1. Loan Terms. Your loan will have a principal balance as set forth on each Non-Negotiable Promissory Note and Security Agreement attached as Exhibit A. All loans are secured, fully-amortizing, closed-end loans with a nine (9)-month term. Please see your Borrower Membership Agreement and other information provided to you in connection with registering your borrowing request on the Site for additional details. Your obligations, including your obligation to repay principal and interest, are set forth in this Agreement and in the Note or Notes that you will make to us, as described in section 3 below.
2. Credit Decisions. Your borrowing request must include your business cash flow and such other information as we may obtain through the Site. We reserve the right to verify any information you submit by requiring you to produce appropriate documentation or other proof, and also reserve the right to conduct such verification through a third party. You hereby authorize us to request and obtain data from a third party to verify any information you provide to us in connection with your borrowing request. We may terminate consideration of your application at any time in our sole discretion.
3. Loan Funding and Closing. You may post a borrowing request on the Site, and we will make the determination of whether to post your borrowing request on the Site. If we make the determination to post your borrowing request on the Site, potential lenders to us ("FC Lenders") will be able to review your borrowing request. FC Lenders may commit to lend, in various amounts, funds to us, which will be evidenced by short terms promissory notes secured on the assets of our business ("FCNs") that we may issue to FC Lenders who commit to make a loan to us in support of your borrowing request in order for us to achieve the cash flow necessary to satisfy for your borrowing request. You acknowledge that an FC Lender’s commitment to lend any funds to us bears no relation to any obligation we may have to lend funds to you and does not confer any rights to you. You understand that individual FC Lenders make their own decisions whether to commit or loan funds to us. We may also choose to commit funds for all or part of your borrowing request without posting your borrowing request on the Site but are not obligated to do so.
Your loan will close and issue, unless you notify us in writing of your election to terminate your borrowing request sufficiently far in advance of the loan closing for us to cancel the loan, if:
Within 21 days following the posting of your borrowing request, the aggregate amount of loan commitments to us through the Site corresponding to your listed borrowing request is equivalent to the full amount of your borrowing request, provided that we may, at our discretion, extend such 21 day period at any time.
You acknowledge that our posting your loan request on the Site is for the purpose of gauging interest in your business and for achieving the cash flow we may need to pursue our business of funding your borrowing request. It is not reflect any tie or connection between any loan we may make from you and any loan we may accept from an FC Lender.
If at the end of the posting period for your borrowing request, the loan commitments to us through the Site corresponding to your listed borrowing request are less than the full amount of your original borrowing request to us we will withdraw your posting. In this case you may make another borrowing request to us at any point following withdrawal. We reserve the right to charge a consideration fee for any such repeat posting.
We may fund your borrowing request prior to the expiration of the 21-day period set forth above. In no event, will we be obligated to notify you of the date upon which we may or will fund your loan.
If we make a loan to you, you agree to execute by power of attorney as described below both as a company and an individual guarantor, and be bound by the terms set forth in, the form of promissory note attached as Exhibit A (the "Note") as to your loan. You agree to execute multiple Notes if we request you do so, provided that the aggregate principal amounts of such Notes shall equal the total amount of our loan to you. We will execute your Note(s) on your behalf pursuant to a power of attorney you grant to us when registering your borrowing request. You authorize us to disburse the loan proceeds by Automated Clearing House ("ACH"), electronic transfer, book entry transfer, Check 21 or such other transfer means as we may determine to use to your designated account or on your behalf to your selected designee.
BY COMPLETING YOUR APPLICATION AND SUBMITTING YOUR BORROWING REQUEST, YOU ARE COMMITTING TO OBTAIN A LOAN FROM US IN THE AMOUNT AND ON THE TERMS SET FORTH IN YOUR AGREEMENTS WITH US (OR OUR ASSIGNEES) AND THE DISCLOSURES PROVIDED TO YOU IN CONNECTION WITH YOUR REQUEST, SHOULD YOUR REQUEST BE FUNDED. YOU HAVE NO RIGHT TO RESCIND THE LOAN ONCE MADE BUT YOU MAY PREPAY THE LOAN AT ANY TIME WITHOUT PENALTY. We are under no obligation to lend you any funds regardless of any loans made to us that correspond with our lenders supporting your posting.
4. Making Your Loan Payments. You authorize us and our successors and assigns to debit your designated account by ACH, electronic transfer, book entry transfer, Check 21 or such other transfer means as we may determine to use for the amount of each payment due on each due date. You may elect to make payments by company check by contacting firstname.lastname@example.org or by regular mail at Funding Community, Inc., 20 Jay Street, Suite 312, Brooklyn, NY 11201, Attention: Loan Processing Department. If you elect to make payments by check, you acknowledge and agree that there will be a $15 check processing fee per payment, subject to applicable law. If you elect to make payments by check, you must send the check by regular or overnight mail to Funding Community, Inc., 20 Jay Street, Suite 312, Brooklyn, NY 11201, Attention: Loan Processing Department. This authorization does not affect your obligation to pay when due all amounts payable on your loan, whether or not there are sufficient funds therefore in such accounts. The foregoing authorization is in addition to, and not in limitation of, any rights of setoff we may have. With regard to payments made by automatic withdrawal, you have the right to stop payment of automatic withdrawals or revoke your prior authorization for automatic withdrawals by notifying your financial institution at least three (3) banking days before the scheduled date of transfer. You must notify us of the exercise of your right to stop a payment or revoke your authorization for automatic withdrawals at least three (3) banking days before the scheduled date of transfer. All payments are to be applied first to the payment of all fees, expenses and other amounts due (excluding principal and interest), then to accrued interest, and the balance on account of outstanding principal; provided, however, that after an Event of Default (as defined below), payments will be applied to your obligations as we determine in our sole discretion.
