Document:

Exhibit 10.6

 

 

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    	4Exhibit 10.7

 

LOAN AND SECURITY AGREEMENT

 

THE FOLLOWING TERMS AND
CONDITIONS, INCLUDING THE ARBITRATION PROVISION SET FORTH IN PARAGRAPH 31, GOVERN THIS AGREEMENT.

 

THIS LOAN
AND SECURITY AGREEMENT ("Agreement")
is made this 5th day of April 2013, by SMALL
BUSINESS FINANCIAL SOLUTIONS, LLC,
a Delaware limited liability company ("Lender")
and BORROWER (as identified in the Business Loan Key Terms Supplement ("Borrower").

 

NOW,
THEREFORE, Borrower
and Lender hereby agree as follows:

 

1. INTRODUCTION.
This Business Loan and Security Agreement ("Agreement")
governs your business loan ("Loan")
from Lender that you applied for by submitting the application ("Application")
to Lender. Please read it and keep it for your reference. In this Agreement,
the words "you,"
"your" and
"Borrower"
means each individual and/or entity that signs this Agreement or on whose behalf this Agreement
is signed. "We,"
"ours" and "Lender" means Small Business Financial Solutions, LLC.
"Parties" shall mean all entities and/or individuals that sign this Agreement.

 

2. EFFECTIVE
DATE. This Agreement begins on the date we accept this Agreement in Maryland. Borrower understands and agrees that Lender may
postpone, without penalty,
the disbursement of amounts to Borrower until all required security interests have been perfected,
Lender has received all required personal guarantees or other documentation,
and at least one payment on the loan has been processed and cleared by Lender.

 

3. LOAN FOR
COMMERCIAL PURPOSES ONLY. The proceeds of the requested Loan may be used for business purposes,
and not for personal, family
or household purposes. Borrower understands that Borrower's
agreement not to use the Loan proceeds for personal, family or household purposes means that certain important duties imposed upon
entities making loans for consumer purposes, and certain important rights conferred upon consumers,
pursuant to federal or state law will not apply to the Loan or the Agreement. Borrower agrees
that a breach by Borrower of the provisions of this section will not affect Lender's
right to: (i) enforce Borrower's promise to pay for all
amounts owed under this Agreement, regardless of the purpose
for which the Loan is in fact obtained; or (ii) use any
remedy legally available to Lender, even if that remedy would not have been available had the Loan been
made for consumer purposes.

 

4. DISBURSEMENT
OF LOAN PROCEEDS. If Borrower applied and was approved for a Loan by Lender, Borrower's
Loan will be disbursed, after Borrower signs this Agreement,
Lender files the appropriate security interest filings,
Lender approves the Loan, and
Lender processes at least one payment by Borrower through an electronic debit to Borrower's
bank account.

 

5. PROMISE
TO PAY. Borrower agrees to pay Lender the amount of the Loan shown in the accompanying Business Loan Key Terms Supplement and
ACH Authorization ("Business Loan Key Terms Supplement")
in accordance with the payment schedule shown in the Business Loan Key Terms Supplement. Borrower authorizes Lender to collect
required payments through electronic debits ("ACH") as provided in the accompanying Business Loan Key Terms Supplement.

 

6.
ALTERNATIVE PAYMENT METHODS. If Borrower knows that for any reason Lender will be unable to process an ACH
payment, Borrower must promptly mail or deliver a
check to Lender in the amount of the missed payment or, if
offered by Lender, make the missed payment by any
pay-by-phone or on-line service that Lender may make available from time to time. If Borrower elects to send payments by
postal mail, Borrower agrees to send such payments to
Small Business Financial Solutions, LLC, 7315
Wisconsin Ave., Suite 350, Bethesda,
MD, 20814, Attn: Accounting. All such payments must
be made in good funds by check, money
order, wire transfer, automatic transfer from an
account at an institution offering such service, or
other instrument in U.S. Dollars. Borrower
understands and agrees that payments made at any other address than as specified herein may result in a delay in processing
and/or crediting. If Borrower makes an alternative
payment on Borrower's Loan by mail or by any pay-by-phone or on-line service that Lender makes available, Lender may treat
such payment as an additional payment and continue to process Borrower's scheduled ACHs.

 

7. APPLICATION
OF PAYMENTS. Subject to applicable law, Lender reserves
the right to apply payments to Borrower's Loan in any manner Lender chooses in Lender's
sole discretion.

 

8. POSTDATED
CHECKS, RESTRICTED ENDORSEMENT CHECKS AND OTHER DISPUTED OR QUALIFIED PAYMENTS. Lender can accept late,
postdated or partial payments without losing any of Lender's
rights under this Agreement.

 

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(A
postdated check is a check dated later than the day it was
actually presented for payment.) Lender is under no obligation
to hold a postdated check
and Lender reserves the right to process every item
presented as if dated the same date received by Lender
unless Borrower gives Lender adequate notice and
a reasonable opportunity to act on
it. Except where such notice and opportunity is given,
Borrower may not hold Lender liable for depositing any postdated check.
Borrower agrees not to send Lender partial payments marked "paid
in full," "without recourse,"
or similar language. If Borrower sends such
a payment, Lender may accept it without losing
any of Lender's rights under this Agreement. All
notices and written communications concerning postdated
checks, restricted endorsement
checks (including any check or other payment instrument that indicates that the payment constitutes
"payment in full" of the
amount owed or that is tendered with
other conditions or limitations
or as full satisfaction of a disputed amount) or any other
disputed, nonconforming
or qualified payments,
must be mailed or delivered
to Small Business Financial Solutions,
LLC, 7316 Wisconsin
Ave., Suite 350,
Bethesda, MD 20814,
Attn: C.E.O.

