ASSIGNMENT OF ACCOUNT
THIS ASSIGNMENT is made this 23rd day of March, 1998, by and between
X. XXXXXX HOMES, INC., a Delaware corporation (the "Assignor") in favor
of the BANK OF HAWAII ("BOH"), a Hawaii corporation.
RECITALS:
A. The Assignor and BOH are parties to that certain unrecorded Master
Facility Agreement (Consolidated and Restructured) dated July 25, 1997 (the
"Master Facility Agreement") under which BOH made available to the Assignor the
following facilities:
1. A revolving construction line of credit (the "Construction LOC")
on a revolving basis up to the principal amount of FOUR MILLION AND NO/100
DOLLARS ($4,000,000.00).
2. A commercial mortgage loan in the original principal amount of
NINE MILLION AND NO/100 DOLLARS ($9,000,000.00) (the "Mauka Land Loan").
3. A revolving working capital line of credit (the "Working Capital
LOC") under which BOH will extend credit to the Assignor from time to time until
the Maturity Date on a revolving basis up to the principal amount of SIX MILLION
AND NO/100 DOLLARS ($6,000,000.00).
4. A commercial mortgage loan in the original principal amount of
THREE MILLION TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($3,200,000.00) (the
"Makai Land Loan").
5. A commercial mortgage loan in the original principal amount of
FOUR MILLION SIX HUNDRED TWENTY THOUSAND AND NO/100 DOLLARS ($4,620,000.00) (the
"Puueo Land Loan").
6. A commercial mortgage loan in the original principal amount of
FOUR MILLION SIX HUNDRED TWENTY-THREE THOUSAND FOUR HUNDRED EIGHT AND NO/100
DOLLARS ($4,623,408.00) (the "Other Land Loan").
B. The Construction LOC, the Mauka Land Loan, the Working Capital LOC,
the Makai Land Loan, the Puueo Land Loan, and the Other Land Loan are
hereinafter collectively referred to as the "Facilities". Unless otherwise
defined in this Assignment, capitalized terms have the same meaning given in the
Master Facility Agreement.
C. Under the terms of Section 3.1 of the Master Facility Agreement, a
Bulk Sale of Property triggers a mandatory reduction in principal equal to one
hundred percent (100%) of the
gross sales proceeds less reasonable closing costs to be applied to the
Facilities in the order specified in the Master Facility Agreement.
D. Under the terms of Section 3.1 of the Master Facility Agreement, a
sale of all or any portion of the Other Parcels triggers a mandatory reduction
in principal equal to one hundred percent (100%) of gross sales proceeds less
reasonable closing costs to be applied to the Facilities in the order specified
in the Master Facility Agreement.
E. The Assignor has entered into the following agreements:
1. Purchase and Sales Agreement and Instructions to Escrow dated
December 15, 1997 (the "Nanea Purchase Agreement") with Xxxxx X. Xxxxxxx, as
buyer for the sale of the 80-lot Nanea subdivision (the "Nanea Parcel"), which
is a portion of the Property.
2. Purchase and Sale Agreement dated September 12, 1997, as amended
by an Amendment to Purchase and Sale Agreement dated February 11, 1998 (the
"Iao II Purchase Agreement") with Xxxxxxxx X. Xxxx Development Corporation, as
buyer for the property commonly known as "Iao II" (the "Iao II Parcel").
F. The Assignor is required to undertake and complete certain
infrastructure improvements to the Nanea Parcel (collectively, the
"Infrastructure Improvements"), which improvements are more particularly
described in the Nanea Purchase Agreement.
G. Under the terms of the Master Facility Agreement, the sale of the
Nanea parcel would be deemed a Bulk Sale of Property while the sale of the Iao
II parcel would be deemed a sale of Other Parcels.
H. Assignor has requested and BOH has agreed to, among other things,
amend the terms of the Master Facility Agreement, subject to and upon the terms
and conditions set forth in that certain unrecorded First Modification to Master
Facility Agreement dated the date hereof (the "First Modification").
