Blueprint





  Exhibit
10.1











 





AMENDED AND RESTATED CREDIT FACILITY AGREEMENT

 


THIS AMENDED AND RESTATED CREDIT FACILITY
AGREEMENT (this “Agreement”), dated as of
March 28, 2019, by and among Flux Power, Inc., a California
corporation (“Borrower”), and Esenjay
Investments, LLC (“Esenjay”), Cleveland
Capital, L.P. (“Cleveland”) and
additional parties who may subsequently become a party to this
Agreement as a lender pursuant to Section 14 hereof
(“Additional
Lenders”, and together with Esenjay and Cleveland, the
“Lenders”).


 


WHEREAS, Borrower and Esenjay entered
into that certain Credit Facility Agreement (“Original
Agreement”), dated as of March 22, 2018 (“Effective
Date”), to provide Borrower with a line of credit (the
“LOC”)
in a maximum principal amount at any time outstanding of up to Five
Million Dollars ($5,000,000); and

 


WHEREAS, the parties hereto desire to
amend and restate the Original Agreement in its entirety to (i) add
Cleveland as an additional lender, (ii) increase the LOC from Five
Million Dollars ($5,000,000) to Seven Million Dollars ($7,000,000),
(iii) extend the maturity date under the Note (as defined below)
from March 31, 2019 to December 31, 2019; and (iv) provide for
additional parties to become a Lender under this
Agreement.

 


NOW, THEREFORE, in consideration of the
above recitals and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, Borrower and
Lenders hereby amend and restate the Original Agreement in its
entirety and agree as follows:

 


 




1.

Credit Facility.





 

(a) Subject to the sole
discretion of each individual Lender, and subject to the terms and
conditions of this Agreement, each of the Lenders severally agrees
to extend a LOC, in the aggregate, of up to Seven Million Dollars
($7,000,000) (the “Advances”) to Borrower
from time to time from the Effective Date until December 31, 2019.
The Advances shall be made pro rata in accordance with each
Lender’s percentage as set forth in Schedule A, subject to
any pro rata adjustments made for Additional Lenders, provided,
however, to the extent such Lender elects not to make an Advance or
the full amount of its right to make an Advance (each event, a
“Shortfall”), the other
Lenders may elect to make up the Shortfall, if any.

 

(b) The Advances shall
be evidenced by separate promissory notes of the Borrower in
substantially the form of Exhibits A-1 and A-2 attached hereto
dated of even date with this Agreement (except for the Note
evidencing Esenjay’s prior Advances to date, which shall be
in the form of the Amended and Restated Promissory Note in
substantially the form attached hereto as Exhibit A-3)
(collectively, the “Notes”), and completed
with appropriate insertions. One Note shall be payable to the order
of each Lender in the principal amount equal to the LOC commitment
or, if less, the outstanding amount of all Advances made by such
Lender, plus interest accrued thereon, as set forth below. All
Advances shall be made pursuant the terms and obligations set forth
in the Note.

 

(c) For the purposes of
the Advances, subject to the limitations, terms and conditions set
forth in the Notes, Borrower may, from time to time, prior to the
Due Date (as defined in the Note), draw down, repay, and re-borrow
on the Note, by giving notice to Lenders of the amount to be
requested to be drawn down.


 







 








 





 




(d) In order to secure
Borrower’s performance under the Note, Borrower will provide
the Lenders with a security interest in substantially all of
Borrower’s tangible and intangible assets in substantially
the form attached hereto as Exhibit B (the “Security Agreement”), the
terms of which are incorporated herein by this
reference.

 

(e) All Advances shall
be used by Borrower for the purchase of inventory and related
operational support expenses.

 

(f) The Note and the
Security Agreement, together with all of the other agreements,
documents, and instruments heretofore or hereafter executed in
connection therewith or with the Loan to be made under this
Agreement, as the same may be amended, supplemented or modified
from time to time, shall collectively be referred to herein as the
“Loan
Documents.”

 

2. Interest Rate and Fees.
Interest and fees shall accrue and be payable on the Loan as set
forth in the Note.

 

3. Representations and Warranties of
Borrower. Borrower represents and warrants to Lender
that:

 

(a) Corporate
Existence and Power.

 

(i) Borrower is a
corporation duly organized, validly existing and in good standing
under the laws of the State of California.

 

(ii) Borrower
has the power and authority to own its properties and assets and to
carry out its business as now being conducted.

