Exhibit 10.1
LOAN AGREEMENT (REAL
ESTATE)
|
Lender:
|
Bank of Hawaii
|
|
|
Commercial Real Estate Loan Division
|
|
|
130 Merchant Street, 17 th Floor
|
|
|
Honolulu, HI 96813
|
|
|
Attn: Tony Mizuno
|
|
|
|
|
Borrower:
|
Maui Land & Pineapple Company,
Inc.
|
|
|
120 Kane Street
|
|
|
Kahului, HI 96733-6687
|
|
|
Attn: Vice President/Treasurer
|
|
|
Telephone: (302) 996-6800
|
|
|
Telecopier: (302) 996-6838
|
THIS LOAN AGREEMENT (REAL ESTATE)
dated as of October 1, 2006 (this “Agreement”) between
Bank of Hawaii, a Hawaii corporation, as lender (with its
successors and assigns, “Lender”), and Maui Land &
Pineapple Company, Inc., a Hawaii corporation, as borrower
(“Borrower”). The effective date of this
Agreement is the Closing Date.
WHEREAS, Borrower desires to obtain
a loan from Lender to finance or refinance the acquisition and
construction of certain property and improvements
thereon.
NOW, THEREFORE, for good and
valuable consideration, receipt of which is hereby acknowledged,
and in consideration of the premises contained in this Agreement,
Lender and Borrower agree as follows:
ARTICLE I
DEFINITIONS AND
EXHIBITS
Section 1.01.
Definitions . The following terms used
herein will have the meanings indicated below unless the context
clearly requires otherwise:
“ Agreement ”
means this Agreement, including all exhibits hereto, as any of the
same may be supplemented or amended from time to time in accordance
with the terms hereof.
“ Borrower ”
means Maui Land & Pineapple Company, Inc., a Hawaii
corporation.
“ Business Day ”
means a day other than a Saturday or Sunday on which banks are
generally open for business in New York, New York and Kahului,
Hawaii.
“ Closing Date ”
means October 27, 2006.
1
“ Consolidated Cash Flow
Available for Debt Service ” means, with respect to the
applicable period of determination, for Borrower and its
Subsidiaries on a consolidated basis (a) the sum of
Consolidated Net Income, interest expense, depreciation,
amortization and other non-cash charges, minus (ii) dividends
and distributions paid out to shareholders during such Fiscal
Year.
“ Consolidated Debt
Service ” means, with respect to the applicable period of
determination, for Borrower and its Subsidiaries on a consolidated
basis the aggregate of (a) interest expense, (b) current
maturities of long term debt during the period of determination,
and (c) the current portion of capital leases that are due during
the period of determination.
“ Consolidated Funded
Debt ” shall mean, as at any date of determination, for
Borrower and its Subsidiaries on a consolidated basis, all
indebtedness for borrowed money evidenced notes, bonds, debentures,
or similar evidences of indebtedness, and which by its term matures
more than one year from, or is directly or indirectly renewable or
extendible at such person’s option under a revolving credit
or similar agreement obligating the lender or lenders thereunder to
extend credit over a period of more than one year from the date of
creation thereof, and specifically including (i) capital lease
obligations, (ii) current maturities of long-term debt, and
(iii) revolving credit and short-term debt extendible beyond
one year at the option of the debtor.
“ Consolidated Net
Income ” shall mean, for any period, on a consolidated
basis, the net income, if any, of Borrower and its Subsidiaries,
determined in accordance with GAAP.
“ Consolidated Net
Worth ” shall mean, as at any date of determination, on a
consolidated basis, the gross book value of the assets of Borrower,
minus the sum of (a) all reserves applicable thereto, and
(b) all liabilities of Borrower (including subordinated
liabilities).
“ Consolidated Total
Capitalization ” shall mean, as at any date of
determination, the sum of (a) Consolidated Funded Debt, plus
(b) Consolidated Net Worth.
“ Contractor ”
means any contractor that is constructing the Improvements on the
Property.
