Exhibit 10.2

 

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U.S. Small Business

Administration

 

NOTE

 

SBA Loan # 40959572-04     SBA Loan Name SHEPHERD’S FINANCE LLC     Date
5/5/2020     Loan Amount $361,485.42     Interest Rate 1.0% per annum (computed
on the basis of the actual number of days elapsed in a year of 365 days)    
Borrower SHEPHERD’S FINANCE LLC     Lender LCA Bank Corporation

 

1. PROMISE TO PAY:

 

In return for the Loan, Borrower promises to pay to the order of Lender the Loan
Amount, plus interest on the unpaid principal balance at the Interest Rate, and
all other amounts required by this Note.

 

2. DEFINITIONS

 

Unless defined in this Section 2, capitalized terms shall have the meanings
ascribed to them above.

 

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act.

 

“Deferral Period” means the six (6) month period beginning on the date of this
Note.

 

“Loan” means the loan evidenced by this Note.

 

“Loan Documents” means the documents related to this loan signed by Borrower.
“Maturity Date” means twenty-four (24) months from the date of this Note.

 

“SBA” means the Small Business Administration, an Agency of the United States of
America.

 

3. PAYMENT TERMS

 

The payment terms for this Note are:

 

  A. There shall be no payments due by Borrower during the Deferral Period.
However, interest shall accrue during the Deferral Period.

 

   

 

 

  B. Commencing one (1) month after the expiration of the Deferral Period, and
continuing on the same day of each month thereafter until the Maturity Date,
Borrower shall pay to Lender monthly payments of principal and interest, each in
such equal amount required to fully amortize by the Maturity Date the principal
amount outstanding on this Note on the last day of the Deferral Period. If a
payment on this Note is more than ten (10) days late, Lender may charge Borrower
a late fee of up to 5.0% of the unpaid portion of the regularly scheduled
payment.         C. This Note will mature on the Maturity Date. On the Maturity
Date, Borrower shall pay to Lender any and all unpaid principal, plus accrued
and unpaid interest and interest accrued during the Deferral Period.         D.
If any payment is due on a date for which there is no numerical equivalent in a
particular calendar month, then it shall be due on the last day of such month.
If any payment is due on a day that is not a Business Day, the payment will be
made on the next Business Day. The term “Business Day” means a day other than a
Saturday, Sunday or any other day on which banks in the State of Illinois are
authorized to be closed.         E. Payments shall be allocated among principal
and interest at the discretion of Lender, unless otherwise agreed or required by
applicable law. Notwithstanding the foregoing, in the event the Loan, or any
portion thereof, is forgiven pursuant to the Paycheck Protection Program under
the CARES Act, the amount so forgiven shall be applied to principal.         F.
Borrower may prepay this Note at any time without payment of any premium.      
  G. Borrower must make all payments under this Note at the place Lender
designates.         H. Lender or any holder of this Note shall not be required
to renew, extend or refinance this Note or any amounts due hereunder.

 

4. DEFAULT

 

Borrower is in default under this Note if Borrower does not make a payment when
due under this Note, or if Borrower:

 

  A. Fails to do anything required by this Note and other Loan Documents;      
  B. Defaults on any other loan with Lender;         C. Does not disclose, or
anyone acting on its behalf does not disclose, any material fact to Lender or
SBA;         D. Provides, or anyone acting on its behalf provides, to Lender or
SBA any information that is inaccurate or incorrect;         E. Defaults on any
loan or agreement with another creditor, if Lender believes the default may
materially affect Borrower’s ability to pay this Note.         F. Fails to pay
any taxes when due;         G.

Becomes the subject of a proceeding under any bankruptcy or insolvency law;

 

  H. Has a receiver or liquidator appointed for any part of their business or
property;

 

   

 

 

  I.

Makes an assignment for the benefit of creditors;

 

  J. Has any adverse change in financial condition or business operation that
Lender believes may materially affect Borrower’s ability to pay this Note;      
  K. Reorganizes, merges, consolidates, or otherwise changes ownership or
business structure without Lender’s prior written consent;         L. Becomes
the subject of a civil or criminal action that Lender believes may materially
affect Borrower’s ability to pay this Note; or         M. Makes, or anyone
acting on its behalf makes, a materially false or misleading representation,
attestation or certification to Lender or the SBA in connection with Borrower’s
request for this Loan.

 

5. LENDER’S RIGHTS IF THERE IS A DEFAULT

 

Without notice or demand and without giving up any of its rights, Lender may:

 

  A. Require immediate payment of all amounts owing under this Note;         B.
Collect all amounts owing from Borrower; or         C. File suit and obtain
judgment.

 

6. LENDER’S GENERAL POWERS

 

Without notice and without Borrower’s consent, Lender may:

 

  A. Enforce the terms of this Note or any other Loan Documents;         B.
Incur expenses to collect amounts due under this Note. Such expenses may
include, without limitation, reasonable attorneys fees and costs. If Lender
incurs such expenses, it may demand immediate repayment from Borrower or add the
expenses to the principal balance of this Note; or         C. Take any action
necessary to collect amounts owing on this Note.

