Document:

exhibit10-1.htm

EXHIBIT 10.1

 

FIRST LOAN MODIFICATION AGREEMENT

 

This First Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of April , 2011, by and between SILICON VALLEY BANK, a California corporation with a loan production office located at 275 Grove Street, Suite 2-200, Newton, Massachusetts 02466 (“Bank”), and GLOWPOINT, INC., a Delaware corporation, and GP COMMUNICATIONS, LLC, a Delaware limited liability company, each with offices located at 430 Mountain Avenue, Suite 301, Murray Hill, New Jersey 07974 (individually and collectively, jointly and severally, the “Borrower”).

 

1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of June 16, 2010, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 16, 2010, between Borrower and Bank (as amended, the “Loan Agreement”).  Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

 

2. DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement and in certain Intellectual Property Security Agreements executed by Borrower in favor of Bank each dated as of June 16, 2010 (singly and collectively, the “IP Agreement”, and together with any other collateral security granted to Bank, the “Security Documents”).

 

Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

 

3.  DESCRIPTION OF CHANGE IN TERMS.

 

	
A.  

	
Modifications to Loan Agreement.

 

 

	
1  

	
The Loan Agreement shall be amended by deleting the following text appearing as Section 6.9(b) thereof:

 

 

“(b)           EBITDA.  Borrower, on a consolidated basis, shall maintain, measured as of the end of each fiscal month, on a trailing three month basis ending as of the date of measurement during the following periods, EBITDA of at least (a loss not greater than) the following:

 

	
Trailing Three Month Period Ending

	 	
Minimum EBITDA (max loss)

	 
	
May 31, 2010 through October 31, 2010

	 	$	(650,000	)
	
November 30, 2010 through February 28, 2011

	 	$	(400,000	)
	
March 31, 2011 through June 30, 2011

	 	$	250,000	 
	
July 31, 2011 through September 30, 2011

	 	$	500,000	 
	
October 31, 2011, and as of the last day of each fiscal month thereafter

	 	$	1,000,000”	 

 

  

  

  

 

and inserting in lieu thereof the following:

 

“(b)           EBITDA.  Borrower, on a consolidated basis, shall maintain, measured as of the end of each fiscal month, on a trailing three month basis ending as of the date of measurement during the following periods, EBITDA of at least (a loss not greater than) the following:

 

	
Trailing Three Month Period Ending

	 	
Minimum EBITDA (max loss)

	 
	
May 31, 2010 through October 31, 2010

	 	$	(650,000	)
	
November 30, 2010 through February 28, 2011

	 	$	(400,000	)
	
March 31, 2011

	 	$	250,000	 
	
April 30, 2011through November 30, 2011

	 	$	1.00	 
	
December 31, 2011, and as of the last day of each fiscal month thereafter

	 	$	250,000”	 

 

	
2  

	
The Loan Agreement shall be amended by deleting the following text from Section 7.7 thereof:

 

“7.7           Distributions; Investments.  (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock; or (b) directly or indirectly make any Investment (including, without limitation, any additional Investment in any Subsidiary) other than Permitted Investments, or permit any of its Subsidiaries to do so.”

 

and inserting in lieu thereof the following:

 

“7.7           Distributions; Investments.  (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock; providedthat Borrower may, pursuant to a mandatory redemption, redeem its Series B preferred stock (or any series of capital stock into which such Series B preferred stock is converted or exchanged, the “Preferred Stock”); providedfurtherthat, that such mandatory redemption shall be limited to an aggregate redemption payment of $10,000,000 (plus accrued and unpaid dividends, if any, in an aggregate amount not to exceed $1,000,000) (collectively, the “Redemption Payment”) and any such mandatory redemption payments may only be made by Borrower in the event (x) Borrower raises and receives not less than an additional $20,000,000 from the issuance of new equity securities of  Borrower after the date of the First Loan Modification Effective Date (the “Equity Raise”); (y) after giving effect to any such mandatory redemption, Borrower shall have remaining net proceeds from such issuance of new equity securities of not less than $5,000,000 (the “Net Proceeds”); and (z) there shall be no Default or Event of Default at the time of, and after giving effect to, the mandatory redemption, or (b) directly or indirectly make any Investment (including, without limitation, any additional Investment in any Subsidiary) other than Permitted Investments, or permit any of its Subsidiaries to do so.  Notwithstanding the foregoing, if the Equity Raise is less than $20,000,000, then Borrower may redeem shares of Preferred Stock so long as the Redemption Payment is reduced proportionately and the Net Proceeds after giving effect to such Redemption Payment are equal to or greater than $5,000,000.”

