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APPLICATION and AGREEMENT for IRREVOCABLE STANDBY LETTER of CREDIT Truist Bank ATTN

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APPLICATION and AGREEMENT for IRREVOCABLE STANDBY LETTER of CREDIT Truist Bank ATTN APPLICATION AND AGREEMENT FOR IRREVOCABLE STANDBY LETTER OF CREDIT Advise by 0 Full Details by SWIFT Truist Bank 1E1 REGISTERED MAIL OR COURIER ATTN: Domestic Standby Letter of Credit Dept. 7701 Airport Center Dr., Suite 2600 Greensboro, NC 27409 Irrevocable Standby Letter of Credit No: Date: 06 June 9, 2020 Beneficiary (Name and Address): Letter of Credit Amount (in US Dollars): North Carolina Utilities Commission $10,000.00 4325 Mail Service Center Raleigh, NC 27699 Applicant (Name and Address): Expiration Date: August 4, 2021 Water Resource Management, Inc. 151 Mr Bish Blvd. Boone, NC 28607 The undersigned Applicant hereby requests that you issue an Irrevocable Stand-By Letter of Credit, as follows: Available upon presentation at our office above of Beneficiary's draft(s), at sight unless otherwise stated, drawn at your option, on you or any of your correspondents, not later than 4:00 pm Eastern time on or before the Expiration Date (or automatically extended Expiration Date) when accompanied by the following documents: The original Letter of Credit and amendments, if any; Sight draft duly endorsed by the Beneficiary's authorized representative and bearing the clause "DRAWN UNDER TRUIST BANK IRREVOCABLE STANDBY LETTER OF CREDIT NO. 06"; and Beneficiary's statement on its letterhead signed by its authorized representative that Applicant has defaulted in payment or performance of its obligations and Beneficiary is entitled to draw under the Letter of Credit. Special instructions and/or other conditions: Ej The Irrevocable Standby Letter of Credit shall be in the form attached hereto. 0 The Irrevocable Standby Letter of Credit shall contain an annual auto-renewal provision unless Lender gives not less than days' notice to Beneficiary that it will not allow renewal. 0 This Letter of Credit may be assigned and transferred by you to a successor beneficiary in full and not in part; provided that no such transfer and/or assignment shall be effective until we receive a signed Notice of Transfer in the form of Exhibit A hereto. All fees for such transfer shall be for the account of the Applicant. 0 This Letter of Credit is to be issued under existing line of credit or loan no. The availability under this line of credit or loan will be reduced by the amount of this Letter of Credit. This Letter of Credit is issued subject to the UCC and Z ISP98 or El UCP, as hereinafter defined. - 1 - Form 1893 Fees and Charges: The Issuance Fee and other fees and charges for this Letter of Credit are payable as follows: Issuance Fee $350.00 ❑ % of the Letter of Credit Amount ❑ Payable annually as long as the Letter of Credit remains open Transfer Fee ❑ $ Automatic Debit 0 Lender is authorized to debit from Applicant's deposit account any and all fees designated above when due and payable. Deposit Account Number: 5194250314 IRREVOCABLE STANDBY LETTER OF CREDIT AGREEMENT In consideration of the issuance by the Lender of one or more irrevocable standby letters of credit in accordance with this Application, the Lender and the Applicant agree as follows with respect to each Credit issued: 1. DEFINITIONS: (a) "Adjusted LIBOR Rate" means a rate of interest per annum equal to the sum obtained by adding (i) the ❑ One Month LIBOR plus (ii) N/A % per annum (the "Margin"), which shall be adjusted monthly on the first day of each LIBOR Interest Period. If the first day of the month falls on a date when the Lender is closed, the Adjusted LIBOR Rate shall be determined as of the last preceding business day. The One Month LIBOR means the average rate (rounded upwards, if necessary, to the next higher 1/16th of 1.0%) quoted on a Bloomberg Screen or any quoting service or commonly available source utilized by Lender on the determination date for deposits in U.S. Dollars offered in the London Interbank Market for one month. LIBOR Interest Period means (i) a period of one calendar month applicable to any LIBOR Advance which shall begin on the first day of any month notwithstanding the Expiry Date of the Credit; provided, however, that a LIBOR Interest Period may be less than one calendar month in and only in the calendar month in which the obligation originates or matures. In the event that Lender shall determine, which determination shall be final, conclusive and binding, that One Month LIBOR is unavailable, is no longer reported, an adequate and fair means does not exist for ascertaining the One Month LIBOR interest rate, or Lender has adopted one or more rates to replace One Month LIBOR, then the Applicable Rate shall be Standard Rate plus the Margin adjusted daily and subject to any Maximum Rate or Minimum Rate without any notice to or action or consent by the Borrower. Standard Rate means a rate per annum equal to the Prime Rate with applicable spread adjustment