U.S. Small Business Administration

NOTE

SBA Loan #

PPP 14482078-04

SBA Loan Name

Nicholas Financial, Inc.

Date

May 22, 2020

Loan Amount

$3,243,900.00

Interest Rate

1.00%; Fixed Rate

Borrower

Nicholas Financial. Inc. a Florida corporation

Operating Company

N/A

Lender

Fifth Third Bank, National Association. a federally chartered institution

1.

PROMISE TO PAY:

In return for the Loan, Borrower promises to pay to the order of Lender the amount of

Three million two hundred forty three thousand nine hundred and 00/100

Dollars,

interest on the unpaid principal balance, and all other amounts required by this Note.

2.

DEFINITIONS:

SBA Form 147 (06/03/02) Version 4.1

Page 1/6

3.

PAYMENT TERMS:

Repayment terms:

The interest rate is 1% per year. The interest rate may only be changed in accordance with SOP 50 10.

Borrower must pay principal and interest payments of $181,646.75 every month, beginning seven months from the month this Note is dated; payments must be made on the 1st calendar day in the months they are due.

Lender will apply each installment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fees, and will apply any remaining balance to reduce principal.

Loan Prepayment:

Notwithstanding any provision in this Note to the contrary:

Borrower may prepay this Note. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must:

a.  Give Lender written notice;

b.  Pay all accrued interest; and

c.  If this prepayment is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days' interest from the date lender receives the notice, less any interest accrued during the 21 days and paid under subparagraph b., above.

If Borrower does not prepay within 30 days from the date Lender receives the notice, Borrower must give Lender a new notice.

All remaining principal and accrued interest is due and payable 2 years and 0 months from date of Note.

SBA Form 147 (06/03/02) Version 4.1

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4.

DEFAULT:

A.

Fails to do anything required by this Note and other Loan Documents;

B.

Defaults on any other loan with Lender;

C.

Does not preserve, or account to Lender's satisfaction for, any of the Collateral or its proceeds;

D.

Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;

E.

Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;

F.

Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower's ability to pay this Note;

G.

Fails to pay any taxes when due;

H.

Becomes the subject of a proceeding under any bankruptcy or insolvency law;

I.

Has a receiver or liquidator appointed for any part of their business or property;

J.

Makes an assignment for the benefit of creditors;

K.

Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower's ability to pay this Note;

L.

Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender's prior written consent; or

M.

Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay this Note.

5.

LENDER'S RIGHTS IF THERE IS A DEFAULT:

A.

Require immediate payment of all amounts owing under this Note;

B.

Collect all amounts owing from any Borrower or Guarantor;

C.

File suit and obtain judgment;

D.

Take possession of any Collateral; or

E.

Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

6.

LENDER'S GENERAL POWERS:

A.

Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;

B.

Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney's fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;

C.

Release anyone obligated to pay this Note;

D.

Compromise, release, renew, extend or substitute any of the Collateral; and

E.

Take any action necessary to protect the Collateral or collect amounts owing on this Note.

SBA Form 147 (06/03/02) Version 4.1

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7.

WHEN FEDERAL LAW APPLIES:

8.

SUCCESSORS AND ASSIGNS:

9.

GENERAL PROVISIONS:

A.

All individuals and entities signing this Note are jointly and severally liable.

B.

Borrower waives all suretyship defenses.

C.

Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral.

D.

Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

E.

Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

F.

If any part of this Note is unenforceable, all other parts remain in effect.

G.

To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale.

SBA Form 147 (06/03/02) Version 4.1

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10.

STATE-SPECIFIC PROVISIONS:

SBA Form 147 (06/03/02) Version 4.1

Page 5/6

11.

BORROWER'S NAME(S) AND SIGNATURE(S):

Nicholas Financial, Inc.

a Florida corporation

/s/ Doug Marohn

5/27/20

Signature of Authorized Representative of Borrower

Date

Doug Marohn

President & CEO

Name of Authorized Representative of Borrower

Title

  A. Lender Information

  Lender Name:

Fifth Third Bank, National Association

Lender Location ID:

58036

  Address:

38 Fountain Square Plaza

City:

Cincinnati

St:

OH

Zip:

45202

  Lender Contact:

Michael Shepherd

Ph:

(513)534-5300

Cell or Ext:

(        )       -

  Contact Email:

michael.shepherd@53.com

Title:

SVP

  C. Loan Structure Information

  Amount of Loan Request:

$ 3,243,900.00

Guarantee %:

100%

Loan Term in # of Months:

24

Payment:

Deferred 6 mos.

