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HomeMy WebLinkAbout2000 S EDC - Approval of Resolution Concerning Revised Documents Governing Orange County Small Business Loan Program Draft of March 6, 2000 LOAN AGREEMENT THIS LOAN AGREEMENT is dated as of March J i , 2000 (the "Agreement"), and is by and among ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation (the "Company"), ORANGE COUNTY, NORTH CAROLINA, a North Carolina political subdivision (the "County"), and the national banking associations and North Carolina banking corporations (the "Banks")listed on Schedule 1. WHEREAS: The County has determined that it is appropriate and desirable for the County to stimulate the creation of good jobs for Orange County citizens as well as to stimulate successful business development and expansion in Orange County. To that end, the County has created the Company to serve as a lender to qualifying small businesses. The County and the Company have requested that the Banks provide loans to the Company to provide funds for the Company to make small business loans, and the Banks are willing to do so upon the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement and for other good and valuable consideration,the parties agree as follows: SECTION 1 Bank Commitments To Make Advances for Loans 1.1. Commitment To Make Advances Subject to the terms and conditions of this Agreement each Bank severally (and not jointly) commits (a) to make Advances to the Company from time to time during the Commitment Period in an aggregate amount not to exceed its Loan Commitment and (b) to share in Loan Losses. The Company shall not be entitled to reborrow funds that it has repaid or prepaid, and upon each Borrowing, each Bank's Loan Commitment shall be permanently reduced by the amount of such Bank's Advance included in such Borrowing'. 1.2. Conditions Precedent to Advances. (a) Each Bank shall be obliged to make its initial Advance upon its receipt of the following: (i) A duly executed Note, substantially in the form of Exhibit A, payable to the order of that Bank; (ii) A duly executed Security Agreement, substantially in the form of Exhibit 1 B, in favor of such Bank; (iii) The notice described in Section 3.2(a); and (iv) Such additional information and documents as such Bank and its counsel may reasonably require. (b) Each Bank's obligation to make any further Advance is subject to the further condition of there being no Default Condition or Event of Default existing as of the date of such Advance. SECTION 2 Loan Loss Reserve Pursuant to the Support Agreement, the County has provided a Loan Loss Reserve in the amount of $150,000. The County shall make payments from the Loan Loss Reserve to the Company Loan Loss Account pursuant to Section 2.02 of the Support Agreement for use as provided in Section 4.2 of this Agreement. SECTION 3 Loans to the Company 3.1. Use of Proceeds. The Company will use the proceeds of all Advances exclusively to fund Program Loans. 3.2. Procedures for Borrowings. (a) The Company will request Advances by giving notice to the Banks and the County of(i) the total amount of the proposed Borrowing (which must be a minimum of $5,000, and a maximum of $50,000), (ii) the amount of the Advance required of each Bank, based upon its Percentage Share, and (iii) the date of the proposed Borrowing (which must be at least five Business Days after the notice date). The notice to the County will also comply with the requirements of Section 1.03(a) of the Support Agreement. (b) On the date of the proposed Borrowing as specified in the notice, each Bank will make an Advance by depositing immediately available funds in an amount equal to its Percentage Share of the Borrowing to such account as the Company may direct. In addition, the County will, not later than such date, give the notice provided for 2 in Section 1.03(b) of the Support Agreement. (c) Any Bank's failure to make any Advance required under this Agreement will not relieve any other Bank of its obligation to make an Advance. No Bank will be responsible for any other Bank's performance of its obligations under this Agreement. Advances made by any Bank under this Agreement shall be evidenced as provided for in the terms of the Note payable to that Bank. The County's failure to make any required payment to the Company Loan Loss Account, however, will relieve each Bank of its obligation to make further Advances and shall constitute an Event of Default. 3.3. Company's Loan Repayments. The Company shall pay principal of and interest on the Loan monthly, not later than the 25th day of each month. The.monthly amount due and payable by the Company on the Loan shall be equal to the preceding month's Net Cash Proceeds; provided, however, that on July 25, 2009, the aggregate outstanding balance of the Loan, including all principal and all accrued but unpaid interest, shall be payable in full. The Company shall make all payments on the Loan separately to each Bank pro rata according to its Percentage Share. All payments on a Note shall be credited (a) first, against the amount of interest accrued and unpaid on the Note, and (b) second, against principal. If Net Cash Proceeds for any month are insufficient to pay in full the accrued unpaid interest on the Notes, payment of the deficiency in accrued unpaid interest shall be deferred and be payable out of subsequent Net Cash Proceeds, to the extent that Net Cash Proceeds are available therefor. Payments (and adjustments) to any Bank shall be evidenced as provided for in the terms of the Note payable to that Bank. 3.4. Collateral. (a) To secure payment of the Notes, and to secure the Company's performance of its covenants contained in this Agreement, the Company hereby grants to each Bank a security interest in the Collateral. The Company shall execute and deliver to each Bank a Security Agreement to evidence the grant of such security interest. (b) Notwithstanding any other provision of this Agreement to the contrary, the Collateral does not include, and the Banks shall have no security interest in, (i) interest payments by obligors of Program Loans to the extent the payments represent interest at rates above the Prime Rate, however held, (ii) any amounts paid to the Company by the County from time to time for use on the Company's Administrative Expenses, or(iii) any funds or amounts held by the Company and not derived from the Loan Program. 3.5. Limited Recourse, Notwithstanding any provision of this Agreement or of the Notes to the contrary, the Banks' sole recourse for the recovery of moneys due and owing on the Notes shall be against the Net Cash Proceeds and the collateral granted by the Company to the Banks pursuant to the Security Agreements. Nothing contained in 3 this Section, however, shall limit (a) the Company's liability to account for Net Cash Proceeds not applied in accordance with this Agreement, or (b) any liability for fraud on the part of any Company official, employee or agent. SECTION 4 Loan Losses 4.1. Notice of Loan Losses. (a) At any time the Company declares the principal of any Program Loan due and payable in full after a default pursuant to the terms of that Program Loan, the Company will give notice of the default and acceleration to the Banks and the County. The notice shall specify (i) the Program Loan that is in default, and the nature of the default, (ii) the amount of the resulting Loan Loss, (iii) any collection costs that have been incurred and that are included in such Loan Loss, (iv) the amount to be paid by the County for deposit in the Company Loan Loss Account with respect to such Loan Loss (along with directions for making such payment), (v) the amount of the resulting Uncovered Loan Loss, and (vi) the dollar value of each Bank's Percentage Share of the resulting Uncovered Loan Loss. (b) If additional collection efforts with respect to an accelerated Program Loan produce additional Loan Losses with respect to that Program Loan, the Company shall send notice to the Banks and the County (but not more frequently than monthly) of each additional Loan Loss in substantially the same form as the notice provided for in subsection(a) above. 4.2. Recovery from Loan Loss Reserve. After receipt of a notice of a Loan Loss under Section 4.1(a) or 4.1(b),the County shall make a payment from the Loan Loss Reserve to the Company for deposit in the Company Loan Loss Account as provided in Section 2.02 of the Support Agreement. Any amounts so deposited from time to time in the Company Loan Loss Account shall constitute Net Cash Proceeds in the month such funds become readily available funds to the Company. 