SEVENTH LOAN MODIFICATION AGREEMENT
SEVENTH LOAN MODIFICATION AGREEMENT, effective as
of December 31, 1995 (the "Amendment"), by and among MAUI
LAND & PINEAPPLE COMPANY, INC. (the "Borrower") and BANK OF
HAWAII, a Hawaii banking corporation ("BKOH"), FIRST HAWAIIAN
BANK, a Hawaii banking corporation ("FHB"), BANK OF AMERICA,
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association ("BOA"), CENTRAL PACIFIC BANK, a Hawaii banking
corporation ("CPB" and, together, with BKOH, FHB, and BOA,
the "Lenders") and BANK OF HAWAII, as Agent for the Lenders
(in such capacity, together with its successors in such
capacity, the "Agent"),
W I T N E S S E T H:
WHEREAS, the Borrower, Lenders and Agent are
parties to that certain Revolving and Term Loan Agreement,
dated as of December 31, 1992, as amended by a First Loan
Modification Agreement, dated as of March 1, 1993, and sup-
plemented by letter agreements dated April 30, 1993 and June
24, 1993, and further amended by Second Loan Modification
Agreement, dated September 8, 1993, by a Third Loan Modifi-
cation Agreement, dated September 30, 1993, by a Fourth Loan
Modification Agreement, dated March 8, 1994, by a Fifth Loan
Modification Agreement, dated effective as of December 31,
1994, and by a Sixth Loan Modification Agreement, dated
effective as of March 31, 1995, each among the Borrower and
the Lenders (as so amended and supplemented, the "Loan Agree-
ment"), pursuant to which the Lenders have made Loans to the
Borrower on the terms and conditions stated therein; and
WHEREAS, the Borrower, Lenders and Agent have
agreed to amend the Loan Agreement and the Notes (as such
term is defined in the Loan Agreement) for the purposes of,
among other things, extending the maturity date of the Notes
and amending and restating certain covenants of the Borrower
set forth in the Loan Agreement, all as set forth in this
Amendment;
NOW, THEREFORE, in consideration of the premises
and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, each of the Borrower,
Lenders and Agent agree as follows:
SECTION 1. Definitions. Capitalized terms used
herein and not otherwise defined herein shall have the mean-
ings ascribed to them in the Loan Agreement.
SECTION 2. Amendments to Loan Agreement.
(a) Effective on and after the Effective Date (as
such term is defined in Section 6 of this Amendment), Section
1.04a of the Loan Agreement is amended and restated in its
entirety to read as follows:
"1.04a 'Commitment Reduction Date' means each
of the following dates:
(i) the earlier of (a) January 1, 1996 and (b)
the date that the Aggregate Loan Commitment is reduced
to $22,000,000 or less (the earlier of such dates is
herein referred to as the 'First 1996 Commitment
Reduction Date');
(ii) December 31, 1996 (the 'Second 1996 Com-
mitment Reduction Date');
(iii) each date on which the Borrower or any
Subsidiary receives any amount in respect of the sale of
any of its real estate assets; and
(iv) each other date that the Aggregate Loan
Commitment is to be reduced pursuant to the provisions
of Section 2.06(A) of this Loan Agreement."