  

  

  

 

	
3  

	
The Loan Agreement shall be amended by deleting the following text from Section 10 thereof:

 

 

 

	 	“If to Borrower:	Glowpoint, Inc. 
GP Communications, LLC

c/o Glowpoint, Inc.

225 Long Avenue

Hillside, New Jersey 07205

Attn:  General Counsel

Fax:  (973) 556-1272

Email:  drobinson@glowpoint.com

 

	 	with a copy to:	Gibbons P.C. 
One Gateway Center

Newark, New Jersey 07012

Attn:  Frank Cannone, Esquire

Fax: (973) 639-8340

 

	 	If to Bank:	Silicon Valley Bank

One Newton Executive Park, Suite 200

2221 Washington Street, Newton, MA 02462

Attn: Mr. Jay Tracy

Fax:  (617) 969-4395

Email: jtracy@svb.com

 

	 	with a copy to:    	Riemer & Braunstein LLP

Three Center Plaza

Boston, Massachusetts 02108

Attn:  Charles W. Stavros, Esquire

Fax: (617) 880-3456

Email: cstavros@riemerlaw.com”

 

and inserting in lieu thereof the following:

 

	 	“If to Borrower: 	
Glowpoint, Inc.

GP Communications, LLC

c/o Glowpoint, Inc.

430 Mountain Ave., Suite 301

Murray Hill, New Jersey 07974

Attn:  General Counsel

Fax:  (973) 556-1272

Email:  mhubner@glowpoint.com

 

  

  

  

	 	If to Bank:	

Silicon Valley Bank 
275 Grove Street, Suite 2-200

Newton, MA 02466

Attn: Mr. Jay Tracy

Fax:  (617) 969-4395

Email: jtracy@svb.com

 

	 	with a copy to:	

Riemer & Braunstein LLP 
Three Center Plaza

Boston, Massachusetts 02108

Attn:  Charles W. Stavros, Esquire

Fax: (617) 880-3456

Email: cstavros@riemerlaw.com”

                                         

 

	
4  

	
The Compliance Certificate appearing as Exhibit B to the Loan Agreement is hereby replaced with the Compliance Certificate attached as Exhibit A hereto.

 

4. FEES.  Borrower shall pay to Bank a modification fee equal to Two Thousand Five Hundred Dollars ($2,500.00), which fee shall be due on the date hereof and shall be deemed fully earned as of the date hereof.  Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 

5. RATIFICATION OF IP AGREEMENT.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and conditions of the IP Agreement, and acknowledges, confirms and agrees that said IP Agreement contains an accurate and complete listing of all Intellectual Property Collateral as defined in such IP Agreement, and such IP Agreement remains in full force and effect, other than the addition of U.S. Patent No. 7,916,717 issued on March 29, 2011.

 

6. ADDITIONAL COVENANTS: RATIFICATION OF PERFECTION CERTIFICATE.  Borrower is not a party to, nor is bound by, any license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral.  Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public).  Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under the Loan Agreement and the other Loan Documents.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate, dated as of June 16, 2010, and acknowledges, confirms and agrees the disclosures and information above Borrower provided to Bank in such Perfection Certificate remains true and correct in all material respects as of the date hereof.

