EXHIBIT 10.51
GUARANTY
THIS GUARANTY, made this 5th day of September, 1996, by X. XXXXXX AND
COMPANY, LIMITED, a Hawaii corporation, (the "Guarantor"), to and for the
benefit of BANK OF HAWAII (the "Bank").
WITNESSETH:
WHEREAS, the Bank made available to X. XXXXXX HOMES, INC., a Delaware
corporation, (the "Borrower") two credit facilities described as follows:
(i) a revolving infrastructure construction facility (the "Infrastructure
Facility") in the amount of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00)
evidenced by a revolving note dated August 31, 1995 (the "Infrastructure
Note") and made pursuant to a Revolving Loan Agreement (Infrastructure) dated
August 31, 1995, as amended by First Loan Modification Agreement
(Infrastructure Facility) dated the date hereof (the "Infrastructure Loan
Agreement"); and (ii) a revolving building construction facility (the
"Building Facility") in the amount of TWENTY-FIVE MILLION AND NO/100 DOLLARS
($25,000,000.00) evidenced by a revolving note dated August 31, 1995 (the
"Building Note") made pursuant to a Revolving Loan Agreement (Building) dated
August 31, 1995, as amended by First Loan Modification Agreement (Building
Facility), dated the date hereof (the "Building Loan Agreement"). For
convenience, the Infrastructure Facility and the Building Facility shall, as
the context requires, be referred to individually as a "Facility" and
collectively as the "Facilities", the Infrastructure Note and the Building
Note shall be collectively referred to as the "Notes", and the Infrastructure
Loan Agreement and the Building Loan Agreement shall be collectively referred
to as the "Loan Agreements". Capitalized terms not defined herein, shall have
the meaning given in the Loan Agreement.
WHEREAS, the Borrower has requested, and the Bank has agreed
to amend the terms of the Loan Agreements and other documents evidencing and
securing the Facilities by that certain unrecorded First Loan Modification
Agreement (Infrastructure Facility) and that certain unrecorded First Loan
Modification Agreement (Building Facility) described above (hereinafter,
collectively referred to as the "First Loan Modifications") upon certain
conditions, including the execution of this Guaranty by the Guarantor.
WHEREAS, the First Loan Modifications provide that the Bank will
establish two tranches under each Facility--one tranche for purposes stated in
Section 1.5(a) of the Loan Agreements, (the "Project Tranche") and the other
tranche for borrowings to be used for purposes stated in Section 1.5(b) of the
Loan Agreements (the "Working Capital Tranche").
WHEREAS, the aggregate principal amount at any one time outstanding
under the Working Capital Tranche for the Infrastructure Facility shall not
exceed ONE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00)
and the aggregate principal amount at any one time outstanding under the
Working Capital Tranche for the Building Facility shall not exceed TWO
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS $2,500,00.00); and provided,
further, that the aggregate of the Working Capital
Tranches under both Facilities shall not exceed, at any one time outstanding,
FOUR MILLION AND NO/100 DOLLARS ($4,000,000.00).
WHEREAS, to induce the Bank to agree to the First Loan Modifications
and for other valuable consideration including a mortgage of certain real
property of the Borrower in which the Bank has no interest, the receipt whereof
is hereby acknowledged, the Guarantor has agreed with the Bank to execute this
Guaranty.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Guarantor:
1. Subject to paragraph 17 below, unconditionally and absolutely
guarantees (whether or not the Borrower has initiated or has obtained
dissolution or has initiated bankruptcy proceedings, or has been declared
bankrupt or is insolvent, or is otherwise in default under the Notes and/or any
Loan Documents), the due and punctual payment in lawful money of the United
States of all principal advanced under the Working Capital Tranches, and all
interest and charges on such Working Capital Tranches and all costs of
collection thereof (the "Working Capital Payment Obligations").