5. Other Borrower Obligations. You agree that you (A) are a business formed or incorporated in the US and (B) will not, in connection with your borrowing request: (i) make any false, misleading or deceptive statements or omissions of fact in your listing, including but not limited to in the loan title, or in your loan description; (ii) misrepresent your identity, or describe, present or portray yourself as a person or business other than yourself; (iii) give to or receive from, or offer or agree to give to or receive from any FC member or other person any fee, bonus, additional interest, kickback or thing of value of any kind except (a) a reward approved by us and listed in your post or (b) in accordance with the terms of your loan; (iv) represent yourself to any person, as a representative, employee, or agent of ours, or purport to speak to any person on our behalf; (v) provide, in your borrowing request or in communications on the Site related to your borrowing request, information upon which a discriminatory lending decision may be made, such as your race, color, religion, national origin, sex, marital status, age, or (vi) use any of the loan proceeds (a) to fund any endeavor that does not have a legitimate business purpose or (b) to pay off any personal loan made by any of your owners or principals to you. You acknowledge and agree that we may rely without independent verification on the accuracy, authenticity, and completeness of all information you provide to us. You certify that the proceeds of the loan will not be used for the purpose of purchasing or carrying any securities or to fund any illegal activity.
6. Fees. A non-refundable origination fee paid by you to us as provided under your agreement with us will be deducted from your loan proceeds, so the loan proceeds delivered to you or on your behalf will be less than the full amount of issued your loan. You acknowledge that the origination fee will be considered part of the principal on your loan and is subject to the accrual of interest. You agree to pay a fee of $15, if ACH, electronic transfer, book entry transfer, Check 21 or other similar transfers or checks are returned or fail due to insufficient funds in your account or for any other reason. Each attempt to collect a payment is considered a separate transaction, so an unsuccessful payment fee will be assessed for each failed attempt. The bank that holds your designated account may assess its own fee in addition to the fee we assess. If any payment is more than 15 days late, we may charge a late fee in an amount equal to the greater of 5% of the outstanding principal and interest or $15. If a payment is more than 30 days late, we shall charge such late fee. We will charge only one late fee on each late payment. These fees may be collected using ACH, electronic transfer, book entry transfer, Check 21 or other similar transfers initiated by us from your designated account. Any such late fee assessed is immediately due and payable. Any payment received after 6:00 P.M., Eastern time, on a banking day is deemed received on the next succeeding banking day.
7. Default and Termination. You will be deemed in default on your loan (each, an "Event of Default") if you: (1) fail to pay timely any amount due on your loan; (2) file or have instituted against you any bankruptcy or insolvency proceedings or make any assignment for the benefit of creditors; (3) commit fraud or make any material misrepresentation in this Agreement, the Note, or any other documents, applications or related materials delivered to us in connection with your loan; or (4) fail to abide by the terms of this Agreement. Upon the occurrence of an Event of Default, we may exercise all remedies available to us under applicable law, this Agreement, and the Note, including without limitation (1) demand that you immediately pay all amounts owed on your loan or (2) terminate this Agreement. Any loans you obtain prior to the effective date of termination resulting from listings you placed on the Site shall remain in full force and effect in accordance with their terms.
8. Collection & Reporting of Delinquent Loans. We reserve the right to report loan payment delinquencies at or in excess of 30 days to one or more consumer reporting agencies in accordance with applicable law. You agree to pay all costs of collecting any delinquent payments, including reasonable attorneys' fees, as permitted by applicable law.
9. Assignment of Your Loan. Following the closing of your loan you hereby agree that we may, without notice to you or your consent, sell, assign or transfer all of our right, title and interest in this Agreement and / or your Note(s) without your consent.
10. Your Representations and Warranties. You represent and warrant to us, as of the date of this Agreement and as of any date that we commit to lend you funds, which will be evidenced Notes payable to us, that: (a) you are duly organized and are validly existing as a corporation, limited liability company, or other registered business form (other than a sole proprietorship) in good standing under the laws of your state of organization and have corporate power to enter into and perform its obligations under this Agreement; (b) this Agreement has been duly and validly authorized, executed and delivered by you; (c) the Note(s) have been duly and validly authorized and, following payment of the loan amount by us and electronic execution, authentication and delivery to us, will constitute valid and binding obligations of you enforceable against you in accordance with their terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency or similar laws; (d) you intend to operate as a going concern for at least 24 months following the date we commit to lend you any funds, as evidenced by a Note payable to us; (e) you are a “small business” as defined by the Small Business Administration; (f) all information you provided to us in connection with this Agreement, including any information submitted through the Site, is true and correct as of the date of this Agreement; and (g) you have complied in all material respects with applicable federal, state and local laws in connection with the acceptance of our loan to you and the issuance of the Notes to us.
