LOAN MODIFICATION AGREEMENT

 

                This Loan Modification Agreement (“Agreement”) is made and
entered as of
March 31, 2015 between CALIFORNIA BANK & TRUST, a California banking corporation
("Bank"), and ICON ECI FUND SIXTEEN, a Delaware statutory trust (“Borrower”).   

RECITALS

A.            Pursuant to the terms of a Commercial Loan Agreement ("Loan
Agreement") between Bank and Borrower dated as of December 26, 2013, Bank agreed
to make a revolving Line of Credit available to Borrower. 

B.            The Line of Credit was evidenced by a promissory note ("Note") of
even date with the Loan Agreement, executed by Borrower in favor of Bank.

C.            Borrower's obligations under the Note and Loan Agreement were
originally secured, among other things, by the following:

1.                A Security Agreement, dated the same date as the Loan
Agreement, executed by Borrower in favor of Bank granting Bank a security
interest in Borrower’s personal property (“Security Agreement”).  The security
interest was perfected through a UCC-1 Financing Statement filed with the
Delaware Secretary of State.

D.              Borrower has requested additional time to repay the indebtedness
owing under the Note.  Bank is agreeable to the terms set forth below. 

TERMS

NOW, THEREFORE, Borrower and Bank agree as follows:

                1.             Adoption of Recitals.  Borrower hereby represents
and warrants that each of the Recitals set forth above are true, accurate and
complete.

                2.             Acknowledgement of Debt.  Borrower acknowledges
that there are no claims, demands, offsets or defenses at law or in equity that
would defeat or diminish Bank’s right to collect the indebtedness evidenced by
the documents described in the Recitals (“Loan Documents”) and to proceed to
enforce the rights and remedies available to Bank as provided in the Loan
Documents or by law. Capitalized terms in this Modification shall have the
meanings given to them in the Loan Documents unless otherwise defined herein.

                3.             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 by deleting the definition of “Line of Credit Expiration Date” and
inserting in its place the following:        

               “Line of Credit Expiration Date” means May 30, 2017.

(b)        Section 2.1(a) of the Loan Agreement, entitled “Revolving Line of
Credit,” is modified by deleting the section and inserting in its place 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 Five Million Dollars ($5,000,000.00) 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 re-borrow them. 
Borrower agrees that Borrower will not permit the outstanding balance under the
Line of Credit to exceed the Line of Credit Limit.

 

 

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(c)         Section 8.4 of the Loan Agreement, entitled “Minimum Debt Service
Coverage Ratio,” is deleted and replaced with the following:

Minimum Debt Service Coverage Ratio.  To maintain as of the end of each fiscal
quarter based on the financial results as reported on SEC Form 10-Q or 10-K, as
applicable, a Debt Service Coverage Ratio of not less than 2.00 to 1.00 on a
rolling four quarter basis, effective as of December 31, 2014.

(d)        Section 8.5 of the Loan Agreement, entitled “Tangible Net Worth,” is
deleted and replaced with the following:

Tangible Net Worth.  To maintain as of the end of the fiscal quarter based on
the financial results as reported on SEC Form 10-Q or 10-K, as applicable, a
Tangible Net Worth of not less than Fifteen Million Dollars ($15,000,000.00),
effective December 31, 2014.    

(e)         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 by any amendments, modifications, extensions or renewals of
the same which are hereafter agreed to in writing by the parties.  

                4.             Conditions Precedent.  The modification of the
Loan Documents under Section 3 above is subject to Borrower’s compliance with
the following conditions precedent to Bank’s complete satisfaction: 

(a)         Execution of this Modification by Borrower and delivery of the
executed Modification to Bank by March 31, 2015;

                                               (b)         Borrower shall pay a
renewal fee of $19,000.00;

                                               (c)         Borrower shall pay
all accrued interest on the Line of Credit through March 31, 2015; and  

(d)         Borrower shall reimburse the Bank for the attorneys’ fees incurred
by Bank in preparation of this Modification.

5.             Field Audit. Borrower shall cooperate with Bank’s completion of
an asset based lending field audit of Borrower’s books and records at Borrower’s
expense to be completed by July 31, 2015.

                6.             Borrower’s Representations and Warranties. 
Borrower represents and warrants to Bank as of the date of this Modification and
until repayment of all indebtedness of Borrower to Bank:

(a)                 Accuracy of Representations in Modification and Existing
Loan Documents.  All representations and warranties made and given by Borrower
in this Modification and the Loan Documents are accurate and correct except to
the extent that any breach thereof would not result in a Material Adverse
Change.

(b)           No Default. No default has occurred and is continuing under the
Loan Documents, and no event has occurred and is continuing which, with notice
or the passage of time or both, would be a default which could be reasonably
expected to result in a Material Adverse Change.

(c)           Enforceable Loan Documents/No Conflicts. The Loan Documents and
this Modification are legal, valid and binding agreements of Borrower,
enforceable in accordance with their respective terms.  This Modification does
not conflict with any law, agreement, or obligation by which Borrower is bound.

