LOAN MODIFICATION AGREEMENT (Loan No. 9117000148)
EXHIBIT
10.1
(Loan
No. 0000000000)
This
Loan
Modification Agreement ("Modification") is made and entered as of December
26,
2006, between CALIFORNIA
BANK & TRUST,
a
California banking corporation ("Bank"), and ICON
INCOME FUND EIGHT B L.P.; ICON INCOME FUND NINE, LLC; ICON INCOME FUND TEN,
LLC;
and
ICON
LEASING FUND ELEVEN, LLC (separately
and collectively "Borrower”).
RECITALS
A. Pursuant
to the terms of a Commercial Loan Agreement ("Loan Agreement") between Bank
and
Borrower dated as of August 31, 2005, Bank agreed to make a revolving line
of
credit in the principal sum of $17,000,000 (“Line of Credit”) available to
Borrower; capitalized terms used and not otherwise defined herein shall have
the
meanings assigned to such terms in the Loan Agreement.
B. The
Line
of Credit was evidenced by a promissory note ("Note") of even date with the
Loan
Agreement, executed by Borrower in favor of Bank.
C. Borrower's
indebtedness under the Loan Agreement was secured by assets of Borrower under
a
separate Security Agreement, dated August 31, 2005 ("Security Agreement"
executed by each entity comprising Borrower).
D. In
response to Borrower's request and in reliance upon Borrower's representations
made to Bank in support thereof, Bank has agreed to modify the terms of the
Loan
Agreement as set forth in this Modification.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower and Bank agree as follows:
1. Adoption
of Recitals.
Borrower hereby represents and warrants that each of the recitals set forth
above is true, accurate and complete.
2. Acknowledgment
of Debt.
Borrower acknowledges that, to the best of Borrower’s knowledge, there are no
claims, demands, offsets or defenses at law or in equity that would defeat
or
diminish Bank's present and unconditional right to collect the indebtedness
evidenced by the Note and to proceed to enforce the rights and remedies
available to Bank as provided in the Note, Loan Agreement, Security Agreement,
or any other instrument, agreement, or document given in connection with the
Line of Credit (collectively the "Loan Documents") or by law. Until the Line
of
Credit is paid in full, interest and other charges shall continue to accrue
and
shall be due and owing.
1
3. Representations
and Warranties.
Borrower hereby represents and warrants that no material default exists under
the Line of Credit and no event of default, breach or failure of condition
has
occurred or exists, or would exist with notice or lapse of time, or both, under
any of the Loan Documents that could reasonably be expected to have a Material
Adverse Change, and all representations and warranties of Borrower in this
Modification and the other Loan Documents are true and correct in all material
respects as of the date of this Modification (other than any such
representations and warranties that, by their terms, are specifically made
as of
a date other than the date hereof) and shall survive the execution of this
Modification.
4. Modification
of Loan Documents.
The
Loan Documents are hereby supplemented, amended and modified to incorporate
the
following, which shall supersede and prevail over any existing and conflicting
provisions thereof:
(a) Section
1.1 of the Loan Agreement, entitled "Definitions" is modified as
follows:
(i) By
deleting the definition of “Collateral” and replacing it with the
following:
“Collateral”
means
and includes, without limitation, all property and assets granted as collateral
security for a Loan pursuant to the Security Agreement, whether real or personal
property, whether granted directly or indirectly, whether granted now or in
the
future and whether granted in the form of a security interest, assignment,
pledge, lien, or any other security or lien interest whatsoever, whether created
by law, contract or otherwise. The word “Collateral” includes without limitation
all collateral described in the section of this Agreement titled “Collateral;”
provided,
that
notwithstanding anything to the contrary in this Agreement, the words
“Accounts”, “Accounts Receivable”, “Collateral Documents”, “Indirect Lease”,
“Indirect Loan Contract”, “Inventory”, “Lease”, “Loan Contract”, and “Revolving
Loan Contract” shall not mean any “Accounts”, “Accounts Receivable”, “Collateral
Documents”, “Indirect Leases”, “Indirect Loan Contracts”, “Inventory”, “Leases”,
“Loan Contracts”, or “Revolving Loan Contracts” that are owned or receivable by
or to which ICON Leasing Fund Eleven ULC and/or ICON U.S. Equipment, LLC is
a
party, as applicable.
