Paycheck Protection Program Liquidity Facility: Letter 0F Agrebment

Download as pdf or txt
Download as pdf or txt
You are on page 1of 10

Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 1 of 10

PAYCHECK PROTECTION PROGRAM LIQUIDITY FACILITY


LETTER 0F AGREBMENT

O{on-D ep o sitory Institutions)


(As Amended Jan]ary 14, 2021)

Date:Janunrv 14, 2021

Discount Window Officer


Federal Reserve Bank

Subject: Paycheck Protection Prograni Liquidity Facility

Dear Discount Window Officer:

In consideration of Our being al]le to request Advances from a Federal Reserve Bank desigiiated
by the Board of Governors of the Federal Reserve System (`Board) (the `:Reserve Bank'), as set
forth in this letter as amended and supplemented from time to time by the Reserve Bank (`CPPPLF
Letter of Agreement'), and to incur Indebtedness to the Reserve Bank pursuant to the Paycheck
ProtectionProgramhiquidityFacihity¢he`TPPI.F"orthe`Tacility"}authorizedtytheBoardon
April8,2020,assuchauthorizationmaybeamendedfromtimetotime,undersection13(3)of the
Federal Reserve Act, we (the "Borrover" or "us') agree to the provisions of the Reserve Bank's
Operating Circular No. 10, effective July 16, 2013, as may be amended from time to time (the
"Circular'), and to the terms and conditions of this PPPLF Letter of Agreement which together
apply to all Advances made under the PPPLF (the Circular and this PPPLF Letter of Agreement
together, the `TPPLF Agreement). To the extent any provision of the Ciroular is inconsistent
with the terms of this PPPLF Letter of Agreement, the terms of this PPPLF Letter of Agreement
shall govern with respect to all Advances made under the PPPLF. All capitalized terms used in
this PPPLF Letter of Agreement but not defined herein shall have the meaning specified in the
Circular.ThisPPPLFLetterofAgreementmustbeexecutedanddeliveredbyusinordertoobtaln
any Advance extended to us hereunder after Jantlary 14, 2021.

Security for Advances: Under the PPPLF, Advances must be secured by pledges of loans to
smallbusinessesundertheU.S.SmallBusinessAdministration's("SEA")7(a)loanprograntitled
the Paychck Protcetien Progrern {"PPP"), which was added to the SBA's 7(a) foan prDgran by
section 1102 of the Coronavhus Aid, Relief, and Economic Security Act (the "CARES Act"), as
amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and as
may be amended from time to time ("PPP Loans'). To qualify for the PPPLF, PPP Loans must
(1)befullyguaranteedastoprincipalandinterestbytheSBA,andhavebeeneither(2)origirmted
byus,or(3)purchasedbyusinaccordancewiththeSBA'srequirementsforthesaleandpurchase
of whole PPP Loans (in either case, such that we are the beneficiary of the SBA's guarantee of
suchPPPLoans).AsaconditiontoobtalninganAdvance,weagreetopi.ovideanydocumentation
that the Reserve Bank requires evidencing that we are the beneficiary of the SBA's guarantee of
PPP Loans pledged to the PPPLF. By pledging PPP Loans as collateral for Advances under the
Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 2 of 10

Facility (collectively, "PPPLF Collateral," oi. any PPP Loan individually, an "Item") the Eon.ower
waITants, represents and covenan:ts that each such Item pledged as collateral for Advances under
the Facility:

(a) Is a "coveredloan" for purposes ofl5 U.S.C. § 636(a)(36) or (37);

(b) Complies with all requirements of the PPP, including without limitation any rules or
guidance issued by the SBA inplementing the PPP, and any requirements set fo]th in any
agreement the Borrower is required to execute by the SBA in connection with the PPP;

(c) Has been duly approved under delegated authority for guaranty by the SBA;

(d) Satisfies applicable collateral requirements in the circular; and

(e) Was either (1) originated by us or (2) purchased dy us in accordance with the SBA's
requirements for the sale and purchase of whole PPP Loans (in either case, such that we are
the beneficiary of the SBA's guarantee of such PPP Loans).

