LOAN MODIFICATION AGREEMENT
Exhibit 10.1
| BORROWER | LENDER | LOAN NUMBER |
|
Greenkraft Inc., a California corporation 0000 Xxxxx Xxxxx Xxxxxx Xxxxx Xxx, XX 00000 |
Pacific Premier Bank 00000 Xxx Xxxxxx Xxx., Xxxxx 0000 Xxxxxx, XX 00000 (949) 864-8000 |
00-000000-00 |
THIS LOAN MODIFICATION AGREEMENT (the "Agreement") is made as of August 22, 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, December 26, 2013, and July 24, 2014 (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; Xxxxxx Xxxxxxx; Greenkraft, Inc., a Nevada corporation; and First Industrial Properties, LLC, a California limited liability company (collectively, "Guarantors").
D. Borrower is also indebted to Xxxxxx Xxxxxxx ("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 August 22, 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 L/C No. 10036. Lender will issue a letter of credit in the amount of Three Million Dollars ($3,000,000.00) in favor of Automotive Rentals, Inc., a New Jersey corporation ("L/C No. 10036"), pursuant to terms set forth in that certain Application and Agreement for Irrevocable Letter of Credit dated August 22, 2014 (the "L/C 10036 Agreement"). Copies of L/C No. 10036 and the L/C 10036 Agreement are attached hereto and incorporated herein by reference as Exhibits "A" and "B", respectively.
2.3 Irrevocable Authorization for Draws. Borrower irrevocably authorizes Lender to, at Lender's sole election, draw against the Note, in an amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000.00), any funds paid or required to be paid by Lender under L/C No. 10036, and to repeat such process each time Lender pays or is required to pay funds under L/C No. 10036. Further, Lender may, at its sole election, draw against this Note any funds otherwise owed under the L/C 10036 Agreement, including but not limited to all principal, interest, expenses, commissions, fees, or other costs owed thereunder, and to repeat such process each time funds are owed under the L/C 10036 Agreement. All such amounts drawn against the Note will become part of the amount payable by Borrower under the Note.
2.4 Revolving Portion of Loan. In addition to all other conditions for an advance under the Loan Documents, Lender shall have no obligation to honor any advance request that would cause the principal balance of the Loan and Note to exceed Two Million Dollars ($2,000,000.00), which represents the revolving portion of the Loan and Note (the "Revolving Portion").
2.5 Draw Limitations. Notwithstanding anything in the Note or other Loan Documents to the contrary, Borrower shall have no right to receive draws under the Note except as allowed under the Revolving Portion of the Loan and Note set forth in Section 2.4 above, and as necessary to pay Lender any funds owed under the L/C 10036 Agreement.
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").
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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.
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 Guarantors, Subordinated Creditor, and Grantor shall have signed and delivered to Lender the consents and reaffirmations attached to this Agreement;
6.4 Borrower shall have signed and delivered to Lender the L/C 10036 Agreement in the form attached hereto as Exhibit "B"; and
6.5 Borrower shall have paid Lender a letter of credit fee of $15,000.00.
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.
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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 rale of court.
7.3 This Agreement may be executed in counterparts, all of which taken together shall constitute one instrument.
8. Satisfaction of Conditions. If the conditions precedent set forth in this Agreement are not satisfied on or before September 1, 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/ Xxxxxx Xxxxxxx | By: | /s/ Xxxx Xxxxxxxxxx | |
| Xxxxxx Xxxxxxx, President of Greenkraft Inc., | Xxxx Xxxxxxxxxx, Secretary of Greenkraft Inc., | |||
| a California corporation | a California corporation | |||
LENDER:
| PACIFIC PREMIER BANK | ||
| By: | /s/ Xxxxx Xxxxxxxx | |
| Xxxxx Xxxxxxxx, SVP/Senior Credit Manager of | ||
| Pacific Premier Bank | ||
[CONSENTS AND REAFFIRMATIONS APPEAR ON THE FOLLOWING PAGE(S)]
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