Exhibit 10.1

 

FIRST AMENDMENT TO

LOAN DOCUMENTS

 

THIS FIRST AMENDMENT TO LOAN DOCUMENTS (“First Amendment”) is entered into this
14th day of May, 2012 (“Effective Date”), by and between TWIN CITIES POWER, LLC,
a Minnesota Limited Liability Company (the “BORROWER”) and PATRICK C. SUNSERI
(the “LENDER”).  The BORROWER and LENDER are jointly referred to as “PARTIES.”

 

RECITALS:

 

WHEREAS, the LENDER and BORROWER entered into a Loan Agreement, Secured
Promissory Note and Security Agreement (the “Loan Documents”) as of July 16,
2009 (the “Effective Date”), copies of which are attached hereto and marked as
Exhibits “A,” “B” and “C” and incorporated herein;

 

WHEREAS, two of the BORROWER’s then-members, Tim Krieger and MJ Tufte (the
“Guarantors”), signed a personal guaranty as of the Effective Date, a copy of
which is attached hereto and marked as Exhibit “D” (the “Personal Guaranty”);
and

 

WHEREAS, LENDER has called for payment of  the Principal and any accrued
interest as provided in the Loan Agreement and in the Secured Note;

 

WHEREAS, the BORROWER has requested that LENDER forbear from calling for such
payment and instead enter into this First Amendment;

 

WHEREAS, the BORROWER has agreed to amend that certain May 1, 2006 Employment
Agreement between the PARTIES as part of the consideration for LENDER to agree
to this First Amendment;

 

WHEREAS, the Guarantors have consented to this First Amendment as evidenced by
the Personal Guarantors’ Consent and Ratification, dated as of the Effective
Date and attached hereto as Exhibit “E”.

 

NOW THEREFORE, in consideration of the premises described above, which
consideration is acknowledged to be sufficient, and intending to be legally
bound hereby, the

 

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PARTIES agree to amend the Loan Documents pursuant to this First Amendment to
Loan Documents as follows:

 

1.         Recitals.  The foregoing recitals are hereby incorporated herein by
reference.

 

2.         Loan Agreement.  The Loan Agreement (Exhibit “A”) is hereby amended
as follows:

 

(a)        Article 1 – Loan:

 

(i)         Strike the second sentence of Article 1 and insert in lieu thereof
the following:

 

The Loan shall accrue interest at the lower of 15% per annum based on a 365-day
year and compounded annually or at the highest rate permitted by law.

 

(ii)        Strike the last sentence of Article 1 and insert in lieu thereof the
following:

 

BORROWER shall pay the amounts set forth on the Loan Payment Table attached
hereto and incorporated herein as Schedule 2(a)(ii), by wire in immediately
available funds, in accordance with BORROWER’s instructions, on the first day of
each month, commencing on May 1, 2012, until the Loan and all interest accrued
thereon is paid in full.

 

(b)        Article 2 – LENDER’s Costs and Fees

 

(i)         Add “and any amendment to any of the foregoing and any new guaranty
or security agreement with respect to the foregoing” to the second to last line
between the words “thereto,” and “together”.

 

(c)        Article 5 – Covenants of the BORROWER:

 

(i)         Add the following new Sections:

 

(h)        BORROWER shall notify LENDER of any Event of Default as set forth in
Article 8, as amended.

 

(i)         BORROWER shall deliver to LENDER’s legal counsel, Reed Smith, LLP,
ATTN: Dwight Howes (“LENDER’s Legal Counsel”) (1) in PDF or TIF format by email
to dhowes@reedsmith.com on the same day any such communication is sent or
received or (2) by overnight courier to Reed Smith, LLP,

 

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225 Fifth Avenue, Pittsburgh, PA 15222, ATTN: Dwight Howes (Phone #(412)
288-5933) copies of all non-privileged, written communications (including
emails): (i) from the Federal Energy Regulatory Commission (“FERC”) to Twin
Cities Power Holdings, LLC or any of its direct or indirect subsidiaries
(together, “TCPH”) or any of their respective legal counsel regarding any
investigation by the FERC’s Enforcement Staff; (ii) to or from TCPH from or to
any of their respective legal counsel regarding any investigation by the FERC’s
Enforcement Staff; (iii) to or from any court with jurisdiction over any
litigation to which TCPH and former employees Cho, Brown, and Vaccaro are party
(the “Canadian Litigation”) from or to TCPH or any of their respective legal
counsel; and (iv) to or from TCPH from or to any of their respective legal
counsel regarding the Canadian Litigation.  If it is not practical to send such
communication to LENDER’s Legal Counsel by email, BORROWER shall advise LENDER’s
Legal Counsel by email, at the email address specified above, that such
communication has been sent or received, together with a description of such
communication.

