Exhibit 10.2

 

thirD amendment to

Loan Agreement

 

This Third Amendment to Loan Agreement (as amended, restated, supplemented or
otherwise modified, this “Agreement”) is entered into as of April 25, 2014 (the
“Effective Date”) by and among Maui Land & Pineapple Company, Inc., a Hawaii
corporation (“Borrower”), Kapalua Land Company, Ltd., a Hawaii corporation and
Maui Pineapple Company, Ltd., a Hawaii corporation (referred to herein
collectively as ”Guarantor” and, together with Borrower, the “Credit Parties”),
and American AgCredit, FLCA (“Lender”).

 

RECITALS

 

A.     Borrower and Lender are party to that certain Loan Agreement dated as of
December 22, 2010, as amended by a First Amendment to Loan Agreement dated as of
May 10, 2011 and a Second Amendment to Loan Agreement dated as of February 26,
2013 (as it may be further amended, restated, supplemented or otherwise
modified, the “Loan Agreement”), pursuant to which Lender has agreed to provide
loans and other financial accommodations to Borrower upon the terms and
conditions set forth in the Loan Agreement. Capitalized terms used in this
Agreement but not defined in this Agreement shall have the meanings given to
them in the Loan Agreement.

 

B.     The Credit Parties have requested that Lender agree to amend the terms of
the Loan Agreement.

 

C.     Lender is willing to do so on the terms and conditions set forth in this
Agreement.

 

In consideration of the foregoing, the parties agree as follows:

 

ARTICLE I
ACKNOWLEDGMENTS AND CONSENTS

 

Section 1.1     Affirmation of Recitals. Each Credit Party acknowledges and
confirms that each of the recitals set forth above is true and correct.

 

Section 1.2     Outstanding Indebtedness. Each Credit Party acknowledges and
confirms (a) that Exhibit A hereto sets forth, as of the date specified in
Exhibit A, the aggregate principal amount of the Loan, and (b) that such amount
is not subject to any defense, counterclaim, recoupment or offset of any kind.

 

Section 1.3     Consent to Amendment of Wells Fargo Loan Documents. Lender
consents to Borrower entering into an amendment (the “Wells Fargo Amendment”) to
the Wells Fargo Loan Documents, to be effective concurrently with this
Agreement, providing for an extension of the maturity date to August 1, 2016, a
revolving loan commitment of $32,712,000, and containing only such other terms
and conditions as shall be approved by Lender.

 

 
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ARTICLE II
AMENDMENTS TO LOAN AGREEMENT

 

Section 2.1     Amendment to Section 1(a). The following definitions in
Section 1(a) of the Loan Agreement are hereby amended and restated to read as
follows:

 

“Applicable Spread” shall mean 4.00%; provided that if the principal balance of
the Loan is reduced below Fifteen Million Dollars ($15,000,000), and no Event of
Default shall have at any time occurred, the Applicable Spread shall be reduced
to three and three-quarters percent (3.75%) commencing on the first day of the
first month after the occurrence of such reduction.

 

“Maturity Date” shall mean August 1, 2016.

 

“Wells Fargo Facility” shall mean the secured revolving line of credit provided
by Wells Fargo Bank to Borrower on or about the Closing Date and extended,
renewed, or amended from time to time.

 

Section 2.2     New Definitions. The following definitions are hereby added to
Section 1(a) in appropriate alphabetical order as follows:

 

“Third Amendment Closing Date” shall mean April 25, 2014.

 

Section 2.3     Amendment to Section 4(b). Section 4(b) of the Loan Agreement is
hereby amended and restated to read as follows:

 

(b)     Principal Payments; Maturity Date. Except as provided in Section 6(a)
Section 6(b), or Section 6(c), the principal balance of the Loan shall be due
and payable in full on the Maturity Date; provided, that (i) if the principal
balance of the Loan exceeds Seventeen Million Dollars ($17,000,000) on the first
anniversary of the Third Amendment Closing Date, Borrower shall make a principal
payment on the first anniversary of the Third Amendment Closing Date in such
amount as will reduce the principal balance of the Loan to Seventeen Million
Dollars ($17,000,000), (b) if the principal balance of the Loan exceeds Fifteen
Million Dollars ($15,000,000) on the second anniversary of the Third Amendment
Closing Date, Borrower shall make a principal payment on the second anniversary
of the Third Amendment Closing Date in such amount as will reduce the principal
balance of the Loan to Fifteen Million Dollars ($15,000,000), and (iii) if the
Obligations shall become due and payable in accordance with Section 14 or any
other provision of this Agreement prior to the scheduled Maturity Date, then the
Maturity Date shall be the date on which the Obligations become due and payable.

