Document:

amtx_ex101.htm

Exhibit 10.1

 

AMENDMENT NO. 8 TO

AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

This Amendment No. 8 to Amended and Restated Note Purchase Agreement (this “Amendment”), is dated as of November 7, 2014, is made by and among (i) AEMETIS ADVANCED FUELS KEYES, INC. (f/k/a AE Advanced Fuels Keyes, Inc.), a Delaware corporation (“AEAFK”), AEMETIS FACILITY KEYES, INC., a Delaware corporation and successor-in-interest to Keyes Facility Acquisition Corp., a Delaware corporation (“Keyes Facility”, together with AEAFK, the “Borrowers”), AEMETIS, INC. (formerly known as AE Biofuels, Inc.), a Nevada corporation (“Parent”), and (ii) THIRD EYE CAPITAL CORPORATION, an Ontario corporation, as agent for the Noteholders (“Administrative Agent”), THIRD EYE CAPITAL CREDIT OPPORTUNITIES FUND - INSIGHT FUND (“TEC Insight Fund Purchaser”) and SPROTT PC TRUST (“Sprott PC Trust Purchaser”, and together with TEC Insight Fund Purchaser, “Noteholders”).

 

RECITALS

A. The Borrowers, Administrative Agent and Noteholders entered into the Amended and Restated Note Purchase Agreement dated as of July 6, 2012, as amended by a Limited Waiver and Amendment No.1 to Amended and Restated Note Purchase Agreement dated as of October 18, 2012, as amended by a Limited Waiver and Amendment No. 2 to Amended and Restated Note Purchase Agreement dated as of February 27, 2013, as amended by a Limited Waiver and Amendment No. 3 to Amended and Restated Note Purchase Agreement dated as of April 15, 2013, as amended by an Amendment No. 4 to Amended and Restated Note Purchase Agreement dated as of April 19, 2013, as amended by a Limited Waiver and Amendment No. 5 to Amended and Restated Note Purchase Agreement dated as of July 26, 2013, as amended by a Limited Waiver and Amendment No. 6 to Amended and Restated Note Purchase Agreement dated as of September 30, 2013, as amended by a Limited Waiver and Amendment No. 7 to Amended and Restated Note Purchase Agreement dated as of May 14, 2014 (as the same may be amended, restated, supplemented, revised or replaced from time to time, the “Agreement”).  Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement.

 

B. The Borrowers have requested, and the Administrative Agent and Noteholders have agreed, to amend the Agreement on the terms and conditions contained herein.

 

AGREEMENT

SECTION 1. Reaffirmation of Indebtedness.  The Borrowers hereby confirm that as of November 1, 2014 and before giving effect to this Amendment, the outstanding principal balance of the Notes is $53,951,087.88.

 

SECTION 2. Amendments.  The following sections of the Agreement shall be and hereby are amended as follows:

 

(A) Recitals Part of Agreement.  The foregoing recitals are hereby incorporated into and made a part of the Agreement, including all defined terms referenced therein.

 

(B) Section 1.1 (Definitions).

 

Section 1.1 of the Agreement is hereby amended by substituting and adding the following definitions in lieu of or in addition to the versions of such terms and related definitions contained in the Agreement, as applicable, in the appropriate alphabetical order:

 

“Acquisition Notes Stated Maturity Date” means July 1, 2015; provided that the Acquisition Notes Stated Maturity Date shall be extended to January 1, 2016 upon written notice to the Administrative Agent of the Borrowers’ election to extend not later than 60 days, and not earlier than 30 days, prior to July 1, 2015, so long as at the time of the extension (a) no Default or Event of Default has occurred and is continuing under any Financing Document and (b) the Borrowers pay to the Administrative Agent an extension fee in cash in an amount equal to 3% of the Note Indebtedness in respect to the Acquisition Notes which fee shall be deemed fully earned and nonrefundable, provided that such fee may be added to the outstanding principal balance of the Acquisition Notes on the effective date of such extension at the election of the Borrowers.

 

“Eighth Amendment Advance” has the meaning set forth in Section 2.4.

