Document:

Exhibit 10.13

 

 

*00003000298417-100007004292020*

 

BUSINESS
LOAN AGREEMENT

 

	Principal	Loan Date	Maturity	Loan No	Call / Coll	Account	Officer	Initials
	$209,291.00	04-29-2020	04-29-2022	3000298417-100	004A / 00	 	2161	 
	
        References in the boxes above
        are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

        Any item above containing “***”
        has been omitted due to text length limitations.

 

	Borrower:	
        CHANSON 23RD STREET LLC

        240 LONG HILL DRIVE

        SHORT HILL, NJ 07078
	 	Lender:	
        CATHAY BANK, a California
        Banking Corporation 

        SBA DEPARTMENT

        777 N. BROADWAY, 2ND FLOOR

LOS ANGELES, CA 90012

 

 

 

THIS BUSINESS LOAN AGREEMENT
dated April 29, 2020, is made and executed between CHANSON 23RD STREET LLC (“Borrower”) and CATHAY BANK, a California
Banking Corporation (“Lender”) on the following terms and conditions. Borrower has received prior commercial loans
from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may
be described on any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) in granting, renewing,
or extending any Loan, Lender is relying upon Borrower’s representations, warranties, and agreements as set forth in this
Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s sole
judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

 

TERM. This Agreement
shall be effective as of April 29, 2020, and shall continue in full force and effect until such time as all of Borrower’s
Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys’ fees, and other
fees and charges, or until such time as the parties may agree in writing to terminate this Agreement.

 

CONDITIONS PRECEDENT TO
EACH ADVANCE. Lender’s obligation to make the initial Advance and each subsequent Advance under this Agreement shall
be subject to the fulfillment to Lender’s satisfaction of all of the conditions set forth in this Agreement and in the Related
Documents.

 

Loan Documents. Borrower
shall provide to Lender the following documents for the Loan: (1) the Note; (2) together with all such Related Documents as Lender
may require for the Loan; all in form and substance satisfactory to Lender and Lender’s counsel.

 

Borrower’s Authorization.
Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing
the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such
other resolutions, authorizations, documents and instruments as Lender or its counsel, may require.

 

Payment of Fees and Expenses.
Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement
or any Related Document.

 

Representations and Warranties.
The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate
delivered to Lender under this Agreement are true and correct.

 

No Event of Default. There
shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under
any Related Document.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 2
	 	 	 

 

REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds,
as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:

 

Organization. Borrower
is a limited liability company which is, and at all times shall be, duly organized, validly existing, and in good standing under
and by virtue of the laws of the State of New York. Borrower is duly authorized to transact business in all other states in which
Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which
Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign limited liability
company in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition.
Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or
presently proposes to engage. Borrower maintains an office at 240 LONG HILL DRIVE, SHORT HILL, NJ 07078. Unless Borrower has designated
otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning
the Collateral. Borrower will notify Lender prior to any change in the location of Borrower’s state of organization or any
change in Borrower’s name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence,
rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental
or quasi-governmental authority or court applicable to Borrower and Borrower’s business activities.

 

Assumed Business Names.
Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower.
Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business:
None.

 

Authorization. Borrower’s
execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary
action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower’s
articles of organization or membership agreements, or (b) any agreement or other instrument binding upon Borrower or (2) any law,
governmental regulation, court decree, or order applicable to Borrower or to Borrower’s properties.

 

Financial Information. Each
of Borrower’s financial statements supplied to Lender truly and completely disclosed Borrower’s financial condition
as of the date of the statement, and there has been no material adverse change in Borrower’s financial condition subsequent
to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as
disclosed in such financial statements.

 

Legal Effect. This Agreement
constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal,
valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.

 

Properties. Except as
contemplated by this Agreement or as previously disclosed in Borrower’s financial statements or in writing to Lender and
as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title
to all of Borrower’s properties free and clear of all Security Interests, and has not executed any security documents or
financing statements relating to such properties. All of Borrower’s properties are titled in Borrower’s legal name,
and Borrower has not used or filed a financing statement under any other name for at least the last five (5) years.

 

Hazardous Substances. Except
as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower’s
ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge
of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral
by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by
any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of
the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or
from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local
laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents
to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral
with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower’s expense and for Lender’s
purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any
other person. The representations and warranties contained herein are based on Borrower’s due diligence in investigating
the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against
Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2)
agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or
as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or
substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify and defend,
shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be
affected by Lender’s acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 3
	 	 	 

 

Litigation and Claims. No
litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially adversely affect Borrower’s financial condition
or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in
writing.

 

Taxes. To the best of
Borrower’s knowledge, all of Borrower’s tax returns and reports that are or were required to be filed, have been filed,
and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested
by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.

 

Lien Priority. Unless
otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment
of Borrower’s Loan and Note, that would be prior or that may in any way be superior to Lender’s Security Interests
and rights in and to such Collateral.

 

Binding Effect. This
Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well
as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.

 

AFFIRMATIVE COVENANTS. Borrower
covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:

 

Notices of Claims and Litigation.
Promptly inform Lender in writing of (1) all material adverse changes in Borrower’s financial condition, and (2) all
existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower
or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.

 

Financial Records. Maintain
its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit Borrower’s
books and records at all reasonable times.

 

Financial Statements. Furnish
Lender with such financial statements and other related information at such frequencies and in such detail as Lender may reasonably
request.

 

Additional Information. Furnish such additional
information and statements, as Lender may request from time to time.

 

Insurance. Maintain
fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower’s
properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request
of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Lender.
Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any
way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender
holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender’s loss payable or other
endorsements as Lender may require.

 

Insurance Reports. Furnish
to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the
policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and
the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however
not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the
actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.

 

Other Agreements. Comply
with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party
and notify Lender immediately in writing of any default in connection with any other such agreements.

 

Loan Proceeds. Use all
Loan proceeds solely for Borrower’s business operations, unless specifically consented to the contrary by Lender in writing.

 

Taxes, Charges and Liens.
Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental
charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower’s
properties, income, or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax,
charge, levy, lien or claim so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings,
and (2) Borrower shall have established on Borrower’s books adequate reserves with respect to such contested assessment,
tax, charge, levy, lien, or claim in accordance with GAAP.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 4
	 	 	 

 

Performance. Perform
and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents,
and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of
any default in connection with any agreement.