(ii) By
deleting the definition of “Discount Rate” in its entirety.
(iii) By
deleting the definition of "Line of Credit Expiration Date" and replacing it
in
its entirety with the following:
“Line
of Credit Expiration Date”
shall
mean September 30, 2008, unless extended pursuant to Section 2.1.a.
(iv) By
deleting the definition of "Liquidity" and replacing it in its entirety with
the
following:
“Liquidity”
means
Borrower’s cash reserves (other than deposits reserved pursuant to Borrower’s
non-recourse financing, if any) and unused Availability under the Line of
Credit.
2
(v) By
deleting the definition of "Present Value" and replacing it with the
following:
“Present
Value”
means
any fixed unpaid payment obligation owed to Borrower by a Lessee under a lease
or a Debtor under a loan (including, without limitation, unpaid regularly
scheduled payments, puts and balloon payments) (in each case excluding leases
and loans that are not Eligible Borrowing Base Contracts), such unpaid payments
to be discounted to their present value on the date of calculation at the Prime
Rate. If the contract is an Indirect Lease or Indirect Loan Contract, the
Present Value shall be multiplied by that percentage of the foregoing that
corresponds to Borrower’s interest in the Person that is the lessor or lender,
as the case may be. If a lessee under a lease has the option to terminate the
lease as of a date prior to its scheduled termination date, the Present Value
of
that lease shall be the lower of the following: (i) the Present Value based
on
the lease terminating at such prior date plus the amount of any payment that
the
lessee would be obligated to pay the lessor upon exercise of such option,
discounted to its present value on the date of calculation at the Prime Rate;
or
(ii) the Present Value based on the lease terminating at its scheduled
termination date.
(b) Section
2.1.a. of the Loan Agreement, entitled “Revolving Line of Credit”, is deleted
and replaced in its entirety with the following:
Revolving
Line of Credit. During
the Line of Credit Availability Period and so long as no Event of Default has
occurred and is continuing, Bank will, on a revolving basis, make advances
to
Borrower (“Line
of Credit”),
which, except as set forth below, may not at any time exceed an aggregate amount
outstanding equal to the lesser of Seventeen Million Dollars ($17,000,000.00)
or
the Borrowing Base (collectively the “Line
of Credit Limit”).
Borrower’s obligation to repay advances under the Line of Credit shall be
evidenced by a promissory note in a form acceptable to Bank (the “Line
of Credit Note”).
During the Line of Credit Availability Period, Borrower may repay principal
amounts and reborrow them. Borrower agrees that Borrower will not permit the
outstanding balance under the Line of Credit to exceed the Line of Credit Limit
unless Borrower increases the Restricted Cash Deposit by an amount equal to
the
sum that would otherwise be overadvanced, in which case Borrower shall have
the
right to borrow an amount in excess of the Borrowing Base but not more than
$17,000,000.00. Provided no Event of Default has occurred and is continuing
at
such time, Borrower may request (i) one year extensions of the Line of Credit
Availability Period within 390 days of the then applicable Line of Credit
Expiration Date, but Bank has no obligation to grant the extension and/or (ii)
the addition to Borrower of an additional fund or funds managed by Manager
or an
Affiliate of Manager acceptable to Bank, but Bank has no obligation to grant
the
addition and/or (iii) in connection with any addition to Borrower pursuant
to
the immediately preceding clause (ii), the deletion from Borrower of a fund
managed by Manager or an Affiliate of Manager, but Bank has no obligation to
grant the deletion.
(c) Section
3.2.a. of the Loan Agreement, entitled "Line of Credit Interest Rate," is
modified by deleting "Prime Rate plus one quarter percent (P+0.25%)" and
replacing it with "Prime Rate plus zero percent (P+0.00%)."
