SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is dated
September 30, 1998, and, except as otherwise provided herein, effective as
of September 30, 1998, among XXXXXXX HOMES, INC., a Delaware corporation
(the "Borrower"), the banks from time to time party to this Agreement
(collectively referred to as the "Banks", and individually referred to as
a "Bank"), FIRST HAWAIIAN BANK, a Hawaii corporation, as administrative and
co-syndication agent for the Banks (the "Administrative Agent"), and BANK OF
AMERICA NT&SA, a national banking association, as documentation and
co-syndication agent for the Banks (the "Documentation Agent", the
Administrative Agent and the Documentation Agent are collectively referred to
as the "Agents").
WITNESSETH:
WHEREAS, the Borrower, the Banks and the Administrative Agent entered
into that certain Credit Agreement dated as of March 29, 1996 (the "Original
Credit Agreement"), relating to the establishment of a revolving credit facility
in the amount of U.S. ONE HUNDRED TEN MILLION AND NO/100 DOLLARS (U.S.
$110,000,000.00) (the "Credit Facility") made available to the Borrower by the
Banks; and
WHEREAS, in connection therewith, the Borrower, the Banks and the
Administrative Agent executed certain Loan Documents (as defined in the Original
Credit Agreement); and
WHEREAS, the Borrower, the Banks and the Administrative Agent entered
into that certain Supplement No. 1 to Credit Agreement effective as of January
8, 1997 (the "Supplement"), relating to the use of certain proceeds of Advances
(as defined in the Original Credit Agreement) during the Waiver Period (as
defined in the Supplement); and
WHEREAS, the Borrower, the Guarantors, the Banks and the Administrative
Agent entered into that certain Amended and Restated Credit Agreement dated
March 27, 1997 (the "1997 Credit Agreement"), which amended the terms of the
Original Credit Agreement by, among other things, increasing the amount of the
Credit Facility to $137,600,000.00 and extending the Termination Date (as
defined in the Original Credit Agreement) to July 1, 1999; and
WHEREAS, the Borrower, the Guarantors, the Banks and the Agents entered
into that certain Second Amendment to Loan Documents dated April 29, 1998, which
further amended the terms of the 1997 Credit Agreement to permit the Borrower to
issue "Senior Notes" on a PARI PASSU basis with the Credit Facility; and
WHEREAS, the Borrower has requested the Banks and the Agents to further
amend the terms of the Credit Facility to reduce the amount of the Credit
Facility to $90,000,000.00 and to amend other provisions contained in the 1997
Credit Agreement; and
WHEREAS, the Banks and the Agents are willing to comply with such
request, upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the Borrower, the Banks and the Agents hereby
agree to amend and completely restate the 1997 Credit Agreement, as amended, in
its entirety, effective as of the date stated above, as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. In addition to the terms defined elsewhere in
this Agreement, the following terms have the following meanings:
"ADMINISTRATIVE AGENT" means First Hawaiian Bank, in its
capacity as administrative and co-syndication agent for the Banks hereunder, and
any successor agent.
"ADMINISTRATIVE AGENT'S PAYMENT OFFICE" means the address for
payments set forth on the signature page hereto in relation to the
Administrative Agent or such other address as the Administrative Agent may from
time to time specify in accordance with Section 10.02.
"ADVANCE" means a disbursement of loan proceeds in connection
with a Borrowing, as described in Section 2.03, or upon the conversion of a
Swing-Line Advance, as described in Section 2.04, or upon the negotiation of a
Letter of Credit, as described in Section 2.05, pursuant to the terms and
conditions set forth in Article II of this Agreement, and shall consist of Prime
Rate Advances and LIBO Rate Advances.
"AFFECTED BANK" has the meaning specified in Section 3.06.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person
if the controlling Person possesses, directly or indirectly, the power to direct
or cause the direction of the management and policies of the other Person,
whether through the ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing, no Bank shall be deemed an "Affiliate" of the
Borrower or any of its Subsidiaries, nor shall the Borrower or any of its
Subsidiaries be deemed an "Affiliate" of any Bank.
"AGENT-RELATED PERSONS" means with respect to any Agent, such
Agent and any successor agent arising under Section 9.09, together with their
respective Affiliates, and the officers, directors, employees, agents, and
attorneys-in-fact of such Persons and Affiliates.
"AGENTS" means collectively the Administrative Agent and the
Documentation Agent.
"AGGREGATE COMMITMENT" means the combined Revolving Commitments
of the Banks, in the amount of U.S. NINETY MILLION DOLLARS (U.S.
$90,000,000.00), as such amount may be increased and then reduced pursuant to
this Agreement.
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"AGREEMENT" means this Second Amended and Restated Credit
Agreement, as the same may be amended from time to time in accordance with the
terms hereof.
