AMENDMENT NO. 3 TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT
(the "3RD AMENDMENT") is made as of June 5, 1998 by and among CASTLE
& XXXXX, INC., a Hawaii corporation (the "BORROWER"), the Lenders (as defined
in Article I), the Co-Agents (as defined in Article I), and The Chase
Manhattan Bank (formerly known as Chemical Bank), a New York banking
corporation, as agent (in such capacity, the "Agent") for the Lenders.
WHEREAS, the Borrower, the Lenders, the Co-Agents and the
Agent are parties to the Amended and Restated Credit Agreement dated as of
May 16, 1997, as amended pursuant to (1) the certain Amendment No. 1 to
Amended and Restated Credit Agreement dated as of September 8, 1997, and (2)
that certain Amendment No 2. to Amended and Restated Credit Agreement dated
as of February 20, 1998; (as amended, The "Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders,
Co-Agents and the Agent make certain amendments to the Credit Agreement and
the Lenders, Co-Agents and the Agent are willing to amend certain provisions
of the Credit Agreement upon the terms set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises,
and for other good valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and fully intending to be legally bound by
this 3rd Amendment, the parties agree to amend the Credit Agreement as
follows:
1. DEFINITIONS. Capitalized terms used herein without definition
shall have the meanings assigned to such terms in the Credit Agreement.
2. AMENDMENTS TO THE CREDIT AGREEMENT. Effective as of the date
first above written, the Credit Agreement is amended as follows:
(1) So long as the Lake Elsinore Debt Coverage Ratio is
greater than or equal to 1.25, the term "Third Party Indebtedness" as used in
Section 6.01 (g) of the Credit Agreement shall not include any portion of
principal or interest on the Allocated Partnership Loan Amount; provided,
however, that in the event that the Lake Elsinore Debt Coverage Ratio shall
be less than 1.25, then effective as of the date of filing of the Compliance
Certificate indicating the same, the term "Third Party Indebtedness" as used
in Section 6.01 (g) of the Credit Agreement shall include the then
outstanding principal of the Allocated Partnership Loan Amount. The term
"Third Party Indebtedness," as used in Section 6.01 (g) of the Credit
Agreement and the form of Compliance Certificate attached to the Credit
Agreement as Exhibit H, are amended in conformity with the foregoing.
As used herein, the following terms shall have the respective
meanings indicated:
(a) "Allocated Partnership Loan Amount" means the
portion of the Second Horizon Limited Partnership Loan allocated to the LLC
pursuant to its Class B Interest under the Second Horizon Limited Partnership
Agreement, which was in the original principal amount of $29,500,000.
(b) "Class B Interest" means the LLC's rights and
interests in and to the Lake Elsinore Project acquired by the LLC through the
LLC's acquisition of a limited partnership interest in Second Horizon Limited
Partnership.
(c) "Lake Elsinore Debt Coverage Ratio" means, for any
period of four consecutive fiscal quarters, the ratio of (a) EBITDA
attributable to the Lake Elsinore Project for such period, over (b) the sum
of interest expense, PLUS required principal payments, in each case
attributable to the Allocated Partnership Loan Amount for such period. The
Lake Elsinore Debt Coverage Ratio shall be determined quarterly.
(d) "Lake Elsinore Project" means the shopping complex
known as the Lake Elsinore Outlet Center located in Lake Elsinore, California.
(e) "Second Horizon Limited Partnership" means a secured
loan in the original aggregate principal amount of $99,300,000 made by Nomura
Asset Capital Corporation to Second Horizon Limited Partnership.
(f) "Second Horizon Limited Partnership" means Second
Horizon Group Limited Partnership, a Delaware partnership.
(g) "Second Horizon Limited Partnership Agreement" means
the Second Horizon Group Limited Partnership Amended and Restated Agreement
of Limited Partnership, dated April 1, 1998, among Second HGI, Inc., a
Delaware corporation, Horizon/Xxxx Outlet Centers Limited Partnership, a
Delaware limited partnership.
(h) "LLC" means Castle & Xxxxx Outlet Centers, LLC, a
California limited liability company.
(2) The definition of "Income Producing Property" set forth
in Section 1.01 of the Credit Agreement is amended to include "Approved Golf
Courses" (as defined below) not attached to or part of Resort Property. In
connection therewith, the definition of the term "Income Producing Property"
set forth in Section 1.01 is amended to read in its entirety as follows:
"INCOME PRODUCING PROPERTY" shall mean any multi-family
residential, commercial, industrial or retail property (including, without
limitation, Approved Golf Courses), owned or leased by the Borrower or any
Subsidiary and improved with a building of which 80% or more of the total
square feet is leased or held for the purposes of leasing to unaffiliated
third parties (treating Xxxx for these purposes as an unaffiliated third
party) but not including any Resort Property". "Income Producing Property"
shall also include the real property owned by the Borrower and ground leased
pursuant to that certain Lease dated July 3, 1997, between
2
the Borrower, as lessor, and Home Depot U.S.A., Inc., as lessee, covering the
property located in Iwilei, Hawaii more particularly described therein
provided said lease remains in full force and effect. As used herein, the
term "Approved Golf Courses" means (i) two 18 hole golf courses known as the
Coyote Creek Golf Courses located in Coyote, California (provided that at
least one of such golf courses is open for business at all times during
regular golfing hours ) and (ii) any other golf course with a minimum of 18
holes owned by the Borrower or a Subsidiary, with respect to which operations
have produced a positive net operating cash flow for the period of twelve
consecutive months immediately preceding the time in question (provided such
golf courses remain open for business at all times during regular golfing
hours).
(3) The terms and provisions of the Credit Agreement are
amended in conformity with the foregoing amendments.
3. RATIFICATION AND CONFIRMATION. As hereby amended, the Credit
Agreement and the other Loan Documents are ratified and confirmed in all
respects.
4. COUNTERPARTS. This 3rd Amendment may be executed in one or
more counterparts, each of which shall be an original but all of which, when
taken together, shall constitute one and the same instrument.
In WITNESS WHEREOF, the parties hereto have caused this 3rd
Amendment to be duly executed by their respective authorized officers as of
the day and year first above written.
CASTLE & XXXXX, INC.
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and
Chief Financial Officer
By: /s/ XXXX X. XXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxx
Title: Assistant Treasurer
THE CHASE MANHATTAN BANK
(formerly known as Chemical Bank)
By: /s/ XXXX X. XXXXXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
3
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ D. XXXXX XXX
------------------------------
Name: D. Xxxxx Xxx
Title: Vice President
THE BANK OF NOVA SCOTIA,
SAN FRANCISCO AGENCY
By: /s/ XXXXX XXXXXX
------------------------------
Name: Xxxxx Xxxxxx
Title: Relationship Manager
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ XXXX XXXXXXX
------------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Vice
President
BANK OF HAWAII
By: /s/ XXX X. XXXXXXXX
------------------------------
Name: Xxx X. Xxxxxxxx
Title: Vice President
THE FIRST NATIONAL BANK
OF CHICAGO
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
SOCIETE GENERALE
4
By: /s/ XXXXX XXXXXXXX
------------------------------
Name: Xxxxx XxXxxxxx
Title: Vice President
BANKBOSTON, N.A.
By: /s/ XXXXXX XXXXXXXXX
------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director
BANKERS TRUST COMPANY
By: /s/ XXXXXXXXX XXXXXXX
------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Managing Director
5