4.3. Proratement among Banks of Uncovered Loan Losses. On any date that the Company notifies the Banks of a Loan Loss, the outstanding principal amount of the Note payable to each Bank shall be reduced by the dollar value of such Bank's Percentage Share of the resulting Uncovered Loan Loss, and the amount of accrued unpaid interest on each Note shall be reduced by the amount of accrued unpaid interest attributable to that amount of principal 4.4. Recovery of Loan Losses. If the Company recovers funds in connection with any Program Loan with respect to which the Company has reported a Loan Loss, the Company shall pay such funds (a) first to the County, to the extent of 30% of the 4 recovered funds, and (b) then to each Bank pro rata on the basis of each Bank's Percentage Share. SECTION 5 Company's Covenants 5.1. Affirmative Covenants. So long as any portion of the Loan remains unsatisfied, the Company will: (a) Maintain in force a plan designed to safeguard the Net Cash Proceeds and other assets and to assure the reliability of its personnel and the accuracy of its financial data, and also maintain accurate and current financial records, including books of account. (b) Preserve, for the periods hereinafter specified and in a manner that permits the immediate location thereof: (i) for a period of ten years after the Loan has been paid or otherwise satisfied, all general and subsidiary ledgers reflecting asset, liability, income and expense accounts; all general and special journals (or other records forming the basis for entries in such ledgers); and (H) for a period of at least six years following final disposition of any Program Loan, all applications for such loan, all lending agreements, security agreements and other fmancing instruments pertaining to such loan, and all other documents and supporting materials relating to such loan, including correspondence. (c) Permit the representatives of the Banks access during all business hours to,, and permit such representatives to examine, copy or make excerpts from, any and all books, records and documents in the Company's possession relating to the Program Loans. (d) Comply with all applicable laws, rules, regulations and orders of any governmental authority. (e) Promptly notify the Banks of any litigation or proceeding or threatened litigation or proceeding involving any of the Program Loans, this Agreement, the Support Agreement or any other aspect of the Loan Program. (f) Mark each document or instrument comprising any part of the Program 5 Loan Documents, conspicuously and on its face, as follows: "THIS DOCUMENT OR INSTRUMENT IS THE SUBJECT OF A SECURITY INTEREST IN FAVOR OF THE BANKS THAT ARE PARTIES TO THAT CERTAIN LOAN AGREEMENT WITH ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY AND ORANGE COUNTY,NORTH CAROLINA,DATED AS OF MARCH At , 2000." 5.2. Negative Covenants. So long as any portion of the Loan remains unsatisfied, the Company will not, unless all the Banks otherwise give their prior written consent: (a) Make any Program Loan that has a term that extends beyond June 30, 2009. (b) Endorse, assign, pledge or transfer any notes or other instruments evidencing the Program Loans, except pursuant to the Security Agreements. SECTION 6 Events of Default; Remedies 6.1. Events of Default; Remedies. Upon the occurrence and continuation of any of the following events or conditions: (a) Default by the Company in the payment of principal, interest or any other amount payable on or with respect to the Loan; (b) The Company's breach or failure to perform or observe any term, condition or covenant of this Agreement on its part to be observed or performed, other than as referred to in subsection (a), for a period of 30 days after written notice specifying such failure and requesting that it be remedied shall have been given to the Company by any Bank, unless the Banks, by affirmative vote of at least a majority by Percentage Share, shall agree in writing to an extension of such time; (c) The occurrence and continuation of any Event of Default by the Company or the County under the Support Agreement; or (d) Any other event or condition specified as an Event of Default under this Agreement; then the Banks, by affirmative vote of at least a majority by Percentage Share, at their option may: 6 (i) declare the entire unpaid principal amount of the Loan and the accrued interest thereon to be immediately due and payable; (ii) incur and pay such reasonable expenses for the Company's account as may be necessary to cure the cause of any default; (iii) seek the appointment of a receiver for the Company for the administration of the Loan Program and the collection and disbursement of Net Cash Proceeds; or (iv) proceed to protect and enforce their rights under the Notes and this Agreement by a suit, action or special proceeding at law or in equity, either for the specific performance of any covenant or agreement or execution of any power or for the enforcement of any proper legal or equitable remedy as may be deemed most effectual to protect and enforce such rights. In addition, during the continuation of an Event of Default, (1) no Bank shall have any obligation to make any Ru-ther Advances, and (2) any Bank may, at its option, direct the Company to deposit all Net Cash Proceeds as received by the Company in a designated special trust account held by a bank or financial institution (which may be an affiliate of any Bank) for the account of the Company, the equal benefit of all the Banks and application as provided in this Agreement. Any such obligation so to deposit Net Cash Proceeds shall terminate once there are no longer any continuing events or conditions described in (a), (b) or(c) above. 6.2. No Remedy Exclusive; Delay Not Waive . All remedies under this Agreement are cumulative and may be exercised concurrently or separately. The exercise of any one remedy shall not be deemed an election of such remedy or preclude the exercise of any other remedy. If any Event of Default shall occur and thereafter be waived, such waiver shall be limited to the particular breach so waived and shall not be deemed a waiver of any other breach under this Agreement. 6.3. Recovery by Banks; Coordination of Efforts, (a) If any Bank shall receive, obtain, or recover any payment or collateral under any Security Agreement (whether voluntarily, involuntarily, through the exercise of any right of set-off or otherwise), such Bank shall hold and disburse such recovery in the same fashion as would have been required of the Company. (b) Notwithstanding the provisions of subsection (a), however, (i) the recovering Bank shall be entitled to deduct its reasonable direct costs of making the recovery before calculating and making any such distribution; (ii) the County shall not be entitled to any share of any recovery at any 7 time the County is in default under the Support Agreement or this Agreement; and (iii) no Bank shall exercise any right of setoff against the Company's property without the prior agreement of a majority of Banks by Percentage Share. (c) In pursuing any recovery or taking any action after an Event of Default, each Bank shall act reasonably and with due regard for the interests of the County and the other Banks, and each Bank shall act reasonably to coordinate its recovery efforts with the efforts of the other Banks. SECTION 7 Miscellaneous 7.1. Amendments. All modifications, consents, amendments or waivers of any provisions of any Company Loan Document, or waiver or consent to any departure by the Company therefrom, shall be effective only if the same shall be in writing and consented to by the Banks holding more than a 65% Percentage Share and the Company, and then shall be effective only in the specific instance and for the purposes for which given, and only if communicated to all of the Banks; provided, however, that no modification, consent, amendment or waiver which purports to change the terms of the Notes or the Loan Commitments shall be effective unless approved in writing by all affected Banks. 