In addition, the Borrower understands and agrees that PPPLF Collateral and each Item is
"Collateral" within the meaning of the Circular and that all re|>resentations, warranties and other
agreements with respect to the Collateral in the Circular apply to the PPPLF Collateral and to each
Item.

Structure of Advances: The Borrower shall comply with the directions of the Reserve Bank with
respect to the marmei. and form of submission of requests for Advances under the PPPLF and the
pledge of pppI,F Collateral. The Rsserve Bank may combine PPPLF Collateral into pcols ®f PPP
I.-oars having the same maturity date for purposes of making Advances on the pooled
PPPLF Collateral, and shall have the right Out not the obligation) to combine multiple Advances
into one Advance, or to separate, divide, or process on a lag any Advance as the Reserve Bank
may determine in its sole discretion to be advisable or convenient for administration.

Collateral Valuation: PPPLF Collateral valuation for each Item shall equal the principal amount
of the PPP Loan outstanding at the time the PPP Loan is pledged as PPPLF Collateral.

Amount of Advance: Each Advance shall be in a principal amount equal to the aggregate
principal amount of PPP Loans pledged by the Borrower to secure that Advance. The amount of
any Advance made pursuant to the PPPLF outstanding at any one time shall not exceed the
outstanding amouut of ppp Loans pledged by the Borrower to secure thEil Advance.

Interest Rate: The interest rate applicable to any Advance made under the PPPLF shall be
thirty-five (3 5) basis points.

Advance Maturity: The maturity date of an Advance under the PPPI,F (the "Maturity Date") will
be the maturity date of the PPPLF Collateral pledged to secure the Advance. The Maturity Date
of an Advance will be accelerated on and to the extent of (i) the date of any 7(a) loan forgiveness

Paycheck Protection Program Liquidity Facility Letter of Agreement


Oqon-Depository Institutions -As amended January 14, 2021-)
Page 2 of 1 0
Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 3 of 10

reimbursement by the SBA for any PPPLF Collateral; or (ii) the date of purchase by the SBA from
the Borrower of any PPPLF Collateral to realize on the SBA's guarantee of such PPPLF Collateral.

The Maturity Date of all Advances made pursuant to the PPPLF to a BOITower shall be accelerated
upontheoccurrenceofanEventofDefaultbytheBorrower,includingbutnotlimitedtothefallore
to comply with a I.equirement of the PPPLF Agreement or any representation, warranty, or
covenant of the Borrower under the PPPLF Agreement is inaccurate on or as of the date it is
deemed to be made or on any date on which an Advance remains outstanding,

Consent to Shal'ing Information with SEA and Other Entities: The BCilfower agrees that the
Reserve Bank may provide any and all infomation relating to any Advance to the SBA and the
Board and, if applicable, one or more entities determined by the Reserve Bank to have a current
or potential legal or financial interest in such information, and hereby consents to the providing of
such information to such entities by the Reserve Bank.

Assignment to Reserve Bank of .Amounts Payable to Borrower:

(a) The Borrower agrees that any payments or other amounts received by the Borrower or any
other pet.son (including without limitation prepayments by borrowers under PPP Loans)
arising from or in comection with PPPLF Collateral are the property of the Reserve Bank,
and that the Borrower shall immediat-ely pay any such amounts to the Reserve Bank, in full
and in actually and finally collected funds, without any demand therefor or other action by
the Reserve Bank.

@) The Bon`ower agrees that the Reserve Bank under this PPPLF Lettei. of Agi'eemeut is a
pledges of a frut-pfrority security interest in and to any PPP Imam pledged as PPPLF
Collateral and that the Reserve Bank is not a registered holder, or acting as a registered
holder, of any PPP Loan pledged as PPPLF Collateral.

(c) The Eon.ower agrees that any payment received by the Borrower or any other person fl.om
the SBA in connection with any such loan forgiveness reimbursement or any such loan
guarantee amounts arising from or in connection with PPPLF Collateral is the property of
the Reserve Bank, and that the Borrower shall immediately pay any such amounts to the
ReserveBank,infull.and`in,ach]allyandfinallycollectedfunds,withoutanydemandtherefor
or other action by the Reserve Bank.