“ Construction Contract
” means Borrower’s construction contract with any
Contractor.
“ Construction Costs
” means the contract price paid or to be paid to Contractor
or reimbursed to Borrower for any portion of construction of the
Improvements, including administrative, engineering, legal,
financial and other costs incurred by Lender, Borrower or any
Contractor in connection with the acquisition and construction of
the Improvements.
“ Damaged Property
” has the meaning assigned to such term in Section 8.01
hereof.
“ Damaged Property
Amount ” means an amount equal to the product of (a) the
then Prepayment Amount, and (b) a percentage equal to the original
appraised value of the Damaged Property divided by the original
appraised value of all of the Property.
2
“ Default ” means
an event that, with giving of notice or passage of time or both,
would constitute an Event of Default as provided in Article X
hereof.
“ Environmental Indemnity
Agreement ” means the Environmental Indemnity Agreement
Regarding Hazardous Substances dated of even date herewith by
Borrower and Guarantor for the benefit of Lender, as hereafter
modified or amended.
“ Environmental Laws
” means any federal, state and local laws relating to
emissions, discharges, releases of Hazardous Wastes or Materials
into ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Wastes or Materials.
“ Equipment ” has
the meaning assigned to such term in the Master Security
Agreement.
“ Fixed Charge Coverage
Ratio ” means the ratio of (a) Borrower’s
Consolidated Cash Flow Available for Debt Service to (b)
Borrower’s Consolidated Debt Service.
“ GAAP ” means
generally accepted accounting principles under the United States as
established by the Financial Accounting Standards Board applied on
a consistent basis.
“ Guarantor ”
means Maui Pineapple Company, Ltd., a Hawaii
corporation.
“ Guaranty Agreement
” means the Guaranty Agreement dated as of October 1, 2006 by
Guarantor for the benefit of Lender.
“ Hazardous Waste or
Materials ” means any substance or material defined in or
designated as hazardous or toxic wastes, hazardous or toxic
material, a hazardous, toxic or radioactive substance, or other
similar term, by any Environmental Law now or hereafter in
effect.
“ Improvements ”
has the meaning set forth in the definition of
“Property.”
“ Leases ” has
the meaning set forth in the definition of
“Property.”
“ Lender ” means
(i) Bank of Hawaii, acting as lender under this Agreement,
(ii) any surviving, resulting or transferee corporation of
Bank of Hawaii and (iii) except where the context requires
otherwise, any assignee(s) of Lender.
“ Liens ” means
any mortgage, pledge, lien, charge, license or
encumbrance.
“ Loan ” means
the loan from Lender to Borrower pursuant to this
Agreement.
“ Loan Payments ”
means the loan payments payable by Borrower pursuant to the
provisions of this Agreement as specifically set forth in Exhibit A
hereto. As provided in Article II hereof, Loan Payments shall
be payable by Borrower to Lender in the amounts set forth in
Exhibit A hereto.
3
“ Loan Proceeds ”
means the total amount of money to be paid pursuant to Section 2.02
hereof by Lender to Borrower.
“ Make Whole Amount
” means (i) the net present value of the remaining
scheduled principal and interest payments (including any balloon or
other amount of principal payable that but for the prepayment of
the Loan would be payable on or prior to the scheduled maturity
date hereof), discounted to the prepayment date at a per annum
interest rate equal to the then Reinvestment Rate minus
(ii) the principal balance outstanding as of the prepayment
date (immediately prior to any such prepayment); provided, that the
Make Whole Amount shall be deemed zero if the calculation results
in a negative number.
“ Master Security
Agreement ” means the Master Security Agreement dated as
of September 29, 2006 and schedules thereto between Guarantor and
GE Capital Public Finance, Inc. and the promissory notes issued
thereunder.