2. Subject to paragraph 17 below, waives appraisement and
valuation, diligence, presentment, protest, notice of dishonor, demand for
payment, extensions of time of payment (including multiple extensions for
longer than the original period), notice of acceptance of this Guaranty,
nonpayment at maturity and indulgences and notices of every kind, and
consents to and agrees that the obligations of the Guarantor shall not be
released, impaired or otherwise affected by (a) any and all forbearances and
extensions of the time of payment of the Notes (including multiple extensions
for longer than the original period) or for the Borrower's performance of any
obligation to be performed by the Borrower under the Notes, the Loan
Agreements, the First Mortgage, Security Agreement and Financing Statement
made by Borrower in favor of Bank and dated August 31, 1995 and/or any other
instrument or document given to secure the payment of the Notes
(collectively, the "Loan Documents") or any of them, (b) any and all changes
in the terms, covenants and conditions in the Notes and/or the Loan Documents
or any of them hereafter made or granted, (c) any and all substitutions,
exchanges or releases of all or any part of the security for the Facilities,
(d) waivers of any of the terms, covenants or conditions set forth in any of
the Loan Documents, including this Guaranty, (e) any election or elections by
the Bank to pursue or enforce any particular right or remedy against the
Borrower or another guarantor, or (f) any other cause, whether similar or
dissimilar to the foregoing, it being the intention hereof that the Guarantor
shall remain liable as principal for the payment of all the Working Capital
Payment Obligations until the full amount of the Working Capital Payment
Obligations shall have been fully paid, the Borrower's right to obtain
further advances under the Working Capital Tranches shall have expired or
otherwise been terminated, and all of the terms, covenants, and conditions on
the part of the Borrower to be observed and performed under the Notes and/or
any of the Loan Documents (and only with respect to the Working Capital
Payment Obligations) shall have been fully performed and observed by the
Borrower, notwithstanding any act, omission or thing which might otherwise
operate as a legal or equitable discharge of the Guarantor.
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3. Acknowledges and agrees that all proceeds from the Project and
any other collateral held as security for the Facilities (whether obtained in
the normal course of business or resulting from the exercise by the Bank of its
rights under the Loan Documents) will be applied first to the repayment of
principal, interest and costs due under or with respect to the Project Tranches
of the Facilities, and only if those sums have been fully paid will any of such
proceeds be applied to the Working Capital Payment Obligations.
4. Waives any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy to the rights of the Bank against the Borrower or against any
collateral or security provided to the Bank in the Loan Documents until: (a)
all of the Bank's obligations to disburse loan funds under the Loan Agreements
have expired; (b) all sums owing to the Bank pursuant to the Loan Documents
have been paid in full; and (c) the Bank has released, transferred or disposed
of all of its rights, title and interest in any such collateral or security.
The Bank acknowledges that the foregoing waiver does not apply to the rights of
indemnification or reimbursement under any separate agreement between the
Borrower and the Guarantor in which the Bank has no interest.
5. Agrees that this Guaranty may be enforced by the Bank without
first or concurrently proceeding against the Borrower and without first
resorting to or exhausting any other security or collateral and without first
having recourse to the Notes or to any of the Loan Documents or to any of the
collateral securing the Notes, through foreclosure proceedings or otherwise;
provided, however, that nothing herein contained shall prevent the Bank from
suing on the Notes and/or Loan Documents, with or without making the Guarantor a
party to the suit, or foreclosing on any collateral securing the Facilities or
from exercising any other rights under any Loan Documents, and if such suit,
foreclosure or other remedy is availed of, only the net proceeds therefrom,
after deduction of all charges and expenses of every kind and nature whatsoever,
shall be applied in reduction of the amount due on the Notes and under the Loan
Documents and the Bank shall not be required to institute or prosecute
proceedings to recover any deficiency as a condition of payment hereunder or
enforcement hereof. At any sale of the collateral for the indebtedness or any
part thereof whether by foreclosure or otherwise, the Bank may at Bank's
discretion purchase all or any part of such collateral so sold or offered for
sale for Bank's own account and may apply against the amount bid therefor an
equal amount out of the balance due to Bank pursuant to the terms of the Notes
and/or any Loan Documents.
6. Without limiting the generality of the foregoing, agrees that the
obligation of the Guarantor to make payment in lawful money of the United States
in accordance with the terms of this Guaranty shall not be impaired, modified,
changed, released, or limited in any manner whatsoever by any impairment,
modification, change, release, or limitation of the liability of the Borrower or
Borrower's estate in bankruptcy resulting from the operation of any present or
future provision of the national Bankruptcy Code or other similar statute, or
from the decision of any court.
