Management Prepared Financial Statements: Borrower will deliver to Lender quarterly management prepared financial statements, balance sheets, and profit and loss statements for the quarter then ended, certified to by the president, chief financial officer or manager of Borrower. Such reports will set forth the financial affairs and true condition of Borrower for such time period and will be delivered to Lender no later than forty five (45) days after the end of each quarter.
Projections: Upon request, Borrower shall deliver to Lender within forty five (45) days financial projections including a balance sheet, income statements, and statement of cash flows together with assumptions for the following thirteen (13) weeks/twelve (12) months broken down weekly/monthly.
Tax Returns: Upon request, Borrower will provide Lender with current annual tax returns not later than fifteen (15) days after the filing thereof.
Accounts Receivable and Accounts Payable Agings: Upon request, Borrower will furnish to Lender quarterly accounts receivable aging reports and accounts payable aging reports, certified to by the president, chief financial officer or manager of Borrower, no later than fifteen (15) days after the end of each quarter.
Appraisal and Inspection: The Lender shall have the right to have the Eligible Equipment appraised or inspected on an annual basis. At every appraisal or inspection, the loan balance needs to be at 80% Net FLV or lower and must be paid down at the time of the next scheduled Note payment to stay in formula. If the Loan does not close within forty-five (45) days of the initial inspection, Lender may perform a reinspection of the Collateral at the Borrower’s expense. After the occurrence of a Default, there shall be no limit on the number of appraisals and inspections, and Borrower shall reimburse Lender for costs related to such appraisals or inspections. Prior to the occurrence of a Default, Lender will give Borrower seventy-two (72) hours prior notice and such inspection will only be during normal business hours. Borrower authorizes Lender to debit the amount of the Appraisal Expense (as defined below) from Borrower’s bank account via ACH transfer as more fully set forth in the ACH Authorization Agreement. In addition, at all times Lender shall have the right to verify all Accounts, whether in its name or using a fictitious name.
13.Fees and Expenses.
Loan Fee. At closing of the Loan, Borrower will pay Lender a loan fee in an amount equal to four percent (4%) of the stated principal amount of the Note, which will be fully earned as of such date and not refundable.
Appraisal Expense. Borrower shall pay Lender $7,500 per appraisal or inspection performed by or for the benefit of Lender (the “Appraisal Expenses”).
Late Charges. Borrower shall pay to Lender a late charge for each, and every payment not received by Lender on its due date of $500.00. In the event Borrower has been late in making payments under the Note on more than three (3) separate occasions, from that point forward Borrower shall pay Lender a late charge of $750.00 for each and every payment not received by Lender. Such late charges shall be to cover the additional costs in connection with handling of late payments. The imposition of a late charge shall not affect the rights of Lender to declare a Default, to impose a default interest rate under the Note or to impose the Monitoring Fees and shall not be a waiver of any of Lender’s rights and remedies under the Loan Documents or applicable law.
Monitoring Fees. In the event that Borrower has been late in making payments under the Note on more than three (3) separate occasions:
| a. | There shall be no limit on the number of appraisals or inspections to be performed by or for the benefit of Lender, and no limit to the actual Appraisal Expenses incurred by Lender; and |
| b. | Borrower shall pay Lender a $10,000.00 monitoring fee to be paid on the earlier of the Maturity Date of the Note or the earlier repayment (including prepayment or acceleration) of the Note. |