“ Material Adverse
Effect ” means a material adverse effect or change on (a)
the business, assets, operations, properties or condition
(financial or otherwise) of Borrower or Guarantor, (b) the
ability of Borrower to perform or pay its obligations hereunder or
on any other material obligation in accordance with the terms
thereof, (c) the ability of Guarantor to perform its obligations
under the Guaranty Agreement, (d) Lender’s Lien on the
Property or the priority of such Lien, or (e) the validity or
enforceability of this Agreement, the Mortgage, the Environmental
Indemnity Agreement or the Guaranty Agreement or the rights and
remedies available to Lender hereunder or thereunder.
“ Mortgage ”
means the Mortgage, Security Agreement, Assignment of Leases and
Rents and Fixture Filing dated as of even date herewith by Borrower
in favor of Lender, as hereafter modified or amended.
“ Permitted Exceptions
” means:
(a)
Liens existing on the date hereof and listed on Exhibit B to the
Mortgage and any renewals or extensions thereof, provided that (i)
the property covered thereby is not changed, (ii) the amount
secured or benefited thereby is not increased, and (iii) the direct
or any contingent obligor with respect thereto is not
changed;
(b)
Liens for taxes not yet delinquent or which are being contested in
good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books
of Borrower in accordance with GAAP;
(c)
carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s or other like Liens arising
in the ordinary course of business which are not overdue for a
period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books
of Borrower; and
4
(d)
Liens securing judgments for the payment of money which (i) are
being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are
maintain on the books of Borrower in accordance with GAAP and (ii)
do not otherwise constitute on Event of Default under Section 10.01
hereof.
“ Prepayment Amount
” means the amount which Borrower may or must from time to
time pay or cause to be paid to Lender in order to prepay the Loan,
as provided in Section 2.07 hereof, such amounts being set forth in
Exhibit A hereto, together with the Make Whole Amount and any
accrued interest and all other amounts due hereunder.
“ Property ”
means, collectively, all of Borrower’s estate, right, title
and interest, now owned or hereafter acquired, including any
reversion or remainder interest, in the real property located in
the City of Kahului, County of Maui, State of Hawaii described on
Exhibit A to the Mortgage, including all heretofore or
hereafter vacated alleys and streets abutting the property, and all
easements, rights, appurtenances, tenements, hereditaments, rents,
royalties, mineral, oil and gas rights and profits, water, water
rights and water stock appurtenant to the property (collectively
“Premises”); together with all of Borrower’s
estate, right, title and interest, now owned or hereafter acquired,
in:
(a)
all buildings, structures, improvements, parking areas,
landscaping, equipment, software intangibles, fixtures and articles
of property now or hereafter erected on, attached to, or used or
adapted for use in the operation of the Premises, including
(without limitation) all heating, air conditioning, manufacturing
and incinerating apparatus and equipment; all boilers, engines,
motors, dynamos, generating equipment, piping and plumbing
fixtures, water heaters, ranges, cooking apparatus and mechanical
kitchen equipment, refrigerators, freezers, cooling, ventilating,
sprinkling and vacuum cleaning systems, fire extinguishing
apparatus, gas and electric fixtures, carpeting, floor coverings,
underpadding, elevators, escalators, partitions, mantels, built-in
mirrors, window shades, blinds, draperies, screens, storm sash,
awnings, signs, furnishings of public spaces, halls and lobbies,
and shrubbery and plants, and including also all interest of any
owner of the Premises in any of such items hereafter at any time
acquired under conditional sale contract, chattel mortgage or other
title retaining or security instrument, all of which property
mentioned in this clause (a) shall be deemed part of the
realty covered by this Agreement and not severable wholly or in
part without material injury to the freehold of the Premises (all
of the foregoing together with replacements and additions thereto
are referred to herein as “Improvements”);
(b)
all compensation, awards, damages, rights of action and proceeds,
including interest thereon and/or the proceeds of any policies of
insurance therefor, arising out of or relating to a (i) taking
or damaging of the Premises or Improvements thereon by reason of
any public or private improvement, condemnation proceeding
(including change of grade), sale or transfer in lieu of
condemnation, or fire, earthquake or other casualty, or
(ii) any injury to or decrease in the value of the Premises or