 

7. AUTHORIZATION TO FILE.  Borrower hereby authorizes Bank to file UCC financing statements without notice to Borrower, with all appropriate jurisdictions, as Bank deems appropriate, in order to further perfect or protect Bank’s interest in the Collateral, including a notice that any disposition of the Collateral, by either the Borrower or any other Person, shall be deemed to violate the rights of the Bank under the Code.

 

  

  

  

 

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

 

9. RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of the Loan Agreement, each other Loan Document and all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

 

10. NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

 

11. CONTINUING VALIDITY.  Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents.  Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the existing Obligations pursuant to this  Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing.  No maker will be released by virtue of this Loan Modification Agreement.

 

12. RIGHT OF SET-OFF.  In consideration of Bank’s agreement to enter into this Loan Modification Agreement, Borrower hereby reaffirms and hereby grants to Bank, a lien, security interest and right of set off as security for all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control of Silicon Valley Bank  (including a Bank subsidiary) or in transit to any of them.  At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the loan.  ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

13. CONFIDENTIALITY.  Section 12.11 of the Loan Agreement is hereby incorporated by reference in its entirety.

 

14. JURISDICTION/VENUE.  Section 11 of the Loan Agreement is hereby incorporated by reference in its entirety.

 

15. COUNTERSIGNATURE.  This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally left blank]

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Loan Modification Agreement to be executed as of the date first above written

 

BORROWER:

 

GLOWPOINT, INC.

 

By_________________________________________

 

Name:______________________________________

 

Title:_______________________________________

 

GP COMMUNICATIONS, LLC

 

By_________________________________________

 

Name:______________________________________

 

Title:_______________________________________

 

BANK:

 

SILICON VALLEY BANK

 

By_________________________________________

 

Name:______________________________________

 

Title:_______________________________________

 

 

First Loan Modification Effective Date:  April __, 2011

 

  

  

  

 

Exhibit A to First Loan Modification Agreement

 

EXHIBIT B

COMPLIANCE CERTIFICATE

TO:           SILICON VALLEY BANK                                                                                                                Date:

FROM:    GLOWPOINT, INC. and GP COMMUNICATIONS, LLC

 

The undersigned authorized officer of Glowpoint, Inc. and GP Communications, LLC (individually and collectively, jointly and severally, the “Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.  Attached are the required documents supporting the certification.  The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes.  The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

  

  

  

 

	
Please indicate compliance status by circling Yes/No under “Complies” column.

	  
	
Reporting Covenant

	
Required

	
Complies

	  	  	  
	
Monthly financial statements with 

Compliance Certificate

	
Monthly within 30 days

	
Yes   No

	
Annual financial statement (CPA Audited) + CC

	
FYE within120 days

	
Yes   No

	
10-Q, 10-K and 8-K

	
Within 5 days after filing with SEC

	
Yes   No

	
A/R & A/P Agings, Deferred Revenue

Reports and bank statements

	
Monthly within 15 days

	
Yes   No

	
Transaction Reports

	
Bi-weekly and with each request for a Credit Extension (Monthly within 15

days when no outstanding Credit Extensions

	
Yes   No

	
Projections

	
Within 30 days of FYE and as amended

	
Yes   No

	  
	
 

The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”)

____________________________________________________________________________

 

	
Financial Covenant

	
Required

	
Actual

	
Complies

	  	  	  	  
	
Maintain as indicated:

	  	  	  
	
Liquidity (at all times)

	
$750,000

	
 
$_____

	
Yes   No

	
EBITDA (monthly, on a trailing three month basis)*

	
$_____

	
$_____

	
Yes   No

* See Section 6.9(b) of the Loan Agreement

  

  

  

The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above:  (If no exceptions exist, state “No exceptions to note.”)

 

	
Glowpoint, Inc.

 

GP Communications, LLC

 

 

By:                                                       

 

Name:                                                       

 

Title:                                                       

 

	
BANK USE ONLY

 

Received by: _____________________

                       authorized signer

 

Date:               _________________________

 

Verified:       ________________________

                      authorized signer

 

Date:             _________________________

 

Compliance Status:     Yes     No

 

  

  

  

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

Dated:                      ____________________

 

I.           Liquidity (Section 6.9(a))

 

Required:                      $750,000, at all times.