 

9.
PREPAYMENT. Borrower may prepay Borrower's Loan in
whole by paying Lender the sum total of the payments described
in the payment schedule
set forth in Borrower's
Business Loan Key
Terms Supplement less
the amount of any Loan payments made prior to
such prepayment. Any prepayment
will not reduce the total amount owed and there is no
discount for prepayment.

 

10.
SECURITY INTEREST.
Borrower hereby grants to Lender, the secured party hereunder,
a continuing security interest in and
to any and all "Collateral
" as described below to secure payment and performance
of all debts, liabilities and
obligations of Borrower to Lender hereunder and also any
and all other debts,
liabilities and obligations of
Borrower to Lender of every kind and description, direct
or indirect, absolute
or contingent, primary
or secondary , due
or to become due, now existing or hereafter arising, whether
or not such obligations
are related to the Loan described
in this Agreement, by
class, or kind, or whether or not
contemplated by the Parties at the time of the granting
of this security interest,
regardless of how
they arise or by what agreement or instrument they may
be evidenced or whether evidenced by any
agreement or instrument, and
includes obligations to perform acts and refrain from taking action
as well as obligations
to pay money including, without
limitation, all interest,
other fees and expenses (all hereinafter called
"Obligations"). The Collateral includes the
following property that Borrower now owns or shall acquire
or create immediately upon the acquisition or
creation thereof: (i) any and all amounts owing
to Borrower now or in the future from any merchant
processor(s) for charges made by customers of
Borrower via any payment
card devices (i.
e. credit card, debit card,
charge card, etc.);
and (ii) all other tangible and
intangible personal property, including, but
not limited to: (a) inventory, (b) equipment, (c)
investment property , including
certificated and uncertificated securities, securities
accounts, security entitlements,
commodity contracts and commodity accounts,
(d) instruments, including promissory notes (e)
chattel paper, including
tangible chattel paper and electronic chattel paper,
(f) documents, (g)
letter of credit rights,
(h) accounts, including health-care insurance receivables
and credit card receivables,
(i) deposit accounts,
G) commercial tort claims, (k)
general intangibles, including
payment intangibles and
software and (l)
as-extracted collateral as such
terms may from time to time be defined in the Uniform Commercial Code.
The security interest Borrower grants
includes all accessions, attachments,
accessories, parts,
supplies and replacements for the Collateral,
all products, proceeds and collections thereof and all records and data relating thereto.
Lender disclaims any security
interest in household
goods in which Lender is forbidden by law from taking
a security interest.

 

11.
PROTECTING THE SECURITY INTEREST. Borrower agrees that
Lender may file any financing statement, lien entry form
or other document Lender requires in order to
perfect, amend or continue Lender's security interest in the Collateral
and Borrower agrees to
cooperate with Lender
as may be necessary to accomplish said
filing and to do whatever Lender deems necessary to protect
Lender's security interest in the Collateral.

 

12.
LOCATION OF COLLATERAL; TRANSACTIONS INVOLVING COLLATERAL. Unless Lender has
agreed otherwise in writing,
Borrower agrees and warrants that:
(i) all Collateral (or
records of the Collateral
in the case of accounts,
chattel paper and general intangibles)
shall be located at Borrower's address as
shown in the Application,
(ii) except for inventory sold or accounts
collected in the ordinary course of
Borrower's business, Borrower shall
not sell, offer
to sell, or otherwise
transfer or dispose of the
Collateral, (iii)
no one else has any
interest in or claim against the
Collateral that Borrower has not already
told Lender about, (iv) Borrower
shall not pledge, mortgage,
encumber or otherwise permit the Collateral
to be subject to any lien, security interest, encumbrance or charge,
other than the security interest
provided for in this Agreement and/or the merchant processing
agreement; and (v)
Borrower shall not sell, offer to sell, or otherwise
transfer or dispose of the Collateral for less than
the fair market value thereof. Borrower shall defend
Lender's rights in
the Collateral against
the claims and demands of all other persons. All proceeds
from any unauthorized disposition of the Collateral
shall be held in trust
for Lender, shall not
be co-mingled with any other funds and shall immediately
be delivered to Lender. This requirement,
however, does not constitute consent
by Lender to any such
disposition.

 

13.
TAXES, ASSESSMENTS AND LIENS.
Borrower will complete
and file all necessary
federal, state and local tax
returns and will pay
when due all taxes,
assessments, levies and liens
upon the Collateral and provide
evidence of such payments to Lender upon

 

 

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14. INSURANCE.
Borrower shall procure and
maintain insurance on its business
and with respect to the Collateral,
in form, amounts and coverage consistent with
Borrower's business operation. Borrower must name Lender
as loss payee. If
Borrower at any time fails to
obtain or maintain any insurance
as required under this Agreement, Lender
may obtain such insurance as Lender deems appropriate.
Borrower shall promptly
notify Lender of any loss of or
damage to the Collateral.

 

15. REPAIRS
AND MAINTENANCE. Borrower
agrees to keep and maintain,
and to cause others
to keep and maintain, the
Collateral in good order, repair
and condition at all times while this Agreement
remains in effect. Borrower
further agrees to
pay when due all
claims for work done
on, or services rendered
or material furnished in connection
with the Collateral so that
no lien or encumbrance may ever attach
to or be filed
against the Collateral.

