Exhibit 10.1

 

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*0000010011855-0001007002202018* BUSINESS LOAN AGREEMENT Principal Loan Date
Maturity Loan No Call / coll Account Officer Initials $9,000,000.00 02-20-2018
01-26-2019 10011855-0001 0510/0090 444 References in the boxes above are for
Lender's use only and do not limit the applicability of this document to any
particular loan or item. Any item above containing "***" has been omitted due to
text length limitations. Borrower: RW HOLDINGS NNN REIT, INC.; RICH UNCLES
Lender: PACIFIC MERCANTILE BANK NNN OPERATING PARTNERSHIP, LP; AND RICH UNCLES
NNN LP, LLC NEWPORT BEACH 3090 BRISTOL STREET, SUITE 550 450 NEWPORT CENTER
DRIVE, STE. 250 COSTA MESA,CA 92626 NEWPORT BEACH, CA 92660 THIS BUSINESS LOAN
AGREEMENT dated February 20, 2018, is made and executed between RW HOLDINGS NNN
REIT, INC.; RICH UNCLES NNN OPERATING PARTNERSHIP, LP; and RICH UNCLES NNN LP,
LLC ("Borrower") and PACIFIC MERCANTILE BANK ("Lender") on the following terms
and conditions. Borrower has received prior commercial loans from Lender or has
applied to Lender for a commercial loan or loans or other financial
accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement. Borrower understands and agrees that: (A)
in granting, renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements as set forth in this Agreement; (B)
the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and discretion; and (C) all such Loans shall
be and remain subject to the terms and conditions of this Agreement. TERM. This
Agreement shall be effective as of February 20, 2018, and shall continue in full
force and effect until such time as all of Borrower's Loans in favor of Lender
have been paid in full, including principal, interest, costs, expenses,
attorneys' fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement. ADVANCE AUTHORITY. The
following person or persons are authorized to request advances and authorize
payments under the line of credit until Lender receives from Borrower, at
Lender's address shown above, written notice of revocation of such authority:
(1) HAROLD C. HOFER, CEO/President of RW HOLDINGS NNN REIT, INC.; JOHN H. DAVIS,
CFO of RW HOLDINGS NNN REIT, INC.; JEAN CHI EN HO, SECRETARY of RW HOLDINGS NNN
REIT, INC.; (2) HAROLD C. HOFER, CEO/President of RW HOLDINGS NNN REIT, INC,
JOHN H. DAVIS, CFO of RW HOLDINGS NNN REIT, INC.; JEAN CHI EN HO, SECRETARY of
RW HOLDINGS NNN REIT, INC., General Partner of RICH UNCLES NNN OPERATING
PARTNERSHIP, LP; and (3) HAROLD C. HOFER, CEO/President of RW HOLDINGS NNN REIT,
INC., JOHN H. DAVIS, CFO of RW HOLDINGS NNN REIT, INC.; JEAN CHI EN HO,
SECRETARY of RW HOLDINGS NNN REIT, INC., Member of RICH UNCLES NNN LP, LLC.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents. Loan Documents. Borrower shall provide
to Lender the following documents for the Loan: (1) the Note; (2) guaranties;
(3) together with all such Related Documents as Lender may require for the Loan;
all in form and substance satisfactory to Lender and Lender's counsel.
Borrower's Authorization. Borrower shall have provided in form and substance
satisfactory to Lender properly certified resolutions, duly authorizing the
execution and delivery of this Agreement, the Note and the Related Documents. In
addition, Borrower shall have provided such other resolutions, authorizations,
documents and instruments as Lender or its counsel, may require. Payment of Fees
and Expenses. Borrower shall have paid to Lender all fees, charges, and other
expenses which are then due and payable as specified in this Agreement or any
Related Document. Representations and Warranties. The representations and
warranties set forth in this Agreement, in the Related Documents, and in any
document or certificate delivered to Lender under this Agreement are true and
correct. No Event of Default. There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this Agreement or
under any Related Document. MULTIPLE BORROWERS. This Agreement has been executed
by multiple obligors who are referred to in this Agreement individually,
collectively and interchangeably as "Borrower." Unless specifically stated to
the contrary, the word "Borrower" as used in this Agreement, including without
limitation all representations, warranties and covenants, shall include all
Borrowers. Borrower understands and agrees that, with or without notice to any
one Borrower, Lender may (A) make one or more additional secured or unsecured
loans or otherwise extend additional credit with respect to any other Borrower;
(B) with respect to any other Borrower alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms of any indebtedness, including increases and decreases of the rate of
interest on the indebtedness; (C) exchange, enforce, waive, subordinate, fail or
decide not to perfect, and release any security, with or without the
substitution of new collateral; (D) release, substitute, agree not to sue, or
deal with any one or more of Borrower's or any other Borrower's sureties,
endorsers, or other guarantors on any terms or in any manner Lender may choose;
(E) determine how, when and what application of payments and credits shall be
made on any indebtedness; (F) apply such security and direct the order or manner
of sale of any Collateral, including without limitation, any non-judicial sale
permitted by the terms of the controlling security agreement or deed of trust,
as Lender in its discretion may determine; (G) sell, transfer, assign or grant
participations in all or any part of the Loan; (H) exercise or refrain from
exercising any rights against Borrower or others, or otherwise act or refrain
from acting; (I) settle or compromise any indebtedness; and (J) subordinate the
payment of all or any part of any of Borrower's Indebtedness to Lender to the
payment of any liabilities which may be due Lender or others. REPRESENTATIONS
AND WARRANTIES. Borrower represents and warrants to Lender, as of the data of
this Agreement, as of the date of each disbursement of loan proceeds, as of the
date of any renewal, extension or modification of any Loan, and at all times any
Indebtedness exists:

 

 

 

 

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Organization. RW HOLDINGS NNN REIT, INC. is a corporation for profit which is,
and at all times shall be, duly organized, validly existing, and in good
standing under and by virtue of the laws of the State of Maryland. RW HOLDINGS
NNN REIT, INC. is duly authorized to transact business in all other states in
which RW HOLDINGS NNN REIT, INC. is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which
RW HOLDINGS NNN REIT, INC. is doing business. Specifically, RW HOLDINGS NNN
REIT, INC. is, and at all times shall be, duly qualified as a foreign
corporation in all states in which the failure to so qualify would have a
material adverse effect on its business or financial condition. RW HOLDINGS NNN
REIT, INC. has the full power and authority to own its properties and to
transact the business in which it is presently engaged or presently proposes to
engage. RW HOLDINGS NNN REIT, INC. maintains an office at 3090 BRISTOL STREET,
SUITE 550, COSTA MESA, CA 92626. Unless RW HOLDINGS NNN REIT, INC. has
designated otherwise in writing, the principal office is the office at which RW
HOLDINGS NNN REIT, INC. keeps its books and records including its records
concerning the Collateral. RW HOLDINGS NNN REIT, INC. will notify Lender prior
to any change in the location of RW HOLDINGS NNN REIT, INC.'s state of
organization or any change in RW HOLDINGS NNN REIT, INC.'s name. RW HOLDINGS NNN
REIT, INC. shall do all things necessary to preserve and to keep in full force
and effect its existence, rights and privlleges, and shall comply with all
regulations, rules, ordinances, statutes, orders and decrees of any governmental
or quasi-governmental authority or court applicable to RW HOLDINGS NNN REIT,
INC. and RW HOLDINGS NNN REIT, INC.'s business activities. RICH UNCLES NNN
OPERATING PARTNERSHIP, LP is a limited partnership which is, and at all times
shall be, duly organized, validly existing, and in good standing under and by
virtue of the laws of the State of Delaware. RICH UNCLES NNN OPERATING
PARTNERSHIP, LP is duly authorized to transact business in all other states in
which RICH UNCLES NNN OPERATING PARTNERSHIP, LP is doing business, having
obtained all necessary filings, governmental licenses and approvals for each
state in which RICH UNCLES NNN OPERATING PARTNERSHIP, LP is doing business.
Specifically, RICH UNCLES NNN OPERATING PARTNERSHIP, LP is, and at all times
shall be, duly qualified as a foreign limited partnership in all states in which
the failure to so qualify would have a material adverse effect on its business
or financial condition. RICH UNCLES NNN OPERATING PARTNERSHIP, LP has the full
power and authority to own its properties and to transact the business in which
it is presently engaged or presently proposes to engage. RICH UNCLES NNN
OPERATING PARTNERSHIP, LP maintains an office at 3090 BRISTOL STREET, SUITE 550,
COSTA MESA, CA 92626. Unless RICH UNCLES NNN OPERATING PARTNERSHIP, LP has
designated otherwise in writing, the principal office is the office at which
RICH UNCLES NNN OPERATING PARTNERSHIP, LP keeps its books and records including
its records concerning the Collateral. RICH UNCLES NNN OPERATING PARTNERSHIP, LP
will notify Lender prior to any change in the location of RICH UNCLES NNN
OPERATING PARTNERSHIP, LP's principal office address or any change in RICH
UNCLES NNN OPERATING PARTNERSHIP, LP's name. RICH UNCLES NNN OPERATING
PARTNERSHIP, LP shall do all things necessary to preserve and to keep in full
force and effect its existence, rights and privileges, and shall comply with all
regulations, rules, ordinances, statutes, orders and decrees of any governmental
or quasi-governmental authority or court applicable to RICH UNCLES NNN OPERATING
PARTNERSHIP, LP and RICH UNCLES NNN OPERATING PARTNERSHIP, LP's business
activities. RICH UNCLES NNN LP, LLC is a limited liability company which is, and
at all times shall be, duly organized, validly existing, and in good standing
under and by virtue of the laws of the State of Delaware. RICH UNCLES NNN LP,
LLC is duly authorized to transact business in all other states in which RICH
UNCLES NNN LP, LLC is doing business, having obtained all necessary filings,
governmental licenses and approvals for each state in which RICH UNCLES NNN LP,
LLC is doing business. Specifically, RICH UNCLES NNN LP, LLC is, and at all
times shall be, duly qualified as a foreign limited liability company in all
states in which the failure to so qualify would have a material adverse effect
on its business or financial condition. RICH UNCLES NNN LP, LLC has the full
power and authority to own its properties and to transact the business in which
it is presently engaged or presently proposes to engage. RICH UNCLES NNN LP, LLC
maintains an office at 3090 BRISTOL STREET, SUITE 550, COSTA MESA, CA 92626.
Unless RICH UNCLES NNN LP, LLC has designated otherwise in writing, the
principal office is the office at which RICH UNCLES NNN LP, LLC keeps its books
and records including its records concerning the Collateral. RICH UNCLES NNN LP,
LLC will notify Lender prior to any change in the location of RICH UNCLES NNN
LP, LLC's state of organization or any change in RICH UNCLES NNN LP, LLC's name.
RICH UNCLES NNN LP, LLC shall do all things necessary to preserve and to keep in
full force and effect its existence, rights and privileges, and shall comply
with all regulations, rules, ordinances, statutes, orders and decrees of any
governmental or quasi-governmental authority or court applicable to RICH UNCLES
NNN LP, LLC and RICH UNCLES NNN LP, LLC's business activities. Assumed Business
Names. Borrower has filed or recorded all documents or filings required by law
relating to all assumed business names used by Borrower. Excluding the name of
Borrower, the following is a complete list of all assumed business names under
which Borrower does business: Borrower Assumed Business Name Filing Location
Date RW HOLDINGS NNN REIT, INC. RICH UNCLES NNN REIT, INC. ORANGE COUNTY
09-01-2017 Authorization. Borrower's execution, delivery, and performance of
this Agreement and all the Related Documents have been duly authorized by all
necessary action by Borrower and do not conflict with, result in a violation of,
or constitute a default under (1) any provision of (a) Borrower's articles of
incorporation or organization, or bylaws, or (b) Borrower's articles or
agreements of partnership, or (c) Borrower's articles of organization or
membership agreements, or (d) any agreement or other instrument binding upon
Borrower or (2) any law, governmental regulation, court decree, or order
applicable to Borrower or to Borrower's properties. Financial Information. Each
of Borrower's financial statements supplied to Lender truly and completely
disclosed Borrower's financial condition as of the date of the statement, and
there has been no material adverse change in Borrower's financial condition
subsequent to the date of the most recent financial statement supplied to
Lender. Borrower has no material contingent obligations except as disclosed in
such financial statements. Legal Effect. This Agreement constitutes, and any
instrument or agreement Borrower is required to give under this Agreement when
delivered will constitute legal, valid, and binding obligations of Borrower
enforceable against Borrower in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously disclosed
in borrower’s financial statements or in writing to lender and as accepted by
Lender, and except for property tax liens for taxes not presently due and
payable, Borrower owns and has good title to all of Borrower’s properties free
and clear of all Security interests, and has not executed any security documents
or financing statements relating to such properties. All of Borrower’s
properties are titled in Borrower’s legal name, and Borrower has not used or
filed a financing statement under any other name for at least the last five (5)
years. (initials)

