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HomeMy WebLinkAbout2020-341-E-Economic Dev-KJC CORP- Emergency small business funding program DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 LOAN AND SECURITY AGREEMENT THIS Loan and Security Agreement (the "Agreement") is dated as of May 14, 2020, and is by and between, KJC CORP a North Carolina Corporation ("Borrower") and Orange County, North Carolina, a political subdivision of the State of North Carolina ("County") WHEREAS, the COVID-19 pandemic has impacted the global markets and disrupted economic and business growth throughout the United States including Orange County; and WHEREAS, on March 10, 2020, the State of North Carolina declared a State of Emergency in response to the COVID-19 outbreak, followed by the federal government declaring a State of National Emergency on March 13, 2020, and a Stay-at-Home Order issued by Orange County on March 26, 2020; and WHEREAS, the pandemic and emergency orders have negatively impacted the workforce, businesses, industries and economies with closures and depressed economic activity; and WHEREAS, the County is committed to supporting its local businesses and created an emergency loan program using approximately $300,000 of Article 46 Sales Tax revenue originally budgeted for the Small Business Loan Program; and WHEREAS, the emergency loan program is targeted to small businesses experiencing revenue loss due to the pandemic in the form of both grants and loans intended to provide immediate financial assistance in order to continue operations, return furloughed employees to work or prevent further closures and layoffs; and WHEREAS, the Borrower has applied for a loan from the County, and the County has agreed to make the loan pursuant to its authority granted in N.C. Gen. Stat. 153A-376 and Chapter 166A; and WHEREAS, this Agreement sets out the terms of the loan, including the terms for payments and the security for the loan. NOW, THEREFORE, in consideration of the mutual promises set out in this Agreement, the parties agree as follows: PART ONE —AGREEMENT TO MAKE AND REPAY THE LOAN 1. The County will loan to the Borrower the sum of [$7,973.68] (the "Loan"). The County is making this loan by giving the Borrower a check for the full amount of the loan at closing. 2. The Borrower will repay the loan. The Borrower's obligation to repay the Loan will be represented by a promissory note (the "Note), which the Borrower will execute and deliver to the County in exchange for the Loan proceeds. The Note will set out the terms of repayment, including payment dates and interest rates. 3. The Borrower will use the Loan for the purposes of its business (the "Business") as described in its application to the County for this Loan. PART TWO - SECURITY FOR THE LOAN ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 4. To secure its obligations to the County under the Note and this Loan Agreement, Borrower grants to the County a security interest in the"Collateral"as described in Exhibit A. This Agreement is intended as, and constitutes, a security agreement within the meaning of the North Carolina Uniform Commercial Code (UCC) Financing Statement, with respect to the Collateral. The Borrower will execute and deliver to the County such documents as the County may reasonably deem appropriate to secure the benefits of this Agreement. 5. If required by the County, to further secure the Borrower's obligations to the County under the Note and this Loan Agreement, Borrower shall execute a personal guaranty. PART THREE - EVENTS OF DEFAULT 6. Events of Default—The happening of any of the following events shall constitute a default under this Agreement (these are the "Events of Default"): 6.1 The Borrower fails to pay when due any amounts payable under the Note; 6.2 The Borrower breaches or fails to perform or observe any term, condition or covenant of this Agreement or the Note on its part to be observed or performed; 6.3 The Borrower moves its principal place of business outside Orange County; 6.4 The Borrower sells all or substantially all of the assets of the Business; 6.5 Any warranty, representation or statement made by the Borrower in this Agreement or otherwise to the County in connection with this Loan is found to be incorrect or misleading in any material respect; 6.6 The County believes in good faith that the prospect of the Borrower's payment or performance is impaired; 6.7 The Borrower seeks an order of relief under Federal Bankruptcy laws; 6.8 The Borrower becomes insolvent; or 6.9 A federal or state tax lien is filed against the assets of the Borrower. 7. Remedies on Default— Upon the occurrence of an Event of Default, the County may, without any further demand or notice, exercise any one or more of the following remedies: 7.1 Declare the unpaid balance of the Note immediately due and payable; 7.2 Proceed by appropriate court action to enforce the Borrower's performance of the applicable covenants of this Agreement or to recover for the breach thereof; 7.3 Pursue collection under the guaranties; 7.4 Pursue enforcement of the lien of the UCC Financing Statement; and 7.5 Avail itself of all other rights and remedies available at law and in equity. ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 8. Further Remedies— In addition to the remedies described in paragraph 7, upon the occurrence of an Event of Default the County may avail itself of all the rights and remedies of a secured party under the UCC, and at its option may: 8.1 Enter upon Borrower's premises to take possession of the Collateral or to render it unusable, or require Borrower to assemble the Collateral at any place designated by County reasonably convenient to the parties; 8.2 Give notice to the Borrower before taking any action pursuant to the UCC Financing Statement by mailing such notice to the Borrower's address as shown in this Agreement, at least ten (10) days before the proposed action. 8.3 Use the proceeds of the disposition of any Collateral to pay and discharge the Borrower's obligations as set forth in this Agreement and in the Note; and 8.4 Without other notice (except as set forth below or in the other documents executed and delivered pursuant to or in connection with the making of the loan contemplated by this Agreement) or demand whatsoever to the Borrower, 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 Borrower may have therein. 8.5 If any automobile is part of the Collateral, the Borrower agrees that a sale by the County of such vehicle at a price based upon a recognized automobile quotation, publication or a sale at a recognized automobile wholesale auction shall be deemed "commercially reasonable." 9. Financial records after a default—At any time the Borrower is in default or a payment due under the Agreement is not made, the Borrower hereby authorizes the County to make or cause to be made, at the Borrower's expense and in such manner and at such times as the County require, (a) inspections and audits of any books, records, and papers in custody or control of the Borrower or others, relating to the Borrower's financial or business conditions, including the making of copies thereof and extracts thereof, and (b) inspections and appraisals of any Borrower assets. Should the Borrower fail to make any payment due under the Agreement, the Borrower will furnish to the County for each one-month period from the date of disbursement of the loan proceeds covered by this Agreement, and for a six-month period thereafter, and semiannually thereafter(no later than 30 days following the expiration of any such period), and at such other times and in such form as the County may prescribe, the financial and operating statement of the business. 10. Costs and expenses related to remedial action - The Borrower 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 County's rights under this Agreement, shall be entitled to the benefits of this Agreement. The County may at any time apply to the payment of all such costs and expenses all monies of the Borrower or other proceeds arising from the possession or disposition of all or any portion of the Collateral. ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 11. Other provisions regarding remedies — The County may delay or refrain from exercising any past, present, or future right or remedy hereunder without waiving any such right or remedy. The County shall have no obligation to proceed against real or personal property in preference to the other. PART FOUR— PROMISES BY THE BORROWER 12. The Borrower agrees that it will do the following: 12.1 Operate the Business in full compliance with applicable federal, state, and local laws, including, without limitation,federal laws relating to equal employment opportunity and occupational health and safety, the North Carolina State Building Code, and local building and land use regulations. 12.2 Promptly perform all obligations of Borrower including the payment, when due, of all amounts owed to County secured by this Agreement; 12.3 Protect and properly care for the Collateral, and allow no Collateral to be misused, wasted, or allowed to deteriorate except for normal wear and tear; 12.4 Use the Collateral principally within the State of North Carolina and Orange County, and not to affix the Collateral to real property unless it is classified as a fixture hereinabove the requisite information is supplied; 12.5 Insure all Collateral against theft, loss or destruction, by policies acceptable to County and payable to both Borrower and the County as their interests may appear; that all applicable licenses and permits be obtained; that the employer ID number be provided and a privilege license be obtained; and that both property and liability insurance on the building(s) and contents be procured and maintained by the Borrower. The Borrower shall provide and maintain hazard insurance (fire and extended coverage) in an amount acceptable to the County covering all tangible Collateral. Mortgagee endorsement is to include this loan. 12.6 Pay promptly when due all ad valorem taxes and assessments upon the Collateral; 12.7 Upon the County's request, deposit with County additional Collateral to County's satisfaction; 12.8 That Collateral will not be changed, transferred, or otherwise disposed of or be subjected to any unpaid charge, unless the County consents in advance in writing to such change, transfer, or charge. 12.9 Upon the County's request, provide a list of buyer, commission merchants and selling agents to or through whom the Borrower intends to sell the products granted as Collateral; 12.10 Keep proper books of account in a manner satisfactory to the County; 12.11 Upon the County's request, submit an annual financial statement reviewed or compiled by an independent public accountant; 12.12 Upon the County's request, submit a copy of its annual tax return to the County. 