 

Operations. Maintain
executive and management personnel with substantially the same qualifications and experience as the present executive and management
personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in
a reasonable and prudent manner.

 

Environmental Studies. Promptly
conduct and complete, at Borrower’s expense, all such investigations, studies, samplings and testings as may be requested
by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic
or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any
property or any facility owned, leased or used by Borrower.

 

Compliance with Governmental
Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities
applicable to the conduct of Borrower’s properties, businesses and operations, and to the use or occupancy of the Collateral,
including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance,
or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender
in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s interests in the Collateral are not
jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect
Lender’s interest.

 

Inspection. Permit employees
or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower’s other properties
and to examine or audit Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s books,
accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated
records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request
of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with
copies of any records it may request, all at Borrower’s expense.

 

Environmental Compliance
and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a
result of an intentional or unintentional action or omission on Borrower’s part or on the part of any third party, on property
owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice,
summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any
intentional or unintentional action or omission on Borrower’s part in connection with any environmental activity whether
or not there is damage to the environment and/or other natural resources.

 

Additional Assurances. Make,
execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements,
instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans
and to perfect all Security Interests.

 

Maintain Primary Operating
Account with Lender. Borrower agrees to maintain Borrower’s Primary Operating Account with Lender or any banking affiliate
of Lender and keep such account at all times in good standing. If Borrower does not maintain a separate operating account for its
operations, but rather its operations are primarily administered through an operating account of Borrower’s parent or affiliate,
then Borrower agrees to cause such parent or affiliate to maintain its Primary Operating Account with Lender or any banking affiliate
of Lender. Borrower shall also provide specific authorization to Lender to debit the applicable Primary Operating Account for payments
and fees due in connection with documentary credit financings, collections, loans and advances, if applicable, as they become due
and payable. As used herein, “Primary Operating Account” means the deposit account into which substantially all of
the receipts from the operations of Borrower, or of Borrower’s parent or affiliate if applicable, are deposited and from
which substantially all of its disbursements for its operations are made.

 

Notice of Litigation. Promptly
inform Lender in writing of any proceedings (whether or not purportedly on behalf of Borrower) against Borrower involving an amount
in excess of $25,000.00 and which are not fully covered by insurance.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 5
	 	 	 

 

RECOVERY OF ADDITIONAL COSTS.
If the imposition of or any change in any law, rule, regulation, guideline, or generally accepted accounting principle, or
the interpretation or application of any thereof by any court, administrative or governmental authority, or standard-setting organization
(including any request or policy not having the force of law) shall impose, modify or make applicable any taxes (except federal,
state or local income or franchise taxes imposed on Lender), reserve requirements, capital adequacy requirements or other obligations
which would (A) increase the cost to Lender for extending or maintaining the credit facilities to which this Agreement relates,
(B) reduce the amounts payable to Lender under this Agreement or the Related Documents, or (C) reduce the rate of return on Lender’s
capital as a consequence of Lender’s obligations with respect to the credit facilities to which this Agreement relates, then
Borrower agrees to pay Lender such additional amounts as will compensate Lender therefor, within five (5) days after Lender’s
written demand for such payment, which demand shall be accompanied by an explanation of such imposition or charge and a calculation
in reasonable detail of the additional amounts payable by Borrower, which explanation and calculations shall be conclusive in the
absence of manifest error.

 

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 any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures
incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred
or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender’s
option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any
installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of
the Note; or (C) be treated as a balloon payment which will be due and payable at the Note’s maturity.

 

NEGATIVE COVENANTS. Borrower
covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:

 

Additional Financial Restrictions.

 

Other Indebtedness. Create,
incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, guaranties, leasing, loans or advances,
whether secured or unsecured, matured or un-matured, liquidated or un-liquidated, direct or contingent, joint or several, except
(a) the liabilities of Borrower to Lender, and (b) any other liabilities of Borrower existing as of, and disclosed to Lender prior
to, the date hereof.

 

Loans, Acquisitions and
Guaranties. Except as expressly stated hereafter, (1) loan, invest in or advance money or assets to any other person, enterprise
or entity, (2) purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety
or guarantor other than in the ordinary course of business.

 

Use Of Funds. Use any
of the proceeds of any Credit extended hereunder except for the purposes stated in the Agreement and Related Documents.

 

Dividends, Distributions.
Declare or pay any dividends or other distributions with respect to, purchase, redeem, or otherwise acquire for value any of
its outstanding stock, partnership interests or membership interests or return any capital of its shareholders, partners, members
or managers. Notwithstanding the foregoing, provided that an Event of Default does not exist or after giving effect to the dividend
or distribution will exist, Borrower may make a dividend or distribution in a total amount not to exceed the amount either of the
federal and state income taxes due and owing by the shareholders of Borrower, if it is an S corporation as defined in the Code,
the partners or the members for the most recently ended fiscal year or for estimated federal and state income taxes for the current
fiscal year due and owing by the shareholders, partners or members of Borrower.

 

Merger, Consolidation, Transfer
of Assets. Merge into or consolidate with any other entity; make any substantial change in the nature of Borrower’s business
as conducted as of the date hereof; acquire all or substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower’s assets except in the ordinary course of its
business.

 

No Pledge Of All Borrower’s
Assets Or Acceleration of Debt. Mortgage, pledge, grant or permit to exist a security interest in, or lien upon, all or any
portion of Borrower’s assets now owned or hereafter acquired or accelerate payment on any existing debt, except any of the
foregoing in favor of Lender or which is existing as of, and disclosed to Lender in writing prior to, the date of this Agreement.

 

Agreements. Enter into
any agreement containing any provisions which would be violated or breached by the performance of Borrower’s obligations
under this Agreement or in connection herewith.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 6
	 	 	 

 

CESSATION OF ADVANCES. If
Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under
the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender;
(B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings,
or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower’s financial condition, in the financial
condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor’s guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have occurred.

 

RIGHT OF SETOFF. To
the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff
would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the debt against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts
to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph.

 

DEFAULT. Each of the following
shall constitute an Event of Default under this Agreement:

 

Payment Default. Borrower
fails to make any payment when due under the Loan.

 

Other Defaults. Borrower
fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the
Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower.