"APPLICABLE MARGIN" means: (i) for any Prime Rate "A" Advance --
0.000%; (ii) for any Prime Rate "B" Advance -- 0.000%; (iii) for any Prime Rate
"C" Advance -- 0.250%; (iv) for any LIBO Rate "A" Advance -- 1.500%; (v) for any
LIBO Rate "B" Advance -- 1.750%; and (vi) for any LIBO Rate "C" Advance --
2.000%.
"AUTHORIZED STATES" means the States of Hawaii, California,
Colorado, Oregon, Utah, and Washington.
"BANK" has the meaning specified in the introductory clause
hereto.
"BASE GRID" means the parameters for the Leverage Ratio and the
Interest Coverage Ratio as set forth in Section 7.02 herein.
"BORROWING" means a borrowing hereunder consisting of Advances
made to the Borrower on the same day by the Banks pursuant to Section 2.03.
"BORROWING BASE" means, at any date, the GAAP consolidated net
book value, including all inventoriable costs as set forth as "Real Estate
Inventories" in the consolidated financial statement of the Borrower and its
Subsidiaries, at such date, of: (i) Unentitled Land x 0%; plus (ii) Unimproved
Land x 65%; plus (iii) Land Under Development x 65%; plus (iv) Unsold Homes
Under Construction x 75%; plus (v) Completed Unsold Homes x 75%; plus (vi)
Completed Unsold Homes Over 180 Days x 0%; plus (vii) Contracted Homes x 90%,
excluding, however, the entirety of any assets from Country Club Village,
unconsolidated Subsidiaries of the Borrower, and joint venture projects, such as
Iao Parkside, which are not consolidated in the Real Estate Inventories. All of
such properties described in (i) through (vii) above must be Unencumbered.
"BORROWING BASE CERTIFICATE" means a certificate described in
Section 6.02(d) of this Agreement.
"BUSINESS DAY" means any day other than a Saturday, Sunday,
United States federal holiday or other day on which commercial banks in
Honolulu, Hawaii, and any other jurisdiction in which any Bank maintains its
Lending Office, are authorized or required by law to close and, if the
applicable Business Day relates to any LIBO Rate Advance, means such a day on
which dealings are carried on in the London Interbank Market.
"BUSINESS PLAN" means that certain plan with budget and cash
flow projections presented by the Borrower and its Subsidiaries to the Banks on
June 29, 1998, as identified and delivered to the Banks prior to the Closing
Date.
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"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"CAPITALIZED INTEREST" means any interest incurred by the
Borrower or any Subsidiary of the Borrower that is added to the assets of the
Borrower on the consolidated balance sheet of the Borrower and expensed in
future periods other than the current applicable period.
"CAPTIVE INSURANCE SUBSIDIARY" means a Subsidiary of the
Borrower which is organized and authorized pursuant to Article 19 of Chapter 431
of the Hawaii Revised Statutes.
"CLOSING DATE" means the date on which all conditions precedent
set forth in Section 4.01 are satisfied or waived by all of the Banks.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder.
"COMMITMENT PERCENTAGE" means, as to any Bank, the percentage
equivalent of such Bank's Revolving Commitment divided by the Aggregate
Commitment. Each Bank's initial Commitment Percentage is set forth opposite
such Bank's name in SCHEDULE 1 attached hereto.
"COMPLETED UNSOLD HOMES" means all condominium units and
one-to-four family residences (including Model Homes) in the Authorized
States owned by the Borrower or its Subsidiaries as part of their respective
real estate development business, for which construction has been "completed"
less than 180 days before such date, but for which there is in existence no
written Contract for Sale. Construction will be considered "completed" for a
condominium unit when the temporary certificate of occupancy for such unit
has been issued; construction will be considered "completed" for a
one-to-four family residence when all electrical and plumbing fixtures have
been installed and utility services in connection therewith have been
connected. Notwithstanding the foregoing, Model Homes will continue to be
considered Completed Unsold Homes until the date which is 180 days after the
last production unit in the particular real estate project (for which such
Model Home is used as a model) has been sold.
"COMPLETED UNSOLD HOMES OVER 180 DAYS" means Completed Unsold
Homes which have been completed 180 days or more before such date.
Notwithstanding the foregoing, Model Homes will not be considered Completed
Unsold Homes Over 180 Days until the date which is 180 days after the last
production unit in the particular real estate project (for which such Model Home
is used as a model) has been sold.
"CONSOLIDATED NET EARNINGS" means consolidated gross revenues of
the Borrower and its Subsidiaries less all operating and non-operating expenses
of the Borrower and its Subsidiaries (including current and deferred taxes on
income, provision for taxes on unremitted foreign earnings which are included in
gross revenues, current additions to reserves, and other similar charges); all
determined in accordance with GAAP.