the Improvements for any reason whatsoever;
5
(c)
return premiums or other payments upon any insurance any time
provided for the benefit of or naming Lender, and refunds or
rebates of taxes or assessments on the Premises;
(d)
all the right, title and interest of Borrower in, to and under all
written and oral leases and rental agreements (including
extensions, renewals and subleases; all of the foregoing shall be
referred to collectively herein as the “Leases”) now or
hereafter affecting the Premises including, without limitation, all
rents, issues, profits and other revenues and income therefrom and
from the renting, leasing or bailment of Improvements and
equipment, all guaranties of tenants’ performance under the
Leases, all letter-of-credit rights and all other supporting
obligations associated with the Leases and all rights and claims of
any kind that Borrower may have against any tenant under the Leases
or in connection with the termination or rejection of the Leases in
a bankruptcy or insolvency proceeding; and the leasehold estate, if
applicable;
(e)
plans, specifications, contracts, documents and agreements relating
to the design or construction of the Improvements; Borrower’s
rights under any payment, performance or other bond in connection
with the design or construction of the Improvements; all
landscaping and construction materials, supplies and equipment used
or to be used or consumed in connection with construction of the
Improvements, whether stored on the Premises or at some other
location; and contracts, agreements and purchase orders with
contractors, subcontractors, suppliers and materialmen incidental
to the design or construction of the Improvements;
(f)
all contracts, accounts, deposit accounts, documents, rights,
claims or causes of action to the extent pertaining to or affecting
the Premises or the Improvements, including, without limitation,
all options or contracts to acquire other property for use in
connection with operation or development of the Premises or
Improvements, promissory notes, management contracts, service or
supply contracts, deposits, bank accounts, general intangibles
(including without limitation trademarks, trade names, symbols and
payment intangibles), permits, licenses, franchises and
certificates, and all commitments or agreements, now or hereafter
in existence, intended by the obligor thereof to provide Borrower
with proceeds to satisfy the loan evidenced hereby or improve the
Premises or Improvements, and the right to receive all proceeds due
under such commitments or agreements, including refundable deposits
and fees;
(g)
all books, records, surveys, reports and other documents related to
the Premises, the Improvements, the Leases or other items of
collateral described herein; and
(h)
all additions, accessions, replacements, substitutions, proceeds
and products of the real and personal property, tangible and
intangible, described herein.
“ Reinvestment Rate
” means the per annum interest rate that is equal to the sum
of (a) 1.90% plus (b) the stated yield to maturity of
United States Treasury Notes having a life equal to the remaining
term of the Loan as stated in the most current Federal Reserve
Statistical Release H.15(519) on the day Lender receives notice of
the prepayment. If no maturity exactly
6
corresponds to the remaining term of
the Loan, the Treasury Note life to be adopted from Federal Reserve
Statistical Release H.15(519) shall correspond to a full number of
years period, excluding partial years of such remaining
term.
“ State ” means
the State of Hawaii.
“ Subsidiaries ”
means any corporation, partnership, limited liability company,
joint venture or any other legal entity that in accordance with
GAAP would be properly consolidated on the books of
Borrower.
“Terrorism
Laws” means
Executive Order 13224 issued by the President of the United
States of America, the Terrorism Sanctions Regulations
(Title 31 Part 595 of the U.S. Code of Federal
Regulations), the Terrorism List Governments Sanctions Regulations
(Title 31 Part 596 of the U.S. Code of Federal
Regulations) and the Foreign Terrorist Organizations Sanctions
Regulations (Title 31 Part 597 of the U.S. Code of
Federal Regulations), and all other present and future federal,
state and local laws, ordinances, regulations, policies and any
other requirements of any governmental authority (including,
without limitation, the United States Department of the Treasury
Office of Foreign Assets Control) addressing, relating to, or
attempting to eliminate, terrorist acts and acts of war, each as
hereafter supplemented, amended or modified from time to time, and
the present and future rules, regulations and guidance documents
promulgated under any of the foregoing, or under similar laws,
ordinances, regulations, policies or requirements of other states
or localities.