I. Pursuant to and as more particularly specified in the First
Modification, a portion of the proceeds from the sale of the Nanea Parcel and
the Iao II Parcel shall be deposited into an account at BOH (the "Account"),
which account shall be under the control of BOH.
NOW, THEREFORE, Assignor agrees as follows:
A. DEPOSIT OF FUNDS. BOH and Assignor agree that certain funds shall be
deposited into the Account by direct payment to BOH from the escrow company
closing the Nanea Purchase Agreement and the Iao II Purchase Agreement in
accordance with the First Modification.
B. ASSIGNMENT. In consideration of BOH's agreement to make the
Assignor's requested modifications contained in the First Modification, and in
order to secure the repayment
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of the Facilities and the performance by Assignor of all covenants, terms and
agreements contained in all documents now or hereafter related to or securing
the Facilities, Assignor hereby grants, assigns, pledges, sets over and
transfers to BOH, its successors and assigns, all of Assignor's right, title and
interest in and to all funds now or hereafter on deposit in the Account,
together with all monies and claims for monies now and hereafter due or payable
thereon or in respect thereof, and together with all interest thereon and
substitutions, proceeds and renewals thereof (the "Collateral").
C. REPRESENTATIONS. Assignor represents to BOH that Assignor will own
the Collateral, that no one other than BOH shall have a security interest in or
other claim to the Collateral and that Assignor does not know of anything that
would make the Collateral uncollectible by BOH.
D. DUTIES AND PROMISES CONCERNING THE COLLATERAL. Assignor agrees that:
1. Assignor will help prepare, and will sign, any documents and do
anything else BOH asks to carry out Assignor's promises and duties under this
Assignment and to protect the security interest of BOH against the claims of
anyone else.
2. Assignor will not, and Assignor will not let anyone else:
a. Sell, assign or transfer the Collateral or any right to it
to anyone else;
b. Let anything happen which will make the Collateral become
subject to any claim or liable to seizure in bankruptcy or otherwise, or which
will impair the interest of BOH in the Collateral.
E. RIGHTS AND REMEDIES. Upon the occurrence of a default under this
Assignment or any document evidencing or securing the Facilities, BOH shall have
the following rights and remedies:
1. At its sole discretion, BOH may apply the Collateral to reduce
the unpaid balance of the Facilities.
2. BOH may substitute itself for Assignor with respect to the
Collateral, in which case BOH may do anything with the Collateral that Assignor
could. BOH can have the Collateral transferred to its name and exercise all
rights to which BOH may be entitled as the owner of the Collateral.
3. BOH shall have all the rights and remedies of a secured party
under the Hawaii Uniform Commercial Code or any other applicable law. All
rights and remedies of BOH will be cumulative.
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4. In order to be able to do what BOH is entitled to do hereunder,
BOH can endorse or assign the Collateral.
F. INDEMNITY. Assignor agrees to indemnify BOH against and hold BOH
harmless from any and all liability, loss or damages, including all costs,
expenses, and reasonable attorneys' fees, which BOH may incur by reason of this
Assignment or any actions taken by BOH pursuant to this Assignment. Should BOH
incur any liability, costs or expenses mentioned in this paragraph, the Assignor
shall immediately upon demand reimburse BOH for the full amount thereof, and BOH
may apply the Collateral in or toward the satisfaction of, or reimbursement for
said loss or damage.
G. EFFECT. This instrument shall be binding upon and inure to the
benefit of the Assignor, BOH and their respective successors and assigns.
H. RELEASE. This Assignment will be released when there are no funds
remaining in the Account pursuant to the disbursement procedures outlined in the
First Modification.
IN WITNESS WHEREOF, the Assignor has executed these presents on the day and
year first above written.
X. XXXXXX HOMES, INC.,
a Delaware corporation
By /s/ Xxxx X. Xxxxx
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XXXX X. XXXXX
Its President and Chief
Executive Officer
By /s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
Its Executive Vice President
and Chief Financial Officer
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