 

 

 

 

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Hazardous Substances. Except as disclosed to and acknowledged by Lender in
writing, Borrower represents and warrants that: (1) During the period of
Borrower's ownership of the Collateral, there has been no use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any
Hazardous Substance by any person on, under, about or from any of the
Collateral. (2) Borrower has no knowledge of, or reason to believe that there
has been (a) any breach or violation of any Environmental Laws; (b) any use,
generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance on, under, about or from the Collateral by
any prior owners or occupants of any of the Collateral; or (c) any actual or
threatened litigation or claims of any kind by any person relating to such
matters. (3) Neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the Collateral shall use, generate, manufacture,
store, treat, dispose of or release any Hazardous Substance on, under, about or
from any of the Collateral; and any such activity shall be conducted in
compliance with all applicable federal, state, and local laws, regulations, and
ordinances, including without limitation all Environmental Laws. Borrower
authorizes Lender and its agents to enter upon the Collateral to make such
inspections and tests as Lender may deem appropriate to determine compliance of
the Collateral with this section of the Agreement. Any inspections or tests made
by Lender shall be at Borrower's expense and for Lender's purposes only and
shall not be construed to create any responsibility or liability on the part of
Lender to Borrower or to any other person. The representations and warranties
contained herein are based on Borrower's due diligence in investigating the
Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1)
releases and waives any future claims against Lender for indemnity or
contribution in the event Borrower becomes liable for cleanup or other costs
under any such laws, and (2) agrees to indemnify, defend, and hold harmless
Lender against any and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or suffer resulting
from a breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened release of a
hazardous waste or substance on the Collateral. The provisions of this section
of the Agreement, including the obligation to indemnify and defend, shall
survive the payment of the indebtedness and the termination, expiration or
satisfaction of this Agreement and shall not be affected by Lender's acquisition
of any interest in any of the Collateral, whether by foreclosure or otherwise.
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially
adversely affect Borrower's financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing. Taxes. To the best of Borrower's knowledge,
all of Borrower's tax returns and reports that are or were required to be filed,
have been filed, and all taxes, assessments and other governmental charges have
been paid in full, except those presently being or to be contested by Borrower
in good faith in the ordinary course of business and for which adequate reserves
have been provided. Lien Priority. Unless otherwise previously disclosed to
Lender in writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security Interests on
or affecting any of the Collateral directly or indirectly securing repayment of
Borrower's Loan and Note, that would be prior or that may in any way be superior
to Lender's Security Interests and rights in and to such Collateral. Binding
Effect. This Agreement, the Note, all Security Agreements (if any), and all
Related Documents are binding upon the signers thereof, as well as upon their
successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms. AFFIRMATIVE COVENANTS. Borrower
covenants and agrees with Lender that, so long as this Agreement remains in
effect, Borrower will: Notices of Claims and Litigation. Promptly inform Lender
in writing of (1) all material adverse changes in Borrower's financial
condition, and (2) all existing and all threatened litigation, claims,
investigations, administrative proceedings or similar actions affecting Borrower
or any Guarantor which could materially affect the financial condition of
Borrower or the financial condition of any Guarantor. Financial Records.
Maintain its books and records in accordance with GAAP, applied on a consistent
basis, and permit Lender to examine and audit Borrower's books and records at
all reasonable times. Financial Statements. Furnish Lender with the following:
Additional Requirements. Financial Statements (RW.Holdlngs NNN REIT, inc.). As
soon as available, but in no event later than one-hundred-twenty (120) days
after the end of each fiscal year, Borrower's balance sheet and income statement
for the year ended, audited by a Certified Public Accountant and filed with the
Securities and Exchange Commission. Interim Statements (RW Holdings NNN REIT,
Inc.). As soon as available, but in no event later than fifty (50) days after
the end of each fiscal quarter, Borrower's balance sheet and profit and loss
statement for the period ended, prepared by Borrower and filed with the
Securities and Exchange Commission. Financial Information from Guarantor.
Guarantor's shall provide or cause to be provided to Lender, the following
financial information and statements in form and content acceptable to Lender as
indicated below: Tax Returns (Individual). As soon as available, but in no event
later than thirty (30) days after filing, Guarantor's signed and dated Federal
and other governmental tax returns including all Statements and Schedules
(K-1's), prepared by a tax professional; and if applicable copies of any
extensions. Financial Statements (Individual). As soon as available, but in no
event later than thirty (30) days upon request, Guarantor's personal statement
for the year ended, prepared by Guarantor and satisfactory to Lender. Liquidity
Requirement. Guarantor's, Raymond E. Wirta, Ray Wirta and Sandra Wirta Trust FBO
Wirta Family Trust UTA 7-5-05, Harold C. Hofer and Amendment to and Complete
Restatement of Declaration of Trust Establishing the Harold C. Hofer Revocable
Trust Established July 1, 1996, to maintain a minimum combined liquidity of
$15,000,000.00 to be measured on a semi-annual basis as of June 30th and
December 31st of each calendar year. Bank to be in receipt of such statements no
later than thirty (30) days after each required reporting period. The term
"Liquidity" is defined as cash and readily marketable securities verified by
bank or stock statements. All financial reports required to be provided under
this Agreement shall be prepared in accordance with GAAP, applied on a
consistent basis, and certified by Borrower and Guarantor's as being true and
correct. Additional Information. Furnish such additional information and
statements, as Lender may request from time to time.

