General

LOAN AGREEMENT

This Loan Agreement (“Agreement”) is a contract between Merchant, Celtic Bank Corporation and Square Capital, LLC and is entered into on the Loan Acceptance Date set forth above.

Definitions

a. “Applicant” means the individual executing this Agreement who has the legal capacity and all necessary authority to bind Merchant to this Agreement.

b. “Bank” means Celtic Bank Corporation, including its agents and assignees, as the originator and issuer of Your loan.

c. “Governmental Authority” means any federal, state, local, foreign or other court, governmental department, commission, board, bureau, agency or instrumentality.

d. “Linked Bank Account(s)” means any valid U.S. bank, debit card, or other transaction account used for business purpose You provide to Square Capital for the purpose of the deposit of the Loan Amount and repayment of your Loan via ACH withdrawal.

e. “Loan Acceptance Date” means the date You enter into this Agreement, and is set forth in the summary box above.

f. “Loan Amount” is the dollar amount of funds extended to You by Bank, in the amount specified in the summary box above.

g. “Loan Balance” is the total amount that You are obligated to repay and is equal to the sum of the Loan Amount and the Total Borrowing Cost specified in the summary box above.

h. “Loan Maturity Date” means the date, as specified in the summary box above, on which the outstanding Loan Balance is due and payable in full.

i. “Loan Term” means the total period of time, with the payment cadence set forth in “Payment Frequency” in the summary box above (ie. monthly, bi-weekly, weekly), that your obligation is scheduled for full repayment.

j. “Merchant”, “You” or “Your” means the business identified by the Legal Business Name, which may be further identified by the “Doing Business As” name above.

k. “Origination Date” means the date the Loan Amount specified in the summary box above is approved to be disbursed to your Linked Bank Account.

l. “Parties” means, collectively, Merchant, Bank and Square Capital.

m. “Partner” means the entity specified in the summary box above.

n. “Payment Frequency” means the recurrent interval between payments due over the Loan Term, as set forth in the summary box above.

o. “Prohibited Industries” means any of the following businesses or business activities: (1) any illegal activity or goods, (2) paraphernalia that may be used for illegal activity (3) buyers or membership clubs, including dues associated with such clubs, (4) credit counseling or credit repair agencies, (5) credit protection or identity theft protection services, (6) direct marketing or subscription offers or services, (7) infomercial sales, (8) internet/mail order/telephone order pharmacies or pharmacy referral services (where fulfillment of medication is performed with an internet or telephone consultation, absent a physical visit, including re-importation of pharmaceuticals from foreign countries), (9) unauthorized multi-level marketing businesses, (10) inbound or outbound telemarketers, (11) prepaid phone cards or phone services, (12) rebate based businesses, (13) up-sell merchants, (14) bill payment services, (15) betting, including lottery tickets, sports related gambling, casino gaming chips, off-track betting, and wagers at races, (16) manual or automated cash disbursements, (17) prepaid cards, checks, insurance or other financial merchandise or services, (18) sales of money-orders or foreign currency, (19) wire transfer money orders, (20) high-risk products and services, including telemarketing sales, (21) automated fuel dispensers, (22) adult entertainment oriented products or services (in any medium, including internet, telephone, or printed material), (23) sales of (i) firearms, firearm parts or hardware, and ammunition; or (ii) weapons and other devices designed to cause physical injury (24) internet/mail order/telephone order of age restricted products (e.g., tobacco), (25) occult materials, (26) hate or harmful products, (27) escort services, (28) bankruptcy attorneys or collection agencies engaged in the collection of debt or (29) merchants who self-identify as nongovernmental organizations, charities, and political organizations.

p. “Repayment Start Date” means the date Your repayment obligations begin and is specified in the summary box above.

q. “Scheduled Payment” means the amount due on your loan as of each Scheduled Payment Due Date as set forth in the summary box above.

r. “Scheduled Payment Due Date” means the date a Scheduled Payment is due starting on the Repayment Start Date and then repeating according to the Payment Frequency for the Loan Term. For example, with respect to a monthly Payment Frequency, if your loan is originated on the 29th, 30th, or 31st, your Scheduled Payment Due Date will be the 1st of the month after next. For example, if your loan is accepted on January 29th, then your Repayment Start Date will be due on March 1st, and Scheduled Payment Due Dates after that will be due on the 1st of the following months for the Loan Term.

s. “Square Capital” means Square Capital, LLC, the servicer of Your loan, as agent on behalf of Bank and otherwise as agent of Bank.