7.2. Benefit; Assignments This Agreement shall be binding upon and shall inure to the benefit of the Banks and the Company and their respective successors and assigns. Any Bank may assign its rights and obligations under this Agreement, in whole or in part, to any other federally-insured national banking association or North Carolina banking corporation, and any Bank making such assignment shall promptly notify the Company of such assignment and provide the Company with evidence of the assignment and the assignee's undertaking to comply with the.requirements of this Agreement. The Company may assign its rights and obligations under this Agreement, in whole only and not in part, but only with the written consent of Banks holding more than a 65% Percentage Share, which consent shall not be unreasonably withheld. 7.3. Confidentiality, Each Bank agrees to hold any confidential information which it may receive from the Company pertaining to the Program Loans in confidence, except for disclosure (a) to the other Banks, (b) to legal counsel, accountants, and other professional advisors, (c) to regulatory officials, (d) as required by law or legal process or in connection with any legal proceeding, or (e) to another financial institution in connection with any disposition or proposed disposition of a Bank's interests hereunder or under that Bank's Note. In all aspects of carrying out the terms and purposes of this Agreement, the Banks and the Company shall maintain the 8 confidentiality of information provided by actual or potential Program Loan borrowers. 7.4. Noullab ill ty of Banks, The relationship between the Company and the Banks is, and shall at all times remain, solely that of borrower and lenders. The Banks do not undertake or assume any responsibility or duty to the Company to review, inspect, supervise, pass judgment upon, or inform the Company in connection with any phase of the Company's operations, Program Loans, or otherwise. 7.5. Obligations Several, Unless otherwise expressly provided for herein, each Bank's obligations under this Agreement are several, and not joint. No Bank shall be responsible for the obligations of any other Bank, nor will the failure of any Bank to perform any of its obligations under this Agreement relieve any other Bank from the performance of its respective obligations. 7.6. Applicable Law, The parties intend that North Carolina law shall govern all matters pertaining to this Agreement. 7.7. Notices. (a) All notices, requests, approvals, demands and other communications given or made in connection with the terms and provisions of this Agreement shall be in writing (unless otherwise provided for in this Agreement) and shall be deemed to have been given or made when either delivered by hand or shown as delivered by a receipt for delivery from the United States Postal Service, and sent as follows: (1) If to the Company, to its President, at Orange County Small Business Loan Program Company, c/o Bank of America, N.A., Post Office Box 570, Chapel Hill, NC 27514-0570, with a copy to its Secretary-Treasurer, at Orange County Small Business Loan Program Company, Post Office Box 1177, Hillsborough, NC 27278; or, (2) If to the County, to Orange County Manager, Attn: Small Business Loan Program Notice, 200 South Cameron St., Hillsborough,NC 27278; or (3) If to the Banks, as indicated on each Bank's respective signature page to this Agreement. (c) Any addressee may designate additional or different addresses for communications by notice given under this Section to each of the others. 7.8. Severability. The provisions of this Agreement are declared to be severable. If any court of competent jurisdiction shall hold any provision of this Agreement to be invalid and unenforceable, such holding shall not invalidate any other provision hereof. 9 7.9. Definitions. Capitalized terms used in this Agreement and not otherwise defined shall have the meanings ascribed thereto in Exhibit C. 7.10. Acceptance of Support Agreement, Each Bank, by its entering into this Agreement, acknowledges its acceptance of the terms of the Support Agreement. 7.11. Liability of Officers and Agents. No covenant, condition or agreement contained in this Agreement shall be deemed to be a covenant, agreement or obligation of a present or future officer, employee or agent of any party hereto in such person's individual capacity. No such officer, employee or agent shall incur any personal liability with respect to any action taken under this Agreement, provided such person acts in good faith. 7.12. Third-Party Beneficiaries. There are no intended third-party beneficiaries of this Agreement. 7.13. Performance on Holidays. If the date for making any payment or the last day for performance of any act or the exercising of any right shall not be a Business Day, such payment shall be made or act performed or right exercised on or before the next succeeding Business Day. 7.14. Entire Agreement; Amendments. This Agreement constitutes the entire contract among the parties with respect to its subject matter, and this Agreement shall not be changed except in writing signed by all the parties. 7.15. Execution in Counterparts. This Agreement may be executed in several counterparts, including separate counterparts. Each shall be an original, but all of them together constitute the same instrument. [The remainder of this page has been intentionally left blank] 10 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in their corporate names by their duly authorized officers, all as of the date first above written. [SEAL] ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY uc� By Dianne Reid . Troy erguson II Secretary-Treasurer President ORANGE COUNTY,NORTH CAROLINA y Beveryj A. Blythe Moses Carey, Jr. Clerk, Board of Commissioners Chair,Board of Commis oners This instrument has been preaudited in the manner required by The Local Government Budget and Fiscal Control Act. Kenneth T. Chavious Finance Officer Orange County,North Carolina [Signatures of Banks appear on the following pages] [Loan Agreement dated as of March a 1 2000] Schedule 1 —Table of Loan Commitments and Percentage Shares Exhibits: A—Form of Company's Promissory Notes B—Form of Security Agreement C-Definitions 11 s BANK SIG-NATURE PAGE TO LOAN AGREEMENT The undersigned [national banking association] [North Carolina banking corporation] accepts and enters into that certain Loan Agreement dated as of March a , 2000, by and among ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation, ORANGE COUNTY, NORTH CAROLINA, a North Carolina political subdivision, and certain national banking associations and North Carolina banking corporations (including the undersigned). ATTEST: (SEAL) (BANK NAME] By: [Printed name] [Printed name] Assistant Secretary Vice President Address for notices: Tel: Fax: [Loan Agreement dated as of March , 2000] 12 JAN-17-1900 20:37 P,02 BANK SIGNAT THE PAGE TO LOAN AGREEMENT The undersigned [national banking association] [North Carolina banking corporation] accepts and enters into that certain Loan Agreement dated as of March L 1 , 2000; by and among ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COWANY, a North Carolina nonprofit corporation, ORANGE COUNTY, NORTH CAAOLINA, a North Carolina political subdivision, and certain national banking associations and North Carolina banking corporations (including the undersigned). ATTEST: (SEAL) [BANK NAME] F r 5 f C i �► S 6 ft-�t tc S I L V IA W E:�C By; ( R r4 l S [Printed name] [Printed name] Assistant Secretary Vice President Address for notices: MO E Fr��C►n st Tel: X1 .3 2-- Z5�Z Fax:--333 — ?7 3 L5 [Loan Agreement dated as of March 1 , 20001 12 BAN SIGNATURE PAGE TO LOAN AGREEMEN T The undersigned [national banking association] [North Carolina banking corporation] accepts and enters into that certain Loan Agreement dated as of March a► , 2000, by and among ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation, ORANGE COUNTY, NORTH CAROLINA, a North , Carolina political subdivision, and certain national banking associations and North Carolina banking corporations (including the undersigned). AT'T'EST: (SEAL) [BANK NAME] // Q /'"41 1�hv By. [ rinted name] [P ' ed n X4f711vtAl Assistant Secretary Vice P ident Address for'notices: Wo,chau.,a 13 e.n K Rafe;5T �tiC _ 761 �} -t 4-n. ('�..: S .T-S fey Tel: 0119 755- ?nly Fax: q/9 7 s s-- 7P?? [Loan Agreement dated as of March ! , 2000] 12 BANK SIGNATURE PAGE TO LOAN AGREEMENT The undersigned [national banking association] [North Carolina banldng corporation] accepts and enters into that certain Loan Agreement dated as of March-71 , 2000, by and among ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation, ORANGE