(b) Effective on and after the Effective Date,
Section 2.01 of the Loan Agreement is amended and restated in
its entirety to read as follows:
"2.01 General Terms. On the terms and pro-
visions and subject to the satisfaction of the condi-
tions stated in this Loan Agreement, each Lender hereby
severally agrees to make Loans to the Borrower, from
time to time from the date of this Loan Agreement to and
including June 30, 1997 (the 'Revolving Loan Period'),
each in a principal amount equal to such Lender's Indi-
vidual Loan Commitment Percentage of the total amount to
be borrowed on any occasion; provided, however, that (a)
subject to the provisions of Section 2.06(A) of this
Loan Agreement, the aggregate principal amount at any
one time outstanding of all Loans hereunder shall not
exceed the Aggregate Loan Commitment (i.e., $40,000,000
at any one time outstanding during the Initial Period
and, at any one time outstanding on and after each
Commitment Reduction Date and until the next Commitment
Reduction Date, if any, the Aggregate Loan Commitment
after giving effect to the reduction to occur on such
Commitment Reduction Date), (b) no lender shall be
obligated to make Loans to the Borrower which shall
exceed, in the aggregate principal amount at any one
time outstanding, such Lender's Individual Loan Commit-
ment, (c) each advance of Loan proceeds hereunder shall
be made by the several Lenders ratably, in a principal
amount equal to such Lender's Individual Loan Commitment
Percentage of the total amount to be borrowed on any
occasion, (d) no Lender shall have any obligation or
liability to the Borrower or any other Person as a
result of the failure of another of the Lenders to
observe any of its obligations under this Loan Agree-
ment, and (e) no Lender (in its capacity as such) shall
have any obligation or liability to the Borrower or any
other Person as a result of the failure of the Agent to
observe any of its obligations under this Loan Agreement
or the Agency Agreement. During the Revolving Loan
Period the Borrower may borrow, repay without penalty or
premium and reborrow hereunder, either the full amount
of the Aggregate Loan Commitment then in effect or any
lesser sum, provided that any borrowing hereunder shall
be in an amount not less than $500,000, and an integral
multiple of $100,000, and provided that any voluntary
prepayment hereunder shall be in an amount not less than
$250,000, and an integral multiple of $50,000. Interest
on the Loans shall be paid by the Borrower at the times
and in the manner stated in the Notes. All of the out-
standing principal balance of, and accrued but there-
tofore unpaid interest on, the Loans shall be paid in
full on June 30, 1997."
(c) Effective on and after the Effective Date,
Section 2.06(A) of the Loan Agreement is amended and restated
in its entirety to read as follows:
"A. Mandatory Reduction. On May 15, 1995,
the Aggregate Loan Commitment was reduced to
$23,000,000; and on each Commitment Reduction Date
thereafter, the Aggregate Loan Commitment shall be
reduced to the amount set forth below with respect to
such Commitment Reduction Date:
(1) At the close of business on the First
1996 Commitment Reduction Date, the Aggregate Loan Com-
mitment in effect at the opening of business on such
date shall be reduced to Twenty-two Million Dollars
($22,000,000.00);
(2) At the close of business on the Second
1996 Commitment Reduction Date, the Aggregate Loan Com-
mitment in effect at the opening of business on such
date shall be reduced by Three Million Dollars
($3,000,000.00);
(3) By the close of business on each date the
Borrower or any Subsidiary receives any net sales pro-
ceeds (i.e., gross sales proceeds less closing costs
acceptable to the Lenders) in respect of the sale of any
real estate assets referred to in clause (iii) of
Section 1.04a of this Loan Agreement, the Borrower shall
notify the Agent of such sale and the Borrower's receipt
of such net sale proceeds and shall pay to the Lenders
through the Agent 75% of the after-tax net proceeds so
received by the Borrower as a mandatory prepayment of
the outstanding principal amount of the Loans; and
(4) The Aggregate Loan Commitment in effect
shall be reduced by the close of business on the date of
the earlier of (x) the date of the sale of the Napili
Plaza project in an amount equal to the net sale
proceeds of such sale and (y) the date of any permanent
financing of the Napili Plaza project in an amount equal
to the net mortgage loan proceeds of such permanent
financing.
The Borrower shall pay to the Lenders through the Agent
no later than the close of business on each Commitment
Reduction Date, as a mandatory prepayment of the aggre-
gate outstanding principal amount of the Loans, an
amount equal to the difference between (I) the aggregate
outstanding principal amount of the Loans, minus (II)
the Aggregate Loan Commitment as so reduced."
(d) Effective on and after the Effective
Date, Section 5.01(F) of the Loan Agreement is amended
and restated in its entirety to read as follows:
"(F) The Borrower will maintain:
(1) At all times on and after January
1, 1994, a Current Ratio of not less than 1.90;
(2) A Recourse Debt/Net Worth Ratio of
not more than (a) 0.80 at December 31, 1995, March 31,
1996, and September 30, 1996, and (b) 0.70 at
December 31, 1996 and thereafter (for the purposes of
this covenant, KCA's debt approved by the Lenders pur-
suant to the last sentence in Section 5.02(I) of this
Agreement, and any KCA debt which is Nonrecourse to the
Borrower, shall be disregarded); and
(3) A minimum Net Worth of at least (a)
$57,000,000 at December 31, 1995, and (b) an amount
equal to the sum of (i) $57,000,000, plus (ii) the
cumulative net profits (but no the net losses) of the
Borrower, at January 1, 1996 and thereafter."