 

Default in Favor of Third
Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s or any Grantor’s
property or Borrower’s or any Grantor’s ability to repay the Loans or perform their respective obligations under this
Agreement or any of the Related Documents.

 

False Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Agreement
or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.

 

Death or Insolvency. The
dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other
termination of Borrower’s existence as a going business or the death of any member, the insolvency of Borrower, the appointment
of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout,
or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

 

Defective Collateralization.
This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document
to create a valid and perfected security interest or lien) at any time and for any reason.

 

Creditor or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other
method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment
of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion,
as being an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor.
Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

 

Adverse Change. A material
adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of the
Loan is impaired.

 

Insecurity. Lender in
good faith believes itself insecure.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 7
	 	 	 

 

Change of Control. Any
change of control in Borrower. “Change of Control” means: (a) the sale of all or substantially all of the consolidated
assets of Borrower to any third party; (b) a sale or transfer resulting in no less than a majority of the Units of Borrower being
held by a third party purchaser; or (c) a merger, consolidation, recapitalization or reorganization of Borrower with or into a
third party purchaser that results in the inability of the members to designate or elect a majority of the managers (or the board
of directors (or its equivalent) of the resulting entity or its parent company). “Unit” means a unit representing a
fractional part of the membership interests of the members and shall include all types and classes of units, including the preferred
units, the common units and the incentive units.

 

EFFECT OF AN EVENT OF DEFAULT.
If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including
any obligation to make further Loan Advances or disbursements), and, at Lender’s option, all Indebtedness immediately will
become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type
described in the “Insolvency” subsection above, such acceleration shall be automatic and not optional. In addition,
Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except
as may be prohibited by applicable law, all of Lender’s rights and remedies 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 make
expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender’s right to
declare a default and to exercise its rights and remedies.

 

COUNTERPARTS. This document
(i) may be signed in counterparts, each of which shall be an original and all of which taken together shall constitute the same
instrument, and (ii) shall be effective when executed by all parties thereto.

 

BANK SECRECY ACT. Borrower
shall not, and shall not permit any of its subsidiaries, if applicable, to: (a) be or become a Sanctioned Person or be or become
subject at any time to any Sanctions or any foreign asset control, anti-terrorism, money laundering or other similar law, regulation
or list of any governmental authority of the United States (including, without limitation, the OFAC list) that prohibits or limits
Lender from making any advance or extension of credit to any Obligor or from otherwise conducting business with any Obligor; (b)
fail to provide documentation and other evidence of the identity of the Obligors as may be requested by Lender at any time to enable
Lender to verify the identity of the Obligors or to comply with any applicable law, including, without limitation, Section 326
of the Patriot Act at 31 U.S.C. Section 5318; or (c) use any part of the proceeds from the Loan, directly or indirectly, (i) in
connection with any investment in, or any transactions or dealings with, any Sanctioned Country or Sanctioned Person, (ii) for
any purpose that would cause Lender to be in violation of any Sanctions, or (iii) otherwise in violations of Sanctions. For the
purpose of this provision: “Obligor” shall mean Borrower, each Guarantor and any other person that is or becomes primarily
or secondarily liable on this Agreement, the Note or any of the other Related Documents. “OFAC” shall mean the Office
of Foreign Assets Control of the United States Department of the Treasury. “Sanctioned Country” shall mean a country
or territory that is subject to Sanctions. “Sanctioned Person” shall mean (a) a Person that is, or is owned or controlled
by, Persons that are (i) the subject/target of any Sanctions or (ii) located, organized or resident in a Sanctioned Country, or
(b) a Person named on the list of “Specially Designated Nationals and Blocked Persons” or other similar sanctions party
list maintained by OFAC and available at http://www.treasury.gov/resource-center/sanctions/ SDN-List/Pages/default.aspx,
or as otherwise published from time to time. “Sanctions” shall mean any trade, economic or financial sanctions administered
or enforced by OFAC, the U.S. Department of State, the United Nations Security Council, the EU, Her Majesty’s Treasury or
other relevant sanctions authority.

 

WAIVER OF CONFIDENTIALITY
OF BUSINESS ADDRESS. Borrower hereby waives any and all rights to keep the business address of Borrower confidential from Lender
whether on file with the Department of Motor Vehicles or equivalent governmental agency. Borrower hereby authorizes Lender, its
agents, successors, and/or assigns, to obtain the business address from any agency whenever Lender deems it has a legitimate need
for this information.

 

SBA FORMS. Borrower
agrees to execute and deliver at any time and from time to time, upon the request of Lender, any additional instrument, document
or certificate which, in the sole judgment of the SBA, may be necessary to evidence such Loan.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 8
	 	 	 

 

MISCELLANEOUS PROVISIONS.
The following miscellaneous provisions are a part of this Agreement:

 

Amendments. This Agreement,
together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth
in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.

 

Arbitration. Borrower
and Lender agree that all disputes, claims and controversies between them whether individual, joint, or class in nature, arising
from this Agreement or otherwise, including without limitation contract and tort disputes, shall be arbitrated pursuant to the
Rules of the American Arbitration Association in effect at the time the claim is filed, upon request of either party. No act to
take or dispose of any Collateral shall constitute a waiver of this arbitration agreement or be prohibited by this arbitration
agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining order; invoking a power of
sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising any rights
relating to personal property, including taking or disposing of such property with or without judicial process pursuant to Article
9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act,
or exercise of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement
relating to the Collateral, shall also be arbitrated, provided however that no arbitrator shall have the right or the power to
enjoin or restrain any act of any party. Borrower and Lender agree that in the event of an action for judicial foreclosure pursuant
to California Code of Civil Procedure Section 726, or any similar provision in any other state, the commencement of such an action
will not constitute a waiver of the right to arbitrate and the court shall refer to arbitration as much of such action, including
counterclaims, as lawfully may be referred to arbitration. Judgment upon any award rendered by any arbitrator may be entered in
any court having jurisdiction. Nothing in this Agreement shall preclude any party from seeking equitable relief from a court of
competent jurisdiction. The statute of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable
in an action brought by a party shall be applicable in any arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of an action for these purposes. The Federal Arbitration Act shall apply to the construction,
interpretation, and enforcement of this arbitration provision.

 

Attorneys’ Fees; Expenses.
Borrower agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s attorneys’ fees
and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone
else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include
Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and
legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and
any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed
by the court.