 

 

 

 

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Additional Requirements. Debt Service Coverage Ratio. Borrower to maintain a
minimum Debt Service Coverage Ratio of not less than 1.350 to 1.000. Debt
Service Coverage Ratio is defined as: Earnings Before Interest, Depreciation and
Amortization less cash dividends, divided by the prior period Current Portion of
Long Term Debt, Capitalized Lease payments and Current Period Interest Expense,
This ratio will be measured quarterly off of the 10-Q and year end form Audited
Statements/10-K. ADDITIONAL PROVISIONS. Borrower to comply with the following
provisions: Loan Balance. Notwithstanding anything in this Agreement to the
contrary, Borrower agrees that for a period of thirty (30) consecutive days
during each of its fiscal years. Borrower shall repay the entire outstanding
principal balance on the Loan and during such period Borrower shall not have the
right to, and Borrower shall not request an advance of funds under the Loan.
Springing Guaranty. The loan will be secured by Springing Guaranties which shall
become effective at such time as there is a Trigger Event, as defined below. The
Guaranties are intended to be a present obligation of a future contingent
commitment. A “Trigger Event” Is defined as one or more of the following: A. The
Guaranties shall be effective until the existing principal balance of the Loan
as of the date of this Agreement is paid in full. B. Failure to pay one or more
subsequent advances under the Loan within ninety (90) days of the disbursement
date of such advance. In the event that the Guaranty becomes effective based on
the foregoing section, the Guaranty will remain in effect until the advance or
advances are paid in full. C. The Loan to Value ratio on any real property which
Is acquired with funding in whole or in part from the Loan exceeds 75 percent at
origination of the third party long-term financing secured by the property. In
this case, the Guaranty shall become effective until the Loan Is paid in full.
D. Any Event of Default is called and remains uncured under the Loan Documents
or Borrower defaults under the agreements governing the Real Estate Investment
Trust, In this case, the Guaranty shall become effective until the Event of
Default is cured or until the Loan is paid in full. Insurance. Maintain fire and
other risk insurance, public liability insurance, and such other insurance as
Lender may require with respect to Borrower’s properties and operations, in
form, amounts, coverages and with insurance companies acceptable to Lender.
Borrower, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at least
ten (10) days prior written notice to Lender. Each insurance policy also shall
include an endorsement providing that coverage in favor of Lender will not be
impaired in any way by any act, omission or default of Borrower or any other
person. In connection with all policies covering assets in which Lender holds or
is offered a security interest for the Loans, Borrower will provide Lender with
such lender’s loss payable or other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on each
existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (1) the name of the
insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties
insured; (5) the then current property values on the basis of which insurance
has been obtained, and the manner of determining those values; and (6) the
expiration date of the policy. In addition, upon request of Lender (however not
more often than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value or
replacement cost of any Collateral. The cost of such appraisal shall be paid by
Borrower. Guaranties. Prior to disbursement of any Loan proceeds, furnish
executed guaranties of the Loans in favor of Lender, executed by the guarantors
named below, on Lender’s forms, and In the amounts and under the conditions set
forth in those guaranties. Names of Guarantors Amounts RAYMOND E. W1RTA
$9,000,000.00 RAY WIRTA AND SANDRA WIRTA TRUST FBO WIRTA FAMILY TRUST UTA 7-5-05
$9,000,000.00 HAROLD C. HOFER $9,000,000.00 AMENDMENT TO AND COMPLETE
RESTATEMENT OF DECLARATION OF TURST ESTABLISHING THE HAROLD C. HOFER REVOCABLE
TRUST ESTABLISHED JULY 1. 1996 $9,000,000.00 Other Agreements. Comply with all
terms and conditions of ail other agreements, whether now or hereafter existing,
between Borrower and any other party and notify Lender immediately in writing of
any default in connection with any other such agreements. Loan Proceeds. Use all
Loan proceeds solely for Borrower’s business operations, unless specifically
consented to the contrary by Lender in writing. Taxes, Charges and Liens. Pay
and discharge when due all of its indebtedness and obligations, Including
without limitation all assessments, taxes, governmental charges, levies and
liens, of every kind and nature, imposed upon Borrower or its properties,
income, or profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any of
Borrower’s properties, income, or profits. Provided however. Borrower will not
be required to pay and discharge any such assessment, tax, charge, levy, lien or
claim so long as (1) the legality of the same shall be contested in good faith
by appropriate proceedings, and (2) Borrower shall have established on
Borrower’s books adequate reserves with respect to such contested assessment,
tax, charge, levy, lien, or claim in accordance with GAAP.

