2014-633-E Econ Dev - Flawless LLC business loan and security agreement

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LOAN AND SECURITY AGREEMENT Page1of7 ȱ THIS Loan and Security Agreement (the "Agreement") is dated as of October 20, 2014, and is by and between Flawless, LLC, a North Carolina limited liability company (the "Borrower") and the Orange County Small Business Loan Program Company, a North Carolina nonprofit corporation (the “Company”) The Borrower has applied for a loan from the Company, and the Company has agreed to make the loan. 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 Company will loan to the Borrower the sum of [$10,000] (the "Loan"). The Company is making this loan by giving the Borrower a check for the full amount of the loan, reduced by the Company’s loan fee of [$100]. 2. The Borrower will repay the loan. The Borrower’s obligation to repay the Loan will be represented by a promissory note (the “Note) in substantially the form of Exhibit A, which the Borrower will execute and deliver to the Company 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 Company for this Loan. PART TWO - SECURITY FOR THE LOAN 4. To secure its obligations to the Company under the Note and this Loan Agreement, Borrower grants to the Company a security interest in the “Collateral” as described in Exhibit B. 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 Company UCC Financing Statements and such other documents as the Company may reasonably deem appropriate to secure the benefits of this Agreement. 5. To further secure the Borrower’s obligations to the Company under the Note and this Loan Agreement, Wendy E. Solomon shall execute a personal guaranty in substantially the form of Exhibit C. 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; DocuSign Envelope ID: 13893DB1-E609-41AD-9B91-B891B8DC7CA8