t. “Total Borrowing Cost” means the one time flat fee assessed by Bank for entering into this Agreement, in the amount specified in the summary box above.
Information About Your Loan

a. Extension of Credit. Bank is extending to You the Loan Amount and, in exchange, You agree as follows:

i. Business Purpose. You acknowledge and agree that funds received under this Agreement are for business purposes only and will not be used for personal, family or household purposes. You understand that You are not receiving a consumer loan, and that statutory and regulatory protections for consumers will not apply to Your loan. You also understand that Bank may not confirm whether the use of any funds provided conforms to this section. You agree that a breach of this section will not affect Bank’s right to (a) enforce Your promise to pay all amounts owed under this Agreement, regardless of the purpose for which the funds are in fact obtained, or (b) use any remedy legally available to Bank, even if that remedy would not have been available had the funds been provided for consumer purposes.

ii. Obligation to Repay. You agree (a) to repay the Scheduled Payment on each Scheduled Payment Due Date and (b) to repay the Loan Balance in full by the Loan Maturity Date. While you have an outstanding Loan Balance, You direct Bank to direct Square Capital (or its agent) to process an ACH debit for the Scheduled Payment from your Linked Account at the Payment Frequency. Your repayments will be applied to and reduce the amount of your Loan Balance until the balance is paid in full. Your repayments begin on the Repayment Start Date.

iii. Application of Repayments. Any amounts paid by you or otherwise collected will be applied (i) first to any late fees owed, (ii) then to past due Scheduled Payment(s), (iii) then to the current Scheduled Payment due, and (iv) then toward any remaining Loan Balance.

iv. Late Payments. You will be charged a 2% fee assessed monthly on any past due amount that is not paid by the next Scheduled Payment Due Date.Your loan is considered past due if you do not make your Scheduled Payment on or prior to your Scheduled Payment Due Date.

v. Early Repayment. You may repay Your outstanding Loan Balance in full or in part at any time without penalty by contacting the Square Capital Support Center to arrange for repayment.
You may also repay Your outstanding Loan Balance in full or in part at any time without penalty by sending a check (with Your email address in the “Memo” field) to:

Square Capital Program
Attn: Capital Servicing
29053 Network Place
Chicago, IL 60673-1290

vi. ACH Authorization. You authorize Bank to credit Your Linked Bank Account with Your Loan Amount or where otherwise required for servicing. If You decide to prepay Your Loan Balance, or need to make payment to satisfy Your Scheduled Payment or other amounts due under this Agreement, You authorize Square Capital, as the Bank’s agent to debit any Linked Bank Account. If any debit attempt to Your Linked Bank Account fails, You grant Square Capital at each instance a new, original authorization to make new debit attempts in an amount less than the amount then currently due or an amount reduced from the previous debit from Your Linked Bank Account.You acknowledge and agree to be bound by NACHA’s rules for business-related ACH debits and credits.

vii. Cancellation Period. You may cancel this Agreement any time prior to the Repayment Start Date. If You cancel, Bank will debit the Loan Amount from Your Linked Bank Account. Your loan will not be deemed cancelled if the debit to Your Linked Bank Account is unsuccessful.
Termination and Default.

a. Termination of Agreement. Except as otherwise stated in this Agreement, this Agreement will remain in full force and effect until the entire Loan Balance has been repaid in full.

b. Events of Default. You will be in default of this Agreement if You:

i. Misrepresent a fact in Your loan application;

ii. Fail to comply with terms of the Agreement, including specifically but without limitation, Your representations, warranties, and covenants at paragraph 6 below, as well as all other representations, warranties, and covenants in this Agreement;

iii. File or become the subject of a bankruptcy or insolvency proceeding; or

iv. Do not repay Your Loan Balance or any Scheduled Payment when due in accordance with the terms of this Agreement.

c. Rights upon Default. If You default, Square Capital may, upon written notice to You, (i) demand immediate repayment of the Loan Balance, which will be paid by You within five (5) business days of receipt of such demand, unless a longer period is specified and/or (ii) debit any past due amounts from Your Linked Bank Account; pursuant to the terms of this Agreement, and in the instance of nonpayment of Your Loan Balance will enforce those rights solely against Merchant’s business assets, including but not limited to the property and interests described in Section 2(a)(ix) above. This does not limit Your repayment obligations in this Agreement and Bank’s enforcement rights.

d. Indemnification. Merchant will indemnify and hold harmless Bank and Square Capital (and their respective employees, directors, agents, affiliates and representatives) from and against any cost, loss or liability including interest, penalties, reasonable attorneys’ fees and expenses resulting from Your misrepresentation or breach of warranty, default or breach of any covenant in this Agreement.