 

Caption Headings. Caption
headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this
Agreement.

 

Consent to Loan Participation.
Borrower agrees and consents to Lender’s sale or transfer, whether now or later, of one or more participation interests
in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any
other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters.
Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of
such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as
the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements
governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have
now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender
or such purchaser may enforce Borrower’s obligation under the Loan irrespective of the failure or insolvency of any holder
of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have against Lender.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 9
	 	 	 

 

Applicable Law. The Loan
secured by this lien was made under a United States Small Business Administration (SBA) nationwide program which uses tax dollars
to assist small business owners. If the United States is seeking to enforce this document, then under SBA regulations: (a) When
SBA is the holder of the Note, this document and all documents evidencing or securing this Loan will be construed in accordance
with federal law. (b) Lender or SBA may use local or state procedures for purposes such as filing papers, recording documents,
giving notice, foreclosing liens, and other purposes. By using these procedures, SBA does not waive any federal immunity from local
or state control, penalty, tax or liability. No Borrower or Guarantor may claim or assert against SBA any local or state law to
deny any obligation of Borrower, or defeat any claim of SBA with respect to this Loan. (c) Any clause in this document requiring
arbitration is not enforceable when SBA is the holder of the Note secured by this instrument.

 

Choice of Venue. If
there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of Los Angeles County,
State of California.

 

No Waiver by Lender. Lender
shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.
A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise
to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course
of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender’s rights
or of any of Borrower’s or any Grantor’s obligations as to any future transactions. Whenever the consent of Lender
is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent
to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion
of Lender.

 

Notices. Any notice
required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually
received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or,
if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to
the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by
giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party’s address.
For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower’s current address. Unless otherwise
provided or required by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice
given to all Borrowers.

 

Severability. If a court
of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance,
that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible,
the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision
cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity,
or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision
of this Agreement.

 

Subsidiaries and Affiliates
of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word “Borrower” as used in this Agreement shall include all of Borrower’s
subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to
require Lender to make any Loan or other financial accommodation to any of Borrower’s subsidiaries or affiliates.

 

Successors and Assigns.
All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower’s
successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have
the right to assign Borrower’s rights under this Agreement or any interest therein, without the prior written consent of
Lender.

 

Survival of Representations
and Warranties. Borrower understands and agrees that in making the Loan, Lender is relying on all representations, warranties,
and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under
this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such
representations, warranties and covenants will survive the making of the Loan and delivery to Lender of the Related Documents,
shall be continuing in nature, and shall remain in full force and effect until such time as Borrower’s Indebtedness shall
be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.

 

Time is of the Essence.
Time is of the essence in the performance of this Agreement.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 10
	 	 	 

 

DEFINITIONS. The following
capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise
defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and
terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date of this Agreement:

 

Advance. The word “Advance”
means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower’s behalf on a line of credit or multiple
advance basis under the terms and conditions of this Agreement.

 

Agreement. The word
“Agreement” means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.

 

Borrower. The word “Borrower”
means CHANSON 23RD STREET LLC and includes all co-signers and co-makers signing the Note and all their successors and assigns.

 

Collateral. The word
“Collateral” means all property and assets granted as collateral security for a Loan, whether real or personal property,
whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest,
mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel
trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease
or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract,
or otherwise.

 

Environmental Laws. The
words “Environmental Laws” mean any and all state, federal and local statutes, regulations and ordinances relating
to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California
Health and Safety Code, Section 25100, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant
thereto.

 

Event of Default. The
words “Event of Default” mean any of the events of default set forth in this Agreement in the default section of this
Agreement.

 

GAAP. The word “GAAP”
means generally accepted accounting principles.

 

Grantor. The word “Grantor”
means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation
all Borrowers granting such a Security Interest.

 

Guarantor. The word
“Guarantor” means any guarantor, surety, or accommodation party of any or all of the Loan.

 

Guaranty. The word “Guaranty”
means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.

 

Hazardous Substances. The
words “Hazardous Substances” mean materials that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly
used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words “Hazardous Substances”
are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste
as defined by or listed under the Environmental Laws. The term “Hazardous Substances” also includes, without limitation,
petroleum and petroleum by-products or any fraction thereof and asbestos.

 

     

     

    

 

	 	BUSINESS LOAN AGREEMENT	 
	 	(Continued)	Page 11
	 	 	 

 

Indebtedness. The word
“Indebtedness” means the indebtedness evidenced by the Note or Related Documents, including all principal and interest
together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any
of the Related Documents.

 

Lender. The word “Lender”
means CATHAY BANK, a California Banking Corporation, its successors and assigns.

 

Loan. The word “Loan”
means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule
attached to this Agreement from time to time.

 

Note. The
word “Note” means the Note dated April 29, 2020 and executed by CHANSON 23RD STREET LLC in the principal amount
of $209,291.00, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement.

 

Related Documents. The
words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements
and documents, whether now or hereafter existing, executed in connection with the Loan.

 

Security Agreement. The
words “Security Agreement” mean and include without limitation any agreements, promises, covenants, arrangements, understandings
or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security
Interest.

 

Security Interest. The
words “Security Interest” mean, without limitation, any and all types of collateral security, present and future, whether
in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien or title
retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether
created by law, contract, or otherwise.

 

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS
OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED APRIL 29, 2020.

 

BORROWER:

 

CHANSON 23RD STREET LLC

 

GEORGE CHANSON (NY) CORP., Member of CHANSON
23RD STREET LLC

 

	By:	/s/
    GANG LI	 	By:	/s/
    FIFI ZHENG
	 	GANG LI, President of GEORGE CHANSON (NY) CORP.	 	 	FIFI ZHENG, Secretary of GEORGE CHANSON (NY) CORP.

 

LENDER:

 

CATHAY BANK, A CALIFORNIA BANKING CORPORATION

 

	By:	/s/
    CATHAY BANK	 
	 	Authorized Signer	 

 

 

 

LaserPro, Ver. 19.4.10.036 Copr.
Finastra USA Corporation 1997, 2020. All Rights Reserved. - CA C:\CFI\LPL\C40.FC TR-40897 PR-291

 

     

     

    

 

 

*00003000298417-100095504292020*

 

PROMISSORY
NOTE

 

	Principal	Loan Date	Maturity	Loan No	Call / Coll	Account	Officer	Initials
	$209,291.00	04-29-2020	04-29-2022	3000298417-100	004A / 00	 	2161	 
	
        References in the boxes above
        are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

        Any item above containing “***”
        has been omitted due to text length limitations.

