THIRD LOAN MODIFICATION AGREEMENT (Loan No. 9117000148)
Exhibit 10.4
(Loan
No. 0000000000)
This Loan
Modification Agreement (“Third Modification”) is made and entered as of May 1,
2008, between CALIFORNIA BANK
& TRUST, a California banking corporation (“Bank”); 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 “Original Borrower”), and ICON LEASING FUND TWELVE, LLC
(“Added Borrower”). As used herein the term “Borrower” means,
separately and collectively, the Added Borrower and the Original
Borrower.
RECITALS
A. Pursuant
to the terms of a Commercial Loan Agreement (the "Loan Agreement") between Bank
and Original Borrower, dated as of August 31, 2005, Bank agreed to make a
revolving line of credit in the principal sum of $17,000,000 (the “Line of
Credit”) available to Original 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 (the “Note”) of even date with
the Loan Agreement, executed by Original Borrower in favor of Bank.
C. Original
Borrower's indebtedness under the Loan Agreement was secured by assets of
Original Borrower under a separate Security Agreement, dated August 31, 2005
(the “Security Agreement” executed by each entity comprising Original
Borrower).
D. Under
the terms of a Loan Modification Agreement, dated as of December 26, 2006,
executed by Original Borrower and Bank (the “First Modification”), the Loan
Agreement was amended.
E. Under
a further Loan Modification Agreement, dated June 20, 2007, executed by Original
Borrower, Added Borrower, and Bank (“Second Modification”), among other things,
Added Borrower became a Borrower under the Loan Agreement and became a party to
the Security Agreement, Alternative Dispute Resolution Agreement, Designation of
Deposit Accounts and Contribution Agreement which had previously been executed
by Original Borrower. By the Second Modification, and amended note
(the “Amended Note”) replaced the Note and there were amendments to a financial
reporting covenant under the Loan Agreement. As used herein the term
“Prior Modifications” means the First Modification and the Second
Modification.
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 Third 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 Amended Note and to proceed to enforce the
rights and remedies available to Bank as provided in the Amended Note, Loan
Agreement, Security Agreement, Prior Modifications 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.
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 Third Modification and the other Loan Documents
are true and correct in all material respects as of the date of this Third
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 Third 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 “Line of
Credit Expiration Date” and replacing it in its entirety with the
following:
“Line of Credit Expiration
Date” shall mean April 30, 2010, unless extended pursuant to Section
2.1.a.
(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 Thirty Million Dollars ($30,000,000.00) 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
$30,000,000.00. 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) 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) The first
sentence of Section 3.5.c. of the Loan Agreement, entitled “Unused Commitment
Fee,” is deleted and replaced in its entirety with the following:
For the
Line of Credit, Borrower agrees to pay a fee (“Unused Commitment Fee”) equal to
the product of one-quarter of one percent (0.25%) multiplied by the difference
between Thirty Million Dollars ($30,000,000.00) and the amount of credit
extended to Borrower, determined by the Average Loan Balance, as defined below,
maintained during the Line of Credit Availability Period.
(d) 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 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 Three Hundred Million
Dollars ($300,000,000.00).
(e) 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 Borrower,
Liquidity of at least Ten Million Dollars ($10,000,000.00).
(f) The
Amended Note is superseded and replaced by the Second Amended Note, described
below, and all references in the Loan Documents to “Note” shall mean and refer
to the Second Amended Note.
(g) The form
of the Compliance Certificate shall be replaced by the Second Amended Compliance
Certificate appended hereto.
(h) Upon the
effectiveness of this Third 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 Third Modification and the Second Amended Note
in form satisfactory to Bank;
(b) Execution
and delivery to Bank of a Corporate Resolution for Borrowing by Limited
Liability Companies and Limited Partnership in form satisfactory to
Bank;
(c) Execution
and delivery to Bank of a Certificate of Limited Liability Company and
Authorization to Sign on behalf of Added Borrower;
(d) Such
other documents or instruments as Bank shall reasonably require;
(e) 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;
and
(f) Payment
of a line of credit extension fee in the sum of $75,000.00 to Bank.
(g) Payment
of Bank's reasonable attorneys 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.
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 Third 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 Third Modification, Borrower hereby acknowledges,
reaffirms and confirms its obligations under the Loan Documents.
10. Entire
Agreement. This
Third 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 Third Modification and
any documents referred to herein, this Third Modification shall
prevail. No amendment of this Third Modification shall be valid
unless it is in writing and is signed by the parties to this Third
Modification.
11. Counterparts. This Third
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 Third Modification by facsimile shall be
effective as delivery of a manually executed counterpart of this Third
Modification.
IN
WITNESS WHEREOF, the parties have executed this Modification as of the day and
year first above written.
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ICON
INCOME FUND EIGHT B L.P.,
a
Delaware limited partnership
By: ICON CAPITAL CORP.,its
general partner
By: /s/ Xxxxxxx X.
Xxxxxxx
Xxxxxxx X. Xxxxxxx
Co-President
and Co-Chief Executive Officer
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CALIFORNIA BANK &
TRUST,
a
California banking corporation
By: /s/
J. Xxxxxxx Xxxxxxxx
Name: J. Xxxxxxx
Xxxxxxxx
Title: Vice President
andRelationship Manager
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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: Xxxxxxx
X. Xxxxxxx
Co-President
and Co-Chief Executive Officer
Facsimile
No.: (000) 000-0000
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Address
where notices are to be sent:
South
Bay Commercial Banking
0000
Xxxxx Xx Xxxxxx Xxxx
Xxx
Xxxxx, XX 00000
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ICON
INCOME FUND NINE, LLC,
a
Delaware limited liability company
By: ICON CAPITAL CORP.,its
manager
By: /s/ Xxxxxxx X.
Xxxxxxx
Xxxxxxx X. Xxxxxxx
Co-President and Co-Chief
Executive 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: Xxxxxxx
X. Xxxxxxx
Co-President
and Co-Chief Executive Officer
Facsimile
No.: (000) 000-0000
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ICON
INCOME FUND TEN, LLC,
a
Delaware limited liability company
By: ICON CAPITAL CORP.,its
manager
By: /s/ Xxxxxxx X.
Xxxxxxx
Xxxxxxx X. Xxxxxxx
Co-President and Co-Chief
Executive 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: Xxxxxxx
X. Xxxxxxx
Co-President
and Co-Chief Executive Officer
Facsimile
No.: (000) 000-0000
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ICON
LEASING FUND ELEVEN, LLC,
a
Delaware limited liability company
By: ICON CAPITAL CORP.,its
manager
By: /s/ Xxxxxxx X.
Xxxxxxx
Xxxxxxx X. Xxxxxxx
Co-President and Co-Chief
Executive Officer
|
|
|
Address
where notices are to be sent:
ICON
LEASING FUND ELEVEN, LLC
c/o
ICON Capital Corp., its manager
000
Xxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention: General
Counsel
Attention: Xxxxxxx
X. Xxxxxxx
Co
President and Co-Chief Executive Officer
Facsimile
No.: (000) 000-0000
|
|
|
a
Delaware limited liability company
By: ICON CAPITAL CORP.,its
manager
By: /s/ Xxxxxxx X.
Xxxxxxx
Xxxxxxx X. Xxxxxxx
Co-President and Co-Chief
Executive 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: Xxxxxxx
X. Xxxxxxx
Co
President and Co-Chief Executive Officer
Facsimile
No.: (000) 000-0000
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