e. Costs to Enforce Payable by Merchant. Merchant will pay all reasonable costs associated with a breach by Merchant of any of its obligations, covenants or any of the representations and warranties of Merchant under this Agreement and the enforcement thereof. These “reasonable costs” include the costs, including attorneys’ fees, associated with defending, protecting, or enforcing the rights under this Agreement including in any bankruptcy proceeding.
Relationship of the Parties

a. Unaffiliated Parties. Square Capital and Bank are not affiliated.

b. Obligation to Provide Transactional Information. Merchant agrees to provide to Bank and Square Capital, upon request, transaction files maintained by Merchant, and any other information related to the transactions contemplated by this Agreement.

c. Further Inquiries. If Bank or Square Capital requires additional information You will respond to those requests in the time frame requested.

d. Consent to Share Data. You acknowledge and agree that you have read and agree to Square Capital’s Privacy Policy, Bank’s Privacy Policy and Partner’s Privacy Policy. You further acknowledge and agree that Bank and Square Capital may share information concerning your loan with Partner in order for Square Capital to service and administer your Loan.

e. Transfer of Servicing. In the event Square Capital transfers the servicing of your loan, you hereby agree that you will (i) continue making Scheduled Payments on the agreed upon Scheduled Payment Due Dates during the remainder of the Loan Term, and (ii) comply with alternative payment timing, instructions and methods as provided by the designated service provider. In the event that alternative payment timing, instructions and methods are required, you will be provided with reasonable notification of those requirements, including a statement reflecting your outstanding Loan Balance and any change to your Scheduled Payment Due Dates, to be delivered within a reasonable time.
Consent for Electronic Signatures; Additional Communications.

a. Electronic Signature. In order to receive the Loan Amount, Bank must provide You certain disclosures required by law. By submitting Your application and agreeing to the terms of this Agreement, which You collectively adopt as Your electronic signature, You consent and agree that:

i. Bank can provide all disclosures required by law and other information about Your legal rights and duties to You electronically, including by e-mail, a Website portal or mobile phone application.

ii. Your electronic signature on agreements and documents has the same effect as if You signed them in ink and is evidence of Your intention to be bound by this Agreement.

iii. Electronic disclosures have the same meaning and effect as if You were provided paper disclosures.

iv. Disclosures are considered received by You within 24 hours of the time posted to Bank’s website, or within 24 hours of the time emailed to You unless Bank receives notice that the email was not delivered.

v. Bank reserves the right to cancel this electronic disclosure service, change the terms of use of this service or send disclosures in paper form at any time.

vi. Bank is responsible for sending notice of the disclosures to You electronically, but Bank is not responsible for any delay or failure in Your receipt or review of the email notices.

b. Access to Disclosures. You understand that in order to access and retain the electronic disclosures You will need the following:

i. A computer or mobile device with Internet or mobile connectivity.

ii. For desktop website-based Communications:
1. Latest web browser that includes 256-bit encryption.
2. The browser must have cookies enabled. Use of browser extensions may impair full website functionality.
3. Minimum recommended browser standards are Mozilla Firefox latest version (see http://www.mozilla.com for latest version), Apple Safari latest version (see http://www.apple.com/safari for latest version), or Chrome latest version (see http://www.google.com/chrome for latest version).
iii. For mobile-based Communications:
1. A latest device operating system that supports text messaging, downloading, and applications from the Apple App Store or Google Play store; and
2. The latest version of Safari or Chrome on iOS or the latest version of Chrome for Android.
iv. Access to the email address provided in connection with your loan.

v. Sufficient storage space to save Communications and/or a printer to print them.

vi. Use of spam filters may block or re-route emails from senders not listed in your email address book.

c. Confirmation. You agree and confirm that You have access to the necessary equipment to receive, access and print any disclosures that may be provided in electronic form.

d. Withdrawal. You will not seek to withdraw Your consent for electronic signature and disclosures while You have an outstanding Loan Balance.

e. Additional Communications. You consent to accept and receive communications from Bank and Square Capital, including e-mail, text messages, calls, and push notifications to the cellular telephone number You provide. These non-telemarketing communications may be generated by automatic telephone dialing systems which will deliver pre-recorded messages, including for the purposes of secondary authentication, receipts, reminders and other notifications. Standard message and data rates applied by Your cell phone carrier may apply to the text messages Bank or Square Capital sends You. You may only opt-out of receiving text message communications by replying STOP to text messages.
Merchant Covenants

