. Collateral so assigned shall not, however, constitute collateral for any obligations other than those arising under this Agreement or any instruments, agreements or other documents delivered in connection with this Agreement. 22. A waiver of any provision hereof in any instance shall not constitute a waiver thereof in the future. This Agreement cannot be assigned by Borrower without the prior written consent of Lender. 23. The Borrower covenants and agrees that upon any default by Borrower in the payment of the Note, or if the Borrower or any guarantor is in default of any of its or their respective obligations arising out of the Loan, then in either of such events, Borrower and each guarantor agree to pay to Lender such further amounts as shall be sufficient to cover the cost and expense ol collection, including reasonable compensation to Lender's attorneys to pay for all services rendered to Lender in connection with collection, or curing any default, or negotiations or discussions with Lender with respect thereto. All such collection expense and attorney's fees shall be deemed secured by the collateral and may be added to the principal balance at the time 9
of the payoff of the Loan, or in the event the default is cured, the same shall be paid in full at the time of curing any default and as a condition thereof. 24. Notwithstanding anything to the contrary set forth in this Agreement and/or the Note, the Borrower and any other obligor(s) hereunder acknowledge and agree that, irregardless of the date set forth above, the effective date for the Loan shall be the date the Note is funded by Lender to or on behalf of Borrower, on which date interest shall begin to accrue at the rate set forth herein and in the Note. IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement as of the day and year first above written. Capital One Taxi Medallion Finance, a trade name for Capital One Equipment Finance orp. s, Assistant Secretary ~1! ' \ Tony Georgiton ~.Prantor ~c --~ Tony Georgiton as agent for en Georgiton - Guarantor Basil Messados as agent for George Kyro - Guarantor Executive Owners Holding Corp. ~-<C- B y: Tony Georgiton, Secretary 10
Bouzoukia LLC KukJa Cab Corp. Plakoto Transport Inc. P/outonas Transport Inc. Samson Transport LLC Skilla LLC Spasarhidi Enterprises Inc. Spyro & George ltd. TavU Transport Inc. Tommy & Yiayia ltd. Varfa Transport Inc. Walk Cab Corp. Filarakla LLC Schedule A