 

(iii) Borrower
has the power and authority to execute, deliver and perform the
Loan Documents to which it is a party, to borrow and guaranty money
in accordance with the terms thereof, to execute, deliver and
perform its obligations under the Note and the other Loan Documents
to which it is a party and any other documents made by it as
contemplated hereby, and to grant to Lender liens and security
interests in the Collateral (as defined in the Security Agreement)
as hereby contemplated.

 

(b) Authorization
and Approvals. All corporate
action on the part of Borrower, its board of directors, and
shareholders necessary for the (a) authorization, execution,
delivery and performance by it of the Loan Documents to which it is
a party, and (b) the performance of its obligations under the Loan
Documents, has been taken or will be taken prior to this Agreement.
This Agreement and the other Loan Documents, when executed and
delivered by Borrower, shall constitute the valid and binding
obligations of Borrower, enforceable in accordance with their
respective terms.

 

(c) Pre-existing
business relationship; Experience. Borrower has a
pre-existing business relationship with Lenders and has such
knowledge and experience in financial and business matters: (a) to
be capable of evaluating the merits and risks of the LOC, (b) to
make an informed decision relating thereto, and (c) to protect its
own interests in connection with the transaction contemplated by
this Agreement.

 

(d) Compliance with Laws, Etc. The
execution and delivery of this Agreement and the Note hereunder
does not and will not violate any requirement of law or any
contractual obligation of Borrower.


 







 

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(e) Defaults. Borrower is not
currently in default of any contractual obligation that would have
a material adverse effect on Borrower’s business, assets or
financial condition.

 

(f) Litigation. There is no
litigation, arbitration or other proceedings taking place, pending
or to the knowledge of Borrower threatened against Borrower or any
of its assets which questions the validity of this Agreement or the
right of Borrower to enter into it or to consummate the
transactions contemplated hereby.

 

4. Representations and Warranties of Each
of the Lenders. Each of the Lenders severally represents and
warrants to Borrower that:

 

(a) Requisite Power and Authority.
Lender has all of the requisite power, authority, and capacity to
execute, deliver, and comply with the terms of this Agreement, and
such execution, delivery, and compliance does not conflict with, or
constitute a default under, any instruments governing Lender, any
law, regulation or order, or any agreement to which Lender is a
party or by which Lender may be bound. All action on Lender’s
part necessary for the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, and the
performance of all obligations of Lender hereunder has been taken.
This Agreement has been duly executed and delivered by
Lender.

 

(b) Pre-existing business relationship;
Experience. Lender has a pre-existing business relationship
with Borrower and has such knowledge and experience in financial
and business matters: (a) to be capable of evaluating the merits
and risks of the loan to Borrower, (b) to make an informed decision
relating thereto, and (c) to protect its own interests in
connection with the transaction contemplated by this
Agreement.

 

5. Notices. Any notice, request,
instruction, or other document to be given hereunder by any party
hereto to any other party will be in writing and will be given by
delivery in person, by facsimile transmission, by email or other
electronic communication, by overnight courier or by registered or
certified mail, postage prepaid (and will be deemed given when
delivered if delivered by hand, when transmission confirmation is
received if delivered by facsimile, three (3) days after mailing if
mailed by United States mail, and one (1) business day after
deposited with an overnight courier service if delivered by
overnight courier), as follows:

 






If to
Borrower:                   
Flux Power, Inc.


Attn:
President


985
Poinsettia Avenue, Suite A


Vista,
CA 92081


rdutt@fluxpwr.com


 


If to
Lender:                       
Esenjay Investments, LLC


Attn:
Howard Williams


500 N.
Water, Suite 1100S


Corpus
Christi, TX 78471


Williams@epc-cc.com

 






Cleveland Capital,
L.P.


Attn:
Wade Massad


1250
Linda St. Suite 304


Rocky
River, OH 44116

 






 

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or at
such other address of which any party may, from time to time,
advise the other party by notice in writing given in accordance
with the foregoing. The date of receipt of any such notice shall be
deemed to be the date of delivery or facsimile (with confirmation)
thereof.

 

6. Entire Agreement. This
Agreement, the Loan Documents, and the other agreements entered
into in connection herewith supersede all prior negotiations and
agreements (whether written or oral) and constitute the entire
understanding among the parties hereto.

 

7. Successors. This Agreement
shall inure to the benefit of and be binding upon the parties named
herein and their respective successors and assigns.

 

8. Headings. The section headings
contained in this Agreement are for convenience only and shall not
control or affect the meaning or construction of any of the
provisions of this Agreement.