12.13 The Borrower hereby authorizes all federal, state and municipal authorities to furnish reports of examinations, records, and other information relating to the condition and affairs of the business and any desired information from reports, returns, files, and records of such authorities upon request therefore by the County; ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 12.14 Keep and maintain books, records, and other documents relating directly to the receipt and disbursement of loan funds and the fulfillment of this Agreement. Each party agrees that any duly authorized representative of the County shall at all reasonable times, have access to and the right to inspect, copy, audit and examine all of the books, records and other documents relating to the loan and fulfillment of this Agreement. 12.15Authorize, give permission and provide necessary information and cooperation for Orange County and its agents and representatives to debit funds from a bank account through an Electronic Fund Transfer ("EFT") on the Automated Clearing House network. 12.16 Borrower shall endeavor to meet the following conditions but in no case fail to meet at least one of the following conditions for at least one year: (a)Job Retention, within six months of the award retain at least 50% of the work force that existed on January 1, 2020 and retain 100% within one year of the award date; (b) Living Wage, pay 90% of Borrower's work force a living wage of $15 per hour; or (c) Community Participation and Involvement, in kind service, discounts or donation to first responders, healthcare and other front line workers in the amount of at least $250 annually for award recipients with net income of up to$100,000 and at least$500 annually for all others. Any value derived from discounts shall be the result of at least 15% off retail price. Determinations regarding qualifying recipients of in kind services or donations shall be at the sole discretion of the County. Borrower shall supply evidence of compliance through NC Employment Commission reports, IRS 941 Payroll quarterly reports, Orange County Living Wage certificate or, if those are inapplicable, owner affidavit. Validation of meeting the selected requirement will be obtained six months from the award date. 13. The Borrower agrees that it will not do any of the following without the County's prior written consent: 13.1 Effect a change of ownership or control of the Business; 13.2 Consolidate or merge with any other County, unless the procedures for assignment and/or assumption are complied with; or 13.3 At any time an Event of Default is in existence, give any preferential treatment or make any advance to any person or entity directly or indirectly controlling or affiliated with or controlled by the Borrower, or any other County, or to any officer, director, or employee of the Borrower, or of any such County; 13.4 For two years after the date of this Agreement, undertake additional debt financing without prior written consent of the County, except that this provision shall not prohibit Borrower from (a) purchase money financing of ordinary and necessary equipment or (b) credit purchases of inventory. The County's consent, when required under this provision, shall not be unreasonably withheld. 13.5 Permit or suffer to exist any other lien, security interest or encumbrance upon the Collateral, except for the existing security interest described in Exhibit A and the security interest created pursuant to this Agreement and any other agreements delivered by the Borrower pursuant to this Agreement. 13.6 Use the Collateral for any illegal purposes. 13.7 Assert a claim or defense held against the County against any assignee of this Agreement 14. The Borrower further represents to the County and acknowledges that the following things are true: 14.1 No financing statement, other than those financing statement(s) on file with the North Carolina Secretary of State at the date of execution of this Agreement and described in Exhibit B (if ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 applicable), covers the Collateral; there is no adverse lien or security interest in the Collateral; that Borrower has the right to transfer a security interest in the Collateral; and that the Borrower will defend the title to the Collateral and its proceeds against the claims of others 14.2 The Borrower's correct address appears below its signature to this Agreement 14.3 The County may act as attorney for Borrower in adjusting any insurance coverage and in endorsing any insurance draft and may retain for the satisfaction of the Borrower's obligation any insurance proceeds and/or unearned premium on such insurance. 14.4 All information supplied and statements made by or in support of the Borrower in its application for this credit are true and correct. 14.5 Any loss or destruction of the Collateral shall not release the Borrower from the payment and performance of its obligations under this Agreement. 14.6 The Borrower has its principal place of business in North Carolina and that place of business is in Orange County. 