 

16. INSPECTION
OF COLLATERAL. Lender and Lender's
designated representatives
and agents shall have the right at
all reasonable times to examine and inspect
the Collateral wherever located.

 

17. LENDER’S
EXPENDITURES. If any action or proceeding is commenced
that would materially affect Lender's
interest in the Collateral or if Borrower fails to
comply with any provision of this
Agreement or any related documents,
including but not limited to Borrower's
failure to discharge or pay when due any amounts Borrower
is required to discharge or pay under this Agreement
or any related documents, Lender
on Borrower's behalf may (but
shall not be obligated to) take any action that
Lender deems appropriate,
including but not limited to discharging or paying
all taxes, liens,
security interests, encumbrances and
other claims, at any time
levied or placed on
the Collateral and paying all costs for
insuring, maintaining and
preserving the Collateral. To the
extent permitted by applicable
law, all such expenses
will become a part
of the amount owed to Lender by Borrower and,
at Lender's option, will: (i)
be payable on demand; (ii) be added to the
balance of the Loan and be
apportioned among and be payable with
any installment payments to become due
during either (a) the
term of any applicable insurance policy or
(b) the remaining
term of the Loan; or (iii) be
treated as a balloon payment that will
be due and payable
at the Loan’s maturity. Such
right shall be in
addition to all other rights and remedies
to which Lender may
be entitled upon an Event
of Default.

 

18. BORROWER’S
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that: (i) Borrower will comply
with all laws, statutes,
regulations and ordinances
pertaining to the conduct of Borrower's business and promises to
hold Lender harmless from any damages,
liabilities, costs,
expenses (including attorneys' fees)
or other harm arising
out of any violation thereof;
(ii) Borrower's principal
executive office and the office
where Borrower keeps its records concerning its
accounts, contract rights and
other property, is
that shown in the
Application; (iii) Borrower is duly organized, licensed,
validly existing and in good
standing under the laws of its state of formation
and shall hereafter remain in good
standing in that state, and
is duly qualified, licensed and in good
standing in every other state in
which it is doing business,
and shall hereafter remain duly qualified,
licensed and in good
standing in every other state in which it
is doing business, and shall hereafter
remain duly qualified, licensed and in good
standing in every other state
in which the failure to qualify or
become licensed could have
a material adverse
effect on the financial condition, business
or operations of Borrower;
(iv) the exact legal
name of the Borrower is
set forth in the Application; (v) the
execution, delivery and performance of this Agreement,
the Application and
the Business Loan Key Terms Supplement,
and any other document
executed in connection
herewith, are within
Borrower's powers,
have been duly authorized, are
not in contravention of law
or the terms of Borrower's charter,
by-laws or other organization
papers, or of any
indenture, agreement or undertaking to which Borrower is
a party; (vi) all organization papers and
all amendments thereto of Borrower have been duly
filed and are in proper order and any capital stock issued
by Borrower and outstanding
was and is properly
issued and all books
and records of Borrower are
accurate and up to date and will be
so maintained; (vii) Borrower (a) is
subject to no charter, corporate or other legal
restriction, or any judgment,
award, decree, order,
governmental rule or
regulation or contractual restriction
that could have a
material adverse effect on its
financial condition, business or
prospects, and (b)
is in compliance with its organization documents
and by-laws, all contractual requirements by which
it may be bound and all applicable laws,
rules and regulations
other than laws, rules
or regulations the validity
or applicability of which it
is contesting in good
faith or provisions of any of the
foregoing the failure to comply with which cannot reasonably
be expected to materially adversely
affect its financial condition, business
or prospects or the value
of the Collateral; and (viii) there
is no action, suit, proceeding or
investigation pending or, to Borrower
's knowledge, threatened
against or affecting it or any
of its assets before
or by any court or other governmental authority which,
if determined adversely to it, would have a material adverse effect
on its financial condition
, business or prospects
or the value of the Collateral.

 

19. FEES.
In addition to any other fees described
in the Agreement, Borrower agrees to pay the following
fees:

 

	A.		Origination
Fee: A one-time Origination Fee in the amount
set forth in the accompanying
Business Loan Key
Terms Supplement.
Borrower agrees
that this fee will
be immediately deducted from the proceeds
of Borrower's
Loan at the
time the proceeds are distributed
to Borrower.

 

 

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	B.		Returned Payment Charge:
A Returned Payment Charge in the amount of $25 (or such lesser amount if required by law)
if any payment processed on Borrower's Loan is returned unpaid or dishonored for any reason or if any ACH is rejected.

 

	C.		Processing Fee: A one-time Processing Fee of $250. Borrower
agrees that this fee will be immediately deducted from the proceeds of Borrower’s Loan at the time the proceeds are distributed
to Borrower.

 

20. INTEREST
AND FEE REFUNDS. If
the Loan is subject to a law that sets maximum charges, and
that law is finally interpreted by a court of law so that the interest or other fees collected or to be collected in connection
with this Agreement exceed the permitted limits, then:
(i) any such charge
will be reduced by the amount necessary to reduce the charge to the permitted limit; and
(ii) any sums already collected from Borrower that exceed the permitted limits will be refunded or credited to Borrower.