Merchant irrevocably agrees that while there is an outstanding Loan Balance, Merchant will:

a. Terms of Service. Comply with any applicable terms of service or required terms as required by Partner and not engage in any Prohibited Industry, in each case, for the duration of this Agreement;

b. Conduct of Business. Maintain Merchant’s business, in substantially the same manner as it exists as of the Loan Acceptance Date. Merchant will conduct its business under the same name and in a manner consistent with past practice unless Merchant provides prior written notification to Square Capital.

c. Control of Business. Not allow another person or company, including without limitation a franchisor company (if Merchant is a franchisee), to assume or take over the operation and/or control of Merchant’s business or business location, whether physical or virtual;

d. Sale of Business. Not sell, dispose, convey or otherwise transfer any of Merchant’s business or assets (other than in the ordinary course of business); and

e. Cooperation. Cooperate fully with Square Capital to take all necessary actions to effectuate each of Merchant’s obligations in this Agreement, including but not limited to signing any and all documents Bank or Square Capital deems necessary and furnishing Bank or Square Capital with such information (including updated financial statements) as Bank or Square Capital may reasonably request from time to time.
Merchant Representations and Warranties

Merchant represents and warrants that as of the Loan Acceptance Date and until full repayment of Loan Balance:

a. Capacity. The Applicant executing this Agreement is authorized on behalf of Merchant to do so, is at least eighteen (18) years of age and has the legal capacity and all necessary authority to bind Merchant to this Agreement;

b. Third Party Interest. Merchant’s assets are not subject to any claims, charges, liens, restrictions or security interests where the third party holding a security interest in Merchant’s assets is currently exercising its remedies;

c. Approvals and Taxes. Merchant possesses and is in compliance with all permits, licenses, approvals, consents and any other authorizations necessary to conduct its business. Merchant is in compliance with, and the execution of this Agreement and consummation of the transaction contemplated in this Agreement will not conflict with (i) any and all applicable federal, state and local laws and regulations, (ii) any agreements to which Merchant is a party, and (iii) Merchant’s articles or certificate of incorporation, bylaws, or other organizational documents. Merchant possesses all requisite permits, authorizations and licenses to own, operate and lease its properties and to conduct the business in which it is presently engaged. All federal, state, local and foreign tax returns and tax reports, and all taxes due and payable that are required to be filed by Merchant have been or will be filed and paid, on a timely basis (including any extensions). All such returns and reports are and will be true, correct and complete. Merchant has no material liabilities and, to the best of its knowledge, knows of no material contingent liabilities, except current liabilities incurred in the ordinary course of business;

d. Conflicts With Other Agreements. Merchant will comply with the provisions of this Agreement and its performance under this Agreement does not and will not conflict with other agreements to which Merchant is a party or beneficiary, or result in any of the following: (1) violation or default of other agreements; (2) entitlement of any person or entity to receipt of notice or right of consent; (3) a right of termination, cancellation, guaranteed rights or acceleration of any obligation or to loss of a benefit; or (4) creation of any claim on the properties or assets of Merchant;

e. Authorization. Merchant has the power and authority to enter into and perform Merchant’s duties and obligations under this Agreement and any documents required to facilitate the transactions contemplated by this Agreement. Merchant is not a party to any contract or aware of any existing situation that would prevent Merchant from entering into or performing its obligations under this Agreement. Merchant has taken all necessary action to authorize their respective execution and delivery of, and performance under, this Agreement;

f. Other Proceedings and Bankruptcy. There is no action, suit, claim, investigation or legal, administrative, or arbitration proceeding pending or currently threatened whether at law or in equity or before any Governmental Authority against Merchant. Merchant has not declared bankruptcy within the past seven years and is not currently contemplating the filing of a bankruptcy proceeding or closing or materially modifying Merchant’s business. Merchant is solvent and financially capable of fulfilling its obligations under this Agreement;

g. Good Standing. Merchant is validly existing and in good standing under any applicable laws of its state of organization. Merchant has all requisite power and authority to own, lease, pledge and operate its properties and assets and to carry on its business as presently conducted;

h. Compliance With Laws. Merchant is in compliance with all statutes, rules, regulations, orders or restrictions of all applicable Governmental Authorities. All federal, state, local and foreign tax returns and tax reports, and all taxes due and payable arising therefrom required to be filed by Merchant have been or will be filed and paid, on a timely basis (including any extensions). All such returns and reports are and will be true, correct and complete. Merchant has no material liabilities and, to the best of its knowledge, knows of no material contingent liabilities, except current liabilities incurred in the ordinary course of business; and

i. Loan Purpose. Merchant is applying for credit solely for business purposes and not for personal, family or household use. Any credit extended under this Agreement, including the Loan Amount, is solely for business purposes and not for personal, family or household use.
Disputes