 

	Borrower:	
        CHANSON 23RD STREET LLC

        240 LONG HILL DRIVE

        SHORT HILL, NJ 07078
	 	Lender:	
        CATHAY BANK, a California
        Banking Corporation

        SBA DEPARTMENT

        777 N. BROADWAY, 2ND FLOOR

        LOS ANGELES, CA 90012

 

 

 

	Principal Amount: $209,291.00	Interest Rate: 1.000%	Date of Note: April 29, 2020

 

PURPOSE. The
proceeds of the Loan shall be used for the following purposes only: (i) payroll costs (as defined in the CARES Act and in
Section 2.f of the SBA Interim Final Rule dated April 2, 2020); (ii) costs related to the continuation of group health care
benefits during periods of paid sick, medical, or family leave, and insurance premiums; (iii) mortgage interest payments (but
not mortgage prepayments or principal payments); (iv) rent payments; (v) utility payments; (vi) interest payments on any
other debt obligations that were incurred before February 15, 2020; and/or (vii) refinancing an SBA Economic Injury Disaster
Loan (EIDL) made between January 31, 2020 and April 3, 2020, under the conditions as specified in Section 2.r.vii of the SBA
Interim Final Rule dated April 2, 2020. “SBA” means the U.S. Small Business Administration and “CARES
Act” means the federal Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136).

 

PROMISE TO PAY. CHANSON
23RD STREET LLC (“Borrower”) promises to pay to CATHAY BANK, a California Banking Corporation (“Lender”),
or order, in lawful money of the United States of America, the principal amount of Two Hundred Nine Thousand Two Hundred Ninety-one
& 00/100 Dollars ($209,291.00), together with interest on the unpaid principal balance from April 29, 2020, calculated as described
in the “INTEREST CALCULATION METHOD” paragraph using an interest rate of 1.000%, until paid in full. The interest rate
may change under the terms and conditions of the “INTEREST AFTER DEFAULT” section.

 

PAYMENT. Borrower will pay
this loan in accordance with the following payment schedule:

 

During the first 6 months
of this loan, interest will accrue on the unpaid principal balance at the rate as stated above and no payments will be due. On
the date which is seven months after the date of this Note, and on the same day of each month after that, Borrower will pay this
loan in 18 payments in an amount sufficient to repay the accrued unpaid interest and the then-outstanding principal balance that
has not been forgiven as described in the Loan Forgiveness provision below amortized over a period of 18 months. Borrower’s
final payment will be for all principal and all accrued interest not yet paid, together with any other unpaid amounts due under
this Note. Payments include principal and interest.

 

Unless otherwise agreed or required
by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; and then to any unpaid collection
costs. Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing.

 

INTEREST CALCULATION METHOD.
Interest on this Note is computed on a 365/365 simple interest basis; that is, by applying the ratio of the interest rate over
the number of days in a year (365 for all years, including leap years), multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using this
method.

 

PREPAYMENT. Borrower
may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments under the payment schedule. Rather,
early payments will reduce the principal balance due and may result in Borrower’s making fewer payments. Borrower agrees
not to send Lender 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 Note, and Borrower will remain
obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, 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 must be mailed or delivered to: Cathay
Bank, Loan Servicing Department, RS-15, 9650 Flair Drive, El Monte, CA 91731.

 

     

     

    

 

	 	PROMISSORY NOTE	 
	 	(Continued)	Page 2
	 	 	 

 

INTEREST AFTER DEFAULT. Upon
default, at Lender’s option, and if permitted by applicable law, Lender may add any unpaid accrued interest to principal
and such sum will bear interest therefrom until paid at the rate provided in this Note (including any increased rate). Upon default,
the interest rate on this Note shall, if permitted under applicable law, immediately increase by 5.000 percentage points.

 

DEFAULT. Each of the
following shall constitute an event of default (“Event of Default”) under this Note:

 

Payment Default. Borrower
fails to make any payment when due under this Note.

 

Other Defaults. Borrower
fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related
documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between
Lender and Borrower.

 

Default in Favor of Third
Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or
Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any of the related documents.

 

False Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Note or
the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.

 

Death or Insolvency. The
dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other
termination of Borrower’s existence as a going business or the death of any member, the insolvency of Borrower, the appointment
of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout,
or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other
method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment
of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion,
as being an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor.
Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness
or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by this Note.

 

Adverse Change. A material
adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of this
Note is impaired.

 

Insecurity. Lender in
good faith believes itself insecure.

 

     

     

    

 

	 	PROMISSORY NOTE	 
	 	(Continued)	Page 3
	 	 	 

 

CHANGE OF CONTROL. Any
change of control in Borrower shall constitute an Event of Default. “Change of Control” means: (a) the sale of all
or substantially all of the consolidated assets of Borrower to any third party; (b) a sale or transfer resulting in no less than
a majority of the Units of Borrower being held by a third party purchaser; or (c) a merger, consolidation, recapitalization or
reorganization of Borrower with or into a third party purchaser that results in the inability of the members to designate or elect
a majority of the managers (or the board of directors (or its equivalent) of the resulting entity or its parent company). “Unit”
means a unit representing a fractional part of the membership interests of the members and shall include all types and classes
of units, including the preferred units, the common units and the incentive units.

 

LENDER’S RIGHTS. Upon
default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,
and then Borrower will pay that amount.

 

ATTORNEYS’ FEES; EXPENSES.
Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount.
This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses,
whether or not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts to modify
or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court costs, in addition to all other sums
provided by 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.

 

CHOICE OF VENUE. If
there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of Los Angeles County,
State of California.

 

RIGHT OF SETOFF. To
the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff
would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the debt against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts
to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph.

 

COLLATERAL. This loan
is unsecured.

