Exhibit 10.1

 

 LOAN MODIFICATION AGREEMENT

 

BORROWER   LENDER   LOAN NUMBER

Greenkraft Inc., a California corporation

2530 South Birch Street Santa Ana, CA 92707

 

Pacific Premier Bank

17901 Von Karman Ave., Suite 1200 Irvine, CA 92614

(949) 864-8000

  56-800308-15

 

 

THIS LOAN MODIFICATION AGREEMENT (the "Agreement") is made as of July 24, 2014,
by and among Greenkraft Inc., a California corporation ("Borrower") and Pacific
Premier Bank ("Lender") with reference to the following facts;

 

A. Borrower entered into a loan (the "Loan") evidenced by a Promissory Note
dated March 13, 2012, payable to Lender in the original principal amount of
Three Million Five Hundred Thousand Dollars ($3,500,000.00) (the "Note"). The
Loan has been modified in accordance with those certain Loan Modification
Agreements dated May 10, 2013, July 15, 2013, and December 26, 2013 (the "Prior
Modifications").

 

B. The Note is secured by, among other things, a Deed of Trust dated March 13,
2012 ("Deed of Trust") and two Commercial Security Agreements each dated March
13, 2012 (the "Security Agreements"). The Loan is also subject to a Business
Loan Agreement dated March 13, 2012 (the "Business Loan Agreement").

 

C. Repayment of the Note is guaranteed by C.E.E., LLC; First Standard Real
Estate, LLC; The Gemayel Family Trust dated May 18, 2007; George Gemayel;
Greenkraft, Inc., a Nevada corporation (collectively, "Guarantors"),

 

D. Borrower is also indebted to George Gemayel ("Subordinated Creditor"). In the
Subordination Agreement dated March 13, 2012 (the "Subordination Agreement"),
Subordinated Creditor subordinated the indebtedness Borrower owes to him to the
indebtedness Borrower owes to Lender.

 

E. The Note, Deed of Trust, Security Agreements, Business Loan Agreement, Prior
Modifications and all other loan documents given to Lender either evidencing the
Loan or to induce Lender to make or modify the Loan are referred to collectively
as the "Loan Documents".

 

F. Insofar as the Loan Documents do not prohibit certain modifications upon
written agreement between the parties, the parties hereby agree to modify the
terms of the Loan subject to the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the promises herein contained, the parties
hereto agree as follows:

 

1. One-Time Forbearance. In the Loan Documents, Borrower promised and covenanted
that it would maintain (a) a minimum Global Debt Coverage Ratio of not less than
1.250 to 1.000 (the "Global DCR Covenant"), (b) a minimum Business Debt Coverage
Ratio of not less than 1.250 to 1.000 (the "Business DCR Covenant), (c) a ratio
of Debt / Worth not in excess of 3.000 to 1.000 (the "Debt / Worth Covenant),
and (d) a Tangible Net Worth of not less than $350,000 (the "Tangible Net Worth
Covenant") (collectively the "Covenants"). Borrower is in breach of the
Covenants (collectively the "Covenant Violations"). Lender agrees to forbear
enforcement of its rights arising out of the Covenant Violations until Lender's
receipt of Borrower's December 31, 2014 financial statements (the
"Forbearance"). Borrower acknowledges that the Forbearance is granted by Lender
on a one-time basis and that Lender reserves the right to withhold its consent
to any future request that Lender forbear or refrain from enforcement of the
Covenants. Nothing herein shall be construed as a waiver of Lender's right to
strictly enforce the Covenants on and after Lender's receipt of Borrower's
December 31, 2014 financial statements.

 

2. Loan Modification. The Note and other Loan Documents are hereby amended as
follows:

 

   2.1 Maturity Date. The maturity date of the Note is hereby extended to June
10, 2015 (the "Maturity Date"). Borrower will continue to pay regular monthly
payments of all accrued unpaid interest due as of each payment date until the
Maturity Date. On the Maturity Date, Borrower will pay the Loan in one payment
of all outstanding principal plus all accrued unpaid interest and all other
amounts owed under the Note.