 

“Existing Notes Stated Maturity Date” means July 1, 2015; provided that the Existing Notes Stated Maturity Date shall be extended to January 1, 2016 upon written notice to the Administrative Agent of the Borrowers’ election to extend not later than 60 days, and not earlier than 30 days, prior to July 1, 2015, so long as at the time of the extension (a) no Default or Event of Default has occurred and is continuing under any Financing Document and (b) the Borrowers pay to the Administrative Agent an extension fee in cash in an amount equal to 3% of the Note Indebtedness in respect to the Existing Notes which fee shall be deemed fully earned and nonrefundable, provided that such fee may be added to the outstanding principal balance of the Existing Notes on the effective date of such extension at the election of the Borrowers.

 

  

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“Financing” means, collectively, (i) the issuance and sale by the Borrowers of $7,443,536.22 aggregate original principal amount of Existing Notes pursuant to this Agreement, (ii) the issuance and sale by the Borrowers of $16,335,733.96 aggregate original principal amount of Acquisition Notes pursuant to this Agreement, (iii) the issuance and sale by the Borrowers of up to $25,831,416.99 aggregate original principal amount of Revolving Notes (plus (A) any PIK Amount added to the outstanding principal amount of the Revolving Notes pursuant to Section 2.11(1) and (B) any portion of the Monitoring Fee added to the outstanding principal amount of the Revolving Notes pursuant to Section 2.11(5)), pursuant to this Agreement and (iv) the issuance and sale by the Borrowers of $10,340,400.71 aggregate original principal amount of Revenue Participation Notes pursuant to this Agreement and (iv) the entry into by the parties thereto of the other transactions contemplated by the Financing Documents.

 

“Non-Revolving Portion” means the Eighth Amendment Advance and the Monitoring Fee Advance (together with any PIK Amounts added to the Revolving Notes pursuant to Section 2.11(1)) in the aggregate principal amount, inclusive of PIK Amounts as of November 1, 2014, of $7,831,416.99.

 

“Preferred Stock” means the issued and outstanding preferred stock in the capital of the Parent.

 

“Preferred Stock Equity Proceeds” has the meaning set forth in Section 6.3(jj).

 

“Principal Waterfall” means the order in which payments are applied to the principal outstanding under the Notes, as follows: (i) first, to the components of the Non-Revolving Portion of the Revolving Notes (A) the portion of the Revolving Notes issued in respect of the Eighth Amendment Advance, (B) if applicable, the portion of the Revolving Notes issued in respect of any portion of the Monitoring Fee added to the outstanding principal amount of the Revolving Notes and (C) any PIK Amounts added to the principal amount of the Revolving Notes, (ii) second, to the Existing Notes, (iii) third, to the Acquisition Notes, (iv) fourth, to the Revenue Participation Notes and (v) fifth, to the Revolving Portion of Revolving Notes.

 

“Revenue Participation Notes Stated Maturity Date” means July 1, 2015; provided that the Revenue Participation Notes Stated Maturity Date shall be extended to January 1, 2016 upon written notice to the Administrative Agent of the Borrowers’ election to extend not later than 60 days, and not earlier than 30 days, prior to July 1, 2015, so long as at the time of the extension (a) no Default or Event of Default has occurred and is continuing under any Financing Document and (b) the Borrowers pay to the Administrative Agent an extension fee in cash in an amount equal to 3% of the Note Indebtedness in respect to the Revenue Participation Notes which fee shall be deemed fully earned and nonrefundable, provided that such fee may be added to the outstanding principal balance of the Revenue Participation Notes on the effective date of such extension at the election of the Borrowers.

 

“Revolving Notes Stated Maturity Date” means July 1, 2015; provided that the Revolving Notes Stated Maturity Date shall be extended to January 1, 2016 upon written notice to the Administrative Agent of the Borrowers’ election to extend not later than 60 days, and not earlier than 30 days, prior to July 1, 2015, so long as at the time of the extension (a) no Default or Event of Default has occurred and is continuing under any Financing Document and (b) the Borrowers pay to the Administrative Agent an extension fee in cash in an amount equal to 3% of the Note Indebtedness in respect to the Revolving Notes which fee shall be deemed fully earned and nonrefundable, provided that such fee may be added to the outstanding principal balance of the Revolving Notes on the effective date of such extension at the election of the Borrowers.