Applicant must provide documentation to Lender supporting how the loan amount was calculated in accordance with the Paycheck Protection Program Rule and the CARES Act, and Lender must retain all such supporting documentation in Lender's file.

Interest Rate:

1%

  E. General Eligibility (If the answer is no to either, the loan cannot be approved)

•

The Applicant has certified to the Lender that (1) it was in operation on February 15, 2020 and had employees for whom the Applicant paid salaries and payroll taxes or paid independent contractors, as reported on Form(s) 1099-MISC, (2) current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant, (3) the funds will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, and (4) the Applicant has not received another Paycheck Protection Program loan.

☒   Yes    ☐    No

•

The Applicant has certified to the Lender that it (1) is an independent contractor, eligible self-employed individual, or sole proprietor or (2) employs no more than the greater of 500 or employees or, if applicable, meets the size standard in number of employees established by the SBA in 13 C.F.R. 121.201 for the Applicant's industry.

☒   Yes    ☐    No

  F. Applicant Certification of Eligibility (If not true, the loan cannot be approved)

•

The Applicant has certified to the Lender that the Applicant is eligible under the Paycheck Protection Program Rule.

☒   True

  G. Franchise/License/Jobber/Membership or Similar Agreement (If applicable and no, the loan cannot be approved)

•

The Applicant has represented to the Lender that it is a franchise that is listed in the SBA's Franchise Directory.

☐   Yes    ☒    No

SBA Form 2484 (Revised 04/20)

1

  H. Character Determination (If no, the loan cannot be approved)

•

The Applicant has represented to the Lender that neither the Applicant (if an individual) nor any individual owning 20% or more of the equity of the Applicant is subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction, or is presently incarcerated, or on probation or parole.

☒   Yes    ☐    No

•

The Applicant has represented to the Lender that neither the Applicant (if an individual) nor any individual owning 20% or more of the equity of the Applicant has within the last 5 years, for any felony: 1) been convicted; 2) pleaded guilty; 3) pleaded nolo contendere; 4) been placed on pretrial diversion; or 5) been placed on any form of parole or probation (including probation before judgment).

☒   Yes    ☐    No

  I. Prior Loss to Government/Delinquent Federal Debt (If no, the loan cannot be approved)

•

The Applicant has certified to the Lender that neither the Applicant nor any owner (as defined in the Applicant's SBA Form 2483) is presently suspended, debarred, proposed for debarment, declared ineligible, voluntarily excluded from participation in this transaction by any Federal department or agency, or presently involved in any bankruptcy.

☒   Yes    ☐    No

•

The Applicant has certified to the Lender that neither the Applicant nor any of its owners, nor any business owned or controlled by any of them, ever obtained a direct or guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted in the last 7 years and caused a loss to the government.

☒   Yes    ☐    No

  J. U.S. Employees (If no, the loan cannot be approved)

•

The Applicant has certified that the principal place of residence for all employees included in the Applicant's payroll calculation is the United States.

☒   Yes    ☐    No

  K. Fees (If yes, Lender may not pass any agent fee through to the Applicant or offset or pay the fee with the proceeds of this loan)

•

Is the Lender using a third party to assist in the preparation of the loan application or application materials, or to perform other services in connection with this loan?

☐   Yes    ☒    No

•

The Lender has complied with the applicable lender obligations set forth in paragraphs 3.b(i)-(iii) of the Paycheck Protection Program Rule.

•

The Lender has obtained and reviewed the required application (including documents demonstrating qualifying payroll amounts) of the Applicant and will retain copies of such documents in the Applicant's loan file.

•

Neither the undersigned Authorized Lender Official, nor such individual's spouse or children, has a financial interest in the Applicant.

Authorized Lender Official:

Alicia Moge

Date:

5/27/20

Signature

Type or Print Name:

Alicia Moge

Title:

Officer

SBA Form 2484 (Revised 04/20)

2

Account name:

Account Type:

Account Number:

Account name: Nicholas Financial, Inc

Account Type: DDA

Account Number: 4862503661

Routing Number: 121000248

Authorized Signer:

Doug Marohn, President / CEO

Date:

5/27/20

Name/Title

Phone:

727-431-6114

Email:

Doug.marohn@nicfn.com

Fee Disclosure and Compensation Agreement

For use with 7(a) and 504 Loan Programs

OMB Control No.: 3245-0201

Expiration Date: 08/31/2021

1.