 

Section 2.4     Amendment to Section 6(b). Section 6(b) of the Loan Agreement is
hereby amended to add the following sentence at the end thereof:

 

Borrower shall not be required to make a principal prepayment under this section
with the proceeds of sale of Borrower’s Lipoa Point Property so long as the Net
Non-Collateral Sale Proceeds of such sale are used by Borrower to terminate
Borrower’s pension plans.

 

 
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Section 2.5     Addition of Section 11(l). A new Section 11(l) is hereby added
to the Loan Agreement as follows:

 

(i) Sale of Lipoa Point Property and Termination of Pension Plans. On or before
December 31, 2015, sell Borrower’s Lipoa Point property and use the proceeds of
such sale to terminate Borrower’s pension plans.

 

Section 2.6     Amendment to Section 12(i). Section 12(i) of the Loan Agreement
is hereby amended and restated to read as follows:

 

(i) Indebtedness. Incur any Indebtedness other than the Loan, except for
Indebtedness disclosed on the consolidated balance sheet of Borrower and its
Subsidiaries dated as of September 30, 2009, provided, however, that (i)
Borrower may incur Indebtedness under the Wells Fargo Facility not to exceed
$32,712,000 at any time outstanding; (ii) Borrower may incur Indebtedness to
First Hawaiian Bank in an amount not to exceed $3,5000,000 at any time
outstanding so long as (A) such Indebtedness is non-recourse and is secured
solely by an approximately 1.1 acre parcel together with improvements consisting
of an approximately 6,599 square foot building known as the Honolulu Store
located at 502 Office Road, Kapalua Resort, Maui, Hawaii, and (B) such
Indebtedness is on terms substantially the same as those set forth in the term
sheet delivered by Borrower to Lender before Borrower’s incurrence of such
Indebtedness, and (iii) Borrower may incur up to $250,000 in total Indebtedness
outstanding at any time in connection with the acquisition or lease of equipment
used in the ordinary course of its business.

 

Section 2.7     Amendment to Section 12(k). Section 12(k) of the Loan Agreement
is hereby amended to replace “$4,000,000” with “$3,000,000.”

 

Section 2.8     Amendment Fee. In consideration of Lender’s entering into this
Agreement, on the Effective Date, Borrower shall pay to Lender a fee (the
“Amendment Fee”) in the amount of $100,000. The Amendment Fee shall be fully
earned and non-refundable upon the Effective Date.

 

ARTICLE III
CONDITIONS TO EFFECTIVENESS

 

Section 3.1     Conditions Precedent. This Agreement shall become effective as
of the Effective Date upon the satisfaction of each of the following conditions:

 

(a)     receipt by Lender of duly executed counterparts of this Agreement from
Borrower and each Guarantor;

 

(b)     receipt by Lender of the Amendment Fee;

 

(c)     Borrower shall have entered into the Wells Fargo Amendment in the form
approved by Lender and delivered a copy thereof to Lender; and

 

 
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(d)     if required by Lender, Borrower shall have paid all costs and expenses
of Lender in connection with this Agreement, the Loan Documents and the
transactions contemplated hereby including an estimate of anticipated closing
costs (it being understood that if Lender elects not to require payment prior to
closing, Borrower shall pay such amounts upon being billed therefor by Lender).