 

“Subsequent Closing” means, at the option of the Borrowers, one or more Closings for the purchase and sale of Revolving Notes following the First Closing, in each case as contemplated herein, provided that no more than $25,831,416.99 principal amount of Revolving Notes (plus (i) any PIK Amount added to the outstanding principal amount of the Revolving Notes pursuant to Section 2.11(1) and (ii) any portion of the Monitoring Fee added to the outstanding principal amount of the Revolving Notes pursuant to Section 2.11(5)), shall be issued and outstanding at any time.

 

(C) Section 2.3 (Creation and Issuance of the  Notes). Section 2.3 of the Agreement is deleted in its entirety and replaced with the following:

 

“2.3 Creation and Issuance of the Notes. The Borrowers hereby create and authorize the Notes for issuance in the aggregate original principal amount of up to $59,951,087.88 (plus (i) any PIK Amount added to the outstanding principal amount of the Revolving Notes pursuant to Section 2.11(1) and (ii) any portion of the Monitoring Fee added to the outstanding principal amount of the Revolving Notes pursuant to Section 2.11(5)).  The Notes shall be dated as of their applicable Issue Date (including all replacement certificates issued in accordance with this Agreement) and will become due and payable, together with all accrued and unpaid interest thereon, on the Maturity Date.  Other than the Revolving Portion of the Revolving Notes, which may be re-issued once redeemed, neither the Non-Revolving Portion of the Revolving Notes nor any other Notes, may be re-issued once redeemed.”

 

(D) Section 2.4 (Subsequent Closings and Revolving Notes).  Section 2.4 of the Agreement is deleted in its entirety and replaced with the following:

 

“2.4 Subsequent Closings and Revolving Notes. Subject to the terms and conditions set forth in Section 2.2, on and after the date of this Agreement and upon written notice by the Borrowers to the Administrative Agent of not less than ten Business Days in substantially the form attached hereto as Exhibit B (each, a “Revolving Loan Request”), the Borrowers, jointly and severally, agree to issue Revolving Notes in an aggregate amount not to exceed at any time outstanding the amount identified in the Allocation Notice; provided, however, that (i) after giving effect to any outstanding Revolving Notes, the aggregate principal amount of all outstanding Revolving Notes shall not exceed $25,831,416.99 (plus (A) any PIK Amount added to the outstanding principal amount of the Revolving Notes pursuant to Section 2.11(1) and (B) any portion of the Monitoring Fee added to the outstanding principal amount of the Revolving Notes pursuant to Section 2.11(5)), (ii) $6,000,000 of the Revolving Notes may only be used by the Borrowers for the purposes agreed to in writing by the Administrative Agent (the “Eighth Amendment Advance”), (iii) up to $1,350,000 of the Revolving Notes may only be used by the Borrowers to pay the Monitoring Fee pursuant to Section 2.11(5) (the “Monitoring Fee Advance”) and (iv) once the portion of the Revolving Notes representing the Eighth Amendment Advance and the Monitoring Fee Advance, together with any accrued but unpaid PIK Amounts thereon, have been redeemed, such amounts shall not be re-issued.  The aggregate principal amount of any new Revolving Notes issued at any Subsequent Closing must be at least $500,000 and in increments of $100,000. At each Subsequent Closing, the Borrowers shall deliver an officer’s certificate to the Administrative Agent and such other evidence reasonably acceptable to the Administrative Agent that the conditions precedent set forth in Section 2.2 have been met.  The proposed use of proceeds in each Revolving Loan Request shall be acceptable to the Administrative Agent in its sole discretion.  The issuance and purchase of Revolving Notes in connection with any Eighth Amendment Advance shall be subject to the sole discretion of the Administrative Agent.”

 

  

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(E) Section 6.3 (Affirmative Covenants).  Section 6.3 of the Agreement is amended by adding the following new subsection (jj) as follows:

 

(jj) Preferred Stock Equity Offering.

 

(i) Parent shall complete an equity offering of Preferred Stock by March 31, 2015 and such offering shall raise net proceeds in an aggregate amount of not less than $20,000,000 (the “Preferred Stock Equity Proceeds”);

 

(ii) Notwithstanding anything to the contrary in Section 4.2(3), within two Business Days of receipt, the Borrowers shall use 100% of the Preferred Stock Equity Proceeds to repay the principal outstanding under the Notes in accordance with the Principal Waterfall.

 

SECTION 3. Conditions to Effectiveness.  This Amendment shall be effective only upon and subject to satisfaction of the following conditions precedent:

 

(A) Administrative Agent shall have received this Amendment duly executed by the parties hereto.