(e) Effective on and after the Effective Date,
Section 5.02(D) of the Loan Agreement is amended and restated
in its entirety to read as follows:
"(D) Neither the Borrower nor any Subsidiary
will make any Capital Expenditures or any Investments,
or both, in any of the fiscal years listed below in
column (a) which, together with all other Capital
Expendituresand Investments made by the Borrower and
its Subsidiaries
in any such fiscal year, will exceed in the aggregate
the amount show opposite such fiscal year listed below
in column (b):
(a) (b)
1992 $14.0 Million
1993 $13.0 Million
1994 $11.0 Million
1995 $10.0 Million
1996 $ 9.5 Million
1997 and thereafter $ 9.0 Million"
(f) Effective on and after the Effective Date,
Section 5.02(H) of the Loan Agreement is amended and restated
in its entirety to read as follows:
"(H) Neither the Borrower nor any Subsidiary,
without the prior written consent of all of the Lenders,
will incur, agree to incur, assume, or in any manner
become liable in respect of any Indebtedness for Bor-
rowed Money (recourse or nonrecourse) other than the
indebtedness evidenced by the Notes and this Loan
Agreement and additional indebtedness which, together
with the indebtedness evidenced by the Notes and this
Loan Agreement, shall cause Total Debt to not exceed:
(a) $66,000,000 in the aggregate
principal amount as of December 31, 1993, and
(b) $63,000,000 in the aggregate
principal amount as of March 31, 1994, and
(c) $65,000,000 in the aggregate
principal amount as of June 30, 1994, and
(d) $69,000,000 in the aggregate
principal amount as of September 30, 1994, and
(e) $57,000,000 in the aggregate
principal amount as of December 31, 1994, and
(f) $58,000,000 in the aggregate
principal amount as of March 15, 1995, and
(g) $53,000,000 in the aggregate
principal amount as of May 5, 1995, and
(h) $50,000,000 in the aggregate
principal amount as of December 31, 1995, and
(i) $40,000,000 in the aggregate
principal amount as of December 31, 1996 and thereafter.
For the purposes of this Section 5.02(H), KCA's
debt approved by the Lenders pursuant to the last
sentence in Section 5.02(I) of this Agreement, and
any KCA debt which is Nonrecourse to the Borrower,
including that portion subject to Borrower's
Limited Payment Guaranty, shall not be deemed to
constitute indebtedness of the Borrower or any
Subsidiary."
SECTION 3. Amendments to Notes.
(a) Effective on and after the Effective Date,
Section 2 of each of the Notes is amended and restated in its
entirety to read as follows:
"2. Interest Rates. Outstanding balances of
principal under this Note, prior to the maturity
(whether by acceleration or otherwise) of the
indebtedness evidenced by this Note, shall bear interest
at
(i) during the period commencing on the date of
this Note to and including December 31, 1993, a
floating rate equal to the Base Rate in effect from
time to time,
(ii) during the period commencing on January 1,
1994 to and including May 15, 1995, a floating rate
equal to one-half of one percentage point (0.5%),
plus the Base Rate in effect from time to time,
(iii) during the period commencing on May 15, 1995,
to and including the earlier of (x) the date (the
"Interest Reduction Date"), if any, that the Aggre-
gate Loan Commitment is reduced to $15,000,000.00
and (y), if no Interest Reduction Date occurs prior
to maturity, the date that the Loans are paid in
full and the Aggregate Loan Commitment is termi-
nated, a floating rate equal to one-quarter of one
percentage point (0.25%), plus the Base Rate in
effect from time to time, and
(iv) if the Interest Reduction Date occurs prior to
maturity, during the period commencing on the
Interest Reduction Date, if any, to and including
the date that the Loans are paid in full, a
floating rate equal to the Base Rate in effect from
time to time,
computed in each case with daily adjustments, if
required, it being the intent that such interest rate
shall increase or decrease simultaneously with any
increase or decrease in the Base Rate."
(b) Effective on and after the Effective Date,
Section 4(a) of each of the Notes is amended by deleting
therefrom the date "June 30, 1996," and by inserting, in lieu
thereof, the date "June 30, 1997."
(c) Effective on and after the Effective Date,
Section 4(b) of the Note held by Bank of Hawaii is amended
and restated in its entirety to read as follows:
"(b) In addition to the payments of interest
mentioned above in paragraph 4(a) of this Note, (1) the
Maker shall, from time to time, make all principal pay-
ments or prepayments required to be made from time to
time pursuant to Section 2.06(A) of the Loan Agreement,
and (2) the Maker shall pay the entire outstanding
balance of principal hereunder on June 30, 1997."