 

9. Governing Law. This Agreement
shall be construed and enforced in accordance with the laws of the
State of California without reference to principles of conflict of
law and, in the event of any litigation or other dispute in
connection with this Agreement or any of the exhibits attached
hereto, the venue and jurisdiction of which shall be in Los Angeles
County, California.

 

10. Delay, Etc. No delay or
omission to exercise any right, power or remedy accruing to any
party hereto shall impair any such right, power or remedy of such
party nor be construed to be a waiver of any such right, power or
remedy, nor constitute any course of dealing or performance
hereunder.

 

11. Costs and Attorneys’
Fees. If any action, suit, arbitration proceeding or other
proceeding is instituted arising out of this Agreement, the
prevailing party shall recover all of such party’s costs,
including, without limitation, the court costs and reasonable
attorneys’ fees incurred therein, including any and all
appeals or petitions therefrom.

 

12. Waiver and Amendment. Any of
the terms and provisions of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but only
by a written instrument executed by such party. This Agreement may
be amended only by an agreement in writing executed by the parties
hereto, provided however, the admission of an “Additional
Lender” shall not require any consent or approval from the
Lenders, and Schedule
A may be amended by the Company from time to time to provide
for Additional Lenders who join as a party to this
Agreement with no consent
or approval required from the Lenders. Upon the admission of a new
Additional Lender, the Company shall provide the existing Lenders
with notice of new Additional Lender and updated Schedule A with the new
adjusted Lender Percentages.

 

13. Consent to Amendment and Restatement;
Effect of Amendment and Restatement. Esenjay, as the
original Lender under the Original Agreement, hereby consents to
the amendment and restatement of the Original Agreement pursuant to
the terms of this Agreement and the amendment or amendment and
restatement of the other Loan Documents. Upon the execution by all
parties to this Agreement, the Original Agreement shall be amended
and restated in its entirety by this Agreement, and the Original
Agreement shall thereafter be of no further force and effect and
shall be deemed replaced and superseded in all respects by this
Agreement.

 

14. Additional Lenders.
Notwithstanding anything to the contrary contained herein, a party
may become a Lender under this Agreement by executing and
delivering an additional counterpart signature page to this
Agreement and thereafter shall be deemed an “Lender”
for all purposes hereunder.

 

15. Counterparts; Electronic
Transmission. This Agreement may be executed in one or more
counterparts (any of which may be delivered by fax or electronic
mail transmission), each of which will for all purposes be deemed
to be an original and all of which will constitute the same
instrument.

 


 




 

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IN
WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement effective as of the date first above
written.

 


	
 

	


BORROWER:


 


Flux
Power, Inc.,


a
California corporation


 


 


By:


       Ronald
F. Dutt, Chief Executive Officer


 


 


LENDERS:


 


Esenjay
Investments, LLC


 


 


By:


 


___________________________________


Name


___________________________________


Title


 


 


Cleveland
Capital, L.P.


 


By:


 


___________________________________


Name


___________________________________


Title

 




 









 




 








 






 


	
 

	


ADDITIONAL
LENDER*


 


_____________________________________________


Print
Name


 


By:__________________________________________



Name:                                                                            







Title:___________________                                                                            






Address: 


 


Date:_________________________________________

 




 






 



 





 









 


 


 


 


 


*Pursuant
to Section 14 of the Amended and Restated Credit Facility Agreement
dated March 28, 2019.

 




 








 










 



SCHEDULE A

 



LENDER PERCENTAGES

 


 

 


	


Lenders


 

	


Percentages


 


	

Esenjay
Investments, LLC


 

	

51%*


 


	

Cleveland
Capital, L.P.


 

	

49%*


 


	

__________________________


*Subject
to adjustments based on admission of Additional Lenders from time
to time by the Company.


 







 

 

 

 

 

 

 

 

 

 

 

 

 

 


 




 








 





  




EXHIBIT A-1

 



FORM OF SECURED PROMISSORY NOTE

 


 

 


 

 






 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 




 








 






 

 



EXHIBIT A-2

 



SECURED PROMISSORY NOTE

 



Cleveland Capital, L.P.

 


 

 


 

 


 

 


 

 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 




 








 










 



EXHIBIT A-3


 



AMENDED AND RESTATED PROMISSORY NOTE


 



Esenjay Investments, LLC


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 








 










 



EXHIBIT B

 


 



SECURITY AGREEMENT