 

(B) Administrative Agent shall have been paid an amendment fee in the amount of $300,000 which fee shall be deemed fully earned and nonrefundable and paid with proceeds from an Eighth Amendment Advance.

 

(C) Administrative Agent shall have received a Seventh Amended and Restated Revolving Note for Sprott PC Trust Purchaser duly executed by the Borrowers in the original principal amount of $20,665,133.59.

 

(D) Administrative Agent shall have received an Eighth Amended and Restated Revolving Note for TEC Insight Fund Purchaser duly executed by the Borrowers in the original principal amount of $5,166,283.40.

 

(E) Administrative Agent shall have received a Reaffirmation of Unconditional Personal Guaranty, duly executed by the Chairman.

 

(F) Administrative Agent shall have received a Reaffirmation of Guaranty, duly executed by the Company Parties (other than the Borrowers).

 

(G) Administrative Agent shall have received a Reaffirmation of Guaranty, duly executed by McAfee Capital, LLC.

 

(H) Administrative Agent shall have received a certificate of a Senior Officer of the Parent and each Borrower certifying (1) that no change has occurred to the Organizational Documents of such Person since certified copies thereof were previously delivered to the Administrative Agent and (2) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors of each such Person authorizing the execution, delivery and performance of the Note Purchase Documents to which such Person is a party delivered in connection with this Amendment, and that such resolutions have not been modified, rescinded or amended and are in full force.

 

(I) Administrative Agent shall have performed and complied with all of the covenants and conditions required by this Amendment and the Note Purchase Documents to be performed and complied with upon the effective date of this Amendment.

 

(J) Administrative Agent shall have received evidence that the Borrowers have paid the reasonable fees and expenses of Administrative Agent’s outside legal counsel in connection with the preparation of the Amendment, previous amendments and other matters regarding the Agreement and with proceeds from an Eighth Amendment Advance.

 

(K) Administrative Agent shall have received all other approvals, opinions, documents, agreements, instruments, certificates, schedules and materials as Administrative Agent may reasonably request.

 

Each Borrower acknowledges and agrees that the failure to perform, or to cause the performance of, the foregoing covenants and agreements will constitute an Event of Default under the Agreement and Administrative Agent and Noteholders shall have the right to demand the immediate repayment in full in cash of all outstanding Indebtedness owing to Administrative Agent and Noteholders under the Agreement, the Notes and the other Note Purchase Documents.  In consideration of the foregoing and the transactions contemplated by this Amendment, each Borrower hereby (a) ratifies and confirms all of the obligations and liabilities of such Borrower owing pursuant to the Agreement and the other Note Purchase Documents, and (b) agrees to pay all costs, fees and expenses of Administrative Agent and Noteholders in connection with this Amendment.

 

SECTION 4. Agreement in Full Force and Effect as Amended.  Except as specifically amended or waived hereby, the Agreement and other Note Purchase Documents shall remain in full force and effect and are hereby ratified and confirmed as so amended.  Except as expressly set forth herein, this Amendment shall not be deemed to be a waiver, amendment or modification of, or consent to or departure from, any provisions of the Agreement or any other Note Purchase Document or any right, power or remedy of Administrative Agent or Noteholders thereunder, nor constitute a waiver of any provision of the Agreement or any other Note Purchase Document, or any other document, instrument or agreement executed or delivered in connection therewith or of any Default or Event of Default under any of the foregoing, in each case whether arising before or after the execution date of this Amendment or as a result of performance hereunder or thereunder.  This Amendment shall not preclude the future exercise of any right, remedy, power, or privilege available to Administrative Agent or Noteholders whether under the Agreement, the other Note Purchase Documents, at law or otherwise.  All references to the Agreement shall be deemed to mean the Agreement as modified hereby.  This Amendment shall not constitute a novation or satisfaction and accord of the Agreement or any other Note Purchase Documents, but shall constitute an amendment thereof.  The parties hereto agree to be bound by the terms and conditions of the Agreement and Note Purchase Documents as amended by this Amendment, as though such terms and conditions were set forth herein.  Each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Agreement as amended by this Amendment, and each reference herein or in any other Note Purchase Documents to “the Agreement” shall mean and be a reference to the Agreement as amended and modified by this Amendment.

