EXHIBIT 10.5
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THIRD NOTE MODIFICATION AGREEMENT
AND CONFIRMATION OF GUARANTY
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THIS THIRD NOTE MODIFICATION AGREEMENT AND CONFIRMATION OF GUARANTY
is executed as of June 16, 2009 (the "Effective Date"), by WAIKELE COUNTRY
CLUB, INC., a Hawaii corporation, whose address is 1750 Kalakaua Avenue,
Suite 3603, Honolulu, Hawaii 96826 (the "Maker"). WAIKELE GOLF COURSE,
LLC, a Delaware limited liability company, whose address is 900 North
Michigan Avenue, Suite 1400, Chicago, Illinois 60611 (the "Holder"), DONG
YANG ENTERPRISE INC., a Hawaii corporation, whose address is 1750 Kalakaua
Avenue, Suite 3603, Honolulu, Hawaii 96826, and SAM SOON SUN, an
individual, whose address is 1750 Kalakaua Avenue, Suite 3603, Honolulu,
Hawaii 96826 (Dong Yang Enterprise Inc. and Sam Soon Sun being collectively
referred to herein as the "Guarantor").
W I T N E S S E T H T H A T:
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WHEREAS, the Maker executed that certain Promissory Note dated
November 12, 2008, in favor of the Holder, in the principal amount of
THIRTEEN MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($13,250,000.00), as modified by that certain Note Modification Agreement
and Confirmation of Guaranty (the "First Modification") dated as of May 12,
2009, executed by the Maker, the Holder and the Guarantor,a s further
modified by that certain Second Note Modification Agreement and
Confirmation of Guaranty (the "Second Modification") dated as of May 19,
2009 executed by the Maker, the Holder and the Guarantor (such Promissory
Note, the First Modification and the Second Modification being collectively
referred to herein as the "Note"), which principal amount was fully funded,
the Note being secured by that certain Mortgage, Assignment of Leases and
Rents, Security Agreement, Financing Statement and Fixture Filing dated
November 12, 2008, filed in the Office of the Assistant Registrar of the
Land Court of the State of Hawaii as Land Court Document No. 3805044, and
noted on Transfer Certificate of Title No. 928,280, and also recorded in
the bureau of Conveyances of the State of Hawaii as Document No. 2008-
172621, a UCC Financing Statement having been filed as Document No. 2008-
172622 (collectively, the "Mortgage");
WHEREAS, Maker's obligations under the Note and the Mortgage have
been guaranteed by each Guarantor under the terms of that certain Guaranty
dated November 12, 2008, executed by each Guarantor in favor of the Holder;
which Guaranty was reaffirmed by the First Modification and the Second
Modification;
WHEREAS, the Maker and the Holder have agreed to further modify the
Note as hereinafter provided; and
WHEREAS, each Guarantor has agreed to again confirm that the
obligations of each Guarantor under the Guaranty remain in full force and
effect.
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NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the Maker and the Holder mutually agree
that the Note is modified, as of the Effective Date, as follows:
1. The section of the Note entitled "Interest" is revised in its
entirety to state as follows:
"INTEREST. From November 12, 2008 through July 11, 2009,
interest on the principal balance of this Note shall accrue at the
rate of seven percent (7%) per annum. From July 12, 2009 through the
earlier of the date that this Note is paid in full or the Maturity
Date, interest on the principal balance of this Note shall accrue at
the rate of eight percent (8%) per annum. Interest shall be computed
on the basis of the actual number of days elapsed through the date of
payment."
2. In the section of the Note entitled "Payments; Maturity Date",
subsection (b) is revised in its entirety to state as follows:
"(b) A principal payment in the amount of $200,000.00 shall be
made by the Maker to the Holder on May 12, 2009. An additional
payment in the amount of $50,000.00 shall be made by the Maker to the
Holder on May 20, 2009, which payment shall be applied first to
accrued and unpaid interest through such date with the remainder
applied to the outstanding principal balance of the Note. An
additional payment in the amount of $100,000.00 shall be made by the
Maker to the Holder on June 16, 2009, which payment shall be applied
first to accrued and unpaid interest through such date with the
remainder applied to the outstanding principal balance of the Note.
An additional payment in the amount of $100,000.00 shall be made by
the Maker to the Holder on June 23, 2009, which payment shall be
applied first to accrued and unpaid interest through such date with
the remainder applied to the outstanding principal balance of the
Note. An additional payment in the amount of $100,000.00 shall be
made by the Maker to the Holder on September 12, 2009, which payment
shall be applied first to accrued and unpaid interest, if any,
through such date with the remainder applied to the outstanding
principal balance of the Note. All unpaid principal and accrued
interest shall be due and payable in full, unless sooner paid, on
November 12, 2009 (the "Maturity Date")."
3. In all other respects the terms and conditions of the Note, as
modified by this instrument, (i) shall remain in full force and effect, and
(ii) shall continue to be secured by the Mortgage, which Mortgage is hereby
confirmed.
AND each Guarantor hereby reconfirms to the Holder that the
obligations of each Guarantor under the Guaranty remain in full force and
effect and that each Guarantor is obligated to repay the outstanding
principal balance under the Note, as modified by this instrument, together
with interest thereon, all in accordance with the terms of the Guaranty,
the Note, as modified by this instrument, and the Mortgage.
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AND, in further consideration of the premises, each of the Maker and
the Guarantor hereby (i) reaffirms to the Holder that neither the Maker nor
the Guarantor possesses any offset or defense to the enforcement of the
Note, as modified by this instrument, to the enforcement of the Mortgage
and/or to the enforcement of the debt evidenced and secured thereby, (ii)
waives and releases all defenses and agrees not to assert any offset or
defense arising out of events or occurrences prior to the Effective Date,
and (iii) confirms that this instrument evidences a revision to the Note
and not a novation.
This instrument may be executed in one or more counterparts. It
shall be fully executed when each party whose signature is required has
signed at least one counterpart even through no one counterpart contains
the signatures of all of the parties. Each executed counterpart shall be
deemed as original, but all of such counterparts together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Maker, the Holder and the Guarantor have
executed this instrument as of the Effective Date.
WAIKELE COUNTRY CLUB INC.,
a Hawaii corporation
By: /s/ Ji Yong Park
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Name: Ji Yong Park
Title: President
Maker
WAIKELE GOLF COURSE, LLC,
a Delaware limited liability company
By: /s/ Janis G. Yee
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Name: Janis G. Yee
Title: Vice President
Holder
DONG YANG ENTERPRISE INC.,
a Hawaii Corporation
By: /s/ Ji Yong Park
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Name: Ji Yong Park
Title President
Guarantor
/s/ SAM SOON SUN
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SAM SOON SUN
Guarantor
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