“ UCC ” means the
Uniform Commercial Code as adopted and in effect in the
State.
Section 1.02.
Exhibits . The following exhibits are
attached hereto and made a part hereof:
Exhibit A :
Schedule of Loan Payments setting forth the Loan Payments and
Prepayment Amounts.
Exhibit B :
[Reserved.]
Exhibit C :
Form of Certificate of Chief Financial Officer.
Exhibit D :
Survey Requirements.
Exhibit E :
Permanent Loan Insurance Requirements.
Section 1.03. Rules of
Construction . (a) The singular form of any
word used herein, including the terms defined in Section 1.01
hereof, shall include the plural, and vice versa. The use
herein of a word of any gender shall include correlative words of
all genders.
(b)
Unless otherwise specified, references to Articles, Sections and
other subdivisions of this Agreement are to the designated
Articles, Sections and other subdivision of this
7
Agreement as originally
executed. The words “hereof,”
“herein,” “hereunder” and words of similar
import refer to this Agreement as a whole.
(c)
The headings or titles of the several articles and sections shall
be solely for convenience of reference and shall not affect the
meaning, construction or effect of the provisions
hereof.
ARTICLE II
FINANCING OF PROPERTY AND TERMS
OF LOAN
Section 2.01.
Construction of Improvements . Borrower
has caused to be constructed, or will cause to be constructed, the
Improvements pursuant to each Construction Contract with each
Contractor. Borrower shall remain liable to each Contractor
in respect of its duties and obligations in accordance with each
Construction Contract and shall bear the risk of loss with respect
to any loss or claim relating to any portion of the Improvements
covered by any Construction Contract, and Lender shall not assume
any such liability or risk of loss.
Section 2.02.
Loan . Lender hereby agrees, subject to
the terms and conditions of this Agreement, to make a loan to
Borrower in the amount of $10,000,000; and Borrower hereby agrees
to borrow such amount from Lender. Upon fulfillment of the
conditions set forth in Article III hereof, Lender shall disburse
the Loan Proceeds to First American Title Insurance Company, Inc.
(“Title Company”). Borrower’s obligation to
repay the Loan shall commence, and interest shall begin to accrue,
on the date that Loan Proceeds are disbursed to Title
Company.
Section 2.03.
Interest . The principal amount of the
Loan outstanding from time to time shall bear interest (computed on
the basis of actual days elapsed in a 360-day year) at an annual
rate equal to 6.93%. Interest accruing on the principal
balance of the Loan outstanding from time to time shall be payable
as provided in Exhibit A and upon earlier demand in
accordance with the terms hereof or prepayment in accordance with
Section 2.07 hereof.
Section 2.04.
Payments . Borrower shall pay Loan
Payments, in the amounts and on the dates set forth in Exhibit A
hereto. Additionally, Borrower shall pay to Lender an amount
equal to the product of (i) the lesser of (A) 15% per annum and (B)
the highest rate permitted by law and (ii) the delinquent amount of
any Loan Payment not paid when due. All amounts required to
be paid by Borrower hereunder shall be paid in lawful money of the
United States of America in immediately available funds.
Section 2.05 Payment on
Non-Business Days . Whenever any payment to
be made hereunder shall be stated to be due on a day which is not a
Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be
included in the computation of interest or the fees hereunder, as
the case may be.
8
Section 2.06. Loan
Payments To Be Unconditional . The
obligations of Borrower to pay the Loan Payments required under
this Article II and to make other payments hereunder and to
perform and observe the covenants and agreements contained herein
shall be absolute and unconditional in all events, without
abatement, diminution, deduction, setoff or defense for any reason,
including (without limitation) any failure of the Improvements to
be constructed, any defects, malfunctions, breakdowns or
infirmities in the Improvements or any accident, condemnation,
destruction or unforeseen circumstances. Notwithstanding any
dispute between Borrower and any of Lender, any Contractor or any
other person, Borrower shall make all Loan Payments when due and
shall not withhold any Loan Payments pending final resolution of
such dispute, nor shall Borrower assert any right of set-off or
counterclaim against its obligation to make such payments required
under this Agreement.
