Item 1.01 Entry into a Material Definitive Agreement.
Purchase Agreement
On August 31, 2018, Terra Tech Corp. (the “Company”) entered into a Standard Purchase Agreement (the “Purchase Agreement”) with North Fourth LLC pursuant to which the Company agreed to purchase the real property located at 121 North Fourth Street, Las Vegas, NV 89101 (the “Property”) for a purchase price of $2,700,000. On October 2, 2018, the Company assigned all of its right, title and interest to the Purchase Agreement to its wholly-owned subsidiary, 121 North Fourth Street, LLC (“121 North Fourth Street”) pursuant to an Assignment (the “Assignment”). On October 5, 2018 (the “Closing Date”), 121 North Fourth Street closed on the acquisition of the Property.
Loan Agreement
In connection with the acquisition of the Property, on the Closing Date 121 North Fourth Street entered into a Loan Agreement (the “Loan Agreement”) with RD 121 N Fourth LLC (“RD 121”) pursuant to which RD 121 agreed to lend to 121 North Fourth Street $1,600,000 (the “Loan”) for the purchase of the Property as evidenced by a Secured Promissory Note (the “Note”). The Loan matures on the three (3) year anniversary of the Closing Date; provided that 121 North Fourth Street may extend the maturity date by 12 months by delivering a notice to RD 121 at least 30 days before the stated maturity date. The Loan bears interest at the rate of 12% during the first 12 months, 12.5% during the second 12 months, 13% during the third 12 months, and 13.5% during any extension. 121 North Fourth Street prepaid the first three (3) months of interest on the Loan and additional interest payments are due on the first day of each month starting on the fourth month after the Closing Date. 121 North Fourth Street may prepay the loan, in whole or in part, at any time after the end of the third full month immediately following the Closing Date, without penalty or premium. 121 North Fourth Street paid an origination fee of 2% of the original principal amount of the Loan. Upon the occurrence of an event of default under the Loan Agreement, RD 121 may accelerate the maturity date of the Loan.
Secured Promissory Note
On the Closing Date, 121 North Fourth Street entered into the Note with RD 121 to evidence the Loan made pursuant to the Loan Agreement.
Guaranty Agreement
On the Closing Date, the Company entered into a Guaranty Agreement (the “Guaranty Agreement”) with RD 121 pursuant to which the Company agreed to guaranty 121 North Fourth Street’s obligations under the Loan Agreement, the Note and any other documents or agreements entered into in connection therewith. At any time after an event of default under the Loan Agreement, the Company may elect to convert the then outstanding principal balance and interest due on the Loan into shares of common stock of the Company at a price based on commercially reasonable determinations, plus a default penalty of 130% of the principal balance and interest.
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
On the Closing Date, 121 North Fourth Street entered into a Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the “Deed of Trust”) with RD 121 pursuant to which 121 North Fourth Street mortgaged in trust its right, title and interest in the Property to RD 121.
The foregoing descriptions of the Purchase Agreement, Assignment, Loan Agreement, Guaranty Agreement, Deed of Trust, and Note are qualified in their entirety by reference to the full text of such documents, copies of which are filed as Exhibits 10.51-10.55 and Exhibit 4.53, respectively, to this Current Report on Form 8-K (this “Report”) and which are incorporated by reference herein in their entirety.