 

  

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SECTION 5. Representations.  Each of the Parent and the Borrowers hereby represents and warrants to Administrative Agent and Noteholders as of the execution date of this Amendment as follows:  (A) it is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation; (B) the execution, delivery and performance by it of this Amendment and all other Note Purchase Documents executed and delivered in connection herewith are within its powers, have been duly authorized, and do not contravene (i) its articles of incorporation, bylaws or other organizational documents, or (ii) any applicable law; (C) no consent, license, permit, approval or authorization of, or registration, filing or declaration with any Governmental Entity or other Person, is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment or any other Note Purchase Documents executed and delivered in connection herewith by or against it; (D) this Amendment and all other Note Purchase Documents executed and delivered in connection herewith have been duly executed and delivered by it; (E) this Amendment and all other Note Purchase Documents executed and delivered in connection herewith constitute its legal, valid and binding obligation enforceable against it in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity; (F) it is not in default under the Agreement or any other Note Purchase Documents and no Event of Default exists, has occurred and is continuing or would result by the execution, delivery or performance of this Amendment; and (G) the representations and warranties contained in the Agreement and the other Note Purchase Documents are true and correct in all material respects as of the execution date of this Amendment as if then made, except for such representations and warranties limited by their terms to a specific date.

 

SECTION 6. Miscellaneous.

 

(A) This Amendment may be executed in any number of counterparts (including by facsimile or email), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement.  Each party agrees that it will be bound by its own facsimile or scanned signature and that it accepts the facsimile or scanned signature of each other party.  The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof or thereof.  Whenever the context and construction so require, all words herein in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine.  The use of the word “including” in this Amendment shall be by way of example rather than by limitation.  The use of the words “and” or “or” shall not be inclusive or exclusive.

 

(B) This Amendment may not be changed, amended, restated, waived, supplemented, discharged, canceled, terminated or otherwise modified without the written consent of the Borrowers and Administrative Agent.  This Amendment shall be considered part of the Agreement and shall be a Note Purchase Document for all purposes under the Agreement and other Note Purchase Documents.

 

(C) This Amendment, the Agreement and the Note Purchase Documents constitute the final, entire agreement and understanding between the parties with respect to the subject matter hereof and thereof and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties, and shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto and thereto.  There are no unwritten oral agreements between the parties with respect to the subject matter hereof and thereof.

 

(D) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET FORTH IN THE AGREEMENT AND SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS OF THE AGREEMENT.

 

(E) Neither the Parent nor any Borrower may assign, delegate or transfer this Amendment or any of their rights or obligations hereunder.  No rights are intended to be created under this Amendment for the benefit of any third party donee, creditor or incidental beneficiary of the Borrowers or any Company Party.  Nothing contained in this Amendment shall be construed as a delegation to Administrative Agent or Noteholders of the Borrowers or any Company Party’s duty of performance, including any duties under any account or contract in which Administrative Agent or Noteholders have a security interest or lien.  This Amendment shall be binding upon the Borrowers, the Parent and their respective successors and assigns.

 

(F) All representations and warranties made in this Amendment shall survive the execution and delivery of this Amendment and no investigation by Administrative Agent or Noteholders shall affect such representations or warranties or the right of Administrative Agent or Noteholders to rely upon them.

 

(G) THE BORROWERS AND THE PARENT ACKNOWLEDGE THAT SUCH PERSON’S PAYMENT OBLIGATIONS ARE ABSOLUTE AND UNCONDITIONAL WITHOUT ANY RIGHT OF RECISSION, SETOFF, COUNTERCLAIM, DEFENSE, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE “OBLIGATIONS” OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM ADMINISTRATIVE AGENT OR ANY NOTEHOLDER.  THE BORROWERS AND THE PARENT HEREBY VOLUNTARILY AND KNOWINGLY RELEASE AND FOREVER DISCHARGE ADMINISTRATIVE AGENT AND EACH NOTEHOLDER AND THEIR RESPECTIVE PREDECESSORS, ADMINISTRATIVE AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH SUCH PERSON MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY “LOANS”, INCLUDING ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE AGREEMENT OR OTHER NOTE PURCHASE DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

 

{Signatures appear on following pages.}

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the date first noted above.

 

BORROWERS:

 

AEMETIS ADVANCED FUELS KEYES, INC.