11. NO GUARANTEE. WE DO NOT WARRANT OR GUARANTEE (1) THAT WE WILL FUND YOUR BORROWING REQUEST REGARDLESS OF ANY LOANS WE MAY RECEIVE.
12. Entire Agreement. This Agreement and any Note represents the entire agreement between you and us regarding the subject matter hereof and supersedes all prior or contemporaneous communications, promises and proposals, whether oral, written or electronic, between us with respect to your borrowing request and loan.
14. Notices. All notices and other communications to you hereunder may be given by email to your registered email address or posted on the Site, and shall be deemed to have been duly given and effective upon transmission. You acknowledge that you have sole access to such email account and your area on the Site and that communications from us may contain sensitive, confidential, and collections-related communications. If your registered email address changes, you must notify us of the change by sending an email to email@example.com or calling (212) 389-9644. You also agree to update your registered business address and telephone number on the Site if they change.
15. NO WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, WE MAKE NO REPRESENTATIONS OR WARRANTIES TO YOU, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
16. LIMITATION ON LIABILITY. IN NO EVENT SHALL WE BE LIABLE TO YOU FOR ANY LOST PROFITS OR SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHERMORE, WE MAKE NO REPRESENTATION OR WARRANTY TO YOU REGARDING THE EFFECT THAT THE AGREEMENT MAY HAVE UPON YOUR FOREIGN, FEDERAL, STATE OR LOCAL TAX LIABILITY.
17. Miscellaneous. The parties acknowledge that there are no third party beneficiaries to this Agreement. You may not assign, transfer, sublicense or otherwise delegate your rights or obligations under this Agreement to another person without our prior written consent. Any such assignment, transfer, sublicense or delegation in violation of this section 16 shall be null and void. We are located in the state of New York and this Agreement and the Note will be entered into in the state of New York. The provisions of this Agreement will be governed by federal laws and the laws of the state of New York to the extent not preempted, without regard to any principle of conflicts of laws that would require or permit the application of the laws of any other jurisdiction. Any waiver of a breach of any provision of this Agreement will not be a waiver of any other subsequent breach. Failure or delay by either party to enforce any term or condition of this Agreement will not constitute a waiver of such term or condition. If at any time after the date of this Agreement, any of the provisions of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality and unenforceability of such provision shall have no effect upon and shall not impair the enforceability of any other provisions of this Agreement. The headings in this Agreement are for reference purposes only and shall not affect the interpretation of this Agreement in any way.
a. Either party to this Agreement may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration pursuant to this section 18 (the "Arbitration Provision"), unless you opt out as provided in section 18(b) below. As used in this Arbitration Provision, "Claim" shall include any past, present, or future claim, dispute, or controversy involving you (or persons claiming through or connected with you), on the one hand, and us (or persons claiming through or connected with us), on the other hand, relating to or arising out of this Agreement, any Note, the Site, and/or the activities or relationships that involve, lead to, or result from any of the foregoing, including (except to the extent provided otherwise in the last sentence of section 18(f) below) the validity or enforceability of this Arbitration Provision, any part thereof, or the entire Agreement. Claims are subject to arbitration regardless of whether they arise from contract; tort (intentional or otherwise); a constitution, statute, common law, or principles of equity; or otherwise. Claims include matters arising as initial claims, counter-claims, cross-claims, third-party claims, or otherwise. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable.
b. You may opt out of this Arbitration Provision for all purposes by sending an arbitration opt out notice to Funding Community, Inc., 20 Jay Street, Suite 312, Brooklyn, NY 11201, Attention: Loan Processing Department, which is received at the specified address within 30 days of the date of your electronic acceptance of the terms of this Agreement. The opt out notice must clearly state that you are rejecting arbitration; identify the Agreement to which it applies by date; provide your name, address, and EIN; and be signed by your legal representative. You may send the opt out notice in any manner you see fit as long as it is received at the specified address within the specified time. No other methods can be used to opt out of this Arbitration Provision. If the opt out notice is sent on your behalf by a third party, such third party must include evidence of his or her authority to submit the opt out notice on your behalf.
c. The party initiating arbitration shall do so with the American Arbitration Association (the "AAA") or JAMS. The arbitration shall be conducted according to, and the location of the arbitration shall be determined in accordance with, the rules and policies of the administrator selected, except to the extent the rules conflict with this Arbitration Provision or any countervailing law. In the case of a conflict between the rules and policies of the administrator and this Arbitration Provision, this Arbitration Provision shall control, subject to countervailing law, unless all parties to the arbitration consent to have the rules and policies of the administrator apply.