COUNTY, NORTH CAROLINA, a North. Carolina political subdivision, and certain national banking associations and North Carolina banking corporations (including the undersigned). o-r y wtt2s ,C'{ AT'T'EST: (SEAL) [BANK NAME] J"wT By: [Printed e] rioted e] Assistant Secretary Vice President `may T V"I Address for notices: 6tt4z o!2/ FQ.S"� GLYLK f tjc 7 TZ 615 Tel: l� �- Fax: [Loan Agreement dated as of March , 2000] 12 BANK SIGNATURE PAGE TO LOAN AGREEMENT The undersigned Centura Bank,a North Carolina banking corporation,accepts and enters into that certain Loan Agreement dated as of March 21,2000,by among ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY,a North Carolina nonprofit corporations, ORANGE COUNTY,NORTH CAROLINA,a North Carolina political subdivision,and certain national banking associations and North Carolina banking corporations(including the undersigned). ATTEST-: (SEAL) CENTURA BANK By: 46en-n-is M. Marcin Chandler S. Burns Assistant Secretary Bank Officer Address for notices: Centura Bank c/o Chandler Burns 101 E. Rosemary St. Chapel Hill,NC 27514 Tel: (919) 918-4339 Fax: (919) 918-4315 BANK SIGNATURE PAGF. Tn T -AN AGREEMENT The undersigned [national banking association] [North Carolina banking corporation] accepts and enters into that certain Loan Agreement dated as of March a 1 , 2000, by and among ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation, ORANGE COUNTY, NORTH CAROLINA, a North Carolina political subdivision, and certain national banking associations and North Carolina banking corporations (including the undersigned). /j�4 �f /�A.�i ,✓� �4�v %/LU ST ATTEST: (SEAL) BANK NAMEt, By: / o pM.zc6—s-W " uJ, 6 � [Pruned name] [Printed name j,q-x t Assistant Secretary Vice President Address for notices: QTTPK.ITe�/: �a,�/ cJ. /yam /00 N. Tel:_ 9-- 9 = 7033 Fax: 9/3/9/,vf'— 70Y34 [Loan Agreement dated as of March 1 , 2000] 12 BANK SIGNATURE PA AN AGREEMENT -J( .dFe-c'{ Sav< 5t The undersigned on] [Nogh-Zaro>ina—lankin_g cgrpemtten] accepts and enters into that certain Loan Agreement dated as of March 2000, by and among ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation, ORANGE COUNTY, NORTH CAROLINA, a North Carolina political subdivision, and certain national banking associations and North Carolina banking corporations (including the undersigned). A.1 EST: (SEAL') [BANK NAME] Zoeser By: [Printed name] [Printed name] Assistant Secretary .-VicwPresident Address for notices: tfarf,ti -fb, 14: 0,{. -VC If Tel: Fax: [Loan Agreement dated as of March i , 2000] 12 BANK SIGNATURE PAGE TO LOAN AGREEMENT The undersigned [national banking association] [North Carolina banking corporation] accepts and enters into that certain Loan Agreement dated as of March-71 , 2000, by and among ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation, ORANGE COUNTY, NORTH CAROLINA, a North. Carolina political subdivision, and certain national banking associations and North Carolina banking corporations (including the undersigned). ATTEST: (SEAL) Central Carolina Bank and Trust Company By: a i E. Rice James L. Carter Assistant Secretary z��a Vice President Address for notices: Tel: Fax: [Loan Agreement dated as of March 12 Schedule 1 —Table of Loan Commitments and Percentage Shares Name of Institution Amount of Loan Commitment (S) Percentage Share j°lot Bank of America $62,500.00 12.5% BB&T $62,500.00 12.5% First Union $62,500.00 12.5% Wachovia 'Bank $62,500.00 12.5% Central Carolina Ban $62,500.00 12.5% entura Bank U2.500.00 12.5% Harrington Bank $62,500.00 . 12.5% Citizens B $62,500.00 12.5% 13 Exhibit A—Form of Promissory Note from Company to Banks PROMISSORY NOTE Amount: Date: $ March , 2000 FOR VALUE RECEIVED, the undersigned ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation (the "Company"), promises to pay to the order of a [national banking association] [North Carolina banking corporation] (the "Bank"), at its offices at North Carolina, or at such other place as the holder hereof may from time to time designate in writing, the principal sum of Dollars ($ ), or so much thereof as may have been loaned and outstanding hereunder, together with interest from the date hereof on the unpaid principal balance at the "Prime Rate," as defined below, all in lawful money of the United States of America. This is one of the Notes referred to in that certain Loan Agreement among the Company, Orange County, North Carolina, the Bank, and certain other financial institutions of even date herewith(the "Loan Agreement"). Capitalized terms used in this Note and not otherwise defined have the meanings ascribed thereto in the Loan Agreement. PRINCIPAL ADVANCES; INTEREST. Principal of this Note shall be advanced to the Company from time to time as provided under the Loan Agreement. Each Advance shall bear interest from the date of such Advance at the Prime Rate. An authorized Bank officer shall note the amount and date of each Advance on the Certificate of Principal Advances, and shall also identify on the Certificate of Principal Advances (in a manner reasonably acceptable to both the County and the Bank) the corresponding Program Loan to which the Advance relates. For the purposes of this Note, the "Prime Rate" means the interest rate so denominated and set by the Bank in its discretion as its "Prime Rate," as in effect from time to time. Changes in the Prime Rate 14 shall be effective immediately to change the interest rate payable on this Note. The Bank makes no representation that the Prime Rate is the best or lowest rate of interest that the Bank charges on loans; the Bank makes other loans at rates above and below its Prime Rate. PAYMENT SCHEDULE. The unpaid principal balance of this Note at any date shall be equal to (a) the sum of all Advances made by the Bank through that date, minus (b) all payments on account of principal actually made by the undersigned through that date, and minus (c) all reductions pursuant to Section 4.3 of the Loan Agreement in the principal balance reflecting the Bank's Percentage Share of Uncovered Loan Losses. Payments on this Note shall be made and shall be applied as provided for in the Loan Agreement. If not sooner paid, all unpaid principal and all accrued and unpaid interest on this Note shall be due and payable on July 25, 2009. LIMITED RECOURSE. Notwithstanding any provisions hereof or of the Loan Agreement to the contrary, the holder's sole recourse for the recovery of monies due and owing on the Notes shall be against the holder's Percentage Share .of the Net Cash Proceeds and any collateral granted by the Company to the Banks pursuant to the Security Agreements; provided, however, that nothing contained in this paragraph will limit (a) the liability of the undersigned to account for the holder's Percentage Share of any Net Cash Proceeds not applied on a current basis by the Company in accordance with the provisions of this Note and the Loan Agreement, or (b) any liability for fraud on the part of any Company official, employee or agent. DEFAULT. Upon the occurrence of any Event of Default described in the Loan Agreement, the Bank shall have all rights granted by the Loan Agreement. EXPENSES OF COLLECTION. Notwithstanding the "Limited Recourse" provisions of this Note, in the event of default under this Note, the holder shall be entitled to collect (in addition to all principal, interest and other amounts due hereon) the holder's reasonable costs and expenses incurred in the collection of this Note, including, but not limited to, reasonable attorneys' fees. COVENANTS. All parties to this Note, including the maker and any sureties, endorsers or guarantors, hereby waive (to the extent permitted by law) protest, presentment, notice of dishonor and notice of acceleration of maturity and agree to continue to remain bound for the payment of principal, interest and all other sums due under this Note, notwithstanding any change or changes by way of release, surrender, exchange, modification or substitution of any security for this Note or by way of any extensions or extensions of time for the payment of this Note or by way of any extension or extensions of time for the payment of principal and interest; and all such parties waive (to the extent permitted by law) all and every kind of notice of such change or changes and agree that the same may be made without notice or consent of any of them. 15 i GOVERNING LAW. The Company and the Bank intend that North Carolina law shall govern all