 

By:  /s/ Eric A. McAfee

Name:  Eric A. McAfee

Title:    Chief Executive Officer

 

AEMETIS FACILITY KEYES, INC.

 

By:  /s/ Eric A. McAfee

Name:  Eric A. McAfee

Title:    Chief Executive Officer

 

PARENT:

 

AEMETIS, INC.

 

By:  /s/ Eric A. McAfee

Name:  Eric A. McAfee

Title:    Chief Executive Officer

 

ADMINISTRATIVE AGENT:

THIRD EYE CAPITAL CORPORATION

 

By:  /s/ Arif N. Bhalwani

Name:  Arif N. Bhalwani

Title: Managing Director

 

By:  /s/ David G. Alexander

Name:  David G. Alexander

Title: Managing Director

 

NOTEHOLDERS:

SPROTT ASSET MANAGEMENT GP INC., in its capacity as general partner of SPROTT ASSET MANAGEMENT L.P., in its capacity as Manager of SPROTT PC TRUST

 

By: /s/ Steve Rostowsky

Name:  Steve Rostowsky

Title: CFO

 

THIRD EYE CAPITAL CREDIT OPPORTUNITIES S.ar.l, it its capacity as Managing General Partner of THIRD EYE CAPITAL CREDIT OPPORTUNITIES FUND – INSIGHT FUND

By:  /s/ Richard Goddard

Name:  Richard Goddard

Title: Manager

 

By:  /s/ Robert L. DeNormandie

Name:  Robert L. DeNormandie

Title: Manager

 

5Exhibit 10.1

 

BUSINESS
FINANCING MODIFICATION AGREEMENT

 

This
Business Financing Modification Agreement is entered into as of July 2, 2014, by and between TSS, Inc., Innovative Power Systems,
Inc., and VTC, L.L.C. (individually “Borrower”, and collectively “Borrower” or “Borrowers”)
and Bridge Bank, National Association (“Lender”).

 

1.          DESCRIPTION
OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by Borrowers to Lender, Borrowers are indebted
to Lender pursuant to, among other documents, a Business Financing Agreement, dated May 21, 2013, by and among Borrowers and Lender,
as may be amended from time to time (the “Business Financing Agreement”). Capitalized terms used without definition
herein shall have the meanings assigned to them in the Business Financing Agreement.

 

Hereinafter,
all indebtedness owing by Borrowers to Lender shall be referred to as the “Indebtedness” and the Business Financing
Agreement and any and all other documents executed by Borrowers in favor of Lender shall
be referred to as the “Existing Documents.”

 

2.          DESCRIPTION
OF CHANGE IN TERMS.

 

A.           Modification(s)
to Business Financing Agreement:

 

(i)          Subsection
4.9 in Section 4 entitled “Miscellaneous Provisions” is hereby amended as follows:

 

4.9          Maintain
all depository and operating accounts with Lender and, in the case of any investment accounts not maintained with Lender, grant
to Lender a first priority perfected security interest in and “control” (within the meaning of Section 9104
of the UCC) of such deposit account pursuant to documentation acceptable to Lender, provided however, Borrower may maintain an
operating account with PNC Bank with an aggregate balance not to exceed $200,000 (the “Permitted Accounts”). Borrower
shall provide to Lender no later than 30 day after the end of each month, the monthly statements and such other reports related
to the Permitted Accounts as Lender may request in its sole discretion.

 

(ii)         The
following defined term in Section 12.1, entitled “Definitions” is hereby amended as follows:

 

“Maturity
Date” means May 21, 2016 or such earlier date as Lender shall have declared the Obligations immediately due
and payable pursuant to Section 7.2.

 

3.          CONSISTENT
CHANGES. The Existing Documents are each hereby amended wherever necessary to reflect the changes described above.

 

4.          PAYMENT
OF FEES. Borrower shall pay Lender the Facility Fee in the amount of $30,000, and the Due Diligence Fee in the amount
of $1,000, plus all out-of-pocket expenses.