(d) Section
3.2.b. of the Loan Agreement, entitled "Line of Credit Optional Interest,"
is
modified by deleting "LIBO Rate, as defined below, plus two and three quarters
percent (L+2.75%)" and replacing it with "LIBO Rate, as defined below, plus
two
and a half percent (L+2.50%)."
(e) Section
8.4 of the Loan Agreement, entitled "Minimum Debt Service Coverage Ratio,"
is
deleted and replaced in its entirety with the following:
3
Minimum
Debt Service Coverage Ratio.
To
maintain as of the end of each fiscal quarter based on the combined financial
results as reported on SEC Form 10-Q or 10-K, as applicable, of each entity
comprising Borrower, a Debt Service Coverage Ratio of not less than 2.00 to
1.00
on a rolling four quarter basis.
(f) Section
8.5 of the Loan Agreement, entitled "Tangible Net Worth," is deleted and
replaced in its entirety with the following:
Tangible
Net Worth.
To
maintain as of the end of each fiscal quarter, based on the financial results
of
each entity comprising Borrower as reported on SEC Form 10-Q or 10-K, as
applicable, of each entity comprising Borrower, a combined Tangible Net Worth
of
not less than Two Hundred Seventy-Five Million Dollars ($275,000,000.00).
(g) Section
8.6 of the Loan Agreement, entitled "Leverage Ratio," is deleted and replaced
in
its entirety with the following:
Leverage
Ratio.
To
collectively maintain, and cause each entity comprising Borrower to maintain,
as
of the end of each fiscal quarter, based on the financial results as reported
on
SEC Form 10-Q or 10-K, as applicable, of each entity comprising Borrower, a
ratio of Adjusted Total Liabilities to Tangible Net Worth not to exceed 0.5
to
1.0.
(h) Section
8.7 of the Loan Agreement, entitled "Minimum Liquidity," is deleted and replaced
in its entirety with the following:
Minimum
Liquidity.
To
maintain, as of the end of each fiscal quarter, based on the combined financial
results as reported on the SEC Form 10-Q or 10-K, as applicable, of each entity
comprising Borrower, Liquidity of at least Seven Million Dollars
($7,000,000.00).
(i) Section
8.8 of the Loan Agreement, entitled "Restricted Cash Deposit," is deleted in
its
entirety.
(j) Section
8.22 of the Loan Agreement, entitled "Operating/Business Accounts," is modified
by deleting the last sentence thereof: "Borrower shall also open and maintain
with Bank a lock box for Accounts Receivable collection."
(k) Section
11 of the Loan Agreement, entitled “Miscellaneous,” is hereby amended to insert
the following section at the end thereof:
11.18
Additional
Collateral.
With
respect to any Person, that on or subsequent to the date of the Modification,
(i) is or becomes a direct or indirect Subsidiary of any Borrower and (ii)
Borrower elects to have one or more Eligible Borrowing Base Contracts to which
such Subsidiary is a party added to the Borrowing Base and thereby contribute
the assets related to such Eligible Borrowing Base Contract as Collateral,
then
Borrower shall cause such Subsidiary to execute and deliver to Bank such
documentation to the Security Agreement as to (x) become a party to the Security
Agreement and (y) grant Bank a lien on all of its assets for the benefit of
Bank.
4
(l) Section
9
of the Security Agreement, entitled “Miscellaneous,” is hereby amended to insert
the following section at the end thereof:
9.9
Additional
Grantor.
Each
Subsidiary of the Grantor that becomes a party to this Security Agreement
pursuant to Section 11.18 of the Loan Agreement shall become a Grantor for
all
purposes of this Security Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex
I
attached
to the Modification.