matters related to this Note. RIGHTS CUMULATIVE. The rights and remedies of the holder as provided in this Note and in any instrument securing this Note shall be cumulative and may be pursued singly, successively, or together, in the sole discretion of the holder. The failure to exercise any such right or remedy shall not be a waiver or release of such rights or remedies or the right to exercise any of them at another time. AMENDMENT AND MODIFICATION. No waiver by the holder of any of the terms and conditions of this Note shall be effective unless it is in writing and signed by the holder. No modification or amendment to this Note may be made except in writing, signed by the maker and the holder. IN WITNESS WHEREOF, the undersigned has caused this instrument to be signed, sealed and delivered by its duly authorized officers on the day and year first above written. [SEAL] ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY By Dianne Reid B. Troy Ferguson Secretary-Treasurer President [Promissory Note dated March , 2000] CERTIFIC_A_TE OF PRINCIPAL DVANCES The amount and date of principal advances not to exceed the face amount hereof shall be entered hereon by an authorized officer of the Bank when the proceeds of each such principal advance are delivered to the Company. Amaze Date Corresponding Loan Authorized Signature 16 Exhibit B -- Form of Security Agreement SECURITY AGREEMENT THIS SECURITY AGREEMENT is dated as of March , 2000, and is by and between ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation (the "Company"), and , a [national banking association] [North Carolina banking corporation] (the "Bank"). RECITALS: The Company is indebted to the Bank up to the sum of$ as evidenced by the Company's Promissory Note of even date herewith (the "Note"). The Note evidences the Company's obligations under that certain Loan Agreement by and among the Company, Orange County, North Carolina, the Bank and certain other financial institutions of even date herewith (the "Loan Agreement"). This is one of the security agreements referred to in the Loan Agreement. The Company desires to secure its obligations under the Note and the Loan Agreement by granting to the Bank a security interest in certain chattel paper and other collateral. Capitalized terms used in this Security Agreement and not otherwise defined have the meanings ascribed thereto in the Loan Agreement NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the parties agree as follows: 1. The Company pledges, assigns and grants to the Bank a continuing security interest in, and a lien upon, (a) all of the Program Loan Documents, (b) any other chattel paper (as defined under the North Carolina Uniform Commercial Code) held by the Company and arising from Program Loans, (c) all amounts in the Company's possession from time to time constituting Net Cash Proceeds,_ and (d) any other collateral for Program Loans held by the Company (the property described in clauses (a), (b), (c) and (d) of this paragraph is referred to collectively in this Security Agreement as the "Collateral"). The Company grants this security interest to secure the Company's prompt and complete performance of all of its obligations to the Bank under the Loan Agreement and the Note (and all other documents executed and delivered pursuant thereto or in connection therewith), whether now existing or hereafter arising, .whether primary or secondary, direct or indirect, absolute, contingent or conditional or due or to become due 17 (the "Liabilities"). 2. This Agreement is intended as, and constitutes, a security agreement within the meaning of the North Carolina Uniform Commercial Code. The Company agrees to execute and deliver to the Bank Uniform Commercial Code financing statements and such other documents, instruments, supplemental security agreements and chattel mortgages as the Bank may reasonably deem necessary to obtain the benefits of this Agreement. The Company further agrees to assign to the Bank its-rights in or under any financing statements relating to the Collateral filed in favor of the Company. 3. Until satisfaction in full of all Liabilities, the Company shall not permit or suffer to exist any other lien, security interest or encumbrance upon the Collateral, except for the similar security interests created and existing under the other security agreements delivered by the Company pursuant to the Loan Agreement. Upon the satisfaction in full of all Liabilities, the Bank shall execute and deliver to the Company all such documents and instruments as shall be necessary to evidence termination of this Agreement. 4. If any one or more events of default under the Loan Agreement or the Note shall have occurred and be continuing beyond any applicable cure period therefor, or if there shall otherwise be a default in the satisfaction of any of the Liabilities or any of the Company's obligations under this Agreement, which default is not cured within any applicable cure period therefor (any of the foregoing being hereinafter referred to as an "Event of Default), the Bank shall have, in addition to all other rights and remedies given to it by this Agreement, the Loan Agreement and the Note, all the rights and remedies of a secured party under the North Carolina Uniform Commercial Code or otherwise allowed by law. Without limiting the generality of the foregoing, the Bank may immediately, without demand of performance and without other notice (except as set forth below or in the Loan Agreement, Note or other documents executed and delivered pursuant thereto or in connection therewith) or demand whatsoever to the Company, all of which are hereby waived (to the extent permitted by law), and without advertisement, sell at public or private sale or otherwise realize upon, the whole or, from time to time, any part of the Collateral, or any interest which the Company may have therein. After deducting from the proceeds of sale or other disposition of the Collateral all expenses (including all reasonable expenses for legal services), the Bank shall apply the residue of such proceeds towards the satisfaction of the Liabilities. Any remainder of the proceeds after satisfaction in full of all Liabilities shall be paid to the Company. 5. The Company agrees that all costs and expenses (including reasonable attorneys' fees and expenses for legal services of every kind) of, or incidental to, the custody, care, management, sale or collection of, or realization upon, any of the Collateral, or in any way relating to the enforcement or protection of the Bank's rights under this Agreement, shall become part of the Liabilities and shall be entitled to the benefits of this Agreement. The Bank may at any time apply to the payment of all such 18 costs and expenses all monies of the Company or other proceeds arising from the possession or disposition of all or any portion of the Collateral. 6. All notices, requests, approvals, demands and other communications given or made in connection with the terms and provisions of this Agreement shall be in writing and shall be deemed to have been given or made when either delivered by hand or shown as delivered by a receipt for delivery from the United States Postal Service, and sent as follows: (a) If to the Company, to its President, at Orange County Small Business Loan Program Company, c/o Bank of America, N.A., Post Office Box 570, Chapel Hill, NC 27514-0570, with a copy to its Secretary-Treasurer, at Orange County Small Business Loan Program Company, Post Office Box 1177, Hillsborough,NC 27278; or, (b) If to the Bank, as indicated on the Bank's respective signature page to the Loan Agreement; or to such other addresses as either party shall furnish in writing to the other. 7. The Bank and the Company agree and acknowledge that the Company is making several simultaneous grants of similar security interests in the Collateral to the other banks that are parties to the Loan Agreement. Each such grant is being made pursuant to a security agreement in substantially the same form as this Agreement. The rights of the banks in the Collateral are of equal rank with one another. If the Bank shall receive, obtain, or recover any payment or collateral under this Security Agreement (whether voluntarily, involuntarily, through the exercise of any right of set-off or otherwise), the Bank shall hold and disburse such recovery as provided in the Loan Agreement. 8. The parties intend that North Carolina law shall govern this Agreement. 