d. If we elect arbitration, we shall pay all the administrator's filing costs and administrative fees (other than hearing fees). lf you elect arbitration, filing costs and administrative fees (other than hearing fees) shall be paid in accordance with the rules of the administrator selected, or in accordance with countervailing law if contrary to the administrator's rules. We shall pay the administrator's hearing fees for one full day of arbitration hearings. Fees for hearings that exceed one day will be paid by the party requesting the hearing, unless the administrator's rules or applicable law require otherwise, or you request that we pay them and we agree to do so. Each party shall bear the expense of its own attorneys' fees, except as otherwise provided by law. If a statute gives you the right to recover any of these fees, these statutory rights shall apply in the arbitration notwithstanding anything to the contrary herein.
e. Within 30 days of a final award by the arbitrator, any party may appeal the award for reconsideration by a three-arbitrator panel selected according to the rules of the arbitrator administrator. In the event of such an appeal, any opposing party may cross-appeal within 30 days after notice of the appeal. The panel will reconsider de novo all aspects of the initial award that are appealed. Costs and conduct of any appeal shall be governed by this Arbitration Provision and the administrator's rules, in the same way as the initial arbitration proceeding. Any award by the individual arbitrator that is not subject to appeal, and any panel award on appeal, shall be final and binding, except for any appeal right under the Federal Arbitration Act ("FAA"), and may be entered as a judgment in any court of competent jurisdiction.
f. We agree not to invoke our right to arbitrate an individual Claim you may bring in Small Claims Court or an equivalent court, if any, so long as the Claim is pending only in that court. NO ARBITRATION SHALL PROCEED ON A CLASS, REPRESENTATIVE, OR COLLECTIVE BASIS (INCLUDING AS PRIVATE ATTORNEY GENERAL ON BEHALF OF OTHERS), EVEN IF THE CLAIM OR CLAIMS THAT ARE THE SUBJECT OF THE ARBITRATION HAD PREVIOUSLY BEEN ASSERTED (OR COULD HAVE BEEN ASSERTED) IN A COURT AS CLASS REPRESENTATIVE, OR COLLECTIVE ACTIONS IN A COURT. Unless consented to in writing by all parties to the arbitration, no party to the arbitration may join, consolidate, or otherwise bring claims for or on behalf of two or more individuals or unrelated corporate entities in the same arbitration unless those persons are parties to a single transaction. Unless consented to in writing by all parties to the arbitration, an award in arbitration shall determine the rights and obligations of the named parties only, and only with respect to the claims in arbitration, and shall not (a) determine the rights, obligations, or interests of anyone other than a named party, or resolve any Claim of anyone other than a named party; nor (b) make an award for the benefit of, or against, anyone other than a named party. No administrator or arbitrator shall have the power or authority to waive, modify, or fail to enforce this section 18(f), and any attempt to do so, whether by rule, policy, arbitration decision or otherwise, shall be invalid and unenforceable. Any challenge to the validity of this section 18(f) shall be determined exclusively by a court and not by the administrator or any arbitrator.
g. This Arbitration Provision is made pursuant to a transaction involving interstate commerce and shall be governed by and enforceable under the FAA. The arbitrator will apply substantive law consistent with the FAA and applicable statutes of limitations. The arbitrator may award damages or other types of relief permitted by applicable substantive law, subject to the limitations set forth in this Arbitration Provision. The arbitrator will not be bound by judicial rules of procedure and evidence that would apply in a court. The arbitrator shall take steps to reasonably protect confidential information.
h. This Arbitration Provision shall survive (i) suspension, termination, revocation, closure, or amendments to this Agreement and the relationship of the parties; (ii) the bankruptcy or insolvency of any party or other person; and (iii) any transfer of any loan or Note or any other promissory note(s) which you owe, or any amounts owed on such loans or notes, to any other person or entity. If any portion of this Arbitration Provision other than section 18(f) is deemed invalid or unenforceable, the remaining portions of this Arbitration Provision shall nevertheless remain valid and in force. If an arbitration is brought on a class, representative, or collective basis, and the limitations on such proceedings in section 18(f) are finally adjudicated pursuant to the last sentence of section 18(f) to be unenforceable, then no arbitration shall be had. In no event shall any invalidation be deemed to authorize an arbitrator to determine Claims or make awards beyond those authorized in this Arbitration Provision.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE A RIGHT TO LITIGATE CLAIMS THROUGH A COURT BEFORE A JUDGE OR JURY, BUT WILL NOT HAVE THAT RIGHT IF ANY PARTY ELECTS ARBITRATION PURSUANT TO THIS ARBITRATION PROVISION. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO LITIGATE SUCH CLAIMS IN A COURT BEFORE A JUDGE OR JURY UPON ELECTION OF ARBITRATION BY ANY PARTY.