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7. The Bank may, at any time, apply or set off against the
Guarantor's indebtedness under this Guaranty any deposits or other monies owed
by the Bank to the Guarantor.
8. If claim is ever made upon the Bank for repayment or recovery of
any amount or amounts received by Bank in payment or on account of the Notes or
other guaranteed obligations and Bank repays all or part of such amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over Bank, or (b) any settlement or compromise of any such
claim effected by Bank with any such claimant (including the Borrower), then and
in such event the Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon the Guarantor, notwithstanding
the cancellation of the Notes, and the Guarantor shall be and remain liable
hereunder to the same extent as if the amount so repaid or recovered had never
originally been received by the Bank.
9. Agrees that the rights and remedies of the Bank under this
Guaranty and under the Notes and Loan Documents are cumulative and not
exclusive and may be exercised in whole or in part and in any order and at
any time or times as the Bank shall determine. All security of any kind or
nature received or receivable by the Bank for the repayment of the
indebtedness evidenced by the Notes and Loan Documents may be applied in any
manner or order determined by the Bank.
10. Agrees that the terms of this Guaranty may not be modified or
amended except by a written agreement executed by the Guarantor and the Bank.
11. Agrees that the obligations of the Guarantor under this Guaranty
shall be continuing obligations and that a separate cause of action shall be
deemed to arise in respect of each default under the Notes or any or all of the
Loan Documents and that the Guarantor will from time to time deliver, upon
request of the Bank, satisfactory acknowledgments of the Guarantor's continued
liability hereunder.
12. Agrees that any notice or demand to be given or served under this
Guaranty shall be issued in writing and shall be deemed to have been
sufficiently given or served for all purposes when presented personally, or when
facsimilie confirmation is received or forty-eight (48) hours after deposit in
United States certified mail, postage prepaid, addressed to the Guarantor at the
address set forth opposite such Guarantor's signature below.
13. Assumes full responsibility for keeping fully informed of the
financial condition of the Borrower and all other circumstances affecting the
Borrower's ability to perform Borrower's obligations to the Bank under the Notes
and each and all of the Loan Documents, and agrees that the Bank will have no
duty to report to the Guarantor any information which the Bank receives about
the Borrower's financial condition or any circumstances bearing on Borrower's
ability to perform as aforesaid.
14. Agrees that, if this Guaranty is placed in the hands of attorneys
for enforcement, the Guarantor will reimburse the Bank for all expenses
incurred, including reasonable attorney fees.
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15. Agrees that this Guaranty shall inure to the benefit of and may
be enforced by the Bank and any subsequent holder of the Notes, and shall be
binding upon and enforceable against the Guarantor and its successors and
assigns.
16. Agrees that this Guaranty shall be construed and interpreted in
accordance with the laws of the State of Hawaii.
17. Limitations to Guaranty. Notwithstanding anything to the contrary
contained in this Guaranty or in any of the Loan Documents, the Guarantor's
liability and obligation under this Guaranty shall be limited to the Working
Capital Payment Obligations with respect to principal advanced under the Working
Capital Tranches on or prior to the Working Capital Maturity Date (as defined in
the First Loan Modifications) and shall in no event exceed the aggregate sum of
$4,000,000.00 paid upon and in response to demand made by the Bank to the
Guarantor pursuant to this Guaranty. The Bank agrees to notify the Guarantor of
the Bank's intention to exercise its rights under this Guaranty by May 15, 1997;
otherwise, the Guaranty shall expire unless the Guarantor agrees, in writing, to
an extension. The Guarantor and the Bank agree that the foregoing deadline
applies only to the notification of the Guarantor of the Bank's intention to
exercise its rights under this Guaranty and does not, for example, mean that the
Bank must have obtained funds from, or a judgment against, the Guarantor by such
deadline.
IN WITNESS WHEREOF, the Guarantor has executed this instrument as of
the day and year first above written.
ADDRESS: X. XXXXXX AND COMPANY,
P.O. Box 1826 LIMITED, a Hawaii corporation
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimilie No. (000) 000-0000
By /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Executive Vice President
By /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
Title: VICE PRESIDENT AND SECRETARY
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