 

ARBITRATION. Borrower
and Lender agree that all disputes, claims and controversies between them whether individual, joint, or class in nature, arising
from this Note or otherwise, including without limitation contract and tort disputes, shall be arbitrated pursuant to the Rules
of the American Arbitration Association in effect at the time the claim is filed, upon request of either party. No act to take
or dispose of any collateral securing this Note shall constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining order; invoking
a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising
any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant
to Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness
of any act, or exercise of any right, concerning any collateral securing this Note, including any claim to rescind, reform, or
otherwise modify any agreement relating to the collateral securing this Note, shall also be arbitrated, provided however that no
arbitrator shall have the right or the power to enjoin or restrain any act of any party. Borrower and Lender agree that in the
event of an action for judicial foreclosure pursuant to California Code of Civil Procedure Section 726, or any similar provision
in any other state, the commencement of such an action will not constitute a waiver of the right to arbitrate and the court shall
refer to arbitration as much of such action, including counterclaims, as lawfully may be referred to arbitration. Judgment upon
any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Note shall preclude any party
from seeking equitable relief from a court of competent jurisdiction. The statute of limitations, estoppel, waiver, laches, and
similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding,
and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes. The Federal
Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision.

 

     

     

    

 

	 	PROMISSORY NOTE	 
	 	(Continued)	Page 4
	 	 	 

 

COUNTERPARTS. This document
(i) may be signed in counterparts, each of which shall be an original and all of which taken together shall constitute the same
instrument, and (ii) shall be effective when executed by all parties thereto.

 

LOAN FORGIVENESS. Pursuant
to Section 1106 of the “CARES Act”, the following provisions shall apply to the Loan:

 

A. The
Loan is subject to the limited loan forgiveness provisions of Section 1106 of the CARES Act, and the SBA Interim Final Rule dated
April 2, 2020.

 

B.
The amount of loan forgiveness is determined by and is subject to the sole approval of the SBA.

 

C. Limited
loan forgiveness is provided for amounts spent on payroll costs, rent and utilities payments, and interest payments on mortgages
for Borrowers that apply. No more than 25.0% of the amount forgiven may be for costs other than payroll costs.

 

D.
The amount of loan forgiveness will be reduced if Borrower reduces the number of their employees (layoffs).

 

E. Borrower
is eligible for debt forgiveness on a covered loan in an amount equal to the following payments made during the 8-week period beginning
on the Loan Date (“covered period”):

 

(i)
payroll costs;

 

(ii)
interest payments on mortgage obligations (excluding principal and prepaid principal);

 

(iii)
rent; and

 

(iv)
utility payments.

 

F.
The amount of forgiveness cannot exceed the principal balance of the Loan.

 

G.
Cancelled indebtedness will not be included in the Borrower’s taxable income.

 

H.
To receive loan forgiveness, Borrower must apply for Debt Forgiveness through Lender. The Borrower must submit to the Lender servicing
the loan an application, which must include documents verifying the number of full-time employees and the pay rates for
the period described, including payroll tax filings to the IRS and State, income, payroll, and unemployment insurance filings,
cancelled checks, payment receipts, transcript of accounts, or other documents verifying payments on covered mortgage loan obligations,
lease obligations and utility payments, plus any other documentation the SBA deems necessary.

 

I.
There will be no loan forgiveness without Borrower’s submission of the proper application and documentation to Lender.

 

SBA FORMS. Borrower
agrees to execute and deliver at any time and from time to time, upon the request of Lender, any additional instrument, document
or certificate which, in the sole judgment of the SBA, may be necessary to evidence such Loan.

 

SUCCESSOR INTERESTS. The
terms of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors and assigns,
and shall inure to the benefit of Lender and its successors and assigns.

 

     

     

    

 

	 	PROMISSORY NOTE	 
	 	(Continued)	Page 5
	 	 	 

 

GENERAL PROVISIONS. If
any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any
of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, and notice
of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that
Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the
consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint
and several.

 

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND
UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED
COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

 

CHANSON 23RD STREET LLC

 

GEORGE CHANSON (NY) CORP., Member of CHANSON
23RD STREET LLC

 

	By:	/s/
    GANG LI	 	By:	/s/
    FIFI ZHENG
	 	GANG LI, President of GEORGE CHANSON (NY) CORP.	 	 	FIFI ZHENG, Secretary of GEORGE CHANSON (NY) CORP.

 

 

 

LaserPro, Ver. 19.4.10.036 Copr.
Finastra USA Corporation 1997, 2020. All Rights Reserved. - CA C:\CFI\LPL\D20.FC TR-40897 PR-291ex_238100.htm

Exhibit 10.1

REVOLVING LINE OF CREDIT NOTE

(VARIABLE MAXIMUM)

 

	$40,000,000.00	Roanoke, Virginia
	 	March 25, 2021

 

FOR VALUE RECEIVED, the undersigned ROANOKE GAS COMPANY ("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its office at MAC: R4046-080, 10 South Jefferson Street, 8th Floor, Roanoke, Virginia 24011 or at such other place as the holder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of Forty Million Dollars ($40,000,000.00), or so much thereof as may be advanced and be outstanding pursuant to the terms of the Credit Agreement, as defined herein, with interest thereon, to be computed on each advance from the date of its disbursement as set forth herein.

 

DEFINITIONS:

 

As used herein, the following terms shall have the meanings set forth after each, and any other term defined in this Note shall have the meaning set forth at the place defined:

 

(a)         "Daily One Month LIBOR" means, for any day, the rate of interest equal to LIBOR then in effect for delivery for a one (1) month period.

 

(b)         "LIBOR" means the rate of interest per annum determined by Bank based on the rate for United States dollar deposits for delivery of funds for one (1) month as published by the ICE Benchmark Administration Limited, a United Kingdom company, at approximately 11:00 a.m., London time, or, for any day not a London Business Day, the immediately preceding London Business Day (or if not so published, then as determined by Bank from another recognized source or interbank quotation); provided, however, that if LIBOR determined as provided above would be less than zero percent (0.0%), then LIBOR shall be deemed to be zero percent (0.0%).

 

(c)         "London Business Day" means any day that is a day for trading by and between banks in dollar deposits in the London interbank market.

 

INTEREST:

 

(a)         Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a 360-day year, actual days elapsed) at a fluctuating rate per annum determined by Bank to be one percent (1.00%) above Daily One Month LIBOR in effect from time to time. Bank is hereby authorized to note the date and interest rate applicable to this Note and any payments made thereon on Bank's books and records (either manually or by electronic entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of the information noted.