                7.             Borrower Acknowledgment.  Borrower hereby
acknowledges and agrees that:

 

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(a)           No Breach by Bank. Bank has not breached any duty to Borrower in
connection with the Loan Documents, and Bank has fully performed all obligations
the Bank may have had or now has to Borrower and Guarantors.

(b)           Interest, Fees, and Other Charges. All interest, fees or other
charges imposed, accrued, or collected by Bank under the Loan Documents or this
Modification, and the method of computing the interest, fees, or other charges,
were and are proper and agreed to by Borrower and Guarantors and were properly
computed and collected.

(c)           No Waiver. By entering into this Modification, Bank does not waive
any existing defaults or any defaults hereafter occurring, and Bank does not
become obligated to waive any condition or obligation in any agreement between
or among any of the parties hereto.

(d)           No Third Party Beneficiaries. This Modification is not intended
for, and shall not be construed to be for, the benefit of any person not a
signatory hereto.

(e)           Fair Consideration. All payments made by Borrower to Bank under
the Loan Documents and this Modification were and are for fair consideration and
reasonably equivalent value.

                8.             Governing Law.  This Modification shall be
construed, governed and enforced in accordance with the laws of the State of
California.

                9.             Interpretation.  No provision of this
Modification is to be interpreted for or against Borrower or Bank because that
party, or that party's representative, drafted such provision.

                10.          No Impairment/Security.  Except as otherwise
specifically set forth herein, the Loan Documents shall each remain unaffected
by this Modification and all such documents shall remain in full force and
effect.  Borrower’s payment and performance of Borrower’s various obligations to
Bank under the Loan Documents, including all extensions, amendments, renewals or
replacements thereof, continue to be and shall be secured by the liens arising
under the Loan Documents.  Nothing contained herein shall be deemed a waiver of
any of the rights and remedies that Bank may have against Borrower, or of any of
Bank’s rights and remedies arising out of the Loan Documents.

                11.          Purpose and Effect of Bank’s Approval.  Bank’s
approval of any matter in connection with the Loan Documents shall be for the
sole purpose of protecting Bank’s security, rights, and remedies under the Loan
Documents.  No such approval shall result in a waiver of any default of
Borrower. In no event shall Bank’s approval be a representation of any kind by
Bank with regard to the matter being approved.

                12.          Counterparts.  This Modification may be executed in
as many counterparts as necessary or convenient, and by the different parties on
separate counterparts each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
agreement.

                13.          Invalidity.  If any court of competent jurisdiction
determines any provision of this Modification or any of the Loan Documents to be
invalid, illegal or unenforceable, that portion shall be deemed severed from the
rest, which shall remain in full force and effect as though the invalid, illegal
or unenforceable portion had never been a part of this Modification or the Loan
Documents.

                14.          Successors and Assigns.  This Modification shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

                15.          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, including provisions on prepayment, late charges, default interest
and attorneys fees.

                16.          The Current Status of the Line of Credit.  Borrower
hereby acknowledges the following: (a) except as modified by this Modification,
the Loan Documents remain in full force and effect, and remains the binding
obligation of Borrower; and (b) Borrower has no known or suspected defense to
its obligations under the Loan Documents, and no claim or offset whatsoever
against Bank in connection with the Loan Documents or otherwise. 

 

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                17.          Entire Agreement.  This Modification and the Loan
Documents constitute the entire, complete and exclusive understanding between
the parties regarding the Loan and may not be modified, amended, or terminated
except by a written agreement signed by the party against whom enforcement is
sought.  No modification, change or supplement of the Loan Documents and this
Modification shall be binding on Bank unless in writing signed by an authorized
officer of Bank.  No waiver of or any acquiescence to any Event of Default or
any failure or delay by Bank in enforcing any right or remedy shall be construed
to be a waiver, acquiescence, or consent to any preceding or subsequent Event of
Default or a waiver of any right or remedy.

                18.          Documentation.  In addition to the instruments and
documents mentioned or referred to herein, Borrower will, at Borrower’s own cost
and expense, supply Bank with such other instruments, documents, information and
data as are reasonably necessary for the purposes hereof, all of which shall be
in form and content as reasonably required by Bank.

                                IN WITNESS WHEREOF, the parties have executed
this Modification as of the day and year first above written.

 

 

 

ICON ECI FUND SIXTEEN,
a Delaware statutory trust,

                By: ICON MT 16, LLC, its managing owner

                By: ICON CAPITAL, LLC, its sole member

 

                By: /s/ Mark Gatto                                             
 

                                Mark Gatto

Co-President and Co-Chief Executive Officer

 

CALIFORNIA BANK & TRUST,
a California banking corporation

 

 

By:         /s/ J. Michael Sullivan                                        

                J. Michael Sullivan

           Senior Vice President and Relationship Manager

 

 

 

 

 

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