(d) Effective on and after the Effective Date,
Section 4(b) of the Note held by First Hawaiian Bank is
amended and restated in its entirety to read as follows:
"(b) In addition to the payments of interest
mentioned above in paragraph 4(a) of this Note, (1) the
Maker shall, from time to time, make all principal pay-
ments or prepayments required to be made from time to
time pursuant to Section 2.06(A) of the Loan Agreement,
and (2) the Maker shall repay the entire outstanding
balance of principal hereunder on June 30, 1997."
(e) Effective on and after the Effective Date,
Section 4(b) of the Note held by Bank of America National
Trust and Savings Association is amended and restated in its
entirety to read as follows:
"(b) In addition to the payments of interest
mentioned above in paragraph 4(a) of this Note, (1) the
Maker shall, from time to time, make all principal pay-
ments or prepayments required to be made from time to
time pursuant to Section 2.06(A) of the Loan Agreement,
and (2) the Maker shall repay the entire outstanding
balance of principal hereunder on June 30, 1997."
(f) Effective on and after the Effective Date,
Section 4(b) of the Note held by Central Pacific Bank is
amended and restated in its entirety to read as follows:
"(b) In addition to the payments of interest
mentioned above in paragraph 4(a) of this Note, (1) the
Maker shall, from time to time, make all principal pay-
ments or prepayments required to be made from time to
time pursuant to Section 2.06(A) of the Loan Agreement,
and (2) the Maker shall repay the entire outstanding
balance of principal hereunder on June 30, 1997."
SECTION 4. General Amendments.
All references set forth in the Loan Agreement
(including, without limitation, all exhibits, schedules and
appendices thereto), the Notes, the Mortgage, the Agency
Agreement, the Environmental Indemnity Agreement, the Addi-
tional Security Mortgage and the other documents, instruments
and agreements relating to the Loan Agreement, the Notes, the
Mortgage, the Agency Agreement, the Environmental Indemnity
Agreement, the Additional Security Mortgage or to the loans
made under the Loan Agreement by the Lenders to the Borrower
(collectively, the "Loan Documents") to (i) the Loan Agree-
ment, is amended to mean and include the Loan Agreement, as
heretofore amended, as amended by this Amendment, and as may
be further amended, modified and supplemented from time to
time by written agreement between the parties hereto, (ii)
the Notes, are amended to mean and include the Notes, as
heretofore amended, as amended by this Amendment, and as may
be further amended from time to time, (iii) the Mortgage, is
amended to mean and include the Mortgage, as amended from
time to time, and (iv) the other Loan Documents, or any of
them, are amended to mean and include such Loan Documents, as
amended from time to time.
SECTION 5. Representations, Warranties and
Agreements.
The Borrower hereby:
(a) reaffirms each and all of its representa-
tions and warranties set forth in Section 4.01 of the Loan
Agreement as being true and correct on and as of the date
hereof with the same force and effect as if such representa-
tions and warranties were set forth in full herein (provided
that the representations and warranties set forth in Section
4.01(F) of the Loan Agreement shall for the purposes hereof
be deemed to be made with respect to the Borrower's financial
statements most recently delivered to the Lenders pursuant to
the Loan Agreement);
(b) represents and warrants that no Event of
Default and no event, which with the lapse of time, the
giving of notice or both would constitute an Event of
Default, has occurred and is continuing on and as of the date
hereof;
(c) represents and warrants that no material
adverse change in the condition (financial or otherwise) of
the Borrower has occurred since the periods covered by the
Borrower's financial statements most recently delivered to
the Lenders pursuant to the Loan Agreement;
(d) represents and warrants that each of this
Amendment, the Loan Agreement, as heretofore amended and as
amended by this Amendment, and each of the Notes, as here-
tofore amended and as amended by this Amendment has been duly
authorized, executed and delivered by the Borrower and con-
stitutes the legal, valid and binding obligation of the Bor-
rower and is enforceable in accordance with its terms;
(e) represents and warrants that the execu-
tion, delivery and performance of this Amendment do not and
will not violate articles of incorporation, by-laws, any ap-
plicable laws, rules, regulations, orders, injunctions, writs
or decrees or result in a breach of or constitute a default
under any contract, agreement or instrument to which the
Borrower is a party or by which the Borrower, or its proper-
ties are bound, or result in the creation or imposition of
any security interest in, or lien or encumbrance upon any
property or assets of the Borrower, except in favor of the
Lenders; and
(f) represents and warrants that no consent
or withholding of objection, approval or authorization of or
declaration or filing with, or the taking of any other action
by or in respect of any governmental body or regulatory au-
thority or any other Person is required in connection with
the execution, delivery and performance of this Amendment,
other than as may have been obtained or effected prior to the
date hereof, and in respect of which the Borrower shall have
notified the Lenders in writing on or prior to the date
hereof.