9. This Agreement shall inure to the benefit of the Bank, its successors and assigns, and shall be binding upon the Company, its successors and assigns. Only a writing signed on behalf of each party may amend this Agreement. [The remainder of this page has been intentionally left blank] 19 IN WITNESS WHEREOF, the parties have duly signed, sealed and delivered this Agreement as of the day and year first above written. [SEAL] ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY By Dianne Reid B. Troy Ferguson Secretary-Treasurer President ATTEST: (SEAL) [BANK NAME] By: [Printed name] [Printed name] Assistant Secretary Vice President [Security Agreement dated as of March , 2000] 20 EXHIBIT C —DEFINITIONS For all purposes of this Agreement, the following terms shall have the following meanings, unless the context clearly requires otherwise: "Advance" means a payment by a Bank of proceeds loaned to the Company pursuant to this Agreement relating to a specific Program Loan. "Borrowing" means an aggregate of Advances by the Banks to the Company related to a single Program Loan. "Business Day" has the meaning assigned in the Support Agreement. "Collateral" has the meaning assigned in the Security Agreement. "Commitment Period" means the period beginning on the date of this Agreement and ending on the earliest of(a) June 30, 2002, (b) the date on which the Banks have advanced the full aggregate amount of their Loan Commitments, or (c) the date on which the Banks terminate their obligations to make Advances upon the occurrence of an Event of Default. "Company Loan Loss Account" has the meaning assigned in the Support Agreement. "Default Condition" means the occurrence or existence of an event or condition that, upon the giving of notice or the passage of time, or both, would constitute an Event of Default. "Event of Default" has the meaning assigned in Section 6.1. "Loan" means the aggregate of all Advances made by the Banks to the Company pursuant to this Agreement. "Loan Commitment," for any Bank, means that Bank's maximum aggregate obligation to make Advances to the Company during the Commitment Period. Schedule I sets forth the initial Loan Commitment for each Bank. "Loan Loss" means the sum of (a) any deficiency from scheduled principal repayments p1m (b) any collection costs, including reasonable attorneys' fees, actually incurred by the Company, in each case in connection with any Program Loan the principal of which the Company has declared to be due and payable in full after a default pursuant to the terms of that Program Loan. 21 "Loan Loss Reserve"has the meaning assigned in the Support Agreement. "Net Cash Proceeds"means, for any month, (a) all income, revenues,proceeds and payments received during that month by or on behalf of the Company as holder of any Program Loan, including principal payments, interest (but only to the extent of interest at the Prime Rate), penalties, and late charges, p1m (b) all amounts deposited in the Company Loan Loss Account which become immediately available funds to the Company in that month. "North Carolina Uniform Commercial Code" means the version of the Uniform Commercial Code as from time to time in effect in North Carolina (currently, Chapter 25 of the North Carolina General Statutes). "Note" means any of the promissory notes executed by the Company, substantially in the form of Exhibit A, dated of even date with this Agreement and payable to the order of each of the Banks up to the amount of each Bank's Loan Commitment. "Percentage Share" means, with respect to each Bank, the ratio of such Bank's Loan Commitment to the aggregate of all Banks' Loan Commitments, expressed as a percentage. Schedule 1 sets forth the initial Percentage Share for each Bank. "Prime Rate" means the interest rates so denominated and set by the Banks in their respective discretion as their"Prime Rates," as in effect from time to time, "Program Loan" has the meaning assigned in the Support Agreement. "Program Loan Documents" means all documents evidencing Program Loans and evidencing or representing the security thereof or, including, but not limited to, notes, security agreements, deeds of trust, assignments, and guarantees, and any modifications, amendments, renewals and extensions thereof. "Security Agreement" means any of the security agreements executed by the Company, in substantially the form of Exhibit B, dated of even date with this Agreement and made in favor of each of the Banks, granting each Bank a first-priority security interest to the extent of each Bank's Loan Commitment in the collateral described therein. "Support Agreement" means the Small Business Loan Program Support Agreement dated as of March , 2000, between the County and the Company. "Uncovered Loan Loss means the amount of any Loan Loss I= amounts paid with respect to that Loan Loss to the Company by the County from,the Loan Loss Reserve. 22 Attachment B Draft of March 8, 2000 SMALL BUSINESS LOAN.FM UPPO_R_T AORFEMNT THIS SMALL BUSINESS LOAN PROGRAM SUPPORT AGREEMENT is dated as of March .9 1 , 2000 (the "Support Agreement"), and is between ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY, a North Carolina nonprofit corporation (the "Company"), and ORANGE COUNTY, NORTH CAROLINA, a North Carolina political subdivision(the "County"). WHEREAS. The County has determined that it is appropriate and desirable for the County to stimulate the creation of good jobs for Orange County citizens as well as to stimulate successful business development and expansion in Orange County. To that end, the County has determined to provide for the creation of the Company to serve as a lender to small businesses. The County has also determined to support the Company as provided in this Support Agreement, to enable the Company to borrow funds for re-lending to small businesses in furtherance of the County's policy. NOW, THEREFORE, in consideration of the mutual promises contained in this Support Agreement and for other good and valuable consideration, the parties agree as follows: ARTICLE I COMPANY'S AGREEMNT TO CARRY OUT LOAN PRO RAM 1.01. To carry out the County's public purposes as described above, upon the terms and conditions set out in this Support Agreement and subject to the limits imposed by this Support Agreement, the Company agrees to carry out the Loan Program pursuant to the Guidelines. 1.02. The Company shall use its reasonable discretion in its interpretation of the Guidelines. The Company in its discretion may at any time request further interpretation or clarification of the Guidelines from the County, and the County may at any time amend the Guidelines. 1.03. (a) The Company shall notify the County each time the Company determines to make a Program Loan. The notice shall include a copy of the commitment letter sent to the borrower, identifying the borrower and the principal amount of the loan, 1 6 and'shall indicate the total of the principal balances of all Program Loans that will be outstanding after the making of such loan to such borrower. (b) Within five Business Days after the County's receipt of a notice as described in subsection (a) above, the County shall send notice -to the Company acknowledging the Company's intent to make a Program Loan in*partial reliance upon the County's obligations under this Support Agreement. 