 

21. FINANCIAL
INFORMATION AND REEVALUATION OF CREDIT. Borrower and each Guarantor authorize Lender to obtain business and personal credit
bureau reports in Borrower's and Guarantor's
name, respectively ,
at any time and from time to time for purposes of deciding whether to approve the requested
Loan or for any update,
renewal, extension
of credit or other lawful purpose. Upon Borrower's
or any Guarantor 's request,
Lender will advise Borrower or Guarantor if Lender obtained a credit report and Lender will
give Borrower or Guarantor the credit bureau 's name and
address. Borrower and each Guarantor agree to submit current
financial information, a new application,
or both, in Borrower's
name and in the name of each Guarantor, respectively,
at any time promptly upon Lender's request. Borrower authorizes Lender to act as Borrower's
agent for purposes of accessing and retrieving transaction history information regarding Borrower from Borrower's
merchant processor(s). Lender may report Lender's credit experiences with Borrower and any Guarantor to third parties as permitted
by law. Borrower also agrees that Lender may release information to comply with governmental reporting or legal process
that Lender believes may be required, whether or not such
is in fact required, or when necessary or helpful in completing
a transaction, or when investigating
a loss or potential loss. Borrower
is hereby notified that a negative credit report reflecting on Borrower's
credit record may be submitted to a credit reporting agency if Borrower fails to fulfill the terms of Borrower's
credit obligations hereunder.

 

22. ATTORNEYS'
FEES AND COLLECTION COSTS. In the event Borrower defaults, Lender shall be entitled to recover from Borrower and Guarantors
all costs of collection, including reasonable attorney's
fees and third party collection costs. Any Party that files a Claim against another Party as permitted in paragraphs 28 through
31 herein and prevails on the Claim shall be entitled to collect all court or arbitration costs and reasonable attorney's fees
incurred in pursuing the Claim but in no event shall attorney's
fees exceed 15% of the amount of the damages awarded by the court or arbitrator regardless of the amount of attorney's
fees actually incurred by the Party. If no monetary damages
are awarded, no attorney's
fees or costs shall be awarded. If a Party files a Claim
against another Party and the Claim is dismissed or the defending Party prevails in the matter,
the Party filing the Claim shall pay the defending Party's
reasonable attorney's fees and costs incurred
in the defending the matter, whether in court or arbitration.

 

23. BORROWER’S
REPORTS. Promptly upon Lender's written request,
Borrower and each Guarantor agrees to provide Lender with such information about the financial
condition and operations of Borrower or any Guarantor, as
Lender may, from time to time,
reasonably request. Borrower also agrees promptly upon becoming aware of any Event of Default,
or the occurrence or existence of an event which, with
the passage of time or the giving of notice or both, would
constitute an Event of Default hereunder, to provide notice thereof to Lender in writing.

 

24. MERGERS,
CONSOLIDATIONS OR SALES. Borrower represents and agrees that Borrower will not: (i) merge or consolidate
with or into any other business entity; or (ii) sell its
assets or enter into any joint venture or partnership with any person, firm
or corporation.

 

25. CHANGE
IN LEGAL STATUS. Borrower represents and agrees that Borrower will not: (i) change its name,
its place of business, chief
executive office, its mailing address or organizational
identification number if it has one; or
(ii) change its type of organization, jurisdiction of organization
or other legal structure. If Borrower does not have an
organizational identification number issued by the Internal Revenue Service and later obtains one, Borrower shall forthwith notify
Lender of such organizational identification number.

 

26. DEFAULT. To the extent not
prohibited by applicable law, the occurrence of any one or more of the following events (herein, "Events
of Default") shall constitute,
without notice or demand, a
default under this Agreement and all other agreements between Lender and Borrower and instruments and papers given Lender by Borrower,
whether such agreements, instruments,
or papers now exist or hereafter arise: (i) Lender is unable to collect any ACH due and/or,
Borrower fails to pay any amount due on the date due; (ii)
Borrower fails to comply with, promptly,
punctually and faithfully perform or observe any term, condition or promise within this Agreement;
(iii) the determination by Lender that any representations or warranties now or hereafter made
by Borrower to Lender, in any documents,
instrument, agreement,
or paper was not true or accurate when given; (iv) the
occurrence of any event such that any

 

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indebtedness of
Borrower from any lender other than Lender could be accelerated, notwithstanding that such acceleration has not taken place;
(v) the occurrence of any event that would cause a lien creditor,
as that term is defined in the Uniform
Commercial Code, to take priority over the Loan made by Lender; (vi)
a filing against or relating to Borrower of (a) a federal tax lien in favor of the United States of America or any political subdivision
of the United States of America, or (b) a state tax lien
in favor of any state of the United States of America or any political subdivision of any such state;
(vii) the occurrence of any event of default under any agreement between Lender and Borrower
or instrument or paper given Lender by Borrower, whether
such agreement, instrument,
or paper now exists or hereafter arises (notwithstanding
that Lender may not have exercised its rights upon default under any such other agreement, instrument or paper);
(viii) any act by, against,
or relating to Borrower, or its property or assets, which
act constitutes the application for, consent to,
or sufferance of the appointment of a receiver, trustee or other person, pursuant to court
action or otherwise, over all, or any part of Borrower
's property; (ix) the granting of any trust mortgage or
execution of an assignment for the benefit of the creditors of Borrower, or
the occurrence of any other voluntary or involuntary liquidation or extension of debt agreement for Borrower;
(x) the failure by
Borrower to generally pay the debts of Borrower as they mature; (xi) the entry of any judgment against Borrower, which judgment
is not satisfied or appealed from (with execution or similar
process stayed) within 15 days of its entry; (xii) any
act by or against, or relating to Borrower or its assets
pursuant to which any creditor of Borrower seeks to reclaim or repossess or reclaims or repossesses all or a portion of Borrower's assets; or (xiii) the termination of existence, dissolution
or liquidation of Borrower or the ceasing to carry on actively any substantial part of Borrower's
current business.

