Exhibit
10.3
LOAN MODIFICATION
AGREEMENT
(Loan No.
9117000148)
This Loan Modification Agreement
("Modification") is made and entered as of December 26, 2006,
between CALIFORNIA BANK & TRUST , a California banking
corporation ("Bank"), and ICON INCOME FUND EIGHT B L.P.; ICON
INCOME FUND NINE, LLC; ICON INCOME FUND TEN, LLC; and ICON
LEASING FUND ELEVEN, LLC ( separately and collectively
"Borrower”).
RECITALS
A. Pursuant to the terms of a
Commercial Loan Agreement ("Loan Agreement") between Bank and
Borrower dated as of August 31, 2005, Bank agreed to make a
revolving line of credit in the principal sum of $17,000,000
(“Line of Credit”) available to Borrower; capitalized
terms used and not otherwise defined herein shall have the meanings
assigned to such terms in the Loan Agreement.
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 indebtedness under the Loan
Agreement was secured by assets of Borrower under a separate
Security Agreement, dated August 31, 2005 ("Security Agreement"
executed by each entity comprising Borrower).
D. In response to Borrower's request and in
reliance upon Borrower's representations made to Bank in support
thereof, Bank has agreed to modify the terms of the Loan Agreement
as set forth in this Modification.
AGREEMENT
NOW, THEREFORE, in consideration of the premises
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Bank
agree as follows:
1. Adoption of Recitals .
Borrower hereby represents and warrants that each of the recitals
set forth above is true, accurate and complete.
2. Acknowledgment of
Debt . Borrower acknowledges that, to the best of
Borrower’s knowledge, there are no claims, demands, offsets
or defenses at law or in equity that would defeat or diminish
Bank's present and unconditional right to collect the indebtedness
evidenced by the Note and to proceed to enforce the rights and
remedies available to Bank as provided in the Note, Loan Agreement,
Security Agreement, or any other instrument, agreement, or document
given in connection with the Line of Credit (collectively the "Loan
Documents") or by law. Until the Line of Credit is paid in full,
interest and other charges shall continue to accrue and shall be
due and owing.
3. Representations
and Warranties . Borrower hereby represents and warrants that
no material default exists under the Line of Credit and no event of
default, breach or failure of condition has occurred or exists, or
would exist with notice or lapse of time, or both, under any of the
Loan Documents that could reasonably be expected to have a Material
Adverse Change, and all representations and warranties of Borrower
in this Modification and the other Loan Documents are true and
correct in all material respects as of the date of this
Modification (other than any such representations and warranties
that, by their terms, are specifically made as of a date other than
the date hereof) and shall survive the execution of this
Modification.
4. 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 as
follows:
(i) By deleting the definition of
“Collateral” and replacing it with the
following:
“ Collateral ” means and
includes, without limitation, all property and assets granted as
collateral security for a Loan pursuant to the Security Agreement,
whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future and whether
granted in the form of a security interest, assignment, pledge,
lien, or any other security or lien interest whatsoever, whether
created by law, contract or otherwise. The word
“Collateral” includes without limitation all collateral
described in the section of this Agreement titled
“Collateral;” provided , that notwithstanding
anything to the contrary in this Agreement, the words
“Accounts”, “Accounts Receivable”,
“Collateral Documents”, “Indirect Lease”,
“Indirect Loan Contract”, “Inventory”,
“Lease”, “Loan Contract”, and
“Revolving Loan Contract” shall not mean any
“Accounts”, “Accounts Receivable”,
“Collateral Documents”, “Indirect Leases”,
“Indirect Loan Contracts”, “Inventory”,
“Leases”, “Loan Contracts”, or
“Revolving Loan Contracts” that are owned or receivable
by or to which ICON Leasing Fund Eleven ULC and/or ICON U.S.
Equipment, LLC is a party, as applicable.
(ii) By deleting the definition of
“Discount Rate” in its entirety.
(iii) By deleting the definition of
"Line of Credit Expiration Date" and replacing it in its entirety
with the following:
“ Line
of Credit Expiration Date ” shall mean September 30,
2008, unless extended pursuant to Section 2.1.a.
(iv) By deleting the definition of
"Liquidity" and replacing it in its entirety with the
following:
“
Liquidity ” means Borrower’s cash reserves
(other than deposits reserved pursuant to Borrower’s
non-recourse financing, if any) and unused Availability under the
Line of Credit.
(v) By deleting the definition of
"Present Value" and replacing it with the following:
“ Present Value ” means any
fixed unpaid payment obligation owed to Borrower by a Lessee under
a lease or a Debtor under a loan (including, without limitation,
unpaid regularly scheduled payments, puts and balloon payments) (in
each case excluding leases and loans that are not Eligible
Borrowing Base Contracts), such unpaid payments to be discounted to
their present value on the date of calculation at the Prime Rate.
If the contract is an Indirect Lease or Indirect Loan Contract, the
Present Value shall be multiplied by that percentage of the
foregoing that corresponds to Borrower’s interest in the
Person that is the lessor or lender, as the case may be. If a
lessee under a lease has the option to terminate the lease as of a
date prior to its scheduled termination date, the Present Value of
that lease shall be the lower of the following: (i) the Present
Value based on the lease terminating at such prior date plus the
amount of any payment that the lessee would be obligated to pay the
lessor upon exercise of such option, discounted to its present
value on the date of calculation at the Prime Rate; or (ii) the
Present Value based on the lease terminating at its scheduled
termination date.
(b) Section 2.1.a. of the Loan
Agreement, entitled “Revolving Line of Credit”, is
deleted and replaced in its entirety with 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 Seventeen Million Dollars
($17,000,000.00) 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 reborrow them.
Borrower agrees that Borrower will not permit the outstanding
balance under the Line of Credit to exceed the Line of Credit Limit
unless Borrower increases the Restricted Cash Deposit by an amount
equal to the sum that would otherwise be overadvanced, in which
case Borrower shall have the right to borrow an amount in excess of
the Borrowing Base but not more than $17,000,000.00. Provided no
Event of Default has occurred and is continuing at such time,
Borrower may request (i) one year extensions of the Line of Credit
Availability Period within 390 days of the then applicable Line of
Credit Expiration Date, but Bank has no obligation to grant the
extension and/or (ii) the addition to Borrower of an additional
fund or funds managed by Manager or an Affiliate of Manager
acceptable to Bank, but Bank has no obligation to grant the
addition and/or (iii) in connection with any addition to Borrower
pursuant to the immediately preceding clause (ii)
