FIRST AMENDMENT TO CONVERTIBLE PROMISSORY NOTE
Exhibit 6.17
FIRST AMENDMENT
TO
THIS FIRST AMENDMENT TO CONVERTIBLE PROMISSORY
NOTE (this “Amendment”) is made and entered
into this 28th day of September, 2017, by and between Mobile Home Rental Holdings LLC, a North
Carolina limited liability company (the “Company”), and Metrolina Loan Holdings, LLC, a North
Carolina limited liability company (the “Holder”).
Background
A. On or about May 8,
2017, the Company executed and delivered to the Holder a
Convertible Promissory Note in the original principal amount of
$3,000,000 (the “Note”) pursuant to which the
Company agreed to repay the principal amount plus interest all in
accordance with the terms of the Note.
B. The Company and the
Holder now desire to revise and amend the Note in the manner
hereinafter set forth.
Terms
In
consideration of the covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficient
of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. The Maturity Date
definition at the end of the first paragraph shall be modified to
be defined as December 15, 2019.
2. The last sentence
of the Third Paragraph that says “Upon such extension, the
stated “Maturity Date” shall be deemed to be May 8,
2020” shall be modified to state that “Upon such
extension, the stated “Maturity Date” shall be December
15, 2020.
3. Subpart (B) in the
second full paragraph of Section 1(a)(i) of the Note is hereby
deleted in its entirety and the following is substituted in its
place:
“(B) there
will be no other financings of the Company and the Company will not
incur any additional indebtedness (other than indebtedness utilized
to immediately repay this Note in full or indebtedness to Xxxxxxx
X. Xxx or Gvest Capital LLC to cover the costs associated with the
Merger Transaction and any ongoing operating costs and expenses
needed by the Company or its merger successor, including but not
limited to, accountant fees’ and costs, attorneys’ fees
and costs, filing fees and all other costs and expenses incurred by
the Company’s merger successor for securities law compliance,
which indebtedness shall in all respects be subordinate and
inferior to the indebtedness created by this Note and shall not be
repaid until this Note has been paid in full),”
4. Subpart (v) in the
Section 2 of the Note is hereby deleted in its entirety and the
following is substituted in its place:
“(v) the
authorization of additional Shares of the Company, or any dilution
of Holder’s interest in the Company (other than pursuant to a
permitted Merger Transaction or any equity financing by the
Company’s successor in interest subsequent to the Merger
Transaction utilized to immediately repay this Note in full), in
either case, without Holder’s prior written
consent;”
5. Section 3 of the
Note is hereby deleted in its entirety and the following is
substituted in its place:
“Remedies Upon Default. In
addition to any other rights or remedies available to the Holder
hereunder, under any other document, at law or in equity, Holder
shall have the following remedies:
(a)
Acceleration. Upon the
occurrence of an Event of Default, the Holder shall have the right
to cause the entire unpaid principal balance, together with all
accrued and unpaid interest thereon, reasonable attorneys’
fees and all fees, charges, costs and expenses, if any, owed by the
Company pursuant to this Note, to become immediately due and
payable in full by giving written notice to the
Company.
(b)
Assignment of Membership
Interest. The undersigned being all of the members of
Company, as security for payment of the loan evidenced by this
Note, hereby assign, transfer to and pledge with and grant to the
Holder a continuing security interest in and to all right, title
and interests of every kind and nature whatsoever, in and to all
membership interests, including without limitation all management
rights, beneficial or otherwise, of Company and shall execute and
deliver, immediately upon an Event of Default, to Holder any and
all documents necessary or advisable to effectuate a transfer,
assignment or other conveyance of such membership interests with
all management rights of Company.
6. The first sentence
of Section 4 of the Note is hereby deleted in its entirety and the
following is substituted in its place:
“The Holder
shall have a right of first refusal to purchase its pro rata share
of all debt or equity securities (“Future Securities”)
issued by the Company in consideration of money loaned or paid to
the Company after the date of this Note that the Company may, from
time to time, propose to sell and issue after the date hereof
subject to the 10% ownership limitation contained in the last
sentence of Section 1(a); provided, however, that notwithstanding
anything otherwise herein contained, this right of first refusal
and the procedures described below shall not apply to an issue of
Future Securities if the proceeds of such are actually applied to
the payment of this Note in full on the date of such
issuance.”