 

ARTICLE IV
MISCELLANEOUS

 

Section 4.1     Representations and Warranties. Each Credit Party hereby
represents and warrants to Lender that (a) each Credit Party has the legal power
and authority to execute and deliver this Agreement; (b) the officers of each
Credit Party executing this Agreement have been duly authorized to execute and
deliver the same and bind each Credit Party with respect to the provisions
hereof; (c) the execution and delivery hereof by each Credit Party and the
performance and observance by each Credit Party of the provisions hereof do not
violate or conflict with any organizational document of any Person party hereto
or any law applicable to any Credit Party or result in a breach of any provision
of or constitute a default under any other agreement, instrument or document
binding upon or enforceable against any Credit Party; (d)  no Default or Event
of Default exists under the Loan Agreement, nor will any occur immediately after
the execution and delivery of this Agreement or by the performance or observance
of any provision hereof; (e) no Credit Party is aware of any claim or offset
against, or defense or counterclaim to, any of their obligations or liabilities
under the Loan Agreement or any other Loan Document; and (f) this Agreement and
each document executed by any Credit Party in connection herewith constitute
valid and binding obligations of the applicable Person in every respect,
enforceable in accordance with their terms.

 

Section 4.2     Release. Each Credit Party hereby releases, remises, acquits and
forever discharges Lender and its employees, agents, representatives,
consultants, attorneys, fiduciaries, officers, directors, partners,
predecessors, successors and assigns, subsidiary corporations, parent
corporations, and related corporate divisions (collectively, the “Released
Parties”), from any and all actions and causes of action, judgments, executions,
suits, debts, claims, demands, liabilities, obligations, damages and expenses of
any and every character, known or unknown, direct and/or indirect, at law or in
equity, of whatsoever kind or nature, for or because of any matter or things
done, omitted or suffered to be done by any of the Released Parties prior to and
including the effectiveness of this Agreement, and in any way directly or
indirectly arising out of or in any way connected to the Loan Agreement or the
Loan Documents (collectively, the “Released Matters”). Each Credit Party
acknowledges that the agreements in this paragraph are intended to be in full
satisfaction of all or any alleged injuries or damages arising in connection
with the Released Matters.

 

Each Credit Party hereby waives the provisions of any statute or doctrine to the
effect that a general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor. Without limiting the generality of the foregoing, each Credit Party
hereby waives the provisions of any statute that prevents a general release from
extending to claims unknown by the releasing party, including Section 1542 of
the California Civil Code which provides:

 

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.

 

 
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Each Credit Party acknowledges and understands the rights and benefits conferred
by such a statute or doctrine and the risks associated with waiver thereof, and
after receiving advice of counsel, hereby consciously and voluntarily waives,
relinquishes and releases any and all rights and benefits available thereunder,
insofar as they apply, or may be construed to apply, to each release set forth
herein or contemplated hereby. In so doing, each Credit Party expressly
acknowledges and understands that it may hereafter discover facts in addition to
or different from those that it now believes to be true with respect to the
subject matter of the disputes, claims and other matters released herein, but
expressly agrees that it has taken these facts and possibilities into account in
electing to make and to enter into this release, and that the releases given
herein shall be and remain in effect as full and complete releases
notwithstanding the discovery or existence of any such additional or different
facts or possibilities.

 

This release may be pleaded as a full and complete defense and/ or as a
cross-complaint or counterclaim against any action, suit, or other proceeding
that may be instituted, prosecuted or attempted in breach of this release. Each
Credit Party acknowledges that the release contained herein constitutes a
material inducement to Lender to enter into this Agreement and that Lender would
not have done so but for Lender’s expectation that such release is valid and
enforceable in all events.

 

Section 4.3     Covenant Not to Sue. Each Credit Party, on behalf of itself and
its successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably, covenants and agrees with and in favor of each
Released Party that it will not sue (at law, in equity, in any regulatory
proceeding or otherwise) any Released Party on the basis of any claim released,
remised and discharged by such Credit Party pursuant to Section 4.2 above. If
any Credit Party or any of its successors, assigns or other legal
representatives violates the foregoing covenant, such Credit Party, for itself
and its successors, assigns and legal representatives, agrees to pay, in
addition to such other damages as any Released Party may sustain as a result of
such violation, all attorneys’ fees and costs incurred by any Released Party as
a result of such violation.