 

27. RIGHTS
AND REMEDIES UPON DEFAULT. If an Event of Default occurs under this Agreement, at
any time thereafter, Lender may exercise any one or more of the following rights and remedies:

A. Accelerate Indebtedness:
Lender may declare the entire amount owed immediately due and payable, without notice of any kind to Borrower.

B.
Assemble Collateral: Lender may require Borrower to deliver to Lender all or any portion of
the Collateral and any and all certificates of title and other documents relating to the Collateral Lender may require Borrower
to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power
to enter, provided Lender does so without a breach of the
peace or a trespass, upon the property of Borrower to take
possession of and remove the Collateral If the Collateral contains other goods not covered by this Agreement at the time of repossession,
Borrower agrees Lender may take such other goods, provided
that Lender makes reasonable efforts to return them to Borrower after repossession.

C. Sell the Collateral:
Lender shall have full power to sell, lease, transfer,
or otherwise deal with the Collateral or proceeds thereof in Lender's own name or that of Borrower.
Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value
or is of a type customarily sold on a recognized market, Lender
will give Borrower, and other persons as required by law,
reasonable notice of the time and place of any public sale,
or the time after which any private sale or any other disposition of the Collateral is to be
made. However, no notice need be provided to any person
who, after an Event of Default occurs,
enters into and authenticates an agreement waiving that person's right to notification of sale.
The requirements of reasonable notice shall be met if such notice is given at least 10 days before the time of the sale or disposition.
All expenses relating to the disposition of the Collateral, including
without limitation the expenses of retaking, holding,
insuring, preparing
for sale and selling the Collateral, shall become a part
of the Obligations secured by this Agreement. To the extent permitted by applicable law, all such expenses will become a part of
the amount owed and, at Lender's
option, will: (i) be payable on demand; (ii) be added to
the balance of the Loan and be apportioned among and be payable with any installment payments to become due during either (a) be
added to the term of any applicable insurance policy; or
(iii) be treated as a balloon payment that will be due
and payable at the Loan's maturity.

D. Appoint Receiver:
Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral,
with the power to protect and preserve the Collateral,
to operate the Collateral preceding foreclosure or sale,
and to collect the rents from the Collateral and apply the proceeds, over and above the cost
of the receivership, against the Obligations. The receiver
may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent
value of the Collateral exceeds the amount owed by a substantial amount. Employment by Lender shall not disqualify a person from
serving as a receiver.

E. Obtain Deficiency:
If Lender chooses to sell any or all of the Collateral,
Lender may obtain a judgment against Borrower for any deficiency remaining on the amount due
to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Borrower shall
be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper.

F. Other Rights
and Remedies: Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial
Code, as may be amended from time to time. In addition,
Lender shall have and may exercise any or all other rights and remedies it may have available
at law, in equity or otherwise.

G. Election of
Remedies: Except as may be prohibited by applicable law,
all of Lender's rights
and remedies, whether evidenced

by this Agreement,
any related documents, or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of
any other remedy, and an election to 

 

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expenditures or to take action to
perform an obligation of Borrower under the Agreement, after
Borrower's failure to perform,
shall not affect Lender's
right to declare a default and exercise its remedies.

 

28. GOVERNING
LAW, CONSENT TO JURISDICTION AND VENUE. The Parties hereby agree that this Agreement is made, accepted
and performed in Maryland, which
is Lender's principal
place of business. This Agreement,
all transactions it contemplates, the entire relationship
between the Parties, and all Claims
(as defined in paragraph 29 below) , whether
such Claims are based in tort,
contract or arise under statute or in
equity, including all
Claims involving an Affiliated
Entity of Lender, shall be governed by and enforced in
accordance with: (i) the laws of
the State of Maryland without
regard to principles of conflicts of laws that would
require the application of any other law;
and (ii) federal law
for the limited purpose of the Arbitration Agreement (paragraph 31
below). Affiliated Entity means
and includes: (i) any entity or person that at any time
has owned or controlled Lender or
any entity that at any time has been owned or controlled
by Lender; (ii) any
predecessor or successor entities of Lender;
(iii) any entity or person who at
any time owns or holds an equity or security
interest in the Loan and the interest
was granted by Lender; and (iv)
all officers, directors, owners
and employees of Lender, its parent company or
any Affiliated Entity.