 

 

 

 

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Performance. Perform and comply, in a timely manner, with all terms, conditions,
and provisions set forth in this Agreement, in the Related Documents, and in all
other instruments and agreements between Borrower and Lender. Borrower shall
notify Lender immediately in writing of any default in connection with any
agreement. Operations. Maintain executive and management personnel with
substantially the same qualifications and experience as the present executive
and management personnel; provide written notice to Lender of any change in
executive and management personnel; conduct its business affairs in a reasonable
and prudent manner. Environmental Studies. Promptly conduct and complete, at
Borrower’s expense, all such investigations, studies, samplings and testings as
may be requested by Lender or any governmental authority relative to any
substance, or any waste or by-product of any substance defined as toxic or a
hazardous substance under applicable federal, state, or local law, rule,
regulation, order or directive, at or affecting any property or any facility
owned, leased or used by Borrower. Compliance with Governmental Requirements.
Comply with all laws, ordinances, and regulations, now or hereafter in effect,
of all governmental authorities applicable to the conduct of Borrower’s
properties, businesses and operations, and to the use or occupancy of the
Collateral, Including without limitation, the Americans With Disabilities Act.
Borrower may contest in good faith any such law, ordinance, or regulation and
withhold compliance during any proceeding, Including appropriate appeals, so
long as Borrower has notified Lender in writing prior to doing so and so long
as, in Lender’s sole opinion, Lender’s interests in the Collateral are not
jeopardized. Lender may require Borrower to post adequate security or a surety
bond, reasonably satisfactory to Lender, to protect Lender’s interest.
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower’s other
properties and to examine or audit Borrower’s books, accounts, and records and
to make copies and memoranda of Borrower’s books, accounts, and records. If
Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party, Borrower, upon
request of Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of any records
it may request, all at Borrower’s expense. Compliance Certificates. Unless
waived in writing by Lender, provide Lender within fifty (50) days after the end
of each fiscal quarter, with a certificate executed by Borrower’s chief
financial officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement are true and
correct as of the date of the certificate and further certifying that, as of the
date of the certificate, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects with
any and all Environmental Laws; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on Borrower’s part or on the
part of any third party, on property owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
Instrumentality concerning any Intentional or unintentional action or omission
on Borrower’s part in connection with any environmental activity whether or not
there is damage to the environment and/or other natural resources. Additional
Assurances. Make, execute and deliver to Lender such promissory notes,
mortgages, deeds of trust, security agreements, assignments, financing
statements, Instruments, documents and other agreements as Lender or its
attorneys may reasonably request to evidence and secure the Loans and to perfect
all Security Interests. LENDER’S EXPENDITURES. If any action or proceeding is
commenced that would materially affect Lender’s interest In the Collateral or if
Borrower fails to comply with any provision of this Agreement or any Related
Documents, including but not limited to Borrower’s failure to discharge or pay
when due any amounts Borrower is required to discharge or pay under this
Agreement or any Related Documents, Lender on Borrower’s behalf may (but shall
not be obligated to) take any action that Lender deems appropriate, including
but not limited to discharging or paying all taxes, liens, security Interests,
encumbrances and other claims, at any time levied or placed on any Collateral
and paying all costs for insuring, maintaining and preserving any Collateral.
All such expenditures Incurred or paid by Lender for such purposes will then
bear interest at the rate charged under the Note from the date incurred or paid
by Lender to the date of repayment by Borrower. All such expenses will become a
part of the Indebtedness and, at Lender’s option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note’s
maturity. NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that
while this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender: Continuity of Operations. (1) Engage in any business
activities substantially different than those in which Borrower is presently
engaged, (2) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change its name, dissolve or transfer or sell
Collateral out of the ordinary course of business, or (3) pay any dividends on
Borrower’s stock (other than dividends payable in its stock), provided, however
that notwithstanding the foregoing, but only so long as no Event of Default has
occurred and is continuing or would result from the payment of dividends.
CESSATION OF ADVANCES. if Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower’s financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor’s guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have
occurred. DEFAULT, Each of the following shall constitute an Event of Default
under this Agreement: Payment Default. Borrower fails to make any payment when
due under the Loan. Other Defaults. Borrower fails to comply with or to perform
any other term, obligation, covenant or condition contained in this Agreement or
in any