 

   2.2 Line Freeze. Without limiting any other condition for advances as set
forth in the Loan Documents, Borrower shall have the ability to access or
otherwise receive advances against the Loan until the Loan has reached an
outstanding principal balance of Two Million Dollars ($2,000,000.00) ("Credit
Line Limit"). Borrower shall have no right Borrower in writing, signed by the
Lender, stating that the Loan has been unfrozen or is otherwise available for
additional advances beyond the Credit Line Limit.

 

 

 

Loan No. 56-800308-15

 

   2.3 Additional Guarantor. In addition to the personal guaranty of Guarantors,
payment and performance under the Note and other Loan Documents shall be
guaranteed by First Industrial Properties, LLC, a California limited liability
company ("Additional Guarantor"), all as more particularly described in the
Commercial Guaranty dated July 24, 2014 (the "Additional Guaranty").

 

In all other respects, Borrower acknowledges and agrees that all terms,
conditions and provisions of the Loan Documents are continued in full force and
effect, except as specifically set forth above, and remain unaffected and
unchanged. This Agreement in no way acts as a release or relinquishment of, and
in no way affects, the liens, security interests and rights created by or
arising under the Deed of Trust, the Security Agreements and the Loan Documents,
or the priority thereof. Such liens, security interests and rights are hereby
ratified, confirmed, renewed and extended in all respects.

 

3. Full Force and Effect. The Loan Documents, any other security for payment of
the Note, and all rights, remedies, titles, liens and equities securing the Note
as hereby modified and the indebtedness represented thereby are hereby
recognized, renewed, extended and continued in full force and effect for the
benefit of the holder of the Note and the indebtedness evidenced thereby.

 

4. Warranties, Representations and Agreements.

 

   4.1 Borrower hereby ratifies, confirms, acknowledges and agrees that the Loan
Documents represent valid, enforceable and collectible obligations of Borrower
and that there are no existing claims, defenses, personal or otherwise, or
rights of setoff whatsoever with respect to any of such documents or
instruments. Borrower further acknowledges and represents that no event has
occurred and no condition exists which would constitute a default under any of
the Loan Documents or this Agreement, either with or without notice or lapse of
time or both.

 

5. Release and Waiver of Claims. In consideration of Lender's agreement to enter
into this Agreement, Borrower hereby agrees as follows:

 

   5.1 Release of All Claims. Borrower, on behalf of itself, its general
partners, its members, its officers, its affiliates and its and their successors
and assigns (collectively, the "Releasing Parties"), hereby releases and forever
discharges Lender and all of its subsidiaries, affiliates, officers, directors,
employees, agents, attorneys, advisors, and its and their successors and assigns
(collectively, the "Released Parties") from any and all claims, demands, debts,
liabilities, contracts, obligations, accounts, torts, causes of action or claims
for relief of whatever kind or nature, whether known or unknown, whether
suspected or unsuspected, which the Releasing Parties may have or which may
hereafter be asserted or accrue against Released Parties, or any of them,
resulting from or in any way relating to any act or omission done or committed
by Released Parties, or any of them, arising directly or indirectly out of the
Loan, the Loan Documents, the transactions evidenced or contemplated thereby,
the Deed of Trust, the Security Agreements; the approval, the origination, the
funding and the closing of the Loan; the review, approval, or disapproval of any
and all documents, instruments, insurance and all other items submitted to
Lender in connection with the Loan; the disbursements of funds under the Loan;
the modification of the Loan made pursuant to this Agreement; Lender's acts,
statements, conduct, representations and omissions made in connection with the
modification of the Loan, including, without limitation, the terms and
conditions of this Agreement; any fact, matter, transaction or event relating
thereto; or the relationships existing or transactions or dealings occurring
between Lender and Borrower up to and as of the date of this Agreement (the
"Claims").

 

   5.2 Release Includes Unknown Claims. The release described in the immediately
preceding paragraph and in this paragraph applies to all Claims which the
Releasing Parties have or which may hereafter arise against the Released
Parties, or any of them, as a result of acts or omissions occurring before the
date of this Agreement, whether or not known or suspected by the Parties hereto.
Borrower expressly acknowledges that, although it may be that ordinarily a
general release does not extend to claims which the releasing party does not
know or suspect to exist in his favor, which if known by him must have
materially affected his settlement with the party released, it has carefully
considered and taken into account in determining to enter into this Agreement
the possible existence of such unknown losses or Claims.