__________, 20__ [The date on which Funding Community, Inc. initiates a transfer for the principal amount of this Note to the Borrower] (the "Note Date")
For value received, I ("Borrower") promise to pay to the order of Funding Community, Inc. or any subsequent holder ("you" or "Lenders") of this Promissory Note (the "Note") the principal sum of ________________ ($_________) Dollars with interest as set forth below. I intend to be legally bound by this Note. I have read, understood, and agreed to all of the terms of this Note.
Interest. This Note bears interest during each calendar month from the date hereof until paid, at a fixed rate of ______ (%). Interest is calculated on a monthly basis upon the unpaid balance with each payment representing 1/12th of a year.
Payments. Principal and interest is to be paid during and throughout the period of nine months in the following manner:
Payments of principal and interest in the amount of ________________ ($______) Dollars are to be made by the Borrower to the Lender commencing ________, 20__, [one calendar month following the Note Date], and on the same day of each successive month thereafter until ________, 20__, [nine calendar months following the Note Date], when the full amount of unpaid principal, together with unpaid accrued interest is due and payable. If the monthly anniversary is on the 29th, 30th, or 31st of the month, and the following month does not have a 29th, 30th, or 31st day, the monthly payment will be due on the last day of the month in which the payment was due. The last payment might be of a slightly different amount to adjust for rounding.
All payments on this Note are to be made in immediately available lawful money of the United States. Borrower authorizes Lender to debit Borrower's designated account by Automated Clearing House ("ACH"), electronic transfer, book entry transfer, Check 21, or such other means of transfer as we may determine to use for the amount of each payment due on each due date. Borrower may elect to make payments by personal check by contacting firstname.lastname@example.org or by regular mail at Funding Community, Inc., 20 Jay St., Suite 321, New York, NY 11201, Attention: Loan Processing Department. If Borrower elects to make payments by check, borrower acknowledges and agrees that there will be a $15 check processing fee per payment, subject to applicable law. This authorization does not affect Borrower's obligations to pay when due all amounts payable under this Note, whether or not there are sufficient funds therefore in such accounts. The foregoing authorization is in addition to, and not in limitation of, any rights of setoff Lender may have. With regard to payments made by automatic withdrawal, Borrower has the right to stop payment of automatic withdrawals or revoke Borrower's prior authorization for automatic withdrawals by notifying Borrower's financial institution at least three (3) banking days before the scheduled date of transfer. Borrower will notify Lender of the exercise of Borrower's right to stop a payment or revoke Borrower's authorization for automatic withdrawals at least three (3) banking days before the scheduled date of transfer. All payments are to be applied first to the payment of all fees, expenses and other amounts due to Lender (excluding principal and interest), then to accrued interest, and the balance on account of outstanding principal; provided, however, that after an Event of Default (as defined below), payments will be applied to Borrower's obligations as Lender determines in its sole discretion.
Fees and Charges. A non-refundable origination fee paid by Borrower to Lender, in the amount and on the terms set forth in Borrower's agreement with Lender, will be deducted from Borrower's loan proceeds, so the loan proceeds delivered to Borrower or Borrower's designee will be less than the full amount of Borrower's borrowing request. Borrower acknowledges that the origination fee will be considered part of the principal of Borrower's loan and is subject to the accrual of interest. Borrower agrees to pay a fee of $15 if ACH transfers, electronic transfer, book entry transfer, Check 21, checks or such other means of transfer we determine to use are returned or fail due to insufficient funds in Borrower's account or for any other reason. Borrower acknowledges that the bank that holds Borrower's designated account may charge a fee in addition to this fee. Each attempt to collect a payment is considered a separate transaction, so an unsuccessful payment fee will be assessed for each failed attempt. If Borrower's payment is more than 15 days late, Lender may charge a late fee in an amount the greater of 5% of the outstanding payment or $15. If Borrower's payment is more than 30 days late, Lender shall charge such late fee. These fees may be collected using ACH transfers initiated by us from Borrower's designated account. Any such late fee assessed is immediately due and payable. Any payment received after 6:00 P.M., Eastern time, on a banking day is deemed received on the next succeeding banking day.
Prepayments and Partial Payments. Borrower may make any payment early, in whole or in part, without penalty or premium at any time. Any partial prepayment is to be applied against the principal amount outstanding and does not postpone the due date of any subsequent monthly installments, unless Lender otherwise agrees in writing. If Borrower prepays this Note in part, Borrower agrees to continue to make regularly scheduled payments until all amounts due under this Note are paid. Lender may accept late payments or partial payments, even though marked "paid in full", without losing any rights under this Note.
Use of Funds. Borrower certifies that the proceeds of the loan will not be used for the purpose of purchasing or carrying any securities or to fund any illegal activity. Borrower further certifies that the proceeds of the loan evidenced by this Note are intended to be used for short-term commercial purposes only.
Borrower certifies that the proceeds of this Note are intended to fund the purchase or sale of a minor asset, to correct for the Borrower’s cash-flow difficulties, or to advance some other commercial purpose.
Not an Investment. Borrower acknowledges that this Note is being issued in exchange for value received and that Borrower understands Lender’s primary purpose in providing such value to the Borrower is generally to assist in the growth of small businesses in the US and is specifically to support the Borrower’s cash-flow and is not for investment.