 

Section 4.4     Loan Documents Unaffected. Except as otherwise specifically
provided herein, all provisions of the Loan Agreement and the other Loan
Documents shall remain in full force and effect and be unaffected hereby. The
parties hereto acknowledge and agree that this Agreement constitutes a “Loan
Document” under the terms of the Loan Agreement.

 

Section 4.5     Guarantor Acknowledgement. Each Guarantor, by signing this
Agreement:

 

(a)    consents and agrees to and acknowledges the terms of this Agreement;

 

(b)    acknowledges and agrees that all of the Loan Documents to which such
Guarantor is a party or otherwise bound shall continue in full force and effect
and that all of such Guarantor’s obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Agreement;

 

 
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(c)     represents and warrants to Lender that all representations and
warranties made by such Guarantor and contained in this Agreement or any other
Loan Document to which it is a party are true and correct in all material
respects on and as of the date of this Agreement to the same extent as though
made on and as of such date, except to the extent that any thereof expressly
relate to an earlier date; and

 

(d)     acknowledges and agrees that (i) notwithstanding the conditions to
effectiveness set forth in this Agreement, such Guarantor consent to this
Agreement is not required under the terms of the Loan Agreement or any other
Loan Document or as a matter of law, and (ii) nothing in the Loan Agreement,
this Agreement or any other Loan Document shall be deemed to require the consent
of such Guarantor to any future amendments to, modifications of, consents under,
or forbearances or waivers with regard to, the Loan Agreement.

 

Section 4.6     Costs, Expenses and Taxes.     Borrower agrees to pay on demand
all costs and expenses of Lender in connection with the preparation, execution,
delivery, administration, modification and amendment of this Agreement and the
other instruments and documents to be delivered hereunder, including the
reasonable fees and out-of-pocket expenses of counsel for Lender with respect
thereto and with respect to advising Lender as to its rights and
responsibilities hereunder and thereunder. Borrower further agrees to pay on
demand all costs and expenses, if any (including reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement and any other instruments and
documents to be delivered hereunder, including reasonable counsel fees and
expenses in connection with the enforcement of rights under this section. In
addition, Borrower shall pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of this
Agreement and any other instruments and documents to be delivered hereunder, and
agrees to save Lender harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such taxes. The
foregoing agreements shall be in addition to and not in lieu of any similar
obligations under the Loan Documents.

 

Section 4.7     No Other Promises or Inducements. There are no promises or
inducements that have been made to any party hereto to cause such party to enter
into this Agreement other than those that are set forth in this Agreement. This
Agreement has been entered into by each Credit Party freely, voluntarily, with
full knowledge, and without duress, and, in executing this Agreement, no Credit
Party is relying on any other representations, either written or oral, express
or implied, made to any Credit Party by Lender. Each Credit Party agrees that
the consideration received by each Credit Party under this Agreement has been
actual and adequate.

 

Section 4.8     No Course of Dealing. Each Credit Party acknowledges and agrees
that, (a) this Agreement is not intended to, nor shall it, establish any course
of dealing between the Credit Parties and Lender that is inconsistent with the
express terms of the Loan Agreement or any other Loan Document, (b)
notwithstanding any course of dealing between the Credit Parties and Lender
prior to the date hereof, except as set forth herein, Lender shall not be
obligated to make any Loan, except in accordance with the terms and conditions
of this Agreement and the Loan Agreement, and (c) Lender shall be under any
obligation to forbear from exercising any of its rights or remedies upon the
occurrence of any Default or Event of Default.

 

 
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Section 4.9     No Waiver. Each Credit Party acknowledges and agrees that (a)
except as expressly provided herein, this Agreement shall not operate as a
waiver of any right, power or remedy of Lender under the Loan Agreement or any
other Loan Document, nor shall it constitute a continuing waiver at any time,
and (b) nothing herein shall in any way prejudice the rights and remedies of
Lender under the Loan Agreement, any Loan Document or applicable law. In
addition, Lender shall have the right to waive any condition or conditions set
forth in this Agreement, the Loan Agreement or any other Loan Document, in its
sole discretion, and any such waiver shall not prejudice, waive or reduce any
other right or remedy that Lender may have against any Credit Party.