Actual:

	
A.

	
Aggregate value of Borrower’s unrestricted cash at Bank

	
$

	
B.

	
Availability Amount

	
$

	
C.

	
LIQUIDITY (line A plus line B)

	
$

 

Is line C equal to or greater $750,000?

No, not in compliance                              Yes, in compliance

  

  

  

II.           EBITDA (Section 6.9(b))

 

Required:                      Borrower, on a consolidated basis, shall maintain, measured as of the end of each fiscal month, on a trailing three month basis ending as of the date of measurement during the following periods, EBITDA of at least (a loss not greater than) the following:

 

	
Trailing Three Month Period Ending

	 	
Minimum EBITDA (max loss)

	 
	
May 31, 2010 through October 31, 2010

	 	$	(650,000	)
	
November 30, 2010 through February 28, 2011

	 	$	(400,000	)
	
March 31, 2011

	 	$	250,000	 
	
April 30, 2011through November 30, 2011

	 	$	1.00	 
	
December 31, 2011, and as of the last day of each fiscal month thereafter

	 	$	250,000”	 

Actual: all amounts measured on a trailing three month basis ending as of the date of measurement:

	
A.

	
Net Income

	
 
$

	
B.

	
To the extent included/deducted in the determination of Net Income

	  
	  	
1.           Interest Expense

	
 
$

	  	
2.           Depreciation expense

	
 
 
$

	  	
3.           Amortization expense

	
 
$

	 	
4.           Provisions for income taxes

	
 
$

	 	
5.           The sum of lines 1 through 4

	
 
$

	
C.

	
EBITDA (line A plus line B.5)

	  

 

Is line C equal to or greater than $[                ]?

  No, not in compliance                             Yes, in complianceex10-1.htm

EXHIBIT 10.1

 

	 
NOTE SECURED BY A DEED OF TRUST

 

	
Loan Number: ALT001

	
Date: 4/25/2011

	
Lafayette, California

204 Edison Way, Reno, NV APN: 012-319-13 

Property Address

 

1.     BORROWER’S PROMISE TO PAY

In return for a loan that I have received, I promise to pay U.S. $1,500,000.00 (this amount will be called “principal”), plus interest, to the order of Suncrest Homes 30, LLC, a California limited liability company, as to 1,000,000/1,500,000 undivided interest, whose address is 300 H Street, Suite D, Antioch, CA 94509, Pacific BVL Corp., a California corporation, as to an undivided 300,000/1,500,000 interest, whose address is 1576 16th Avenue, San Francisco, CA 94122 and Rubicon Mortgage Fund, LLC, a California limited liability company as to an undivided 200,000/1,500,000 interest (who will be called “Lender”). I understand that the Lender may transfer this Note, upon five (5) days prior written notice.  The Lender or anyone else who takes this Note by transfer and who is entitled to receive payments under this Note will be called the “Note Holder(s).”

 

2.     INTEREST

I will pay interest at a yearly rate as described in paragraph 3 below.

Interest commences on the day funds are placed in escrow, and, if paragraph 3 reflects more than one interest rate during the loan term, the rate will change on the date which is one (1) calendar month before each Payment Start Date.

Interest will be charged on unpaid principal until the full amount of principal has been paid.

I also agree to pay interest at the rate described in paragraph 3 below on the prepaid finance charges which are a part of the principal.

 

3.     PAYMENTS

My payments are   þ Interest Only     ̈ Fully Amortized       ̈ Other

I will make my payments each month as follows:

	
Number of Payments

	
Payment Start Dates

	
Interest

Rates

	
Payment

Amounts

	
11

	
Monthly beginning June 1, 2011

	
11.00%

	
$13,750.00

	
1

	
May 1, 2012

	
11.00%

	
$1,513,750.00

 

 

I will make these payments until I have paid all of the principal and interest and any other charges that I may owe under this Note.  If on 05/01/2012 (the Due Date) I still owe amounts under this Note (balloon balance), I will pay all those amounts, in full, on that date.