Section 2.07.
Prepayments . (a) Borrower may, in its
discretion, prepay the Loan in whole at any time on any payment
date by paying the applicable Prepayment Amount.
(b)
Borrower shall prepay the Loan in whole or in part at any time
pursuant to Article VIII hereof by paying the applicable Prepayment
Amount.
(c)
Borrower shall prepay the Loan in full immediately upon demand of
Lender after the occurrence of an Event of Default by paying the
applicable Prepayment Amount.
Upon any prepayment in part of the
Loan, the prepayment shall be applied to the Loan Payments and any
other amounts due hereunder as determined by Lender.
ARTICLE III
CONDITIONS
PRECEDENT
Lender’s agreement to make the
loan to Borrower hereunder and to disburse the Loan Proceeds shall
be subject to the condition precedent that Lender shall have
received all of the following, each in form and substance
satisfactory to Lender:
(a)
This Agreement, properly executed on behalf of Borrower, and each
of the Exhibits hereto properly completed.
(b)
The Guaranty Agreement, properly executed on behalf of
Guarantor.
(c)
The Mortgage, properly executed on behalf of Borrower.
(d)
The Environmental Indemnity Agreement, properly executed on behalf
of Borrower and Guarantor.
(e)
A certificate of the Secretary or an Assistant Secretary of
Borrower, certifying as to (i) the resolutions of the board of
directors and, if required, the shareholders of Borrower,
authorizing the execution, delivery and performance of this
Agreement, the Mortgage, the Environmental Indemnity Agreement and
any related
9
documents, (ii) the bylaws of
Borrower, and (iii) the signatures of the officers or agents of
Borrower authorized to execute and deliver this Agreement, the
Mortgage, the Environmental Indemnity Agreement and other
instruments, agreements and certificates on behalf of
Borrower.
(f)
Currently certified copies of the Articles of Incorporation of
Borrower.
(g)
A Certificate of Good Standing issued as to Borrower by the
Department of Commerce and Consumer Affairs of the State of
Hawaii.
(h)
A certificate of the Secretary or an Assistant Secretary of
Guarantor, certifying as to (i) the resolutions of the board of
directors and, if required, the shareholders of Guarantor,
authorizing the execution, delivery and performance of the Guaranty
Agreement and the Environmental Indemnity Agreement and any related
documents, (ii) the bylaws of Guarantor, and (iii) the signatures
of the officers or agents of Guarantor authorized to execute and
deliver the Guaranty Agreement, the Environmental Indemnity
Agreement and other instruments, agreements and certificates on
behalf of Guarantor.
(i)
Currently certified copies of the Articles of Incorporation of
Guarantor.
(j)
A Certificate of Good Standing issued as to Guarantor by the
Department of Commerce and Consumer Affairs of the State of
Hawaii.
(k)
Current searches of appropriate filing offices showing that
(i) no state or federal tax liens have been filed and remain
in effect against Borrower, (ii) no financing statements have
been filed and remain in effect against Borrower relating to the
Property except those financing statements filed by Lender, and
(iii) all financing statements necessary to perfect the
security interest created pursuant to this Agreement and the
Mortgage have been filed.
(l)
Financing statements authorized by Borrower as debtor, and naming
Lender as secured party.
(m)
An appraisal of the Property addressed to Lender, in form and
substance acceptable to Lender and prepared by an MAI certified
appraiser acceptable to Lender in conformance with the guidelines
and recommendations set forth in the Uniform Standards of
Professional Appraisal Practice (USPAP) and the requirements of the
Code of Professional Ethics and Standards of Professional Appraisal
Practice of the Appraisal Institute. In addition to the
foregoing requirements, whenever the income approach is utilized by
the appraiser, the report shall include a direct capitalization
analysis as well as a discounted cash flow analysis and a final
estimate of value based on the property’s fee simple
estate.
10