(d) The Borrower agrees that, at any time if so instructed by the Reserve Bank, the Borrower
will inevocably assign to the Reserve Bank any and all amounts to which the Borrower is or
may become entitled related to PPPLF Collateral, including but not limited to any and all
amounts paid or payable to the Borrower from the SEA for (i) PPP Loan forgiveness
reimbursement on arty PPP Loan pledged as PPPLF Collateral, or (ii) satisfaction by the SEA
Of the SBA's guarantee of any PPP Loan pledged as PPPLF Collateral.

(e) The Bolfower agrees that, upon receiving an instruction from the Reserve Bank under
paragraph (d), it shall provide to the SBA, in such form and manner as the SEA may require,

Paycheck Protection Program Liquidity Facilrty Letter of Agreement


(Non-Depository Institutions -As amended January 14, 2021 )
Page 3 of 10
Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 4 of 10

wire transfer instructions sufficient to enable the SEA to make payment directly 1:o the
Reserve Bank of loan forgiveness reimbursement and loan guarantee amounts as described
above, and shall consult with the Reserve Bank regarding obtaining accurate wire transfer
instructions to provide to the SEA as provided herein.

Prepayment:AdvancesmadeunderthePPPLFmaybeprepaidinfullorinpart,withoutpenalty.
The Borrower shall prepay an Advance made pursuant to the PPPLF (i) on the date and to the
extent of the payment by the SBA for the amount of covered 7(a) loan forgiveness for any
PPPLoan(or,inthecaseofapoolofpppLoaus,aPPPLoaninsuchloanpool)thatispledgedto
seetlfean-Ad`vance;(ii)unthedateofpurchasebytheSBAfi`omtheBon.owei.OfaPPPLean(or,
in the case of a pool of PPP Loans, a PPP Loan in such loan pool) that is pledged to secure such
Advance to realize on the SBA's guarantee of that PPP Loan; or (iii) on the date and to the extent
a bolfower under a PPP Loan (or, in the case of a pool of PPP Loans, a PPP Loan in such pool)
repays or prepays such PPP Loan, in each case, so that the amount of any Advance outstanding
does not exceed the outstanding amount of PPP Loans pledged to secure such Advance.
Prepayments of any Advance shall be accompanied by accrued and unpaid interest thereon.
Notwithstanding anything to the contrary elsewhere in this PPPLF Agreement, interest on a
prepayment of any Advance under this paragraph will accrue daily until the date that such
prepayment is made to the Reserve Bank.

Waiver of RIght to Repayment on Demand: The Reserve Bank wives its righi to require
repayment on demand under Section 5.1(a) of the Circular with respect to any Advance made
under the PPPLF, provided that the Reserve Bank shall retain all other rights and remedies under
the Circular, including but not limited to remedies upon the occurrence of an Event of Default
except as provided elsewhere in this PPPLF Letter of Agreement.

Repayment on Maturity Date: On the Maturity Date, with respect to each Advance, the
BOITower sham repay such Advance in an aggregate amount equal to the Advance plus accrued
interest, which shall be debited from the Borrower's Accourit as provided below.

Non-Recourse Basis: h the event that the Borrower fiuls to pay an Advance on the Maturity Date
thereof, the Reserve Bank first shall seek repayment from realization upon the PPPLF Collateral,
including any proceeds of payments by the SEA in connection with loan forgiveness or loan
gual.antees with respect to such PPPLF Collateral. Thereafter, the Reserve Bank may pursue any
remedies it may have to recover the remaining outstanding amount of an Advance.
Notwithstanding any provisions of the PPPLF Agi`eemeut lo the contrary, all Advances made to
the Borrower pusuant to the PPPLF shall become a recourse obligation if, in the sole discretion
of the Reserve Bank, the Borrower (i) has breached any of the I.epresentatious, warrantiesg or
covenantsmadeunderthePPPLFAgreementor(ii)hasengagedinanyfrandoi.misrepresentation
in oormection with any Advance or any request to obtain an Advance under the PPPLF.