1.04. The Company shall put in place and administer a commercially reasonable program of collection on overdue Program Loans. The Company shall submit its general overall plan for collections to the County, and the overall plan shall be subject to the County's approval. The Company shall thereafter be free in its.reasonable discretion to administer the plan so approved by the County. ARTICLE]a CO INTY'S,AGREEMENT TO PROVIDE LOAN LOSS RESERVE 2.01. (a) The County agrees to provide the Loan Loss Reserve to support the Loan Program. As provided and described below, County will make payments to -the Company.from the Loan Loss Reserve for each Loan Loss. (b) The County has previously appropriated $150,000 to serve as the Loan Loss Reserve. The Loan Loss Reserve exists as a separate account -for accounting purposes on the County's books and records, and the County may not,use the amounts designated and appropriated for the Loan Loss Reserve for any other purpose without additional action by the County's Board of Commissioners. To the extent permitted by law, the County agrees not to reduce the amount available as the Loan Loss Reserve at any time before the Termination Date. 2.02. (a) Within five Business Days after receiving notice from the Company of a Loan Loss, as provided in Section 4.1 of the Loan Agreement, the County shall pay to the Company, but only from the Loan Loss Reserve and for deposit in the Company Loan Loss Account, an amount equal to 30% of the Loan Loss stated in such notice. The Company's- determination of a Loan Loss shall bind the County in the absence of manifest error. (b) Notwithstanding any other provision of this Support Agreement, however, (i) the County shall have no obligation to make any payment from the Loan Loss Reserve at any time'that the Company or the Banks are in default under this Support Agreement or the Loan Agreement, (ii) the County shall have no obligation to make payments from the Loan Loss Reserve in an aggregate amount exceeding $150,000, and (iii) the County shall have no obligation to make any payment from the Loan Loss Reserve after the 2 7 Termination Date. ARTICLE III LOAN PROGRAM ADMIMSIRATIJIN AND OPERATION 3.01. (a) By March 1 of each year, beginning March 1, 2001, the Company shall notify the County of its proposed budget for Administrative Expenses for the coming Fiscal Year. The County shall provide for the County Board to consider approving the Company's proposed budget as part of the County's normal annual budgeting process. The Company shall be free to use any amounts paid to it by the County (other than amounts paid from for the Loan Loss Reserve) for its Administrative Expenses. Promptly upon the initial delivery of this Support Agreement, the Company and the County shall work together diligently and in good faith to establish an initial budget for the Company's operations and its Administrative Expenses for the period between the date of initial delivery of this Support Agreement and June 30, 2001. (b) The Company agrees that it shall endeavor over time to provide for full funding of its Administrative Expenses through the passing along of costs to Loan Program borrowers (both through the assessment and collection of loan fees and through interest rate mark-ups). 3.02. By August 1 of each year, beginning August 1, 2000, the Company shall provide a written report to the County describing Company's activities for the most recently completed Fiscal Year. Each such report shall, at a minimum, specify (a) the amount and borrower for each Program Loan made by Company in the applicable Fiscal Year, (b) the outstanding balance and borrower for each Program Loan outstanding at the end of such Fiscal Year, and(c) a summary of cash and investments on hand at the end of the Fiscal Year. 3.03. (a) Promptly at the end of each Fiscal Year, the Company, at its own cost, shall provide for the conduct of an independent annual audit of its books and records by an accounting firm reasonably acceptable to the County. The Company shall send a copy of such audit to the County promptly upon the Company's acceptance of the audit. (b) • The Company shall furnish to the County, at such times as the County shall request, all other financial information as the County may request. The Company shall permit the County or its agents and representatives to inspect the Company's books and records and make copies and extracts. The County, however, recognizes that the County's coming into possession of certain Company records may result in the unwanted exposure to publicity of confidential information of Program Loan borrowers, and the County agrees to obtain copies of such borrower information only when the County deems such copies necessary for carrying out its oversight of the Company and the County funds supporting 3 ' 8 the Company and the Loan Program. 3.04. The Company shall not amend any provision of its Governing Documents without the,County's prior express approval. ARTICLE IV REPRESENTATIONS ANTI WARRANTIES The County and Company hereby represent and warrant, one to the other, as follows: (a) Each has full power and authority to enter into this Support Agreement, and each has duly authorized, executed and delivered this Support Agreement. (b) The execution and delivery of this Support Agreement, the approval and consummation of the transactions contemplated by this Support Agreement, and the fulfillment of the terms and conditions of this Support Agreement do not and will not constitute on the part of either party a breach of or default under any mortgage, contract or other agreement or instrument to which such organization is a party or by which it is bound, or result in any material breach of any existing law, public administrative rule or regulation,judgment, court order or consent decree to which such organization is subject. (c) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any.court, public board or body, pending or known to be threatened against.or affecting the County (or any official thereof in an official capacity) or the Company, nor to the best knowledge of the County or the Company is there any basis therefor, wherein an unfavorable decision, ruling, -or finding would materially and adversely affect the ability of such party to perform its obligations under this Support Agreement or which would adversely affect, in any way, the validity or enforceability of this Support Agreement. (d) Upon the execution and delivery of this Support Agreement, all acts, conditions and things required by the Constitution and statutes of the State of North Carolina to have happened, exist and to be performed precedent to such execution and delivery shall have happened, exist and have been performed. This Support Agreement, when executed and delivered by the County and Company, will be the legal, valid and binding obligation of each party, enforceable in accordance with its terms. 4 9 ARTICLE V 5.0 1. (a) Upon the occurrence and continuation of any Event of Default, the non-defaulting party may (i) incur and pay such reasonable expenses for the defaulting party's account as may be necessary to cure the cause of any default, (ii) avail itself of all remedies available under this Support Agreement, and (iii) proceed to protect and enforce its rights under this Support Agreement by all means available a law or.in equity, including by an action for the specific performance of any covenant, agreement or other provision of this Support Agreement as may be most effectual to protect and enforce such rights. (b) All remedies under this Support Agreement -are cumulative and may be exercised concurrently or separately. The exercise of any one remedy shall not be deemed an election of such remedy or preclude the exercise of any other remedy. If any Event of Default shall occur and thereafter be waived, such waiver shall be limited to the particular breach so waived and shall not be deemed a waiver of any other breach under this Support Agreement. 5.02. IndmnificatiQU. To the extent permitted by law, the Company shall indemnify, protect and save the County and its officers harmless from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including attorneys' fees and costs of investigation and discovery, arising out of, connected with, or resulting directly or indirectly from the transactions contemplated by this Support Agreement, the Loan Agreement or otherwise with respect to-the Loan Program. The indemnification arising under this Section shall survive this Support Agreement's termination. 5.03. Bights of Third Partite, The Banks are the only intended third-party beneficiaries of this Support Agreement. 5.04. Limitation of Liability of Officials. No covenant, condition or agreement contained in this Support Agreement shall be deemed to be a covenant, agreement or obligation of a present or future officer, employee or agent of the Company or the County in such person's individual capacity. No Company or County officer, employee or agent shall incur any personal liability with respect to any action taken pursuant to this Support Agreement,provided such person acts in good faith. 5.05. Sev=hilily. The provisions of this Support Agreement .are hereby declared to be severable. If any court of competent jurisdiction shall hold any provision of this Support Agreement to be invalid and unenforceable, such holding shall not invalidate any other provision. 