a. Binding Individual Arbitration. You, Bank and Square Capital agree to arbitrate all disputes arising under or in connection with this Agreement by a neutral arbitrator who has the power to award the same damages and relief that a court can. ANY ARBITRATION UNDER THIS AGREEMENT WILL ONLY BE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS, CLASS ACTIONS, REPRESENTATIVE ACTIONS, AND CONSOLIDATION WITH OTHER ARBITRATIONS ARE NOT PERMITTED. YOU WAIVE ANY RIGHT TO HAVE YOUR CASE DECIDED BY A JURY AND YOU WAIVE ANY RIGHT TO PARTICIPATE IN A CLASS ACTION AGAINST BANK OR SQUARE CAPITAL OR ANY OF THEIR RESPECTIVE ASSIGNEES OR AGENTS If any provision of this arbitration agreement is found unenforceable, the unenforceable provision will be severed, and the remaining arbitration terms will be enforced (but in no case will there be a class arbitration). All disputes will be resolved finally and exclusively by binding individual arbitration with a single arbitrator administered by the American Arbitration Association (www.adr.org) according to this Section and the applicable arbitration rules for that forum. The arbitrator will be responsible for determining all threshold arbitrability issues, including issues relating to whether this Agreement is unconscionable or illusory and any defense to arbitration, including waiver, delay, laches, or estoppel. The Federal Arbitration Act, 9 U.S.C. §§ 1-16, fully applies. Any arbitration hearing will occur in San Francisco, California or other mutually agreeable location. The arbitrator’s award will be binding on the parties and may be entered as a judgment in any court of competent jurisdiction. For any dispute against Bank, Bank will pay all the arbitration fees. For any dispute against Square Capital,Square Capital will pay all the arbitration fees. If You prevail on any claim for which You are legally entitled to attorney’s fees, You may seek to recover those fees in the arbitration. For any claim where You are seeking relief, Bank and Square Capital will not seek to have You pay Bank’s or Square Capital’s attorney’s fees, even if fees might otherwise be awarded, unless the arbitrator determines that Your claim was frivolous. For purposes of this arbitration provision, references to You, Bank and Square Capital also include respective subsidiaries, affiliates, agents , employees, predecessors, successors and assigns as well as authorized users or beneficiaries of the Square Capital Program. Subject to and without waiver of the arbitration provisions above, You agree that any judicial proceedings will be brought in and You consent to the exclusive jurisdiction and venue in the state courts in the City and County of San Francisco, California, or federal court for the Northern District of California.

b. Governing Law. This Agreement is governed by Utah law and/or applicable federal law (including the Federal Arbitration Act) as applied to agreements entered into and to be performed entirely within Utah, without regard to its choice of law or conflicts of law principles that would require application of law of a different jurisdiction.

c. Limitation on Time to Initiate a Dispute. Unless otherwise required by law, an action or proceeding by Merchant relating to any dispute arising under this Agreement must commence within one year after the cause of action occurs or becomes enforceable.
Miscellaneous

a. Modifications; Amendments. Any changes to these terms will be in writing agreed by the party to be affected.

b. Waiver. No Party will be treated as having waived any rights by not exercising (or delaying the exercise of) any rights under this Agreement.

c. Notices. Except as otherwise stated, notices to Bank or Square Capital must be sent by postal mail to: Square Capital Program, 1455 Market Street, Suite 600, MSC 715, San Francisco, California 94103.

d. Assignment. You may not assign or transfer Your rights or obligations under this Agreement, but rights of Bank and/or Square Capital may be assigned by Square Capital and/or Bank without restriction.

e. Severability. If any provision of this Agreement is deemed invalid or unenforceable under any law, rule, or regulation, the remainder of the Agreement will remain in effect.

f. Complete Agreement. This Agreement constitutes the entire Agreement between the Parties related to this subject matter and supersedes any prior agreements or understandings between the Parties.

g. Survival. The obligations in Sections 3(d) (Indemnification), 3(e) (Costs to Enforce Payable by Merchant), 7 (Disputes) and this Section 8 (Miscellaneous) will survive any expiration or termination of this Agreement.

h. Register. You agree that Square Capital, on Your behalf, will maintain a register in order to, record the amount of Your Loan Balance and the current or future owner of Your loan (including any assignee, participant or transferee, if any, who becomes the subsequent owner of any portion of Your Loan Balance) (the “Register”). The Parties agree that the entity whose name is recorded in the Register as the current owner of Your Loan Balance is treated as the owner of Your Loan Balance. The Register must be updated for any transfer of ownership of Your Loan Balance to occur.

LOAN AGREEMENT

General

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