Aeemal Of Interest, Debits try Reserve Bank! Interest on each Advance shall accrue dally
against the Borrower's outstanding obligations and shall be debited fion the account of the
Borrower' s depository institution as identified in the section captioned ``Borrower' s Depository
Institution" below.

Paycheck Protection Progran Liquidity Facility Letter of Agreement


Oqon-I)epository hstitutions -As amended January 14, 2021)
Page 4 of 10
Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 5 of 10

PPPLF Termination: No Advance :innde pursuant to the PPELFmay be inade afar March 31,
2021. unless authorized by the Board.

Additional Financial and Operational Information: Borrower hereby agrees that upon request,
Borrower will furnish the Reserve Bank with such financial and operating data and other

¥go=zaati:9onfaansd:oc#oeT:*rffio¥f=:±c;oos:ti¥,¥ra£¥#oclf¥n:::,Th¥rpefBeL¥t8o¥]oa¥e:¥:r;:
Borrower' s SEA 7(a) program lending practices, procedures, and compliance.

Terms and Conditions: Advances under the PPPLF shall be subject to such procedures,
requirements, and terms and conditions of the PPPLF as may be published and supplemented by
the Board or dy the Reserve Bank, `in either case at its sole discretion, including conditions
regarding safekeeping of PPPLF Collateral, provided that any terms and conditions published or
supplemented after the date of an outtstanding Adranee shall not apply to such Advance. Any
update, amendment, restatement, supplement or other modification of the procedures and
1.equirements and terms and conditions of the PPPLF Agreement (including the terms and
conditions of this PPPLF Letter of Agreement as amended and supplemented from time to time)
published by the Reserve Bank (including on the Reserve Bank's or the Board's website) shall
constitute notification to the Borrower for purposes of Section 15.0 and Section 16.0 of the
Circular.

Counterparts. Delivery of an executed countapat of a signature page of this PPPLF Letter of


Agreement by telecopy, e-mailed .pdf, or any other electronic means that reproduces an image of
the ac-tual executed signature page shall be effective as delivery of a manually executed countexpal.I
of this the PPPLF Letter OfAgreemeut. The words t`exeeution," I"signed," "signature," "delivery,"
andwordsoflikeimportinorrelatingtoanydooumenttobesignedinconnectionwiththisPPPLF
Letter of Agreement and the transactions contemplated hereby shall be deemed to include
electronic signatures, deliveries or the keeping Of 1.ecords in electronic form, in each case, in a
fonn acceptable to the Reserve Bank at its sole discretion, each of which shall be of the same legal
effect, validity or enforceability as a manually executed sigrrfure] physical delivery thereof or the
use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for
in any applicable law, including the Federal Electronic Signatures in Global and National
Cormerce Act, or any other similar state laws based on the Uiniform Electronic Transactions Act.

FaHure of Borrower to Meet PPP Requirements or PPPLF Requirements: Failure by the


Borrower to meet any of the requirements of the PPPLF Agreement (including if any PPPLF
Collateral fails to satisfy the requirements of the PPP including but not linited lo any 1.t;quiz.taneuts
of the SBA for the sale and purchase of whole PPP Loans, if applicable) may, at the sole discretion
of the Reserve Bank, void the non-recourse provisions and any related provisions, i.e., the Reserve
Bank's rights shall be full recoui.se with respect to that portion of any Advance equal to the amount
of the PPPLF Collateral Valuation (on the date of the Advance) of any non¢onforming PPPLF
Collateral, and may, at the sole discretion of the Reserve Bank, result in the Borrower's
disqualification fromparticipating in the PPPLF. For the avoidance of doubt, the Reserve Bank's
exercise of any/-+Of-.the foregoing rights and discretion will not be deemed exclusive of any other

Paycheck Protection Program Liquidity Facility Letter of Agreement


Oron-Depository hstifutions -As amended January 14, 2021 )
Page 5 of 10
Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 6 of 10

rights or I.emedies to which theBeserve Bank may be entitled under the PPPLF Agreement or any
other Lending Agreement or applicable law. The Reserve Bank's determination that any PPPLF
Collateral fails to conform to the requirements of this PPPLF Letter of Agreement or the Circular
shall be conclusive absent manifest en.or.