I will make my payments payable to:

Suncrest Homes 30, LLC:$9,166.71

Pacific BVL, Corp:$2,750.00

Rubicon Mortgage Fund, LLC:$1,833.29

 

I will send my three (3) individual checks c/o Rubicon Capital Partners, Inc., 3575 Mt. Diablo BLvd., Suite 215, Lafayette, CA 94549, or at a different place if I am first notified in writing by the Note Holder.

 

4.     BORROWER’S FAILURE TO PAY AS REQUIRED

 

(A) Late Charge For Overdue Payments.  If I do not pay the full amount of each monthly payment by the end of 10 calendar days after the date it is due, I will pay a late charge to the Note Holder. The amount of the charge will be 10.000% of my overdue payment or U.S. $100.00, whichever is more. I will pay this late charge only once on any late payment.

In the event a balloon payment is delinquent more than 10 days after the date it is due, I agree to pay a late charge in an amount equal to the maximum late charge that could have been assessed with respect to the largest single monthly installment previously due, other than the balloon payment, multiplied by the sum of one plus the number of months occurring since the late payment charge began to accrue.

(B) Default.  If I do not pay the full amount of each monthly payment due under this Note by the date stated in paragraph 3 above, I will be in default, and the Note Holder may demand that I pay immediately all amounts that I owe under this Note.

 

 

 

 

	 
Applied Business Software, Inc. (800) 833-3343 

	ALT001/Reno
	 
Note Standard (Brooke)

	Page 1 of 3

  

  

  

 

Even if, at a time when I am in default, the Note Holder does not require me to pay immediately in full as described above, the Note Holder will still have the right to do so if I am in default at a later time.  In the event of a default under the terms of this Note, then any unpaid principal balance of the loan at the time of default should bear interest at the rate of Eighteen (18) percent per annum (the “Default Rate”), automatically and without notice, from the time of default, until this Note has been paid in full, or until the specific default has been cured.  If I do not pay the full amount of the outstanding balance of the loan at maturity (the “Balloon Balance” referenced in Paragraph 3 above), the Default Rate will automatically apply to all interest accrued thereafter without demand by the Note holder.

I further agree that the increase in the rate of interest payable under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, or the additional cost and expense Note Holder will incur by reason of my delinquent payment and additional compensation Note Holder is entitled to receive for the increased risk of nonpayment associated with a delinquent loan.

(C) Attorney fees and costs.  In the event of any breach or dispute regarding this Secured Promissory Note or to enforce any provision of this Secured Promissory Note in the prevailing party in any such action, including any lawsuit, arbitration, etc., shall be entitled to recover from the other party it’s reasonable attorneys fees and costs incurred regarding any such dispute or breach, including all fees and costs incurred through Judgment, if any, as well as any attorneys fees and costs incurred in any appeals and any efforts to collect on such Judgment.  In addition to the reasonable attorneys fees and costs set forth above, the prevailing party shall also be entitled to its pre-judgment and post-judgment interest through collection.  The “prevailing party” will be determined by the court, arbitrator or trier of fact before whom the action was brought based upon an assessment of which party’s major arguments or positions taken in the suit or proceeding could fairly be said to have prevailed over the other party’s major arguments or positions on major disputed issues in the Court’s/arbitrator’s/trier of fact’s decision.

5.     BORROWER’S PAYMENTS BEFORE THEY ARE DUE - PREPAYMENT PENALTIES

I have the right to make payments of principal at any time before they are due. A payment of principal only is known as “prepayment.” If I pay all or part of the loan principal before it is due, whether such payment is made voluntarily or involuntarily, I agree to pay a prepayment penalty computed as follows: Other -Five (5) months interest ($68,750.00) is guaranteed and is not refundable in the event of an early repayment of this loan.   In the event of prepayment, all prepaid interest, other than five (5) months’ interest ($68,750.00) and accrued but unpaid interest, shall be refunded to Borrower. Borrower may make partial payments of principal at its discretion and without penalty at any time during the term hereof.  Borrower may fully prepay this loan without any penalty at any time subsequent to October 1, 2011.