 

(b)         Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in addition to any other amounts due or to become due hereunder, any and all (i) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign governmental authority and related in any manner to LIBOR, and (ii) costs, expenses and liabilities arising from or in connection with reserve percentages prescribed by the Board of Governors of the Federal Reserve System (or any successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the Federal Reserve Board, as amended), assessment rates imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or foreign governmental authority or resulting from compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority and related in any manner to LIBOR. In determining which of the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be conclusive and binding upon Borrower.

 

 

(c)         Default Interest. The Bank shall have the option in its sole and absolute discretion to have the outstanding principal balance of this Note bear interest at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to three percent (3%) above the rate of interest from time to time applicable to this Note (i) from and after the maturity date of this Note; (ii) from and after the date prior to the maturity date of this Note when all principal owing hereunder becomes due and payable by acceleration or otherwise; and/or (iii) upon the occurrence and during the continuance of any Event of Default.

 

BENCHMARK REPLACEMENT PROVISIONS:

 

Notwithstanding anything to the contrary contained in this Note or in any related loan document (for the purposes of these Benchmark Replacement Provisions, a Swap Agreement is not a loan document):

 

(a)         Benchmark Replacement. If a Benchmark Transition Event or an Early Opt-in Election, as applicable, occurs, the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes under this Note or under any related loan document. Any Benchmark Replacement will become effective on the applicable Benchmark Replacement Date without any further action or consent of Borrower.

 

(b)         Benchmark Replacement Conforming Changes. Bank will have the right to make Benchmark Replacement Conforming Changes from time to time and any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of Borrower.

 

(c)         Notices; Standards for Decisions and Determinations. Bank will promptly notify Borrower of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, (ii) the implementation of any Benchmark Replacement, and (iii) the effectiveness of any Benchmark Replacement Conforming Changes. Any determination, decision or election that may be made by Bank pursuant to these Benchmark Replacement Provisions, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and will be made in its sole discretion and without Borrower consent

 

(d)         Certain Defined Terms. As used in this Note, each of the following capitalized terms has the meaning given to such term below:

 

(i)         “Benchmark” means, initially, LIBOR (including Daily One Month LIBOR, if applicable); provided, however, that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, has occurred with respect to LIBOR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has become effective pursuant to the provisions of this Note.

 

 

(ii)         “Benchmark Administrator” means, initially, ICE Benchmark Administration Limited, a United Kingdom company, or any successor administrator of the then-current Benchmark or any insolvency or resolution official with authority over such administrator.

 

(iii)         “Benchmark Replacement” means the first alternative set forth in the order below that can be determined by Bank as of the applicable Benchmark Replacement Date:

 

(1)         the sum of: (A) Term SOFR or, if Bank determines that Term SOFR for the Corresponding Tenor cannot be determined, Term SOFR for the longest tenor that can be determined by Bank that is shorter than the Corresponding Tenor, and (B) the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero) that has been selected or recommended by the Relevant Governmental Body for Term SOFR; provided, however, that this clause (1) shall not apply (i) to any borrowings under this Note if a Swap Agreement is in effect with respect to all or any portion of this Note as of the Benchmark Transition Event or Early Opt-in Election, and (ii) to any borrowings under this Note that bear interest at Daily One Month LIBOR;

 

(2)         the sum of: (A) the alternate rate of interest that has been selected by Bank as the replacement for the then-current Benchmark for the Corresponding Tenor (which, without limitation, may be compounded SOFR in arrears, term SOFR, Bank’s Prime Rate, or another benchmark selected by Bank); and (B) the applicable spread adjustment or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Bank.

 

With respect to Bank’s decisions under this paragraph (2):

 

(i)          if a Swap Agreement relating to a portion of this Note is in effect as of the Benchmark Transition Event or Early Opt-in Election, then Bank may without limitation, select (i) the benchmark referenced in the Swap Agreement, which may be the sum of a fallback rate and spread adjustment, for the entire balance of this Note, or (ii) the benchmark referenced in the Swap Agreement, which may be the sum of a fallback rate and spread adjustment, for the hedged portion of this Note, and the applicable Benchmark Replacement for the remaining non-hedged portion of this Note; and

 

(ii)          in the case of a replacement rate for Daily One Month LIBOR, Bank may, without limitation, select SOFR notwithstanding the availability or feasibility of determining a daily one month SOFR; and

 

(iii)          Bank’s selection of any applicable Benchmark Replacement shall give due consideration to (i) any selection or recommendation by the Relevant Governmental Body at such time for a replacement rate, the mechanism for determining such a rate, the methodology or conventions applicable to such rate, or the spread adjustment, or method for calculating or determining such spread adjustment, for such rate, or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the then-current Benchmark, the methodology or conventions applicable to such rate, or the spread adjustment, or method for calculating or determining such spread adjustment, for such alternate rate for U.S. dollar-denominated syndicated or bilateral credit facilities at such time.

 

Provided, however, during any period of time that the Benchmark Replacement would be less than zero percent (0.0%), the Benchmark Replacement shall be deemed to be zero percent (0.0%) for the purposes of this Note and the related loan documents, subject to any applicable floor rate provision.

 

(iv)         “Benchmark Replacement Conforming Changes” means any technical, administrative or operational changes (including, without limitation, changes to the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, prepayment provisions and other administrative matters) that Bank decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Bank.

 

(v)         “Benchmark Replacement Date” means the date specified by Bank in a notice to Borrower following a Benchmark Transition Event or Early Opt-in Election.

 

(vi)         “Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark: a public statement or publication of information by or on behalf of the Benchmark Administrator or a regulatory supervisor for the Benchmark Administrator announcing that (A) the Benchmark Administrator has ceased or will cease to provide the Benchmark permanently or indefinitely or (B) the Benchmark is no longer representative of underlying markets.

 

(vii)         “Corresponding Tenor” means a tenor having approximately the same length as the Interest Period, provided, however, that the Corresponding Tenor for Daily One Month LIBOR shall be one day.

 

(viii)         “Early Opt-in Election” means the election by Bank to declare that the Benchmark will be replaced prior to the occurrence of a Benchmark Transition Event and the provision by Bank of written notice of such election to Borrower indicating that at least five (5) currently outstanding U.S. dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) Term SOFR plus a spread adjustment that has been selected or recommended by the Relevant Governmental Body.