 

29. DISPUTES:
Any claim, dispute or controversy
between any of the
Parties or between any of the Parties and an Affiliated
Entity arising from or relating in any way to the relationship between the Parties, including
any relationship with an Affiliated Entity, whether such claims are
based in tort, contract,
or arise under statute
or in equity (referred to herein
as "Claim"
or "Claims"),
shall be resolved only as provided in this Agreement.
Claim includes but is not limited to: any disputes
regarding or relating to this Agreement or the Application
provided in connection with this
transaction; any solicitation
or advertising materials;
any activities relating
to the maintenance or servicing of the transaction;
any disputes arising from
any collection activity related to a breach or alleged
breach of this Agreement;
any disputes regarding information
obtained by Lender from, or reported by Lender to,
Borrower, credit bureaus
or others; and any disputes resulting from or relating
to, in any way, any
previous relationship, agreement or contract between
the Parties or Borrower and an Affiliated Entity including
but not limited to an agreement under which Borrower obtained
a loan from Lender or an Affiliated
Entity. ALL CLAIMS MUST BE RESOLVED BY BINDING ARBITRATION AS PROVIDED IN PARAGRAPH 31
BELOW OR IF NO PARTY ELECTS ARBITRATION, BY A COURT AS PROVIDED IN PARAGRAPH 30 BELOW. The Parties hereby agree
that this provision amends and supersedes any provision
in a previous agreement
entered into between the Parties or between
Borrower and an Affiliated Entity regardless of whether
the previous agreement has been satisfied,
terminated or is in
default. Accordingly, any
Claims between the Parties or made against or
by an Affiliated Entity shall no
longer be governed by the dispute resolution provisions
contained in a previous agreement
but shall be governed
by paragraph 22 and paragraphs
28 through 31 of this Agreement; provided, however, that any changes this
provision makes to previous agreements between the Parties or made
against or by an Affiliated
Entity shall not apply in any litigation, arbitration
or other proceeding commenced before the date of this
Agreement.

 

30. Litigation:
If a Claim is filed in court,
the Claim must be filed
in Montgomery County, Maryland and the Parties hereby agree
that the exclusive venue for all Claims
filed in court shall be
in Montgomery County, Maryland.
No court action may be brought in any other state
or jurisdiction except as necessary to enforce a valid
security interest or enforce a judgment
entered in Maryland. The Parties hereby waive any claim
against or objection to the in personam jurisdiction and
venue in the courts of Montgomery County, Maryland. NO
CLAIM FILED IN COURT WILL BE HEARD BY A JURY
AND ANY CLAIM WILL TAKE PLACE ON AN
INDIVIDUAL BASIS; CLASS ACTIONS ARE NOT PERMITTED. NO COURT
MAY ORDER, PERMIT OR CERTIFY A CLASS ACTION, REPRESENTATIVE
ACTION, PRIVATE ATTORNEY-GENERAL
LITIGATION OR CONSOLIDATED ACTION. NO COURT MAY ORDER OR PERMIT A JOINDER OF PARTIES, UNLESS
BOTH BORROWER AND LENDER CONSENT TO
SUCH JOINDER IN WRITING.

 

31. ARBITRATION:
Any Party may elect
to resolve any Claim by
neutral, binding arbitration. An
election to arbitrate a Claim may
be made by any Party instead of filing an action
in court or in response to a claim,
counterclaim or cross claim filed in
court by any other Party. If a Party
requests arbitration, all Claims (including counterclaims and
cross claims) any Party may have against any other Party or Affiliated Entity,
whether such Claims are deemed to be compulsory or permissive
in law, shall be submitted
to binding arbitration pursuant to this paragraph 31 (referred
to herein as the "Arbitration
Agreement"). The
failure to bring such a Claim
is a waiver of,
and bars, the
bringing of such a Claim
in any subsequent arbitration or court action.
Any arbitration hearing that requires the attendance of
the Parties shall take place in the federal judicial district where Borrower resides
or, if agreed to between
the Parties, Maryland.
The Party initiating
the arbitration proceeding may select from the following arbitration administrators, which will apply the appropriate rules
for commercial disputes in effect at the time the Claim is filed with the arbitration organization ("Arbitration Rules"):
the American Arbitration Association ("AAA"), JAMS or any other organization the Parties agree to in writing. If neither
AAA nor JAMS is able or willing to serve as the arbitration administrator and the Parties are unable to agree on an alternative
administrator or arbitrator(s), then a court of competent jurisdiction will appoint an administrator

 

 

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arbitrator(s).
For information on arbitration fees and costs, a
copy of the Arbitration Rules, or to file a claim contact AAA at 335 Madison Avenue, Floor 10,
New York, New York
10017-4605, www.adr.org (phone
1-800-778-7879) or JAMS at 620 Eighth Ave., Floor 34, New
York, NY 10018, www.jamsadr.com (phone 1-800-352-5267).
In the event of a conflict between the Arbitration Rules and this Arbitration Agreement, this Arbitration Agreement shall govern.
Judgment upon any arbitration award may be entered in any court with jurisdiction and may be enforced by any court having jurisdiction
over that judgment. If a Party elects arbitration and the other Party refuses to arbitrate,
the Party electing arbitration may seek a court order enforcing this Arbitration Agreement.
In that event, the court shall determine any issues regarding
enforceability of this Arbitration Agreement, including
the validity and effect of the class action waiver (set forth below), but
all other issues shall be decided by the arbitrator. All statutes of limitation that otherwise would apply to an action brought
in court will apply in arbitration. NO CLAIM SUBMITTED TO ARBITRATION WILL BE HEARD BY A JURY AND ANY ARBITRATION UNDER THIS
AGREEMENT WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED. NO ARBITRATOR MAY ORDER,
PERMIT OR CERTIFY A CLASS ACTION, REPRESENTATIVE ACTION, PRIVATE ATTORNEY GENERAL LITIGATION OR CONSOLIDATED ARBITRATION. NO ARBITRATOR
MAY ORDER OR PERMIT A JOINDER OF PARTIES, UNLESS BOTH BORROWER AND LENDER CONSENT TO SUCH JOINDER IN WRITING.