Loan packaging services, as defined in SOP 50 10, performed by an SBA Lender or other third party (This includes services performed by an individual/entity that is a Lender Service Provider (LSP) (7(a) only) or has an SBA-approved Professional Services Contract (504 only) with the SBA Lender who is acting as a loan packager or referral agent employed by the Applicant);

2.

Financial statement preparation specifically for the loan application; and/or

3.

Consulting, Broker, or Referral services paid by the Applicant, SBA Lender, or Third Party Lender (504 only).

1.

Applicant's accountant performing services in the normal course of business;

2.

Any attorney in connection with the 7(a) or 504 loan closing;

3.

A state-certified or state-licensed appraiser employed by the SBA Lender to appraise collateral;

4.

An LSP performing services for the Lender under an SBA-reviewed LSP agreement (7(a) only) or an individual performing services for the CDC under an SBA-approved professional services contract (504 only);

5.

An individual employed by the SBA Lender to perform a business valuation in connection with the SBA loan;

6.

An environmental professional employed by the SBA Lender to conduct an environmental assessment of the collateral; and/or

7.

A real estate agent who is receiving a commission for the sale of real estate.

SBA Form 159 (04-18) Previous Editions Obsolete

Page 1 of 3

Fee Disclosure and Compensation Agreement

For use with 7(a) and 504 Loan Programs

OMB Control No.: 3245-0201

Expiration Date: 08/31/2021

☒ 7(a) loan

☐ 504 loan

SBA Loan Name:

Nicholas Financial, Inc.

SBA Loan Number (no spaces):

PPP14482078-04

SBA Lender FIRS (no spaces):

 A363295

SBA Lender Legal Name:

Fifth Third Bank, National Association

Services Performed by (Name of Agent):

Fifth Third Bank, National Association

Agent Contact Person:

Agent Address:

Type of Service

Amount Paid by Applicant*

Amount Paid by SBA Lender*

Loan packaging

0.00

0.00

Financial statement preparation for loan application

Broker or Referral services

Consultant services

Other:                                                      

Total compensation paid by:

Applicant: $ ^0.00                                             

SBA Lender: $  ^0.00                                                               

☐

Itemization and supporting documentation is attached. (Itemization and supporting documentation is required if the compensation paid exceeds $2,500. Itemization must include: 1) a detailed explanation of the work performed; and 2) the hourly rate and the number of hours spent working on each activity.) Note: SBA, in its discretion, may request an itemization and supporting documentation for any fee charged in connection with an SBA loan application, regardless of the amount.

☐ CDC received referral fee from a TPL

Amount of Fee:

$ 

TPL Name:

TPL Address:

/s/ Doug Marohn

5/27/20

Signature of Authorized Representative of Applicant

Date

Doug Marohn

President / CEO

Print Name

Title

SBA Form 159 (04-18) Previous Editions Obsolete

Page 2 of 3

Fee Disclosure and Compensation Agreement

For use with 7(a) and 504 Loan Programs

OMB Control No.: 3245-0201

Expiration Date: 08/31/2021

Signature of Authorized Representative of Agent

Date

Print Name

Title

/s/ Alicia Moge

5/27/20

Signature of Authorized Representative of SBA Lender

Date

Alicia Moge

Officer

Print Name

Title

•

To the Federal, State, local or foreign agency or professional organization which investigates, prosecutes, or enforces violations of statutes, rules, regulations, or orders, or which undertakes procurement of goods or services, when SBA determines that disclosure will promote programmatic integrity or protect the public interest.

•

To SBA employees, contractors, interns, volunteers, and other regulators or legal authorities for the review of Loan Agent fees and activities and for the review of loans generated by Loan Agents (e.g. for performance and other trends).

•

To GSA and the public for publication of Loan Agent suspensions, revocations, debarments, other enforcement actions, and exclusions in the System Award's Management's (SAM) Excluded Parties List System ("EPLS") or any successor system consistent with Executive Order 12549 and other applicable law.

•

To other regulators, SBA employees, contractors, interns, and/or volunteers for regulatory purposes.

•

See 77 FR 61467 (October 9, 2012), 77 FR 15835 (March 16, 2012), 74 FR 14890 (April 1, 2009), and as amended from time-to-time for additional routine uses.

SBA Form 159 (04-18) Previous Editions Obsolete

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