 

Section 4.10     Reaffirmation. Each Credit Party, as debtor, grantor, pledgor,
guarantor, assignor, or in other any other similar capacity in which such Credit
Party grants liens or security interests in its property or otherwise acts as
accommodation party or guarantor, as the case may be, hereby (i) ratifies and
reaffirms all of its payment and performance obligations, contingent or
otherwise, under each of the Loan Documents to which it is a party (after giving
effect hereto) and (ii) to the extent such Person granted liens on or security
interests in any of its property pursuant to any such Loan Document as security
for the Obligations under or with respect to the Loan Documents, ratifies and
reaffirms such grant of security interests and liens and confirms and agrees
that such security interests and liens hereafter secure all of the Obligations
as amended hereby. Each Credit Party hereby acknowledges that each of the Loan
Documents remains in full force and effect and is hereby ratified and
reaffirmed. The execution of this Amendment shall not operate as a waiver of any
right, power or remedy of Lender, constitute a waiver of any provision of any of
the Loan Documents or serve to effect a novation of the Obligations. Each Credit
Party acknowledges that all references in the Loan Agreement to the “Agreement”
or the “Loan Agreement” shall mean the Loan Agreement, as amended hereby, and
all references in the Loan Documents to the “Loan Agreement” shall mean the Loan
Agreement, as amended hereby.

 

Section 4.11     Survival. All representations, warranties, covenants,
agreements, releases and waivers made by or on behalf of any Credit Party under
this Agreement shall survive and continue.

 

Section 4.12     Modification; Waiver. This Agreement may not be modified
orally, but only by an agreement in writing signed by the parties hereto. Any
provision of this Agreement can be waived, amended, supplemented or modified by
written agreement of the parties hereto.

 

Section 4.13     Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICTS OF LAWS.

 

 
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Section 4.14     Entire Agreement. This Agreement sets forth the entire
agreement and understanding among the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements, and undertakings of
every kind and nature among them with respect to the subject matter hereof.

 

Section 4.15     Counterparts; Facsimile or Electronic Transmission of
Signature. This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. The
manual signature of any party hereto that is transmitted to any other party or
its counsel by facsimile or electronic transmission shall be deemed for all
purposes to be an original signature.

 

Section 4.16     Severability Of Provisions; Captions; Attachments;
Interpretation. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. The captions to Sections and subsections herein are inserted
for convenience only and shall be ignored in interpreting the provisions of this
Agreement. Each schedule or exhibit attached to this Agreement shall be
incorporated herein and shall be deemed to be a part hereof. Words in the
singular include the plural and words in the plural include the singular. Use of
the term “includes” or “including,” shall mean “including, but not limited to.”

 

Section 4.17     JURY TRIAL WAIVER. EACH OF THE UNDERSIGNED, HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM HEREIN

 

[Remainder of page intentionally left blank; signatures begin on following
page.]

 

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.

 

 

BORROWER:

 

MAUI LAND & PINEAPPLE COMPANY, INC.

 

By:           /s/ Tim T Esaki

Name:      Tim T. Esaki

Title:        Chief Financial Officer     

 

By:           /s/ Ryan Churchill

Name:      Ryan Churchill

Title:        President

 

 

GUARANTORS:

 

KAPALUA LAND COMPANY, LTD.

 

By:           /s/ Tim T Esaki

Name:      Tim T. Esaki

Title:        Chief Financial Officer     

 

By:           /s/ Ryan Churchill

Name:      Ryan Churchill

Title:        President

 

 

MAUI PINEAPPLE COMPANY, LTD.

 

By:           /s/ Tim T Esaki

Name:      Tim T. Esaki

Title:        Chief Financial Officer     

 

By:           /s/ Ryan Churchill

Name:      Ryan Churchill

Title:        President

 

[Signature Pages Continue]

 

 
Signature Page 1

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LENDER:

 

AMERICAN AGCREDIT, FLCA

 

By:           /s/ Sean P O’Day

Name:      Sean P. O’Day

Title:        Senior Vice President

 

[Signature Pages Continue]

 

 
Signature Page 2 

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EXHIBIT A

 

OUTSTANDING PRINCIPAL AMOUNT OF LOAN

 

As of April 25, 2014: $20,000,000.00

 

 

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