(m) Section
2
of the Security Agreement is modified by adding the following after the last
sentence thereof: “Notwithstanding the foregoing or anything to the contrary in
this Security Agreement, the words “Accounts”, “Chattel Paper”, “Collateral”,
“Contracts”, “Documents”, “Equipment”, “Financial Assets”, “Fixtures”, “General
Intangibles”, “Instruments”, “Inventory”, “Investment Property”, “Letter of
Credit Rights”, and “Proceeds” shall not mean any “Accounts”, “Chattel Paper”,
“Collateral”, “Contracts”, “Documents”, “Equipment”, “Financial Assets”,
“Fixtures”, “General Intangibles”, “Instruments”, “Inventory”, “Investment
Property”, “Letter of Credit Rights”, or “Proceeds” that are owned or receivable
by or to which ICON Leasing Fund Eleven ULC and/or ICON U.S. Equipment, LLC
is a
party, as applicable.
(n) Security
Instruments.
Upon
the effectiveness of this Modification, the Loan Documents which recite that
they are security instruments shall secure, in addition to any other obligations
secured thereby, the payment and performance by Borrower of all obligations
under the Line of Credit, as modified hereby, and any amendments, modifications,
extensions or renewals of the same which are hereafter agreed to in writing
by
the parties.
5. Conditions
Precedent.
This
Modification shall only be effective upon Borrower's completion of the following
conditions precedent to Bank’s satisfaction.
(a) Execution
and delivery by Borrower of this Modification in form satisfactory to
Bank;
(b) Such
other documents or instruments as Bank shall reasonably require;
(c) After
giving effect to this Modification, the absence of any Event of Default under
the Loan Agreement except as may be expressly waived in writing by
Bank;
(d) Payment
of an extension fee of Forty Two Thousand Five Hundred Dollars ($42,500) to
Bank; and
(e) Payment
of Bank's reasonable attorney fees incurred in preparation of this Modification
and related documents.
6. Governing
Law.
This
Modification shall be construed, governed and enforced in accordance with the
laws of the State of California.
7. Interpretation.
No
provision of this Modification is to be interpreted for or against either
Borrower or Bank because that party, or that party's representative, drafted
such provision.
5
8. Full
Force and Effect.
Except
as set forth herein, all other terms and conditions of the Loan Documents shall
remain in full force and effect. Upon and after the effectiveness of this
Modification, each reference in the Loan Agreement and Security Agreement to
“this Agreement”, “hereunder”, “hereof” or words of like import referring to the
Loan Agreement or Security Agreement, as applicable, and each reference in
the
other Loan Documents to “Loan Agreement”, “Security Agreement”, “thereunder”,
“thereof” or words of like import referring to the Loan Agreement or Security
Agreement, as applicable, shall mean and be a reference to the Loan Agreement
or
Security Agreement, as applicable, as modified hereby.
9. Reaffirmation.
Except
as specifically modified by this Modification, Borrower hereby acknowledges,
reaffirms and confirms its obligations under the Loan Documents.
10. Entire
Agreement.
This
Modification and the Loan Documents represent the entire agreement of the
parties and supersede all prior oral and written communication between the
parties. If there is any conflict between this Modification and any documents
referred to herein, this Modification shall prevail. No amendment of this
Modification shall be valid unless it is in writing and is signed by the parties
to this Modification.
11. Counterparts.
This
Modification may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this Modification by facsimile shall be effective as
delivery of a manually executed counterpart of this Modification.
6
IN
WITNESS WHEREOF, the parties have executed this Modification as of the day
and
year first above written.
|
ICON
INCOME FUND EIGHT B L.P.,
a
Delaware limited partnership
By: ICON
CAPITAL CORP., its
general partner
By: /s/
Xxxxxx X. Xxxxxx
Xxxxxx
X. Xxxxxx
Chief
Operating Officer and
Chief
Financial Officer
|
CALIFORNIA
BANK & TRUST,
a
California banking corporation
By: /s/
J. Xxxxxxx Xxxxxxxx
Name: J.