 

The transaction(s)
governed by this Agreement involves interstate commerce and the Parties agree that arbitration shall be governed by the Federal
Arbitration Act (9 U.S.C. § 1 et. seq.) and
the Arbitration Rules and not by any state law concerning arbitration. The
arbitrator will be required to follow relevant law and applicable judicial precedent to arrive at a decision and shall be empowered
to grant whatever relief would be available in court. The cost of any arbitration proceeding shall be divided as follows: (i) if
a Party other than Lender or an Affiliated Entity initiates arbitration and the damages claimed are less than $25,000 or Lender
or an Affiliated Entity initiate arbitration, Lender shall pay all arbitration fees and costs; (ii) if anyone other than Lender
or an Affiliated Entity initiates arbitration and the damages claimed are $25,000
or more, the parties to the arbitration shall split the fees and costs for arbitration equally.
Notwithstanding the foregoing, if a Party other than Lender believes the applicable cost of
arbitration may be too burdensome, that Party may seek
a waiver of costs under the applicable Arbitration Rules. If such a request is made but denied by the arbitration organization,
Lender will consider a written request to either advance or pay all or part of the costs. If
arbitration is elected, each Party shall be responsible
for its own attorney, witness and consulting fees provided the prevailing Party may seek reimbursement of attorney fees and arbitration
costs if they prevail as provided in paragraph 22 above. If any part of this Arbitration Agreement,
other than waivers of class action rights, is
deemed or found to be unenforceable for any reason, the rest shall remain enforceable. If
the waiver of class action rights is deemed or found to be unenforceable for any reason in a case in which class action allegations
have been made, the remainder of this Arbitration Agreement
shall be unenforceable.

 

If any Party does
not want this Arbitration Agreement to apply, they may reject it by mailing a written rejection notice to Lender at 7316 Wisconsin
Ave., Suite 350, Bethesda,
MD 20814, attention: General Counsel. The rejection notice must state that the Party is rejecting
the Arbitration Agreement and must include the Borrower's legal name, the
date of this Agreement, and the amount of the loan. A rejection notice is effective only if it is: (i) signed by Borrower and all
individuals affiliated with Borrower that sign this Agreement; and
(ii) postmarked 45 days or less after the date of this Agreement (the date is set forth on the first page). The rejection of this
Arbitration Agreement will not affect any other provision of this Agreement. If a Party does not reject this arbitration clause
as required herein, it will be effective as of the date
of this Agreement.

 

32. ASSIGNMENT.
This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the Parties hereto; provided,
however, that Borrower
may not assign this Agreement or any rights or duties hereunder without Lender's
prior written consent and any prohibited assignment shall be absolutely void. No
consent to an assignment by Lender shall release Borrower from its Obligations. Lender may assign this Agreement and its rights
and duties hereunder and no consent or approval by Borrower is required in connection with any such assignment. Lender reserves
the right to sell, assign, transfer, negotiate or grant participations in all or any part of,
or any interest in Lender's
rights and benefits hereunder. In connection with any assignment
or participation, Lender may disclose all documents and
information that Lender now or hereafter may have relating to Borrower or Borrower's business.

 

33. INTERPRETATION.
Paragraph and section headings used in this Agreement are for convenience only, and shall not affect the construction of this Agreement.
Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against Lender or Borrower,
whether under any rule of construction or otherwise. On
the contrary, this Agreement has been reviewed by all
Parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the
purposes and intentions of all Parties hereto.

 

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34. SEVERABILITY.
If one or more provisions of this Agreement (or the application thereof) is determined invalid,
illegal or unenforceable in any respect in any jurisdiction,
the same shall not invalidate or render illegal or unenforceable such provision (or its application)
in any other jurisdiction or any other provision of this Agreement
(or its application).

 

35. NOTICES.
Except as otherwise provided in this Agreement, notice
under this Agreement must be in writing. Notices will be
deemed given when deposited in the U.S. mail,
postage prepaid, first class mail; when
delivered in person; or when sent by registered mail; by certified mail; or
by nationally recognized overnight courier. Notice to Borrower will be sent to Borrower's
last known address in Lender's records for this Loan .
Notice to Lender may be sent to: Small Business Financial Solutions,
LLC, 7316 Wisconsin
Ave., Suite 350, Bethesda,
MD 20814.

 

36. RECORDKEEPING
REQUIREMENTS. Lender shall have no obligation to maintain any electronic records or any documents, schedules,
invoices or any other paper delivered to Lender by Borrower in connection with this Agreement
or any other agreement for more than four months after receipt of the same by Lender
except as required by applicable statute or regulation
. At Lender's
request, Borrower shall deliver to Lender:
(i) schedules of accounts and general intangibles; and
(ii) such other information regarding the Collateral as
Lender shall request. Lender, or any of its agents, shall have the right to call at Borrower's
place or places of business at intervals to be determined by Lender, and
without hindrance or delay, to inspect,
audit, check,
and make extracts from any copies of the books, records,
journals, orders, receipts,
correspondence that relate to Borrower 's
accounts and Collateral or other transactions between the parties thereto and the general financial condition of Borrower and Lender
may remove any of such records temporarily for the purpose of having copies made thereof.