 

(ix)         “Interest Period” means, initially, the applicable LIBOR Period, and if a Benchmark Replacement is applicable, the tenor of the Benchmark Replacement.

 

(x)         “Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

 

(xi)         “SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator thereof, (or a successor administrator) on its website.

 

(xii)         “Swap Agreement” means a swap agreement by and between Borrower and Bank or its affiliates.

 

(xiii)         “Term SOFR” means the forward-looking term rate for the Corresponding Tenor based on SOFR that has been selected or recommended by the Relevant Governmental Body.

 

BORROWING AND REPAYMENT:

 

(a)         Borrowing and Repayment of Principal. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Note and of any document executed in connection with or governing this Note; provided however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount set forth above or such lesser amount as shall at any time be available hereunder. The unpaid principal balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for Borrower, which balance may be endorsed hereon from time to time by the holder. The outstanding principal balance of this Note shall be due and payable in full on March 31, 2023.

 

(b)         Payment of Interest. Interest accrued on this Note shall be payable on the first day of each month, commencing April 1, 2021, and on the maturity date set forth above.

 

(c)         Adjustments in Availability. Notwithstanding the principal amount set forth above, the maximum principal amount available under this Note shall vary from time to time as follows:

 

(i)         $28,000,000.00 from the date of this Note up to and including March 31, 2021;

(ii)          $14,000,000.00 from April 1, 2021 up to and including July 19, 2021;

(iii)          $22,000,000.00 from July 20, 2021 up to and including September 17, 2021;

(iv)         $32,000,000.00 from September 18, 2021 up to and including, February 28, 2022;

(v)         $25,000,000.00 from March 1, 2022 up to and including July 19, 2022;

(vi)         $32,000,000.00 from July 20, 2022 up to and including October 18, 2022;

(vii)         $40,000,000.00 from October 19, 2022 up to and including February 28, 2023; and         

(viii)         $34,000,000.00 from March 1, 2023 up to and including March 31, 2023.

 

If the outstanding principal balance of this Note at any time is greater than the new maximum principal amount then available hereunder, Borrower shall immediately make a principal reduction on this Note in an amount sufficient to reduce the then outstanding principal balance hereof to an amount not greater than the new maximum principal amount available hereunder. Such principal reduction shall be subject to any prepayment fee set forth in this Note, if applicable.

 

(d)         Advances. Advances hereunder, to the total amount of the principal sum stated above, may be made by the holder at the oral or written request of (i) LAWRENCE T. OLIVER, PAUL W. NESTER OR RANDALL P. BURTON II, any one acting alone (subject to any of Bank’s applicable authentication policies or procedures, which may require that a particular individual—including another specific individual listed above—provide verification of the identity of the requestor), who are authorized to request advances and direct the disposition of any advances until written notice of the revocation of such authority is received by the holder at the office designated above, or (ii) any person, with respect to advances deposited to the credit of any deposit account of Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of Borrower regardless of the fact that persons other than those authorized to request advances may have authority to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been authorized by Borrower.

 

(e)         Application of Payments. Each payment made on this Note shall be credited first, to any interest then due and second, to the outstanding principal balance hereof.

 

EVENTS OF DEFAULT:

 

This Note is made pursuant to and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated March 31, 2016, as amended from time to time (the "Credit Agreement"). Any default in the payment or performance of any obligation under this Note, or any defined event of default under the Credit Agreement, shall constitute an "Event of Default" under this Note.

 

MISCELLANEOUS:

 

(a)         Remedies. Upon the sale, transfer, hypothecation, assignment or other encumbrance, whether voluntary, involuntary or by operation of law, of all or any interest in any real property securing this Note, if any, or upon the occurrence of any Event of Default, the holder of this Note, at the holder's option, may declare all sums of principal and interest outstanding hereunder to be immediately due and payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of which are expressly waived by Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall immediately cease and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys' fees (to include outside counsel fees and all allocated costs of the holder's in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder's rights and/or the collection of any amounts which become due to the holder under this Note whether or not suit is brought, and the prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Borrower or any other person or entity.

 

(b)         Collateral Exclusion. No lien or security interest created by or arising under any deed of trust, mortgage, security deed, or similar real estate collateral agreement (“Lien Document”) shall secure the Note Obligations unless such Lien Document specifically describes the promissory note(s), instrument(s) or agreement(s) evidencing Note Obligations as a part of the indebtedness secured thereby. This exclusion shall apply notwithstanding (i) the fact that such Lien Document may appear to secure the Note Obligations by virtue of a cross-collateralization provision or other provisions expanding the scope of the secured obligations, and (ii) whether such Lien Document was entered into prior to, concurrently with, or after the date hereof. As used herein, “Note Obligations” means any obligations under this Note, as amended, extended, renewed, refinanced, supplemented or otherwise modified from time to time, or under any other evidence of indebtedness that has been modified, renewed or extended in whole or in part by this Note, as amended, extended, renewed, refinanced, supplemented or otherwise modified from time to time.

 

(c)         Obligations Joint and Several. Should more than one person or entity sign this Note as a Borrower, the obligations of each such Borrower shall be joint and several.

 

(d)         Governing Law. This Note shall be governed by and construed in accordance with the laws of Virginia, but giving effect to federal laws applicable to national banks, without reference to the conflicts of law or choice of law principles thereof.

 

(e)         Effective Date. The effective date of this Note shall be the date that Bank has accepted this Note and all conditions to the effectiveness of the Credit Agreement have been fulfilled to Bank’s satisfaction.  Notwithstanding the occurrence of the effective date of this Note, Bank shall not be obligated to extend credit under this Note until all conditions to each extension of credit set forth in the Credit Agreement have been fulfilled to Bank's satisfaction.

 

(f)         Business Purpose. Borrower represents and warrants that all loans evidenced by this Note are for a business, commercial, investment, or other similar purpose and not primarily for a personal, family or household use.

 

IN WITNESS WHEREOF, the undersigned has executed this Note to be effective as of the effective date set forth herein.

 

 

ROANOKE GAS COMPANY

 

By: /s/ Paul W. Nester            

PAUL W. NESTER,          

PRESIDENT, CHIEF EXECUTIVE                   

OFFICER

 

By: /s/ Randall P. Burton        

RANDALL P. BURTON II,

CHIEF FINANCIAL OFFICER,

TREASURER, SECRETARY

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