Small Business. Borrower certifies that it is a small business in accordance with Small Business Association and industry standards.
Security Interest. The obligations of the Borrower under this Note are secured by a lien on, full recourse to and pledge of all of the assets and property of Borrower (the “Collateral”). Upon and after an Event of Default, upon Lender’s request (the “Lender Request”), Borrower shall sell all the necessary quantity of the above pledged assets in order to pay in full the Principal and Interest. If within 90 days of the Lender Request, Borrower has not made this payment in full, Borrower shall assign the Collateral to Lender in full satisfaction of this Borrower’s obligations under this Note.
Borrower has, or immediately will acquire, full title to Collateral, shall at all time keep collateral free of all liens and claims whatsoever, other than the security interest under this Note and agreement.
Without prior written approval of the Lender, Borrower shall not dispose of any Collateral, except in the ordinary course of business.
To secure Borrower’s performance under this agreement, and the individual or individuals signing below as “Guarantor(s) (the “Guarantor(s)”) hereby guarantee Borrower’s performance hereunder. In order to support such guarantee, Guarantor(s) hereby grants to Lender a security interest in any and all Guarantor(s)’ deposit accounts, regardless of source, wherever found, standing in the name of Guarantor(s), whether established or designated and maintained pursuant to this agreement or not, as well as in the proceeds of those deposits. In the event of default under this agreement, Guarantor(s) stipulate (i) that all personal bank accounts standing in their names shall be subject to this agreement and ACH debit and (ii) all ACH debits, whether made against Guarantor(s) personal accounts, shall bear a commercial account code designation (CCD) for purposes of electronic collection via the ACH system, and (iii) Guarantor(s) irrevocably consent to Lender using any means available to locate such deposit accounts until such time as all amounts that are due have been satisfied.
Default. Borrower and Guarantor(s) will be deemed in default (each, an "Event of Default") of Borrower and Guarantor(s)'s obligations under this Note if Borrower and/or Guarantor(s): (i) fails to pay timely any amount due under this Note; (ii) files or has instituted against Borrower any bankruptcy or insolvency proceedings or makes any assignment of Collateral for the benefit of creditors; (iii) commits fraud or makes any material misrepresentation in this Note; or (iv) fails to abide by the terms of this Note. Upon the occurrence of an Event of Default, Lender may exercise all remedies available to it under applicable law, including demand upon Borrower and/or Guarantor(s) to immediately pay all amounts due under this Note. Lender reserves the right to report loan payment delinquencies of 30 days or longer to one or more consumer reporting agencies in accordance with applicable law. Borrower and Guarantor(s) agree to pay all costs of collecting any delinquent payments, including reasonable attorneys' fees, as permitted by applicable law.
As a primary inducement to Lender to enter into this Note with Borrower the Guarantor(s) executing this Note, and specifically with respect to this section (the “Guaranty”), whether by signing the Note through the power-of-attorney granted to Funding Community, Inc. or by acknowledging consent via the Site, electronic means, jointly or severally, unconditionally and irrevocably, guarantee the continuing full and faithful performance and payment by Borrower of each of its duties and obligations to Lender pursuant to this Note, as it now exists or is amended from time to time, with or without notice and all other obligations described in Indebtedness Guaranteed below (the “Indebtedness”). Guarantor(s) understands further that Lender may proceed directly against Guarantor(s) without first exhausting its remedies against Borrower or any other person or entity responsible therefore to it or any security held by Lender. This Guaranty will not be discharged or affected by the death of the Guarantor(s), will bind all heirs, administrators, representatives and assigns and may be enforced by or for the benefit of any successor Lender. Guarantor(s) understand that the inducement to Lender to extend credit to Borrower hereunder is consideration for this Guaranty, and that this Guaranty remains in full force and effect even if the Guarantor(s) receive no additional benefit from the Guaranty. This Guaranty is a payment guarantee and not a guarantee of collection only.
Amount of Guaranty
The amount of this Guaranty is limited to this note, inclusive of all interest, fees and charges associated with said note.
The Indebtedness guaranteed by this Guaranty includes any and all of Borrower’s indebtedness to Lender and is used in the most comprehensive sense and means and includes any and all of Borrower’s liabilities, obligations and debts to Lender, now existing or hereinafter incurred or created, including, without limitation, all loans, advances, interest, costs, debts, overdraft indebtedness, credit card indebtedness, lease obligations, other obligations, and liabilities of Borrowers, or any of them, and any present or future judgments against Borrowers, or any of them; and whether any such Indebtedness is voluntarily or involuntarily incurred, due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily, or as guarantor or surety; whether recovery on the Indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever; and whether the Indebtedness arises from transactions which may be void able on account of infancy, insanity, ultra vires, or otherwise.