 

 

 

 

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of the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person that
may materially affect any of Borrower’s or any Grantor’s property or Borrower’s
or any Grantor’s ability to repay the Loans or perform their respective
obligations under this Agreement or any of the Related Documents, False
Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower’s behalf under this Agreement or the Related
Documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower’s existence as a going
business or the death of any partner, the insolvency of Borrower, the
appointment of a receiver for any part of Borrower’s property, any assignment
for the benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower. Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien)
at any time and for any reason. Creditor or Forfeiture Proceedings. Commencement
of foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of Borrower or by
any governmental agency against any collateral securing the Loan. This Includes
a garnishment of any of Borrower’s accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a good faith
dispute by Borrower as to the validity or reasonableness of the claim which is
the basis of the creditor or forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits with Lender
monies or a surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve or
bond for the dispute. Events Affecting Guarantor. Any of the preceding events
occurs with respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the indebtedness. Events Affecting General
Partner of Borrower. Any of the preceding events occurs with respect to any
general partner of Borrower or any general partner dies or becomes incompetent.
Change in Ownership. The resignation or expulsion of any general partner with an
ownership interest of twenty-five percent (25%) or more in Borrower. Any change
in ownership of twenty-five percent (25%) or more of the common stock of
Borrower. Adverse Change. A material adverse change occurs in Borrower’s
financial condition, or Lender believes the prospect of payment or performance
of the Loan is impaired. Insecurity. Lender in good faith believes itself
insecure. Right to Cure. If any default, other than a default on Indebtedness,
is curable and if Borrower has not been given a notice of a similar default
within the preceding twelve (12) months, it may be cured if Borrower, after
Lender sends written notice to Borrower, demanding cure of such default: (1)
cure the default within thirty (30) days; or (2) if the cure requires more than
thirty (30) days, immediately initiate steps which Lender deems in Lender’s sole
discretion to be sufficient to cure the default and thereafter continue and
complete all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical. EFFECT OF AN EVENT OF DEFAULT. If any Event of
Default shall occur, except where otherwise provided in this Agreement or the
Related Documents, all commitments and obligations of Lender under this
Agreement or the Related Documents or any other agreement immediately will
terminate (including any obligation to make further Loan Advances or
disbursements), and, at Lender’s option, all Indebtedness immediately will
become due and payable, all without notice of any kind to Borrower, except that
in the case of an Event of Default of the type described In the “Insolvency”
subsection above, such acceleration shall be automatic and not optional. In
addition, Lender shall have all the rights and remedies provided in the Related
Documents or available at law, In equity, or otherwise. Except as may be
prohibited by applicable law, all of Lender’s rights and remedies shall be
cumulative and may be exercised singularly or concurrently. Election by Lender
to pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Borrower or of any Grantor shall not affect Lender’s right to declare a default
and to exercise Its rights and remedies. SUPERSEDED BUSINESS LOAN AGREEMENT.
This Business Loan Agreement replaces and supersedes in its entirety that
certain Business Loan Agreement dated June 7,2016. MISCELLANEOUS PROVISIONS. The
following miscellaneous provisions are a part of this Agreement: Amendments.
This Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement shall be effective
unless given in writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment. Attorneys’ Fees; Expenses. Borrower
agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s
attorneys’ fees and Lender’s legal expenses, Incurred in connection with the
enforcement of this Agreement. Lender may hire or pay someone else to help
enforce this Agreement, and Borrower shall pay the costs and expenses of such
enforcement. Costs and expenses Include Lender’s attorneys’ fees and legal
expenses whether or not there is a lawsuit, including attorneys’ fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automate stay or injunction), appeals, and any anticipated post-judgment
collection services. Borrower also shall pay all court costs and such additional
fees as may be directed by the court, Caption Headings. Caption headings in this
Agreement are for convenience purposes only and are not to be used to interpret
or define the provisions of this Agreement. Consent to Loan Participation.
Borrower agrees and consents to Lender’s sale or transfer, whether now or later,
of one or more participation interests in the Loan to one or more purchasers,
whether related or unrelated to Lender. Lender may provide, without any
limitation whatsoever, to any one or more purchasers, or potential purchasers,
any information or knowledge Lender may have about Borrower or about any other
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relating to the Loan, and Borrower hereby waives any rights to privacy Borrower
may have with respect to such matters. Borrower additionally waives any and all
notices of sale of participation interests, as well as all notices of any
repurchase of such participation interests. Borrower also agrees that the
purchasers of any such participation Interests will be considered as the
absolute owners of such interests in the Loan and will have all the rights
granted under the participation agreement or agreements governing the sale of