14.7 If more than one Borrower executes this Agreement, their obligations under this Agreement shall be joint and several. PART FIVE-THE COUNTY'S POLICIES AND PROCEDURES 15. The Borrower has been given a copy of the County's Emergency Loan Program Policies and Procedures, and has been given an opportunity to review the policies and procedures and ask questions about them. The Borrower will not use the loan proceeds for any purpose that the County's policies and procedures say is an improper use of the loan proceeds. 16. If at any time the Borrower has any questions about whether a particular use of the loan proceeds is permitted, or has any other questions about the policies and procedures or the terms of the loan documents (or wants to request any changes or any permission to vary the terms), Borrower will ask the County for the desired information. The Borrower recognizes that it is the Borrower's responsibility to comply with the policies and procedures and the terms of the loan documents, and it is not the County's responsibility to make sure the Borrower either understands the terms or complies with the terms. The County may take action against the Borrower if the Borrower fails to comply with the policies and procedures and the terms of the loan documents. The Borrower is entitled to rely on a waiver by the County of a requirement of the policies and procedures and the terms of the loan documents only if that waiver is in writing. PART SIX— OTHER AGREEMENTS BETWEEN THE PARTIES 17. Communication— 17.1 Any communication required or permitted by this Agreement must be in writing. 17.2 Any communication under this Agreement shall be sufficiently given and deemed given when delivered by hand or on the date shown as the date of delivery on a United States Postal Service return receipt, if addressed as follows: 17.2.1 If to the County, addressed as follows: Orange County Emergency Loan Program, 131 W. Margaret Lane, Suite 205, Hillsborough, NC 27278; or, ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 17.2.2 If to the Borrower, addressed to the address shown below the Borrower's signature to this Agreement. 17.3 Any addressee may designate additional or different addresses for communications by notice given under this Section to each of the others. 18. The Borrower shall not sell or assign any interest in this Agreement without prior written consent of the County. 19. The parties intend to limit disclosure of confidential information and trade secrets to the fullest extent of the law. Any use of confidential information shall be for the benefit of the Borrower. Notwithstanding anything in the foregoing to the contrary, the County may disclose confidential information pursuant to any governmental, judicial, or administrative order, subpoena, discovery request, regulatory request or similar method. 20. The parties intend that North Carolina law shall govern this Agreement. If any provision of this Agreement shall be determined to be unenforceable, that shall not affect any other provision of this Agreement. 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 preceding business day. The parties agree that time is of the essence of this Agreement. 21. This Agreement, together with the documents referenced in this Agreement, constitutes the entire agreement between the Borrower and the County with respect to its general subject matter. Only a writing signed on behalf of each party may amend this Agreement. 22. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed to be an original. Notwithstanding the foregoing, the parties shall deliver original execution copies of this Agreement to one another as soon as practicable following execution thereof. IN WITNESS WHEREOF, the parties have duly signed, sealed and delivered this Agreement in duplicate originals as of the day and year first above written. ORANGE COUNTY ��¢¢,D,—Sig-d by: By: D6116,W X tkaAVAWS(j 319998]SSESl1 Bonnie Hammersley, County Manager BORROWER DocoSignetl by C By. ,scan ItitaS$f Jean Masse, Vice President KJC CORP 77 South Elliott Road Chapel Hill, NC 27514 ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 Exhibit A — Description of Collateral The "COLLATERAL" is all of the following: 1. All personal property acquired by KJC CORP, with funds loaned by the COMPANY pursuant to this AGREEMENT, all personal property obtained in substitution or replacement therefore, and all personal property obtained in substitution or replacement for any portion of the Mortgaged Property and all proceeds of the foregoing (collectively, the "Purchased Equipment"). This Agreement is a purchase money security agreement with respect to the Purchased Equipment. The parties expect that the Purchased Equipment will include the following: N/A 2. All goods including but not limited to furniture and general intangibles whether now owned or hereafter acquired and wherever located. 3. Equipment, including all Accessions thereto, and all manufactures warranties, parts and tools therefore. 4. Inventory, including all returned inventory. 5. Accounts Receivables. 6. Vehicles, including all manufacturers warranties and parts therefore. 7. Franchise Agreements. 8. General intangibles, including Payment Intangibles, copyrights, trademarks, patents, trade names, tax refunds, company records (paper and electronic), right under equipment leases, warranties software licenses. 