 

7. GOVERNING LAW; WHEN FEDERAL LAW APPLIES

 

When SBA is the holder, this Note will be interpreted and enforced under federal
law, including SBA regulations. Lender or SBA may use state or local procedures
for filing papers, recording documents, giving notice, foreclosing liens, and
other purposes. By using such procedures, SBA does not waive any federal
immunity from state or local control, penalty, tax or liability. As to this
Note, Borrower may not claim or assert against SBA any local or state law to
deny any obligation, defeat any claim of SBA, or preempt federal law.

 

If the SBA is not the holder, this Note shall be governed by and construed in
accordance with the laws of the State of Illinois, where the main office of
Lender is located, without reference to any conflicts or choice of law
provisions thereof. Borrower agrees that any legal action or proceeding with
respect to any of its obligations under this Note may be brought by Lender in
any state or federal court located in the State of Illinois, as Lender in its
sole discretion may elect. Borrower submits to and accepts in respect of its
property, generally and unconditionally, the non-exclusive jurisdiction of those
courts. Borrower waives any claim that the State of Illinois is not a convenient
forum or the proper venue for any such suit, action or proceeding. The extension
of credit that is the subject of this Note is being made by Lender in Illinois.

 

   

 

 

8. SUCCESSORS AND ASSIGNS

 

Under this Note, Borrower includes all successors, and Lender includes its
successors and assigns.

 

9. GENERAL PROVISIONS

 

  A. This Loan is being made under the Paycheck Protection Program pursuant to
the CARES Act. Accordingly, the terms of this Note are subject to the Paycheck
Protection Program and all regulations, rules, guidance and other requirements
of such program and the SBA, including, but not limited to, eligibility for the
Loan, use of Loan proceeds and Loan forgiveness as now or hereafter in effect.
Borrower represents and certifies to Lender that it currently is, and at all
times will be, in compliance with such regulations, rules, guidance and other
requirements. Borrower acknowledges the speed of the implementation of the
Paycheck Protection Program and agrees that additional documents may be required
to document the Loan.         B. The Loan is made for a business purpose. No
proceeds from the Loan will be disbursed until all approvals have been obtained
from Lender and the SBA and all conditions to such disbursement have been
satisfied.         C. All individuals and entities signing this Note are jointly
and severally liable.         D. Borrower waives all suretyship defenses.      
  E. Borrower must sign all documents necessary at any time to comply with the
Loan Documents.         F. Lender may exercise any of its rights separately or
together, as many times and in any order it chooses. Lender may delay or forgo
enforcing any of its rights without giving up any of them.         G. Borrower
may not use an oral statement of Lender or SBA to contradict or alter the
written terms of this Note.         H. If any part of this Note is
unenforceable, all other parts remain in effect.         I. To the extent
allowed by law, Borrower waives all demands and notices in connection with this
Note, including presentment, demand, protest, and notice of dishonor.         J.
This Note shall be construed in a manner consistent with the other Loan
Documents.         K. Borrower’s liability under this Note will continue with
respect to any amounts the SBA may pay Lender based on an SBA guarantee of this
Note. Any agreement with Lender under which SBA may guarantee this Note does not
create any third party rights or benefits for Borrower and, if SBA pays Lender
under such an agreement, the SBA or Lender may then seek recovery from Borrower
of amounts paid by SBA.         L. Within ninety (90) days following the date of
this Note, Borrower shall submit to Lender a certified schedule of eligible
amounts, together with all appropriate supporting documentation, for which
Borrower may seek Loan forgiveness.

 

   

 

 

  M. Borrower waives any defenses based on any claim that Lender did not obtain
or perfect any guaranty of this Note from the SBA.         N. Borrower shall
remain responsible for any amounts under this Note not forgiven pursuant to the
Paycheck Protection Program.

 

10. ELECTRONIC SIGNATURES

 

Borrower’s electronic signature shall have the same force and effect as an
original signature and shall be deemed (i) to be “written” or “in writing” or an
“electronic record,” (ii) to have been signed and (iii) to constitute a record
established and maintained in the ordinary course of business and an original
written record when printed from electronic files. Such paper copies or
“printouts,” if introduced as evidence in any judicial, arbitral, mediation or
administrative proceeding, will be admissible as between the parties to the same
extent and under the same conditions as other original business records created
and maintained in documentary form.

 

11. BORROWER’S NAME AND SIGNATURE(S)

 

By signing below, each individual or entity becomes obligated under this Note as
Borrower.

 

BORROWER:

 

SHEPHERD’S FINANCE LLC

 

  By: /s/ Daniel M. Wallach, CEO           Name: DANIEL M. WALLACH, CEO        
    Title: CEO