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Loan No. 56-800308-15

 

Without limiting the generality of the foregoing, Borrower expressly waives any
and all rights conferred upon it by any statute or rule of law which provides
that a release does not extend to claims which the releasing party does not know
or suspect to exist in the releasing party's favor at the time of executing the
release, which if known by the releasing party must have materially affected the
releasing party's settlement with the released party, including, without
limitation, the following provisions of California Code of Civil Procedure
Section 1542:

 

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR."

 

   5.3 Complete Defense. This release by Releasing Parties shall constitute a
complete defense to any claim, cause of action, defense, contract, liability,
indebtedness, obligation, liability, claim or cause of action exists which is
within the scope of those hereby released.

 

   5.4 No Reliance. Borrower hereby acknowledges that it has not relied upon any
representation of any kind made by Lender in making the foregoing release.

 

6. Conditions Precedent to this Agreement. This Agreement is contingent upon the
satisfaction of the following conditions precedent:

 

   6.1 Lender shall have received a certified resolution from Borrower
authorizing (i) its modification of the Loan pursuant to this Agreement, and
(ii) the execution and delivery of this Agreement by the person(s) signing the
same on behalf of Borrower;

 

   6.2 Borrower shall have signed and delivered this Agreement to Lender;

 

   6.3 Additional Guarantor shall have signed and delivered to Lender the
Additional Guaranty in the form prepared by Lender;

 

   6.4 Guarantors, Subordinated Creditor, and Grantor shall have signed and
delivered to Lender the consents and reaffirmations attached to this Agreement;

 

   6.5 The Trustor of the Deed of Trust shall have signed and delivered to
Lender the consent and reaffirmation attached to this Agreement and the
Modification of Deed of Trust in the form attached hereto as Exhibit "A";

 

   6.6 Lender shall have received a new ALTA Lender's policy of title insurance
and all endorsements thereto required by Lender (collectively, the "Title
Policy") or CLTA Endorsements No. 110.5 modified, or equivalent (collectively,
the "Endorsement") from a title company approved by Lender. Borrower shall have
paid all casts in connection with the Title Policy and/or Endorsement, and all
recording fees; and

 

   6.7 Borrower shall have paid Lender an extension fee of $2,500.

 

7. General.

 

   7.1 Borrower shall execute such additional documents as Lender may require to
fully effectuate the intent of this Agreement.

 

   7.2 If any action, suit or other proceeding is brought to enforce the
obligations of the undersigned under this Agreement, the prevailing party shall
be entitled to receive all of such party's costs and expenses of suit, including
attorneys' fees, incurred in each and every such action, suit or other
proceeding, including any and all appeals or petitions therefrom.

 

As used in this Agreement, attorneys' fees shall mean the full and actual cost
of any legal services actually performed in connection with the matters
involved, calculated on the basis of the usual fee charged by the attorneys
performing such services and shall not be limited to "reasonable attorneys'
fees" as defined in any statute or rule of court.

 

   7.3 This Agreement may be executed in counterparts, all of which taken
together shall constitute one instrument. 

 

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Loan No. 56-800308-15

 

8. Satisfaction of Conditions. If the conditions precedent set forth in this
Agreement are not satisfied on or before July 31, 2014, Lender may, at its sole
option, declare this Agreement null and void, in which case this Agreement shall
have no further force or effect. Lender's waiver of any of the conditions
precedent shall not constitute a waiver of the other conditions precedent.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.

 

BORROWER:

 

GREENKRAFT INC., A CALIFORNIA CORPORATION

 

By: /s/ George Gemayel   By: /s/ Sosi Bardakjian  

George Gemayel, President of Greenkraft Inc.,

a California corporation

   

Sosi Bardakjian, Secretary of Greenkraft Inc.,

a California corporation

 

LENDER:

 

PACIFIC PREMIER BANK

 

By: /s/ Chris Porcelli       Chris Porcelli, SVP/Senior Credit Manager of
Pacific Premier Bank    

 

[CONSENTS AND REAFFIRMATIONS APPEAR ON THE FOLLOWING PAGE(S)]

 

 

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