Borrower's Depository Institution: The Borrower hereby agrees to the provisions of the
Correspondent Credit and Payinent Agreement qxhibit 1 to the Circular's Appendix 5, pages
46-51 of the Circular) ("Corespondent Agreement"). For purposes of the PPPLF Agreement,
references to the following terms in the Correspondent Agi.Cement shall have the following
meanings: references to the "Borrower" shall meeri the Bormwer hereunder, references to the
"Bck" shall mean the Reserve B.ank, and references to the "Con.espondent" shall refer to the
depository institution having an'i Aeeount at the Reserve Bank and that is designated by the
Borrower heeunder ("BOITower' s Depository hstitution"). h the event of any conflict between
thetermsoftheCorrespondentAgreementandthePPPLFAgreement,thePPPLFAgreementshall
control to the extent of any conflict. 'The Borrower designates the following as the Borrower's
Depository Institution under this PPPI,F Letter of Agreement:

PrpfessionalBank(CoirespondentBank)
Ovame of Depository Institution)

Authorized Individuals: The following individuals are permitted to provide inst"cti¢rls, pledge
PPPLF Collateral to and request Advances from the Reserve Bank under the PPPLF on behalf of
the Borrower.

Name Title, Telephone and Email


Bemardo E. Navan.a Managei.,{305)502-8511,bnavaro@benihrfucapital.com

Mldred J. Avila Controller, (3 05)445-5223, mavila@benworthcapital.com


Funding Supervisor, (305)445-5223 ,
Alejandro Varas
avaras@benworthcapital.com

ABorrowermustenclosewiththisPPPLFLetterofAgreementacertifiedcopyoftheAuthorizing
Resolutions for Non-Bank Borrowers containing the titles of those persons authorized to request
Advances from and to pledge PPPLF Collateral under the PPPLF.

Paycheck Pi.otection Program Liquidity Facility Letter of Agreement


(Won-Deposfrony lustitwhuns -As amended Jairmry I 4, 2021 )
Page 6 of 10
Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 7 of 10

Notices: Any notices required`under the PPPLF Agreementshall be directed as follows:

If to the Borrower: If to tlie Reserve Bank:


List department(a) and address(es) List deprrtment(a) and address(es)

BLep±_aTd_Q_Navanobnavari.o@benworthcapital.co_in_ _Dpp I fci.edit@sf, fib , oi.g___ ___ ___ ____

Mild_re_a J. Avila mavila@benworthcapital.com

Paycheck Protection Program Liquidity Facility Letter of Agreement


(Nan-Depository lnstifutinus -As amended fanuery i 4, 2021 )
Page 7 of 10
Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 8 of 10

Executed this ±4 day of January 2021.

Benworth Capital Partners LLC


Full Legal Napie of Borrower

Authorizing Resolutienl

NIldred J. Avila
Name(s)

Controller
Title(s)

_7_goo SW 97th Avenue. Suite 201. Miami. FL 33173


Address, City, State, County of Borrower

(305) 445-5223
Telephone

mavila@benworthcapital.com
E-mail
• 067016574

Routing Transit Number QTN) of Borrower's Depository hstitution

Professional Bank
Name of Borrower' s Depository hstitution

396 Alhambra Circle. Suite 150. Coral Gables. FL 33134


Address, City, State of Borrower.s Depository hstitution

(866) 585-2933

Telephone of Borrower's Depository institution

The signatory or signatories should be authorized to sign documents on behalf of the Borrower as provided in the
Authorizing Resohaisus for Bourowffs 1.equired by the Circular.