such participation interests. Borrower further waives all rights of offset or
counterclaim that it may have now or later against Lender or against any
purchaser of such a participation interest and unconditionally agrees that
either Lender or such purchaser may enforce Borrower's obligation under the Loan
irrespective of the failure or Insolvency of any holder of any interest In the
Loan. Borrower further agrees that the purchaser of any such participation
interests may enforce its interests Irrespective of any personal claims or
defenses that Borrower may have against Lender. Governing Law. This Agreement
will be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the State of California without regard to
its conflicts of law provisions. This Agreement has been accepted by Lender in
the State of California. Choice of Venue. if there is a lawsuit, Borrower agrees
upon Lender's request to submit to the jurisdiction of the courts of ORANGE
County, State of California. Joint and Several Liability. All obligations of
Borrower under this Agreement shall be joint and several, and all references to
Borrower shall mean each and every Borrower. This means that each Borrower
signing below is responsible for all obligations In this Agreement. Where any
one or more of the parties is a corporation, partnership, limited liability
company or similar entity, it is not necessary for Lender to Inquire into the
powers of any of the officers, directors, partners, members, or other agents
acting or purporting to act on the entity's behalf, and any obligations made or
created In reliance upon the professed exercise of such powers shall be
guaranteed under this Agreement. No Waiver by Lender. Lender shall not be deemed
to have waived any rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any other right.
A waiver by Lender of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict compliance with
that provision or any other provision of this Agreement. No prior waiver by
Lender, nor any course of dealing between Lender and Borrower, or between Lender
and any Grantor, shall constitute a waiver of any of Lender's rights or of any
of Borrower's or any Grantor's obligations as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute continuing consent
to subsequent instances where such consent is required and in all cases such
consent may be granted or withheld in the sole discretion of Lender. Notices.
Any notice required to be given under this Agreement shall be given In writing,
and shall be effective when actually delivered, when actually received by
telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement.
Any party may change its address for notices under this Agreement by giving
formal written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. For notice purposes, Borrower agrees to
keep Lender Informed at all times of Borrower's current address. Unless
otherwise provided or required by law. If there is more than one Borrower, any
notice given by Lender to any Borrower is deemed to be notice given to all
Borrowers. Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be illegal, invalid, or unenforceable as to any
person or circumstance, that finding shall not make the offending provision
illegal, invalid, or unenforceable as to any other person or circumstance. If
feasible, the offending provision shall be considered modified so that it
becomes legal, valid and enforceable, if the offending provision cannot be so
modified, It shall be considered deleted from this Agreement. Unless otherwise
required by law, the illegality, Invalidity, or unenforceability of any
provision of this Agreement shall not affect the legality, validity or
enforceability of any other provision of this Agreement. Subsidiaries and
Affiliates of Borrower. To the extent the context of any provisions of this
Agreement makes it appropriate, including without limitation any representation,
warranty or covenant, the word "Borrower" as used in this Agreement shall
include all of Borrower's subsidiaries and affiliates. Notwithstanding the
foregoing however, under no circumstances shall this Agreement be construed to
require Lender to make any Loan or other financial accommodation to any of
Borrower's subsidiaries or affiliates. Successors and Assigns. All covenants and
agreements by or on behalf of Borrower contained In this Agreement or any
Related Documents shall bind Borrower's successors and assigns and shall inure
to the benefit of Lender and its successors and assigns. Borrower shall not,
however, have the right to assign Borrower's rights under this Agreement or any
interest therein, without the prior written consent of Lender. Survival of
Representations and Warranties. Borrower understands and agrees that In
extending Loan Advances, Lender is relying on all representations, warranties,
and covenants made by Borrower In this Agreement or In any certificate or other
instrument delivered by Borrower to Lender under this Agreement or the Related
Documents. Borrower further agrees that regardless of any investigation made by
Lender, all such representations, warranties and covenants will survive the
extension of Loan Advances and delivery to Lender of the Related Documents,
shall be continuing In nature, shall be deemed made and redated by Borrower at
the time each Loan Advance is made, and shall remain in full force and effect
until such time as Borrower's Indebtedness shall be paid in full, or until this
Agreement shall be terminated In the manner provided above, whichever is the
last to occur. Time is of the Essence. Time is of the essence in the performance
of this Agreement. ARBITRATION. WAIVER OF RIGHT TO TRIAL BY JURY; JUDICIAL
REFERENCE IN THE EVENT OF JURY TRIAL WAIVER UNENFORCEABILITY. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION, OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT, THE OTHER
RELATED DOCUMENTS, OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION THEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WiTH RESPECT
TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY. NOTWITHSTANDING THE FOREGOING TO THE CONTRARY, IN THE
EVENT THAT THE JURY TRIAL WAIVER CONTAINED HEREIN SHALL BE HELD OR DEEMED TO BE
UNENFORCEABLE, EACH PARTY HERETO HEREBY EXPRESSLY AGREES TO SUBMIT TO