 

6.     BORROWER’S WAIVERS

I waive my rights to require the Note Holder to do certain things. Those things are: (a) to demand payment of amounts due (known as “presentment”); (b) to give notice that amounts due have not been paid (known as “notice of dishonor”); (c) to obtain an official certification of nonpayment (known as “protest”). Anyone else who agrees to keep the promises made in this Note, or who agrees to make payments to the Note Holder if I fail to keep my promises under this Note, or who signs this Note to transfer it to someone else, also waives these rights. These persons are known as “guarantors, sureties and endorsers.”

 

7.     RESPONSIBILITIES OF PERSONS UNDER THIS NOTE

If more than one person signs this Note, each of us is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety, or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of the guarantor, surety, or endorser of this Note, is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of us together. This means that anyone of us may be required to pay all of the amounts owed under this Note.

 

8.     THIS NOTE IS SECURED BY A DEED OF TRUST

In addition to the protection given to the Note Holder under this Note, a Deed of Trust (the “Security Instrument”) with a Due-on-Transfer Clause dated the same date of this Note, protects the Note Holder from possible losses which might result if I do not keep the promises which I make in the Note. That Security Instrument describes how and under what conditions I may be required to make immediate payment in full of all amounts that I owe under this Note.

Some of those conditions are described as follows:

“Lender’s Right to Require The Loan to be Paid Off Immediately. If the borrower shall sell, enter into a contract of sale, lease for a term of more than 6-years (including options to renew), lease with an option to purchase for any term, or transfer all or any part of the Property or an interest therein, excluding (a) the creation of a lien or encumbrance subordinate to this Deed of Trust, (b) or a transfer by devise, descent, or by operation of law upon the death of a joint tenant, the Lender may, at its option declare the Note and any other obligations secured by this Deed of Trust, together with accrued interest thereon, immediately due and payable, in full. No waiver of the Lender’s right to accelerate shall be effective unless it is in writing.”

 

 

 

 

	 
Applied Business Software, Inc. (800) 833-3343 

	ALT001/Reno
	 
Note Standard (Brooke)

	Page 2 of 3

  

  

  

	
Altair Nanotechnologies Inc., a Canada corporation

	  	
Altairnano, Inc., a Nevada Corporation

	  	
/s/ John C. Fallini 4-27-11

	  	  	  	
/s/ John C. Fallini 4-27-11

	  
	
Borrower

	
By: John C. Fallini

Its: Chief Financial Officer

	
Date

	  	
Borrower

	
By: John C. Fallini

Its: Chief Financial Officer

	
Date

	
Altair Nanotechnologies Inc., a Canada corporation

	  	
Altairnano, Inc., a Nevada Corporation

	  	
/s/ Terry M. Copeland 4-27-11

	  	  	  	
/s/ Terry M. Copeland 4-27-11

	  
	
Borrower

	
By: Terry Copeland

Its: Chief Executive Officer

	
Date

	  	
Borrower

	
By: Terry Copeland

Its: Chief Executive Officer

	
Date

 

	 
 
ASSIGNMENT OF NOTE

SECURED BY A DEED OF TRUST

 

 

Date: _____________________________________________________

FOR VALUE RECEIVED, the undersigned hereby grants, assigns and transfers to:

all beneficial interest under the within Note, without recourse, and Deed of Trust securing same

 

	 	 	 
	 	 	 
	 	 	 

 

 

 

DO NOT DESTROY THIS NOTE: When paid it must be surrendered to the Trustee, together with the Deed of Trust securing same for cancellation, before reconveyance will be made.

 

 

 

 

	 
Applied Business Software, Inc. (800) 833-3343 

	ALT001/Reno
	 
Note Standard (Brooke)

	Page 3 of 3

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