 

(c)        Article 8 – Events of Default:

 

(i)         Strike the word “or” at the end of Section 8(i);

 

(ii)        Add the following new provisions after Section 8(j):

 

(k)        Total liquid assets (cash or cash equivalents) in BORROWER’s
accounts, less the total debt of Twin Cities Power Holdings, LLC (“TCPH”) and
its direct and indirect subsidiaries, is less than $1,000,000;

 

(l)         Total liquid assets (cash or cash equivalents) in TCPH’s and its
direct and indirect subsidiaries’ accounts falls below $10,000,000;

 

(m)       Any judgment of more than $1,000,000 is entered against any direct or
indirect subsidiary of TCPH that is not satisfied within a 30-day period;

 

(n)        TCPH or any of its direct or indirect subsidiaries receives a notice
of probable violation or any notice to such effect from the Federal Energy
Regulatory Commission (“FERC”);

 

(o)        TCPH or any of its direct or indirect subsidiaries makes any payment
outside the ordinary course of business, including under any lease not currently
in effect; or

 

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(p)        Any payment by TCPH or any of its direct or indirect subsidiaries on
any debt or other obligation of more than $250,000 is more than five days over
due.

 

(d)        Section 11(i) – Notices:

 

(i)         add the following address to Notices to LENDER, 1 Landview Court,
Robbinsville, NJ 08691;

 

(ii)        change the Phone Number for LENDER to 609-223-0791.

 

(e)        Section 11(d) – Dispute Resolution, add the following new sentence to
the end of Section 11(d):

 

BORROWER acknowledges that LENDER could be irreparably harmed by any breach by
BORROWER of any covenant of the Loan Agreement as amended, and that money
damages may not constitute a sufficient remedy for any such breach, and
therefore, notwithstanding the foregoing provision relating to arbitration, if
BORROWER breaches any such covenant, then LENDER shall be entitled to seek
specific performance, an injunction, and other equitable relief from any court
of competent jurisdiction, without any necessity of posting any bond or other
security in connection therewith and without any prejudice to any rights LENDER
may have pursuant to the Loan Agreement as amended, at law, or otherwise.

 

(f)         Add the following new Article:

 

13.       Corporate Guarantee.  Pursuant to a separate agreement to be entered
into as of the Effective Date, and as a condition precedent to the effectiveness
of this First Amendment to Loan Documents, Twin Cities Power Holdings, LLC, a
Minnesota Limited Liability Company, shall ratify this First Amendment and shall
absolutely, unconditionally and irrevocably guarantee all obligations of
BORROWER to LENDER pursuant to the Loan Documents as amended.

 

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3.         Secured Promissory Note.  The Secured Promissory Note (Exhibit “B”)
is hereby amended to provide for payment of principal and interest to be
amortized over a twelve month period as set forth in Schedule 2(a)(ii).

 

4.         Security Agreement.  The PARTIES acknowledge and agree that the
Security Agreement (Exhibit “C”) and any financing statement filed in connection
therewith are intended to apply to the Secured Promissory Note as amended
hereby.

 

5.         Ratification.  All terms and conditions of the Loan Documents, except
as amended by this First Amendment, are hereby ratified by the PARTIES and shall
remain in full force and effect.

 

In witness whereof, the PARTIES have executed or caused their duly authorized
representative to execute this First Amendment to Loan Documents as of the
Effective Date.

 

BORROWER:

 

LENDER:

Twin Cities Power, LLC

 

 

 

 

 

By:

/s/ Timothy S. Krieger

 

 

/s/ Patrick C. Sunseri

 

 

Timothy S. Krieger

 

Patrick C. Sunseri

 

Its: President/CEO

 

 

 

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EXHIBIT “A”

 

to

 

FIRST AMENDMENT TO LOAN DOCUMENTS

 

Copy of July 16, 2009 Loan Agreement

 

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EXHIBIT “B”

 

to

 

FIRST AMENDMENT TO LOAN DOCUMENTS

 

Copy of July 16, 2009 Secured Note

 

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EXHIBIT “C”

 

to

 

FIRST AMENDMENT TO LOAN DOCUMENTS

 

Copy of July 16, 2009 Security Agreement

 

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EXHIBIT “D”

 

to

 

FIRST AMENDMENT TO LOAN DOCUMENTS

 

Copy of July 16, 2009 Personal Guaranty

 

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EXHIBIT “E”

 

to

 

FIRST AMENDMENT TO LOAN DOCUMENTS

 

Copy of Personal Guarantors’ Consent and Ratification

 

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