Paycheck Protection Pr.ogram Liquidity Facility Letter of Agreement


(Non-Depository lnstinitious -As amended January 14, 2021 )
Page 8 of 10
Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 9 of 10

For Bormwer's Depository Institution:

Fo]` the purposes of the PPPLF, we agi.ee to act as the Borrower's Depository Institution for the
Bolfower named above and, as such, to be bound by the provisions relating to a Comespundenl in
theCorrespondentCi'editandPaymentAgreement(the"ConespondentAgreonent"),ourmtlyan
anofllary agreement attached to your Cii'oular, as may be amended, and we agree that all references
to "Correspondent" in the Corespondent Agreement shall I.efer to us. Pu.suant to paragraph 3. I
of the Correspondent Agreement, we are furnishing below a list of individuals to whom you may
pi.ovide an advice of credit or debit entries made under the Correapondent Agreement for the
PPPLF. Theseindivirfuals are also authorized to instruct you not to debit out. account or to i`everse
a debit in acoordanoe with Parngraph 5 Qf the Correspondent Agreement. We may amend this list
from time to time.

Professional Bank ABA 067016574 Date January 14,


Name(s) of Bonower's Depository Institution

Robert Regolizio
Name(s)

Senior Vlcet'Papesdient - Chief Ciredlt Officer


Title(s)

786-483-1757
Telephone

__rrego.Iizio@my_p_robank.com _ __ _ _______
E-mail

Individuals permitted to receive notification of credit or debit entries described in the


Cori.espondent Agreement and authorized to instiuct us not to debit the Corespondent Account oi.
to reverse a `debit: .[1ist. between 3flnd 5 €mployees]

Nfrme Title. Telephone and Email


Lorralne Amador VP 786-406-7633,lemador@myprobank.com

Maria E. Pulg SVP 786-346-2868, mpulg@myprobank,com

Migilel Montaner EVP 783483-1763, mmontaner@myprobank.com

2 The signatory or slgnatorlcs chould be authorized to sign documents on behalf of the BotTower'8 Depository
Institution as provided in the BOITower's Dopasitory luslitution'8 Official Authorhation List.

Paycheck Protection Program Liquidity Facility Lettei` of Agreerneut


avon-Depository lnstifution8 -As amended January 14, 2021)
Page 9 of 10
Case 3:24-cv-01313-MAJ Document 1-4 Filed 07/10/24 Page 10 of 10

Name , I/ I ffie.\ Tdeplione and Emal]


Robert Regollzlo SVP. 786ul433-7548, rregolizio@myprobank.com

Christopher Correa VP, 786-406-7630, ccorrea@myprobank, com

--,

Instructions to Email this Letter of Agreement to Your Processing Reserve Bank

Please 8e]ect your Rcserve Bank according to the following contact list

PPPI.F Con fact THute for Non-D epasltory lusututlons

Borrower Bntity Type Processing Reserve Bank EI"ll, Telophono & Mall!ng Address

• Noii-bank cormunity Federal Reserve Bank of Ema».. CLEV.DDi]lfeiied it@clev.fab.ore


Development Financ ia] lnst itution Cleveland
Telephone: (888) 7194636
(CDFD - certified by the U,S.
Department of the Ti.casury Credit rick Manngerrmt
Federal Resenre Bank of Cleveland
P.O, Box 6387
Cleveland, OH 4410] -1387

• Smau Business Lending company FedoL.al Reserve Back Of Einiikmi]Is.credil@mDts.fib.oi[


(SBLC) - licensed and regulated Mirmeapolis
Telephone: (877) 837-8815
by the Small Business
Administration Cred imsR Secti on
Federal Reserve Brml( of Miuncapolis
• Agricultunl creditAssociatlon
P.O. Box 29 I
(ACA) -member of the Fan Minneapolis, MN 55480-0291
Credit System
• All otherNon-Depository SBA PPP Federal Reserve Bank of sam Emall: Dcolfdredlt®sf,fTh.ore
Lenders Fruncisco Telephone: (866) 974-7475

Chedlt hick Maungement


Federal Reserve Bank of Sam Franoisco
101 Market Sfroet, MS 830
Sam Francisco, CA 94105

Paycheck Protection Program Liquidity Facility Letter of Agreement


Q¢on-Depository hstitution8 -A8 amended January 14, 202] )
Page 10 of 10

You might also like