5 10 ARTICLE V DMSCELL.A_NEOI S 5.01. Remedies on Default. . (a) Upon the occurrence and continuation of any Event of Default, the non-defaulting party may (i) incur and pay such reasonable expenses for the defaulting party's account as may be necessary to cure the cause of any default, (ii) avail itself of all remedies available under this Support Agreement, and (iii) proceed to protect and.enforce its rights under this Support Agreement by all means available a law or in equity, including by an action for the specific performance of any covenant, agreement or other provision of this Support Agreement as may be most effectual to protect and enforce such rights. (b) All remedies under this Support Agreement are cumulative and may be exercised concurrently or separately. The exercise of any one remedy shall not be deemed an election of such remedy or preclude the exercise of any other remedy. If any Event of Default shall occur and thereafter be waived, such waiver shall be limited to the particular breach so waived and shall not be deemed a waiver of any other breach under this Support Agreement. 5.02, bd=nificata To the extent permitted by law, the Company shall indemnify, protect and save the :County and its officers harmless from all liability, obligations, losses; claims,' damages, actions, suits, proceedings, costs and expenses, including attorneys' fees. and costs of investigation and discovery, arising out of, connected with, or resulting directly or indirectly from the transactions contemplated by this Support Agreement, the Loan Agreement or otherwise with respect to the Loan Program. The indemnification arising under this Section shall survive this Support Agreement's termination. 5.03. Rights of Third Rmlies. The Banks are the only intended third-party beneficiaries of this Support Agreement. 5.04. Limitation of Liabilfty Officials. No covenant, condition or agreement contained in this Support Agreement shall be deemed to be a covenant, agreement or obligation of a present or future officer, employee or agent of the Company or the County in such person's individual capacity. No Company or County officer, employee or agent shall incur any personal liability with respect to any action taken pursuant to this Support Agreement,provided such person acts in good faith. 5.05. Severability. The provisions of this Support Agreement are hereby declared to be severable. If any court of competent jurisdiction shall hold any provision of this Support Agreement to be invalid and unenforceable, such holding shall not invalidate any other provision. 5 li 5.06. AMlicable Law, The parties intend that North Carolina law shall govern all matters pertaining to this Support Agreement. 5.07. Notices. (a) All notices, requests, approvals, demands and other communications given or made in connection with the terms and provisions of this Support Agreement shall be in writing (unless otherwise provided for in this Support Agreement) and shall be deemed to have been given or-made when either delivered by hand or shown as delivered by a receipt for delivery from the United States Postal Service, and'sent as follows: (i) If to the Company, addressed as follows: President, Orange County Small Business Loan Program Company,Post Office Box 1177,Hillsborough,NC 27278; or, (ii) If to the County, to Orange County Manager, Attn: Small Business Loan Program Notice, 200 South Cameron St.,Hillsborough,NC 27278. (c) Either party may designate additional or different addresses for communications by notice given under this Section to each the other party. 5.08. Definitions- Capitalized terms used in this Support Agreement and not otherwise defined shall have the meanings ascribed thereto in Exhibit A. 5,09. Aggignments- Neither the County nor the Company shall transfer or assign any interest in this Support Agreement without the other party's express prior written consent. Subject to the specific provisions of this Support Agreement, however, this Support Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 5.10. Performance on Hsi dayq If the date for making any payment or the last day for performance of any act or the exercising of any right shall not be a Business Day, such payment shall be made or act performed or right exercised on or before the next succeeding Business Day. 5.11. En rc A&mcmad; Am=dmenls. This Support Agreement constitutes the entire contract between the parties with respect to its subject matter, and this Support Agreement shall not be changed except in writing signed by both parties. 5.12. Fzecu `nn in Cmm=arts. This Support Agreement may be executed in several counterparts, including separate counterparts. Each shall be an original, but all of them together constitute the same instrument. IN WITNESS WHEREOF, the parties have caused this Support Agreement to be signed, sealed and delivered in their corporate names by their duly authorized officers, all 6 12 as of the date fast above written. [SEAL] ORANGE COUNTY SMALL BUSINESS LOAN PROGRAM COMPANY Y By Dianne Reid B. Trdy Fffgusofi Secretary-Treasurer President ORANGE COUNTY, NORTH CAROLINA By Be r y A. Blythe Moses Carey, JWne Clerk, Board of Commissioners Chair, Board of Comm This instrument has,been preaudited in the manner required by The Local Government Budget and Fiscal Control Act. Kenneth T. Chavious Finance Officer Orange County,North Carolina Exhibits: A- Definitions [Small Business Loan Program Support Agreement dated as of March a 1 , 2000] 7 13 ExWbit A—Deflniflons For all purposes of this Support Agreement, the following terms shall have the following meanings, unless the context clearly requires otherwise: "Administrative Expenses" means all of the Company's general and office expenses of operation and of administration of the Loan Program, for such things as office supplies and equipment,utilities,insurance, and banking and professional fees. "Banks" means those financial institutions that are parties to the Loan Agreement with the Company and the County. "Business Day" means any day on which banks in North Carolina are not by law authorized or required to remain closed. "Company Loan Loss Account"means the bank account or accounts owned by the Company to which the Company directs the County to pay over amounts from the Loan Loss Reserve upon a Loan Loss. - "County Board" means the County's governing Board of Commissioners, or any successor to its functions, as from time to time constituted. "Fiscal Year" means the County's fiscal year beginning July 1, or such other fiscal year as the County may later lawfully establish. "Event of Default" means any party's breaching or failing to perform or observe any term, condition or covenant of this Support Agreement on its part to be observed or performed for a period of 45 days after written notice specifying such failure and requesting that it be remedied shall have been given to the defaulting party by the non defaulting party, unless the non-defaulting party shall agree in writing to an extension of such time prior to its expiration. "Governing Documents" means the Company's *Articles of Incorporation and bylaws, the Loan Agreement and this Support Agreement, and any resolution or other corporate proceeding adopted at the County's request or authorizing any of the foregoing. "Guidelines" means the guidelines for the Loan Progmm finally approved by the County Board by resolution adopted 91 2000, as the County Board may duly amend the same from time to time. "Loan Agreement" means the Loan Agreement dated as of March 2000, among the Company, the County and certain financial institutions providing for loans to the Company for the Loan Program. 8 } 14 "Loan Loss"bas the meaning assigned in the Loan Agreement. "Loan Loss Reserve"means the separate account for accounting purposes (and the funds on deposit to the credit of such account, initially in the amount of $150,000) created and existing on the County's books and records to contain amounts appropriated and earmarked by the County to-'serve as a reserve against losses from the failure of borrowers to repay Program Loans in a fiill and timely manner. "Loan Program" means the program for making for making loans to small businesses pursuant to the Guidelines in furtherance of the County's policy to stimulate the creation of good jobs for Orange County citizens as well as to stimulate successful business development and expansion in Orange County. "Program Loans" means loans by the Company to small businesses as part of the Loan Program. "Termination Date" means the earlier. of (a) July 1, 2010, or (b) the date all Program Loans have been paid in firll. 9