Duration of Guaranty
This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to any Guarantor or to Borrower, and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor(s)’ other obligations under this Guaranty shall have been performed in full. If Guarantor(s) elect to revoke this Guaranty, Guarantor(s) may only do so in writing. Guarantor(s) written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor(s) written revocation. For this purpose and without limitation, the term "new Indebtedness" does not include Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. This Guaranty will continue to bind Guarantor(s) for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor(s)’ written notice of revocation, including any extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modifications of the Indebtedness granted after Guarantor(s)' revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to Indebtedness created both before and after Guarantor(s)’ death or incapacity, regardless of Lender's actual notice of Guarantor(s)’ death. Subject to the foregoing, Guarantor(s)' executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor(s) might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor(s) under this Guaranty. A revocation Lender receives from any one or more Guarantor(s) shall not affect the liability of any remaining Guarantors under this Guaranty.
Obligations of Married Persons
Any married person who signs this Guaranty hereby expressly agrees that recourse under this Guaranty may be had against both his or her separate property and community property.
Guarantor(s) authorize Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor(s)' liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or more additional secured loans to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrowers sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application -of payments and credits shall be made on the Indebtedness (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion my determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part.
Guarantor(s) Representations and Warranties
Guarantor(s) represent and warrant to Lender that (A) no representations or agreements of any kind have been made to Guarantor(s) which would limit or qualify in any way the terms of this Guaranty; (B) this Note, as Guarantor, is executed at Borrower's request and not at the request of Lender; (C) Guarantor(s) have full power, right and authority to enter into this Note as Guarantor; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor(s) and do not result in a violation of any law, regulation, court decree or order applicable to Guarantor(s); (E) Guarantor(s) have not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor(s)' assets, or any interest therein; (F) upon Lender's request, Guarantor(s) will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor(s) financial condition as of the dates the financial information is provided; (G) Lender has made no representation to Guarantor(s) as to the creditworthiness of Borrower, and (H) Guarantor(s) have established adequate means of obtaining from Borrower on a continuing basis information regarding Borrowers financial condition. Guarantor(s) agree to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor(s)' risks under this Guaranty, and Guarantor(s) further agree that, absent a request for information, Lender shall have no obligation to disclose to Guarantor(s) any information or documents acquired by Lender in the course of its relationship with Borrower.
Except as prohibited by applicable law, Guarantor(s) waive any right to require Lender to (A) make any presentment, protest, demand, or notice of any kind, including notice of change of any terms of repayment of the Indebtedness default by Borrower or any other guarantor or surety, any action or nonaction taken by Borrower, Lender, or any other guarantor or surety of Borrower, or the creation of new or additional Indebtedness; (B) proceed against any person, including Borrower, before proceeding against Guarantor(s); (C) proceed against any collateral for the Indebtedness, including Borrower's collateral, before proceeding against Guarantor(s); (D) apply any payments or proceeds received against the Indebtedness in any order; (E) give notice of the terms, time, and place of any sale of the collateral pursuant to the Uniform Commercial Code or any other law governing such sale; (F) disclose any information about the Indebtedness, the Borrower, the collateral, or any other guarantor or surety, or about any action or nonaction of Lender; or (G) pursue any remedy or course of action in Lender's power whatsoever.
Guarantor(s) also waive any and all rights or defenses arising by reason of (H) any disability or other defense of Borrower, any other guarantor or surety or any other person; (I) the cessation from any cause whatsoever, other than payment in full, of the Indebtedness; (J) the application of proceeds of the Indebtedness by Borrower for purposes other than the purposes understood and intended by Guarantor(s) and Lender; (K) any act of omission or commission by Lender which directly or indirectly results in or contributes to the discharge of Borrower or any other guarantor or surety, or the Indebtedness, or the loss or release of any collateral by operation of law or otherwise; (L) any statute of limitations in any action under this Guaranty or on the Indebtedness; or (M) any modification or change in terms of the Indebtedness, whatsoever, including without limitation, the renewal, extension, acceleration, or other change in the time payment of the Indebtedness is due and any change in the interest rate, and including any such modification or change in terms after revocation of this Guaranty on Indebtedness incurred prior to such revocation.
Guarantor(s) waive all rights and any defenses arising out of an election of remedies by Lender even though that the election of remedies, such as a non-judicial foreclosure with respect to security for a guaranteed obligation, has destroyed Guarantor(s)' rights of subrogation and reimbursement against Borrower Guarantor(s) waive all rights and defenses that Guarantor(s) may have because Borrower's obligation is secured by real property. This means among other things: (1) Lender may collect from Guarantor(s) without first foreclosing on any real or personal property collateral pledged by Borrower. (2) If Lender forecloses on any real property collateral pledged by Borrower: (a) the amount of Borrower's obligation may be reduced only by the price for which the collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price. (b) Lender may collect from Guarantor(s) even if Lender, by foreclosing on the real property collateral, has destroyed any right Guarantor(s) may have to collect from Borrower. This is an unconditional waiver of any rights and defenses Guarantor(s) may have because Borrower's obligation is secured by real property. Guarantor(s) understand and agree that the foregoing waivers are waivers of substantive rights and defenses to which Guarantor(s) might otherwise be entitled under state and federal law. The rights and defenses waived include, without limitation, those provided by California laws of suretyship and guaranty, anti-deficiency laws, and the Uniform Commercial Code. Guarantor(s) acknowledge that Guarantor(s) have provided these waivers of rights and defenses with the intention that they are fully relied upon by Lender. Until all Indebtedness is paid in full, Guarantor(s) waive any right to enforce any remedy Lender may have against the Borrower or any other guarantor, surety, or other person, and further, Guarantor(s) waive any right to participate in any collateral for the Indebtedness now or hereafter held by Lender.