 

 

 

 

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JUDICIAL REFERENCE ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING
HEREUNDER FOR WHICH A JURY TRIAL WOULD OTHERWiSE BE APPLICABLE OR AVAILABLE.
PURSUANT TO SUCH JUDICIAL REFERENCE, THE PARTIES AGREE TO THE APPOINTMENT OF A
SINGLE REFEREE AND SHALL USE THEIR BEST EFFORTS TO AGREE ON THE SELECTION OF A
REFEREE. IF THE PARTIES ARE UNABLE TO AGREE ON A SINGLE REFEREE, A REFEREE SHALL
BE APPOINTED BY THE COURT TO HEAR ANY DISPUTES HEREUNDER IN LIEU OF ANY SUCH
JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT THE APPOINTED REFEREE SHALL
HAVE THE POWER TO DECIDE ALL ISSUES IN THE APPLICABLE ACTION OR PROCEEDING,
WHETHER OF FACT OR LAW, AND SHALL REPORT A STATEMENT OF DECISION THEREON;
PROVIDED, HOWEVER, THAT ANY MATTERS WHICH WOULD NOT OTHERWISE BE THE SUBJECT OF
A JURY TRIAL WILL BE UNAFFECTED BY THIS WAIVER AND THE AGREEMENTS CONTAINED
HEREIN. THE PARTIES HERETO HEREBY AGREE THAT THE PROVISIONS CONTAINED HEREIN
HAVE BEEN FAIRLY NEGOTIATED ON AN ARM'S-LENGTH BASIS, WITH BOTH SIDES AGREEING
TO THE SAME KNOWINGLY AND BEING AFFORDED THE OPPORTUNITY TO HAVE THEIR
RESPECTIVE LEGAL COUNSEL CONSENT TO THE MATTERS CONTAINED HEREIN. ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY AND THE AGREEMENTS CONTAINED HEREIN REGARDING
THE APPLICATION OF JUDICIAL REFERENCE IN THE EVENT OF THE INVALIDITY OF SUCH
JURY TRIAL WAIVER. Borrower and Lender have each initialed this Section to
further indicate their awareness and acceptance of each and every provision
hereof. Initial Here Lender’s Initial DEFINITIONS. The following capitalized
words and terms shall have the following meanings when used in this Agreement.
Unless specifically stated to the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United States of America. Words and
terms used in the singular shall include the plural, and the plural shall
include the singular, as the context may require. Wards and terms not otherwise
defined in this Agreement shall have the meanings attributed to such terms in
the Uniform Commercial Code, Accounting words and terms not otherwise defined In
this Agreement shall have the meanings assigned to them in accordance with
generally accepted accounting principles as in effect on the date of this
Agreement: Advance, The word "Advance" means a disbursement of Loan funds made,
or to be made, to Borrower or on Borrower's behalf on a line of credit or
multiple advance basis under the terms and conditions of this Agreement.
Agreement. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time, together
with all exhibits and schedules attached to this Business Loan Agreement from
time to time. Borrower. The word "Borrower" means RW HOLDINGS NNN REIT, INC.;
RICH UNCLES NNN OPERATING PARTNERSHIP, LP; and RICH UNCLES NNN LP, LLC and
includes all co-signers and co-makers signing the Note and all their successors
and assigns. Collateral. The word "Collateral" means all property and assets
granted as collateral security for a Loan, 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, mortgage, collateral
mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention contract,
lease or consignment intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract, or otherwise.
Environmental Laws. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5
through 7.7 of Division 20 of the California Health and Safety Code, Section
25100, et seq., or other applicable state or federal laws, rules, or regulations
adopted pursuant thereto. Event of Default. The words "Event of Default'' mean
any of the events of default set forth in this Agreement in the default section
of this Agreement. GAAP. The word "GAAP" means generally accepted accounting
principles. Grantor. The word "Grantor" means each and all of the persons or
entities granting a Security interest in any Collateral for the Loan, including
without limitation alt Borrowers granting such a Security Interest. Guarantor.
The word "Guarantor" means any guarantor, surety, or accommodation party of any
or all of the Loan. Guaranty. The word "Guaranty" means the guaranty from
Guarantor to Lender, including without limitation a guaranty of ail or part of
the Note. Hazardous Substances. The words "Hazardous Substances" mean materials
that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard to
human health or the environment when improperly used, treated, stored, disposed
of, generated, manufactured, transported or otherwise handled. The words
"Hazardous Substances" are used In their very broadest sense and include without
limitation any and all hazardous or toxic substances, materials or waste as
defined by or listed under the Environmental Laws. The term "Hazardous
Substances" also includes, without limitation, petroleum and petroleum
by-products or any fraction thereof and asbestos. Indebtedness. The word
"indebtedness" means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Borrower is responsible under this
Agreement or under any of the Related Documents. Lender. The word "Lender" means
PACIFIC MERCANTILE BANK, Its successors and assigns. Loan. The word "Loan" means
any and all loans and financial accommodations from Lender to Borrower whether
now or hereafter existing, and however evidenced, Including without limitation
those loans and financial accommodations described herein or described on any
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schedule attached to this Agreement from time to time. Note. The word "Note"
means the Note dated February 20, 2018 and executed by RW HOLDINGS NNN REIT,
INC.; RICH UNCLES NNN OPERATING PARTNERSHIP, LP; and RICH UNCLES NNN LP, LLC in
the principal amount of $9,000,000.00, together with all renewals of, extensions
of, modifications of, refinancings of, consolidations of, and substitutions for
the note or credit agreement. Related Documents. The words "Related Documents"
mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the
Loan. Security Agreement. The words "Security Agreement" mean and Include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security Interest.
Security Interest. The words "Security Interest" mean, without limitation, any
and all types of collateral security, present and future, whether in the form of
a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment,
pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel
trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or
title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever whether created by law, contract,
or otherwise. BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN
AGREEMENT IS DATED FEBRUARY 20, 2018. BORROWER: RW HOLDINGS NNN REIT, INC. By:
HAROLD C. HOFER, CEO/President of RW HOLDINGS NNN REIT, INC. RICH UNCLES NNN
OPERATING PARTNERSHIP, LP RW HOLDINGS NNN REIT, INC., General Partner of RICH
UNCLES NNN OPERATING PARTNERSHIP, LP By: HAROLD C. HOFER, CEO/President of RW
HOLDINGS NNN REIT, INC. RICH UNCLES NNN LP, LLC RW HOLDINGS NNN REIT, INC.,
Member of RICH UNCLES NNN LP, LLC By: HAROLD C. HOFER, CEO\President of RW
HOLDINGS NNN REIT, INC. LENDER: PACIFIC MERCANTILE BANK BY: Daniel Epstein,
Senior Vice President