 

37. MONITORING,
RECORDING AND ELECTRONIC COMMUNICATIONS. Lender may choose to monitor and/or record telephone calls with Borrower and its owners,
employees or agents. These
calls are monitored and/or recorded solely for evaluation
by supervisors, training,
monitoring for compliance purposes, collections, and
quality control. By signing this Agreement, Borrower agrees
that any call between Lender and Borrower or a representative
of Borrower may be monitored and/or recorded for these purposes. Borrower further agrees that: (i)
it has an established business relationship with Lender and may be contacted from time to time regarding transactions with Lender
by telephone, text message or email ; (ii) such contacts
are not considered unsolicited or inconvenient; and (iii)
any such contact may be made using any wireless, mobile
cellular or other number Borrower or its representative give Lender, using
any e-mail address Borrower or its representative gives Lender, or
using an automated dialing and announcing or similar device, unless
prohibited by law. This authorization is binding upon Borrower
upon signing this Agreement and shall not be deemed withdrawn or revoked should Lender determine not to proceed with the transaction.

 

38. ENTIRE
AGREEMENT. This Agreement, the Application,
and the Business Loan Key Terms Supplement constitute the entire understanding between the
Parties in connection with the subject matter hereof and supersedes all prior and contemporaneous agreements,
understanding, negotiations,
and discussions, whether
oral or written, of the Parties with respect to the subject matter hereof, and
there are no warranties, representations and/or agreements
among the Parties in conjunction with the subject matter hereof except as set forth in this
Agreement, the Application,
and the Business Loan Key Terms Supplement. The Parties may change any of the terms of this
Agreement or amend this Agreement but any such changes or amendments shall not be effective unless
they are in writing and signed by all Parties. If any of the provisions of this Agreement are
determined to be invalid, illegal or unenforceable in any
respect, the remaining provisions shall not be affected
in any manner. All Parties hereby acknowledge having the full power and authority to enter into and perform the obligations under
this Agreement and that this Agreement. The Parties agree to execute such further and additional documents,
instruments, and writings
as may be necessary, proper, required,
desirable, or convenient
for the purpose of fully effectuating the terms and provisions of this Agreement. Paragraphs 22,
28, 29,
30, 31, 32, 37 and
38 shall survive any termination, satisfaction or cancellation
of this Agreement.

 

39. AFFILIATES.
Borrower and Guarantor(s) agrees that Lender may share all information it obtains from Borrower and Guarantor with Lender's
affiliates for purposes of underwriting, funding,
collecting, servicing
and enforcing this Agreement. Additionally, Borrower acknowledges
and agrees that Lender may use its affiliates to service or collect the Loan or to sue for Events of Default and to enforce any
of Lender's rights under this Agreement.

 

40. COUNTERPARTS;
FAX SIGNATURES. This Agreement may be executed in one or more counterparts, each of which counterparts shall be deemed to be
an original, and all such counterparts shall constitute
one and the same instrument. For purposes of the execution of this Agreement, fax
signatures shall be treated in all respects as original signatures.

 

41. GUARANTY. By signing this
Agreement as Guarantor, the Guarantor(s) hereby assume and, jointly
and severally, guarantees all obligations of the Borrower
arising under this Agreement (including the Business Loan Key Terms Supplement) and authorizes and permits Lender to automatically
withdraw any and all funds from any of Guarantors' bank
accounts to ensure payment of any amount

 

    	8

    	 

    

 

 

owed
under this Agreement. This guarantee is unlimited,
absolute and without
condition, and is binding
upon each Guarantor, the Guarantor's
heirs, legal representatives,
successors and assigns. THIS GUARANTY
IS A GUARANTY
OF PAYMENT AND IS IN
NO WAY CONDITIONED
OR CONTINGENT UPON ANY ATTEMPT TO
COLLECT FROM THE BORROWER OR TO
REALIZE UPON ANY PROPERTY SUBJECT TO THE LIEN
OF, OR SECURITY INTEREST UNDER,
THE LOAN AGREEMENT,
OR ANY OTHER
SECURITY GIVEN FOR THE GUARANTEED OBLIGATIONS. This Guaranty
is given to induce
Lender to make the loan that is the subject of this Agreement
and Guarantor(s) understands
and agrees that Lender
would not make such Loan without
this Guaranty. Guarantor further agrees that in
the event the Lender incurs any expenses in the enforcement of this Guaranty,
whether legal action
be instituted or not,
the Lender shall be entitled
to collect from the Guarantor, and
the Guarantor hereby agrees that they shall pay to the
Lender, its successors and assigns, all such
expenses, including reasonable attorneys' fees, and the
Guarantor shall be obligated
to pay same immediately
upon demand of payment therefore
by the Lender. The Guarantors to
this Agreement are hereby notified that a negative credit
report reflecting on his/her
credit record may be submitted to a credit reporting agency if
the terms of this Agreement
are breached. Each Guarantor acknowledges
receiving a copy of this Agreement
and having read the terms of this
Agreement, including,
without limitation, the guarantee set forth in
this paragraph, and
the Guarantor's signature
below shall serve as
confirmation that the Guarantor understands all terms and
conditions of this Agreement.

 

The
parties hereto have caused this Agreement
to be duly executed by
their respective authorized officers as of the day and
year first above written,
intending this to be a document under seal.

 

EACH PARTY ACKNOWLEDGES THAT
THEY HAVE READ AND AGREE TO ALL OF THE FOREGOING TERMS AND CONDITIONS, INCLUDING THE ARBITRATION PROVISION IN PARAGRAPH
31.

 

 

 

 

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