In addition to the waivers set forth herein, If now or hereafter Borrower is or shall become insolvent and the Indebtedness shall not at all times until paid be fully secured by collateral pledged by Borrower, Guarantor(s) hereby forever waives and gives up in favor of Lender and Borrower, and Lenders and Borrower's respective successors, any claim or right to payment Guarantor(s) may now have or hereafter have or acquire against Borrower, by subrogation or otherwise, so that at no time shall Guarantor(s) be or become a "creditor" of Borrower within the meaning of the Federal bankruptcy laws.
Right of Setoff
To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantor(s)' accounts with Lender (whether checking, savings, credit card or some other account). This includes all accounts Guarantor(s) hold jointly with someone else and all accounts Guarantor(s) may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Guarantor(s) authorize Lender, to the extent permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these accounts to pay what Guarantor(s) owe under the terms of this Guaranty.
Subordination of Borrower’s Debt to Guarantor(s)
Guarantor(s) agree that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be superior to any claim that Guarantor(s) may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor(s) hereby expressly subordinate any claim Guarantor(s) may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor(s) shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor(s) hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor(s) shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor(s) agree, and Lender is hereby authorized, in the name of Guarantor(s), from time to time to execute and file financing statements and continuation statements and to execute such other documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty.
This Note is not negotiable. Notwithstanding the foregoing, Lender may assign this Note, without notice to Borrower. Borrower may not assign this Note without the prior written consent of Lender. Borrower understands there is no common trading for speculation or investment in this Note or others of its kind. This Note inures to the successors, permitted assigns, heirs and representatives of Borrower and Lender.
Any changes to this Note must be in writing signed by Borrower and Lender. Notices will be mailed electronically to the addresses provided.
Controlling Law. Lender is located in the State of New York and this Note has been executed and delivered in the State of New York and is deemed a contract made under such state's law. The provisions of this Note will be governed by federal laws and the laws of the State of New York to the extent not preempted, without regard to any principle of conflicts of law. The unenforceability of any provision of this Note shall not affect the enforceability or validity of any other provision of this Note.
KANSAS (and IOWA residents if the principal amount of this loan exceeds $20,000): IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. LENDER MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
MARYLAND RESIDENTS ONLY: Lender elects to make this loan pursuant to Subtitle 10 (Credit Grantor Closed End Credit provisions) of Title 12 of the Maryland Commercial Law Article only to the extent that such provisions are not inconsistent with Lender's authority under federal law (12 U.S.C. § 85, § 1463(g), or § 1831d, as appropriate) and related regulations and interpretations, which authority Lender expressly reserves.
MISSOURI AND NEBRASKA RESIDENTS: ORAL LOAN AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF SUCH DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWER(S) AND THE LENDER AND ANY HOLDER OF THIS NOTE FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
NEW JERSEY RESIDENTS: The section headings of the Note are a table of contents and not contract terms. Portions of this Note with references to actions taken to the extent of applicable law apply to acts or practices that New Jersey law permits or requires. In this Note, actions or practices (i) by which Lender is or may be permitted by "applicable law" are permitted by New Jersey law, and (ii) that may be or will be taken by Lender unless prohibited by "applicable law" are permitted by New Jersey law.
NEW YORK, RHODE ISLAND and VERMONT RESIDENTS: Borrower and Guarantor each understand and agree that Lender may obtain a consumer credit report in connection with this application and in connection with any update, renewals for extension of any credit as a result of this application. If Borrower or Guarantor asks, Borrower will be informed whether or not such a report was obtained, and if so, the name and address of the agency that furnished the report. Borrower and each Guarantor also understands and agrees that Lender may obtain a consumer credit report in connection with the review or collection of any loan made to Borrower as a result of this application or for other legitimate purposes related to such loans.
WISCONSIN RESIDENTS ONLY: For married Wisconsin residents, Guarantor(s) signature confirms that this loan obligation is being guaranteed in the interest of Borrower's marriage or family. No provision of any marital property agreement (pre-marital agreement), unilateral statement under § 766.59 of the Wisconsin statutes or court decree under § 766.70 adversely affects Lender's interest unless, prior to the time that the loan is approved, Lender is furnished with a copy of the marital property agreement, statement, or decree or have actual knowledge of the adverse provision. If this loan for which Borrower is applying is granted, Guarantor(s) will notify Lender if Guarantor(s) have a spouse who needs to receive notification that credit has been extended to Borrower and is being guaranteed by Guarantor.