as determined by Lender in its sole discretion to generally align the Prime Rate with One Month LIBOR. (b) "Applicable Rate" means an interest rate per annum of or equal to: ❑ N/A%; Prime Rate plus 1.00% adjusted daily; ❑ WSJ Prime Rate plus NN/A% adjusted daily; or ❑ the Adjusted LIBOR Rate. Any change in the interest rate resulting from a change in the Prime Rate or WSJ Prime Rate shall become effective as of the opening of business on the effective date of any change in the Prime Rate or WSJ Prime Rate. If checked here ❑, the interest rate will not exceed a fixed rate of N/A%; and if checked here El, the interest rate will not decrease below a fixed rate of 5.25 %. (c) "Applicant" means the undersigned and its successors and assigns. (d) "Application" means this Application and Agreement for Irrevocable Standby Letters of Credit, as it may be amended from time to time. (e) "Beneficiary" means the entity or person designated on the Application as Beneficiary. (f) "Clean Advances" means advances made pursuant to a Credit containing provisions for one or more payments by the Lender without the presentation of documents other than a draft or other simple demand for payment. (9) "Credit" means one or more irrevocable standby letters of credit, and any substitutions, extensions, and amendments thereof, issued by the Lender in accordance with the Application, whereby the Lender acting at the request and on the instruction of the Applicant or on its own behalf: (I) shall make a payment to or to the order of a third party or to accept and pay drafts drawn by the Beneficiary, or authorizes another lender to effect such payment or to accept and pay such drafts, or (ii) authorizes another lender to negotiate drafts against stipulated documents, provided the terms and conditions contained herein are complied with, or - 2 - Form 1893 (iii) incurs a deferred payment undertaking. (h) "Default Rate" means a rate of interest per annum equal to fifteen percent (15.0%) calculated on the basis of a year consisting of 360 days; provided, however, that such rate shall not exceed the highest rate permitted by applicable law. (i) "Draft" means an instrument, whether negotiable or non-negotiable, that orders the payment of money. (j) "Expiry Date" or "Expiration Date" means the date specified in the Application as the last date on which drafts may be presented for payment under the Credit. If the Expiry Date is a bank holiday, the last date on which the draft may be presented is the first banking day following the holiday. (k) "Instrument" means any draft, bill of exchange, cable or written demand for payment. (I) "ISP98" means International Standby Practices (ISP 98), ICC Publication No. 590. (m) "Lender" means Truist Bank, a North Carolina banking corporation, having executive offices in Winston-Salem, North Carolina, and its successors and assigns. (n) "Prime Rate" means the rate of interest per annum announced by the Lender from time to time as its Prime Rate, which is one of several rate indexes employed by the Lender when extending credit and may not necessarily be the Lender's lowest lending rate. (o) "Property" means goods and merchandise and all documents relative thereto, securities, funds, choses in action, and any other form of property, whether real, personal, or mixed, and all rights or interests therein. (P) "Security Agreement" means an agreement that creates a security interest in favor of the Lender. (q) "Uniform Commercial Code" or "UCC" means the Uniform Commercial Code in effect in the State of North Carolina, as amended from time to time. (r) "Uniform Customs and Practice" or "UCP" means the Uniform Customs and Practices for Documentary Credits — 2007 Revision, International Chamber of Commerce Publication 600, and any subsequent revision thereof. (s) "WSJ Prime Rate" means the rate of interest per annum published in the "Money" section of The Wall Street Journal as the Prime Rate, which is one of several rate indexes employed by the Lender when extending credit and may not necessarily be the Lender's lowest lending rate. Any capitalized terms herein that are not defined have the meanings ascribed to them in the UCC, ISP98 or the UCP, as applicable. 2. UNITED STATES CURRENCY DRAFTS. As to Instruments drawn or purporting to be drawn under the Credit which are payable in the United States currency: in the case of each sight draft, demand or receipt, Applicant shall pay on demand to Lender or order, at any of the Lender's offices as may be designated by the Lender, in immediately available United States currency, the amount of each draft. Any amount not promptly paid by Applicant to reimburse Lender for any Instrument paid shall accrue interest at the Applicable Rate until payment in full is received, provided; however, that failure to immediately reimburse the Lender for any instrument paid shall be a default under this Application and such amount shall, at the option of Lender, accrue interest at the Default Rate, until paid in full.
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