7. Section 19 of the
Note is hereby deleted in its entirety and the following is
substituted in its place.
2
“19.
Use of Note Proceeds; Purpose and
Conditions to Usage. The Company can only use the Note
proceeds as the equity component, up to 25% of the total
capitalized cost, in the Company’s investment acquisitions of
manufactured housing properties. Further, the Company shall not,
without the written consent of Holder, permit the indebtedness
(including without limitation any senior debt, junior debt and
seller financing) on any investment acquisition of a manufactured
home property in which Note proceeds are used to complete the
acquisition to exceed 75% of the total capitalized cost of the
investment acquisition. The phrase “total capitalized
cost” in the foregoing sentence shall mean all costs
necessary to acquire a manufactured home property, including
without limitation, the purchase price, closing costs, commissions,
fees, tax adjustments and other ordinary costs of acquisition. In
addition to the foregoing, the Company is required to expend 10% of
the principal amount of this Note (i.e., $300,000 in the aggregate)
separate and apart from the Note proceeds as equity investments in
acquisitions of manufactured housing properties. (As of May 8,
2017, the Company has provided evidence satisfactory to Holder of
the Company’s minimum $300,000 of equity investment in
relation to the acquisition of manufactured housing properties by
the following: (a) Butternut MHP Land LLC and Butternut MHP Homes
LLC, each a Delaware limited liability company, and (b) Pecan Grove
MHP LLC, a North Carolina limited liability company.)
Notwithstanding anything to the contrary herein, in no event shall
the Company allow or cause (i) any indebtedness to be placed at any
Person comprising an investment, or (ii) Note proceeds to be used
to repay the 10% equity investments (and such 10% equity must be
maintained at all times during the term of this Note), in each
case, without the prior written consent of Holder. The proceeds of
this Note shall be available in multiple draws (in a minimum of at
least $50,000 increments unless such draw is for the entire
remaining undisbursed principal) but this Note is not a revolving
note and no amount prepaid or repaid will be available for
borrowing. The Company shall provide Holder with at least five (5)
Business Days’ written notice of the amount and date of any
requested draw of Note proceeds along with evidence demonstrating
compliance with the conditions herein stated (each a
“Draw
Request”). Section 7 above notwithstanding, a Draw
Request may be made by email communication and will be deemed
delivered when acknowledged by Holder.
8. Except as modified
in paragraphs 1 through 4 above, the Agreement shall remain in full
force and effect as originally written.
9. This Amendment may
be executed in a number of identical counterparts, each of which
constitute collectively, one agreement; but in making proof of this
Amendment, it shall not be necessary to produce or account for more
than one counterpart.
3
Signatures
To
evidence the binding effect of the covenants and agreements
described above, the parties hereto have caused this Amendment to
be executed as of the date first above written.
|
|
COMPANY:
MOBILE
HOME RENTAL HOLDINGS LLC,
By: /s/ Xxxxxxx X.
Xxx
Name:
Xxxxxxx X. Xxx
Title:
Manager
Address
for notices: 000 Xxxx Xxxxxx
Xxxxxxxxx, XX
00000
HOLDER:
METROLINA
LOAN HOLDINGS, LLC
By: /s/ R. Xxxxxx
Xxxxxxx
Name:
R. Xxxxxx Xxxxxxx
Title:
Manager
Address
for notices: 000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxxx,
XX 00000
Members
GVEST
REAL ESTATE CAPITAL, LLC
By: /s/ Xxxxxxx X.
Xxx
Name:
Xxxxxxx X. Xxx, Manager
METROLINA
LOAN HOLDINGS, LLC
By: /s/ R. Xxxxxx
Xxxxxxx
Name:
R. Xxxxxx Xxxxxxx, Manager
|
4