9. To the Extent not listed above as original collateral, all proceeds (cash and non-cash) and products of the foregoing. NOTICE-Pursuant to an Agreement between debtor and secured party, debtor has agreed not to further encumber the collateral described herein. The further encumbrance of which may constitute interference with secured party's right by such encumbrance. CSDocoSignetl by un,Itiws" S Jean Masse, Vice President KJC CORP ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 Exhibit B — Description of Existing Security Interest on Collateral This page left intentionally blank. ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 ORANGE COUNTY EMERGENCY LOAN PROGRAM—INTERNAL USE ONLY Department Party/Vendor Name: KJC CORP Party/Vendor Contact Person: Jean Masse Contact Phone: 919-932- 7266 Party/Vendor Address: 77 South Elliott Road City Chapel Hill State:NC Zip: 27514 Department: Economic Development Amount: $7,973.68 Purpose: Emergency Small Business Funding Program Budget Code(s): 34600020-900047 Vendor# 66205 (N/A if new vendor) This agreement is approved as to technical form and content and I as Department Director affirmatively state work on this project has not been initiated prior to execution of the agreement: o e any 5/21/2020 Department Director's Signature �`g�,g `! Date: Financial Services This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act: o Sis dny: 5/21/2020 Office of the Chief Financial Officer Date: ®re.eieeeiaee_. Legal Services This agreement is approved as to legal form and sufficiency: o Sig.any: 5�21�2020 Office of the County Attorney L�,s� Date: ��28C6P0909AtF5.. Clerk to the Board Received for record retention: All DocuSign contracts must be copied to Sherri Ingersoll upon completion: singersoll@orangecountync.gov The following signature block is for hard copies only and is not required for DocuSign contracts: Office of the Clerk to the Board Date: ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 PERSONAL GUARANTY IN CONSIDERATION of the Loan made by Orange County Small Business Loan Company (referred to below as the "Company") to KJC CORP, a North Carolina Corporation (hereinafter referred to as "Borrower"), the undersigned (hereinafter referred to as "Guarantor"), each absolutely and unconditionally, guarantees to the Company the punctual payment in full of the principal, interest and other sums due under that certain promissory note from Borrower to Company dated May 14, 2020, (hereinafter referred to as "Note") which obligations, indebtedness and liability set forth therein are hereinafter referred to as "indebtedness." The Guarantor expressly waives the following: notice of the incurring of indebtedness by the Borrower; the acceptance of this Guaranty by the Company; presentment and demand for payment, protest, notice of protest and notice of dishonor or nonpayment of any instrument evidencing indebtedness of the Borrower; any right to require suit against the Borrower or any other party before enforcing this Guaranty; and any right of subrogation to the Company's rights against the Borrower until the Borrower's indebtedness is paid in full. The Guarantor hereby consents and agrees that renewals and extensions of time of payment, surrender, release, exchange, substitution, dealing with or taking of additional collateral security, taking or release of other guarantees, abstaining from taking advantage of or realizing upon any collateral security by the Company to the Borrower or any other party, may be made, granted, and effected by the Company without notice to each Guarantor and without in any manner affecting his or her liability hereunder. In the event that a petition in bankruptcy or reorganization of the Borrower under the bankruptcy laws or for the appointment of a receiver for the Borrower or any of its property is filed by or against the Borrower, or if the Borrower shall make an assignment for the benefit of creditors or shall become insolvent, all indebtedness of the Borrower pursuant to the Note shall, for the purpose of this Guaranty, be deemed at the Company's election to have become immediately due and payable. Any notice to Guarantor by the Company at any time shall not imply that such notice or any further or similar notice was or is required. The Guarantor further agrees to pay the Company any and all costs, expenses and reasonable attorneys' fees paid or incurred by the Company in collecting or endeavoring to collect the indebtedness of the Borrower or enforcing or endeavoring to enforce this Guaranty. This Guaranty shall be binding upon each Guarantor and his or her heirs, executors, administrators and assigns,jointly and severally, and shall inure to the benefit of the Company and its successors and assigns. This Guaranty may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes hereof, a facsimile copy of this Guaranty, including the signature pages hereto, shall be deemed to be an original. Notwithstanding the foregoing, the parties shall deliver original execution copies of this Guaranty to one another as soon as practicable following execution thereof. IN WITNESS WHEREOF, this Guaranty has been executed and delivered to the Company by each undersigned Guarantor this May 14, 2020. ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 - 2"',-"' Jean Masse, in their capacity as an individual ED.