Note Modification Agreement
Exhibit 10.52
NOTE MODIFICATION AGREEMENT
THIS NOTE MODIFICATION AGREEMENT (this “Agreement”) is made and entered into as of February 4, 2022, to be effective as of March 1, 2022, by and between, MJ HOLDINGS, INC., a Nevada Domestic Corporation (the “Maker”), and FR HOLDING, LLC, a Wyoming Limited Liability Company (the “Holder”). Maker and Holder are collectively referred to hereinafter as “Parties” in the plural and “Party” in the singular.
WITNESSETH:
WHEREAS, the Maker entered into a certain Note Secured by Deed of Trust (“Secured Note”) (attached hereto as Exhibit “A”) with Holder on January 17, 2018, for the sum of Seven-Hundred and Fifty-Thousand Dollars ($750,000.00) with an annual interest rate of Five Percent (5%) and monthly installment payments of Three-Thousand One Hundred Twenty-Five Dollars ($3,125.00) with a “Balloon” payment Maturity Date of January 31, 2022, at which time the entire remaining balance would become due. Said Secured Note is secured by a Deed of Trust with Assignment of Rents (“Deed of Trust”) dated January 17, 2018, and recorded on February 22, 2019 with the Nye County Recorder, Nye County, Nevada, instrument #907282 (attached hereto as Exhibit “B”).
WHEREAS, the Secured Note was entered into by Maker to facilitate the acquisition of the entity Farm Road, LLC d/b/a Amargosa Valley Pine Growers, A Wyoming Limited Liability Company by Maker through a Membership Interest Purchase and Sale Agreement (“purchase agreement”), which included two-hundred and sixty (260) acres of land in Nye County, Nevada, comprised of a one hundred (100) acre parcel of land described as: APN: 019-181-02 (parcel running adjacent to Anvil Road, Hwy 373) and four (4) contiguous Forty (40) acre parcels of land described as: APN’s: 019-751-04/05/06/07 (southwest of the 100 acre parcel described above) (“subject property”). Also included in the purchase and secured by this Secured Note and Trust Deed #907282, are 204-acre feet of permitted water rights.
WHEREAS, the Secured Note had an additional provision requiring the assessment of a Five-Hundred Thousand Dollars ($500,000.00) “consulting fee” subject to specific conditions in the secured note if the Maker (buyer) did not utilize the subject property sufficiently per the purchase agreement terms or failed to generate sufficient revenues per the obligations stated therein. The consulting fee provision, if assessed, would increase the balance on the Secured Note to One-Million Two-Hundred Fifty-Thousand Dollars ($1,250,000.00) minus any principle paid down prior to this assessment.
WHEREAS, the Parties agree that the maturity date of the Secured Note being January 31, 2022, has passed and that the balance of the note is now due (currently Seven-Hundred and Fifty-Thousand Dollars ($750,000.00), and the parties also agree that the conditions in the secured note requiring the assessment of the additional Five-Hundred Thousand Dollars ($500,000.00) consulting fee was triggered bringing the total amount owed by Maker under the terms of the Secured Note to One-Million Two-Hundred Fifty-Thousand Dollars ($1,250,000.00).
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WHEREAS, it is agreed that it is in the best interest of both parties to modify the terms of the Secured Note.
NOW, THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto hereby agree to modify the terms of the Secured Note as follows:
| 1. | Defined Terms. All capitalized terms used herein not otherwise expressly defined herein shall have the same respective meanings given to such terms in the original Note Secured by Deed of Trust. | |
| 2. | Acknowledgements by Maker. Issuer hereby acknowledges and agrees that (i) as of the close of business on the date hereof, the outstanding balance of the Loan is equal to a principal amount of One-Million Two-Hundred Fifty-Thousand Dollars ($1,250,000.00) plus accrued and unpaid interest of $7,342.88, and (ii) all Obligations of Maker to the Holder are secured a Deed of Trust with Assignment of Rents (“Deed of Trust”) dated January 17, 2018, and recorded on February 22, 2019 with the Nye County Recorder, Nye County, Nevada, instrument #907282. | |
| 3. | Modified Terms: Effective upon satisfaction of the conditions set forth in paragraph 3(a) below, and in reliance upon the representations, warranties, agreements and covenants of the Maker set forth herein the following terms shall be modified from the original Secured Note as follows: |
| a. | Maker shall pay Holder a Three-Hundred and Fifty-Seven Three Hundred Forty-Two and Eighty-Eight Cents Thousand Dollars ($357,342.88.00) lump sum payment within 5 days of the execution of this Note Modification Agreement. | |
| b. | The new balance owed by Maker to Holder under the terms of the Secured Note shall be Nine-Hundred Thousand Dollars ($900,000.00). | |
| c. | The interest rate on the note shall be seven percent (7%) annual interest. | |
| d. | The payments shall be calculated under a twenty (20) year amortization with a balloon payment in three (3) years on February 1, 2025 as follows: |
| i. | Monthly Payments shall be Six-Thousand Nine-Hundred and Seventy-Seven Dollars and Sixty-Nine Cents ($6,977.69) to commence on March 1st, 2022. | |
| ii. | Late payment fee. If any monthly payment is more than 10 days late, there will be a 10% late fee charged and added to the balance due. | |
| iii. | If Maker pays the minimum payments required under the terms of the modified Secured Note, the final balloon payment shall due on February 1, 2025 in the amount of Eight-Hundred Thirty-Seven Thousand Nine-Hundred and Ninety Dollars and Eighty-Four Cents ($837,990.84). |