Xxxxxxx Xxxxxxxx
Title: Vice
President and Relationship
Manager
|
|
Address
where notices are to be sent:
ICON
INCOME FUND EIGHT B L.P.
c/o
ICON Capital Corp., its general partner
000
Xxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
General Counsel
Attention:
Xxxxxx X. Xxxxxx, CFO
Facsimile
No.: (000) 000-0000
|
Address
where notices are to be sent:
South
Bay Commercial Banking
0000
Xxxxx Xx Xxxxxx Xxxx
Xxx
Xxxxx, XX 00000
|
|
ICON
INCOME FUND NINE, LLC,
a
Delaware limited liability company
By: ICON
CAPITAL CORP., its
manager
By: /s/
Xxxxxx X. Xxxxxx
Xxxxxx
X. Xxxxxx
Chief
Operating Officer and
Chief
Financial Officer
|
|
|
Address
where notices are to be sent:
ICON
INCOME FUND NINE, LLC
c/o
ICON Capital Corp., its manager
000
Xxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
General Counsel
Attention:
Xxxxxx X. Xxxxxx, CFO
Facsimile
No.: (000) 000-0000
|
7
|
ICON
INCOME FUND TEN, LLC,
a
Delaware limited liability company
By: ICON
CAPITAL CORP., its
manager
By: /s/
Xxxxxx X. Xxxxxx
Xxxxxx
X. Xxxxxx
Chief
Operating Officer and
Chief
Financial Officer
|
|
|
Address
where notices are to be sent:
ICON
INCOME FUND TEN, LLC
c/o
ICON Capital Corp., its manager
000
Xxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
General Counsel
Attention:
Xxxxxx X. Xxxxxx, CFO
Facsimile
No.: (000) 000-0000
|
|
a
Delaware limited liability company
By: ICON
CAPITAL CORP., its
manager
By: /s/
Xxxxxx X. Xxxxxx
Xxxxxx
X. Xxxxxx
Chief
Operating Officer and
Chief
Financial Officer
|
|
|
Address
where notices are to be sent:
c/o
ICON Capital Corp., its manager
000
Xxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
General Counsel
Attention:
Xxxxxx X. Xxxxxx, CFO
Facsimile
No.: (000) 000-0000
|
8
Annex
I
to
Security
Agreement
ASSUMPTION
AGREEMENT, dated as of ________________, 20__, made by _______________________,
a ______________ [limited liability company] (the “Additional
Grantor”),
in
favor of California Bank & Trust, a California banking corporation, as
lender (“Secured
Party”)
to the
Loan Agreement referred to below. All capitalized terms not defined herein
shall
have the meaning ascribed to them in the Security Agreement referred to
below.
W
I T
N E S S E T H :
WHEREAS,
ICON Income Fund Eight B L.P., a Delaware limited partnership, and ICON Income
Fund Nine, LLC, ICON Income Fund Ten, LLC and ICON Leasing Fund Eleven, LLC,
Delaware limited liability companies (separately, and collectively,
“Borrower”),
and
Secured Party have entered into a Commercial Loan Agreement, dated as of August
31, 2005, (as amended, supplemented, restated or otherwise modified from time
to
time, the “Loan
Agreement”);
WHEREAS,
in connection with the Loan Agreement, the Borrower has
entered into a Security Agreement, dated as of August 31, 2005 (as amended,
supplemented, restated or otherwise modified from time to time, the
“Security
Agreement”)
in
favor of the Secured Party; and
WHEREAS,
the Additional Grantor has agreed to execute and deliver this Assumption
Agreement in order to become a party to the Security Agreement;
NOW,
THEREFORE, IT IS AGREED:
1.
Security
Agreement.
By
executing and delivering this Assumption Agreement, the Additional Grantor,
as
provided in Section 9.9 of the Security Agreement, hereby becomes a party to
the
Security Agreement as a Grantor thereunder with the same force and effect as
if
originally named therein as a Grantor and, without limiting the generality
of
the foregoing, hereby expressly assumes all obligations and liabilities of
a
Grantor thereunder. The
Additional Grantor hereby represents and warrants that each of the
representations and warranties contained in Section 4 of the Security Agreement
is true and correct on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.
2.
Governing
Law.
THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
9
IN
WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly
executed and delivered as of the date first above written.
ADDITIONAL
GRANTOR
| By: |
| Name: |
| Title: |
10