SECTION 6. Effectiveness. Notwithstanding any-
thing herein to the contrary, the amendments to the Loan
Agreement, Notes and the other Loan Documents set forth in
Sections 2, 3 and 4 of this Amendment, shall amend the pro-
visions of the Loan Agreement, Notes and the other Loan
Documents as of December 31, 1995 (the "Effective Date"),
when each and all of the following conditions precedent shall
have been satisfied in full:
(a) Delivery of this Amendment. Each of the
parties hereto shall have duly executed and delivered to the
Agent this Amendment.
(b) No Default. On and as of the Effective
Date, no Event of Default shall have been declared by the
Lenders under the Loan Agreement.
(c) Payments; Charges; Fees. The Borrower
shall have paid to the Lenders in accordance with the terms
of the Loan Agreement all payments, charges and fees required
to have been paid on or before the Effective Date by the
terms of the Loan Agreement or the other Loan Documents, and
in addition, shall have paid to the Agent for pro rata dis-
tribution to the Lenders an extension fee in the amount of
$25,000.
(d) Consents. There shall have been obtained
all third-party consents, if any, necessary or appropriate to
effect the amendments and consummate the transactions set
forth in this Amendment.
SECTION 7. Limitations. The amendments to the
Loan Agreement, the Notes and the other Loan Documents set
forth hereinabove in Sections 2, 3 and 4 of this Amendment
shall be limited precisely as written and shall not, except
as expressly provided herein, be deemed otherwise to be a
consent to any waiver, amendment or modification of any other
terms or conditions of the Loan Agreement, the Notes or any
of the other Loan Documents. The Loan Agreement, the Notes
and other Loan Documents, heretofore amended and as amended
hereby, are in all respects ratified and confirmed and shall
remain in full force and effect.
SECTION 8. Further Assurances. The Borrower shall
take all such further actions and execute and deliver all
such further documents and instruments as the Lenders may
from time to time reasonably request to further evidence or
effect the transactions contemplated by this Amendment.
SECTION 9. Counterparts. This Amendment may be
executed in two or more counterparts, each of which shall be
an original hereof, but all of which together shall consti-
tute but one and the same instrument.
SECTION 10. Headings. The section headings in
this Amendment have been inserted for convenience of refer-
ence only and shall in no manner affect the meaning or
interpretation of the various provisions hereof.
SECTION 11. Governing Law. This Amendment shall
be governed by, and construed in accordance with, the laws of
the State of Hawaii.
SECTION 12. Expenses of the Agent. Without in any
way limiting the obligations of the Borrower under Section
7.04 of the Loan Agreement, the Borrower shall reimburse the
Agent for all of the costs and expenses of the Agent in con-
nection with the preparation of this Amendment, including,
but not limited to, reasonable attorneys fees and expenses.
IN WITNESS WHEREOF, the parties hereto have caused
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this Amendment to be duly executed on the date first-above
written.
MAUI LAND & PINEAPPLE COMPANY, INC.
By: /S/ GLARY X. XXXXXXX
Its: PRESIDENT
By: /S/ XXXX X. XXXXX
Its: EXECUTIVE VICE PRESIDENT
BANK OF HAWAII, individually
and as Agent
By: /S/ XXXXX X. XXXX
Its: VICE PRESIDENT
FIRST HAWAIIAN BANK
By: /S/ XXXX X. XXXXX
Its: BRANCH MANAGER
BANK OF AMERICA, NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /S/ XXXXXXX X. XXXXXX
Its: VICE PRESIDENT
CENTRAL PACIFIC BANK
By: /S/ XXXXXX X. XXXXXXXX
Its: VICE PRESIDENT