| e. | There shall be no pre-payment penalty. |
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| 4. | Effectiveness. The modification provided in paragraph 3 immediately preceding this paragraph 4 shall be effective as of the date of execution and upon satisfaction of paragraph 3(a) by Maker completing the lump sum payment of Three-Hundred and Fifty-Seven Three Hundred Forty-Two and Eighty-Eight Cents Thousand Dollars ($357,342.88.00) | |
| 5. | Reaffirmation of Transaction Documents. The Maker hereby represents and warrants that the facts set forth in the recitals to this Agreement are true and correct, and hereby restates, ratifies, and reaffirms each and every term, condition, representation and warranty heretofore made by it under or in connection with the execution and delivery of the original Note Secured by Deed of Trust and Deed of Trust with Assignment of Rents and each other security agreement and other agreements, document and instrument executed and delivered by the Maker from time to time in connection therewith, as fully as though such representations and warranties had been made on the date hereof and with specific reference to this Agreement, and the Maker hereby further acknowledges and agrees that the Original Promissory Note and the related Security Agreement and other agreements, documents and instruments, and all terms, conditions, covenants, agreements and other provisions thereof remain in full force and effect as originally written, without waiver or modification and are hereby ratified and confirmed, and shall continue to constitute the legal, valid and binding and enforceable obligation of the Maker to the Holder. | |
| 6. | No Event of Default; No Offset, Counterclaim. To induce the Holder to enter into this Agreement, the Maker hereby (a) represents and warrants that, as of the date hereof and after giving effect to the terms hereof, there exists no Event of Default under the original Note Secured by Deed of Trust; (b) acknowledges and agrees that no right of offset, defense, counterclaim, claim, causes of action or objection in favor of the Maker against the Holder exists arising out of or with respect to any of the documents entered into between the Parties, the related guaranties, agreements, documents and instruments, the obligations of the Maker thereunder, or with respect to the administration or funding of the Loan, or under any other facts or circumstances whatsoever;and (c) releases, acquits, remises and forever discharges the Holder and his affiliates and all of their past, present and future officers, directors, employees, agents, attorneys, representatives, successors and assigns from any and all claims, demands, actions and causes of action, whether at law or in equity, whether now accrued or hereafter maturing, and whether known or unknown, which the Maker now or hereafter may have by reason of any manner, cause or things to and including the date of this Agreement with respect to matters arising out of or with respect to this Agreement, agreements between the Parties, documents and instruments, the obligations of the Maker thereunder, or any other arrangement or relationship between the Holder and the Maker. | |
| 7. | Miscellaneous. The Maker agrees to take such further action as the Holder shall request in connection herewith to evidence the agreements herein contained. | |
| This Agreement may be executed in any number of counterparts and by different patties hereto in separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, other than its laws respecting choice of law. The original Note Secured by Deed of Trust and Deed of Trust with Assignment of Rents shall be and remain in full force and effect, and shall constitute the legal, valid, binding and enforceable obligations of the Maker to the Holder. | ||
| 8. | No Amendment or Waiver. The Maker acknowledges that (a) the Holder has not agreed to (and has no obligation whatsoever to discuss, negotiate or agree to any further restructuring, modification, amendment, waiver or forbearance with respect to this Agreement or the obligations of the Maker thereunder or relating thereto, (b) no understanding with respect to any restructuring, modification, amendment, waiver or forbearance with respect to the original Note Secured by Deed of Trust and Deed of Trust with Assignment of Rents or the obligations of the Maker thereunder or relating thereto shall constitute a legally binding agreement or contract, or have any force or effect whatsoever, unless and until reduced to writing and signed by authorized representatives of each party hereto, and (c) the execution and delivery of this Agreement has not established any course of dealing between the parties hereto or created any obligation or agreement of the Holder with respect to any future restructuring, modification, amendment, waiver or forbearance with respect to the original Note Secured by Deed of Trust or the obligations of the Maker thereunder or relating thereto. |
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IN WITNESS WHEREOF, Maker and Holder have caused their duly authorized officers or individually to set their hands and seals as of the day and year first above written.
Entered into this 4th day of February 2022.
| MJ Holdings, Inc. | FR Holding, LLC, | |||
| BY: | BY: | |||
| Roger Bloss, | Stephen P. Pingree | |||
| Its: | Chief Executive Officer | Its: | Managing Member | |
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