-Si9.etlby Susan Henning, in their capacity as an individual ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 PROMISSORY NOTE Amount: Date: $ 7,973.68 May 14, 2020 FOR VALUE RECEIVED, KJC CORP, a North Carolina Corporation (hereafter the "Borrower") promises to pay to the order of the Orange County (hereafter the "County"), the principal sum stated above, together with interest on the unpaid principal balance from the date of this Note at the rate, on the dates and in the amounts described below. INTEREST; PAYMENTS; PREPAYMENT Interest payable on this Note shall accrue at the annual rate of zero percent (0%). For six (6) months from the date of this Note (the "Grace Period"), no payment shall be due. Thereafter, starting on the first day of the month next following the expiration of the Grace Period, and continuing on the first day of each month for 54 consecutive months, equal monthly payments of $147.66. If not sooner paid, all unpaid principal and all accrued and unpaid interest on this Note shall be due and payable five (5) years from the date of this Note. The Borrower may prepay the outstanding principal amount at its option at any time, in whole or in part, without penalty or premium. Each regular monthly payment and any prepayments shall be applied to the principal. MANNER OF PAYMENT All payments shall be made payable to "Orange County." Borrower authorizes, gives permission and provide necessary information and cooperation for Orange County and its agents and representatives to debit funds from a bank account through an Electronic Fund Transfer ("EFT") on the Automated Clearing House network. Payments shall be drawn by EFT but additional payments may be delivered to the County at its offices at 131 West Margaret Lane, Hillsborough, NC 27278. The County, however, by written notice to the Borrower under the Loan Agreement, may designate a different address for payments. All payments shall be made in lawful money of the United States of America. NOTE GIVEN UNDER LOAN AND SECURITY AGREEMENT; SECURED BY DEED OF TRUST This Note is issued pursuant to, and is governed by a Loan and Security Agreement dated May 14, 2020, between the Borrower and the County (the "Loan Agreement"). Payments under this Note are further secured by a Uniform Commercial Code (UCC) Financing Statement of even date herewith made by the Borrower for the County's benefit and any personal guarantee if required. ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 DEFAULT Upon the occurrence of any Event of Default described in the Loan Agreement, the County shall have all rights granted by the Loan Agreement. EXPENSES OF COLLECTION In the event of a default under any provision of this Note (and in addition to collecting all principal, interest and other amounts due on this Note) or the North Carolina UCC financing statement, securing this Note or any violation of the Loan Agreement, the County may employ an attorney to enforce the County's rights and remedies. The Borrower agrees to pay to the County reasonable attorney's fees not exceeding a sum equal to fifteen per cent (15%) of the outstanding balance owing on the Note, plus all other reasonable expenses incurred by the County in exercising any of the County's rights and remedies upon default. COVENANTS All parties to this Note, including the maker and any sureties, endorsers or guarantors, hereby waive (to the extent permitted bylaw) protest, presentment, notice of dishonor and notice of acceleration of maturity and agree to continue to remain bound for the repayment 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 of time for the payment of this Note; 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. GOVERNING LAW The Borrower and the County intend that North Carolina law shall govern all matters related to this Note. RIGHTS CUMULATIVE The rights and remedies of the County as provided in this Note and any instrument securing this Note shall be cumulative and may be pursued singly, successively, or together against the property described in the UCC Financing Statement or any other funds, property or security held by the County for payment or security, in the sole discretion of the County. 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 County of any of the terms and conditions of this Note shall be effective unless it is in writing and signed by the County. No modification or amendment to this Note may be made except in writing, signed by the Borrower and the County. COUNTERPARTS; SIGNATURES AND AMENDMENTS This Note may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes hereof, a facsimile copy of this Note, including the signature pages hereto, shall be deemed to be an original. Notwithstanding the foregoing, the parties shall deliver original execution copies of this Note to one another as soon as practicable following execution thereof. This Agreement together with any amendments or modifications may be executed electronically. All electronic signatures affixed hereto evidence the consent of the Parties to utilize electronic signatures and the intent of the Parties to comply with Article 11A and Article 40 of North Carolina General Statute Chapter 66. ESBLPLSA DocuSign Envelope ID:81024767-66DD-4AEE-B143-EBD82D03FA58 IN WITNESS WHEREOF, the Borrower has caused this Note to be signed and delivered by its duly authorized officers on the day and year first above written: BORROWER: KJC CORP, a North Carolina Corporation By: C hm% `�"" Jean Masse, Vice President ESBLPLSA