 

5.          NO
DEFENSES OF BORROWER/GENERAL RELEASE. Borrower agrees that, as of this date, it has no defenses against the obligations to
pay any amounts under the Indebtedness. Each of Borrower and Guarantor
(each, a “Releasing Party”)
acknowledges that Lender would not enter
into this Business Financing Modification Agreement without Releasing Party’s assurance that it has no claims against Lender
or any of Lender’s officers, directors, employees or agents. Except for the obligations arising hereafter under this Business
Financing Modification Agreement, each Releasing Party releases Lender, and each of Lender’s and entity’s officers,
directors and employees from any known or unknown claims that Releasing Party now has against Lender of any nature, including
any claims that Releasing Party, its successors, counsel, and advisors may in the future discover they would have now had if they
had known facts not now known to them, whether founded in contract, in tort or pursuant to any other theory of liability, including
but not limited to any claims arising out of or related to the Agreement or the transactions
contemplated thereby. Releasing Party waives the provisions of California Civil Code section 1542, which states:

 

    	1

    	 

    

 

A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

The
provisions, waivers and releases set forth in this section are binding upon each Releasing Party and its shareholders, agents,
employees, assigns and successors in interest. The provisions, waivers and releases of this section shall inure to the benefit
of Lender and its agents, employees, officers, directors, assigns and successors in interest. The provisions of this section shall
survive payment in full of the Obligations, full performance of all the terms of this Business Financing Modification Agreement
and the Agreement, and/or Lender’s actions to exercise any remedy available under the Agreement or otherwise.

 

6.          CONTINUING
VALIDITY. Borrower understands and agrees that in modifying the existing Indebtedness, Lender is relying upon Borrower’s
representations, warranties, and agreements, as set forth in the Existing Documents. Except as expressly modified pursuant to this
Business Financing Modification Agreement, the terms of the Existing Documents remain unchanged and in full force and effect. Lender’s
agreement to modifications to the existing Indebtedness pursuant to this Business Financing Modification Agreement in no way shall
obligate Lender to make any future modifications to the Indebtedness. Nothing in this Business Financing Modification Agreement
shall constitute a satisfaction of the Indebtedness. It is the intention of Lender and Borrower to retain as liable parties all
makers and endorsers of Existing Documents, unless the party is expressly released by Lender in writing. No maker, endorser, or
guarantor will be released by virtue of this Business Financing Modification Agreement. The terms of this paragraph apply not only
to this Business Financing Modification Agreement, but also to any subsequent Business Financing modification agreements.

 

7.          CONDITIONS.
The effectiveness of this Business Financing Modification Agreement is conditioned upon payment of the Facility Fee and the Due
Diligence Fee.

 

8.          NOTICE
OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

9.          COUNTERSIGNATURE.
This Business Financing Modification Agreement shall become effective only when executed by Lender, Borrowers, and Guarantors.

 

	BORROWER:	LENDER:
	 	 
	TSS, INC.	BRIDGE BANK, NATIONAL ASSOCIATION
	 	 
	By:	/s/ ANTHONY ANGELINI	 	By:	/s/ [ILLEGIBLE]	 
	 	 	 	 	 	 
	Name: 	ANTHONY ANGELINI	 	Name: 	[ILLEGIBLE]	 
	 	 	 	 	 	 
	Title:	PRESIDENT & CEO	 	Title:	EVP Manager	 

 

    	2

    	 

    

 

	INNOVATIVE POWER SYSTEMS, INC.	 
	 	 
	By:	/s/ ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Name: 	ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Title:	PRESIDENT	 	 	 	 

 

	VTC, L.L.C.	 
	 	 
	By:	/s/ ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Name: 	ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Title:	CHAIRMAN	 	 	 	 

 

Guarantor
consents to the modifications to the Indebtedness pursuant to this Business Financing Modification Agreement, hereby ratifies
the provisions of the Guaranty and confirms that all provisions of that document are in full force and effect.

 

	GUARANTOR:	 
	 	 
	TOTAL SITE SOLUTIONS AZ, INC.	 
	 	 
	By:	/s/ ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Name: 	ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Title:	MANAGER	 	 	Date: July 2, 2014	 

 

	VORTECH, L.L.C.	 
	 	 
	By:	/s/ ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Name: 	ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Title:	CHAIRMAN	 	 	Date: July 2, 2014	 

 

	ALLETAG BUILDERS, INC.	 
	 	 
	By:	/s/ ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Name: 	ANTHONY ANGELINI	 	 	 	 
	 	 	 	 	 	 
	Title:	PRESIDENT	 	 	Date: July 2, 2014	 

 

    	3

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