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"CONSOLIDATED TANGIBLE NET WORTH" means the Tangible Net Worth
of the Borrower and its Subsidiaries, determined, on a consolidated basis, in
accordance with GAAP.
"CONTINUATION DATE" means the effective date, at the end of an
Interest Period, on which a LIBO Rate Advance shall be continued as a LIBO Rate
Advance, as provided in Section 2.06(a)(iii).
"CONTRACT FOR SALE" means a sale and purchase agreement between
the Borrower or its Subsidiaries and an unrelated third party purchaser, who has
made an xxxxxxx money deposit of not less than $250.00 and who has been
pre-qualified by the Borrower, its Subsidiaries or an institutional lender;
PROVIDED, that such agreement shall not contain any contingency clause,
conditioning such purchaser's obligation upon the sale of such purchaser's
property.
"CONTRACTED HOMES" means all condominium units and one-to-four
family residences (including Model Homes) in the Authorized States owned by the
Borrower or its Subsidiaries as part of their respective real estate development
business, on which a building permit has been issued and construction has begun,
and for which the Borrower or its Subsidiaries has entered into a written
Contract for Sale.
"CONTROLLED GROUP" means the Borrower, its Subsidiaries and all
Persons (whether or not incorporated) under common control or treated as a
single employer with the Borrower and its Subsidiaries pursuant to Section
414(b), (c), (m) or (o) of the Code.
"CONVERSION DATE" means the effective date on which a Prime Rate
Advance shall be converted into one or more LIBO Rate Advances, or on which one
or more LIBO Rate Advances shall be converted into a Prime Rate Advance, as
provided in Section 2.06(a)(i) or 2.06(a)(ii).
"COUNTRY CLUB VILLAGE" means the Country Club Village
condominium project, Phases I through VI, located in Salt Lake, Oahu, Hawaii,
which is being developed, or which is to be developed, by the Borrower.
"COUNTRY CLUB VILLAGE SUBORDINATE MORTGAGE" means the
Subordinate Mortgage, Security Agreement and Financing Statement dated February
9, 1993, filed in the Office of the Assistant Registrar of the Land Court of the
State of Hawaii as Document No. 1996140, as amended by Amended and Restated
Subordinate Mortgage, Security Agreement and Financing Statement dated April 7,
1994, filed in said Office as Document No. 2149634, in favor of HCI (America)
Inc., which encumbers Lots 3878 and 3879 in Country Club Village.
"DEFAULT" means any event or circumstance which, with the giving
of notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"DEVELOPMENT RATIO" means Real Estate Development Assets divided
by Real Estate Indebtedness.
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"DOCUMENTATION AGENT" means Bank of America NT&SA, in its
capacity as documentation and co-syndication agent for the Banks hereunder, and
any successor agent.
"ENTITLED LAND" means all land in the Authorized States owned by
the Borrower or its Subsidiaries as part of their respective real estate
development business, which does have residential zoning and the provision of
potable water, sewage and other utilities available to the boundary of such
land.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated thereunder.
"EQUITY OFFERING" means the raising of capital by the Borrower
or any Subsidiary of the Borrower through a public or private issuance and sale
of stock of such entity not previously offered for sale.
"EVENT OF DEFAULT" means any of the events or circumstances
specified in Section 8.01.
"FEDERAL FUNDS RATE" means, for any period, the rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate". If
on any relevant day the appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean as determined by the Administrative
Agent of the rates for the last transaction in overnight Federal Funds arranged
prior to 9:00 a.m. (New York time) on that day by each of three leading brokers
of Federal Funds transactions in New York selected by the Administrative Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the
Federal Reserve System, or any entity succeeding to any of its principal
functions.
"FORM 1001" has the meaning specified in subsection 3.01(f).
"FORM 4224" has the meaning specified in subsection 3.01(f).
"GAAP" means generally accepted accounting principles set forth
from time to time in statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
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"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTOR" or "GUARANTORS" means, singularly or collectively,
XXXXXXX HOMES OF CALIFORNIA, INC., a California corporation, XXXXXXX HOMES OF
OREGON, INC., an Oregon corporation, XXXXXXX HOMES OF WASHINGTON, INC., a
Washington corporation, MELODY HOMES, INC., a Delaware corporation, XXXXXXX
REALTY/MAUI, INC., a Hawaii corporation, XXXXXXX REALTY/OAHU, INC., a Hawaii
corporation, LOKELANI CONSTRUCTION CORPORATION, a Delaware corporation, MELODY
MORTGAGE CO., a Colorado corporation, SHLR OF WASHINGTON, INC., a Washington
corporation, SHLR OF UTAH, INC., a Utah corporation and SHLR OF COLORADO, INC.,
a Colorado corporation.
"GUARANTY" means an agreement or agreements in form and
substance satisfactory to the Banks and the Agents, duly executed by the
Guarantors, jointly and severally guaranteeing the due and punctual payment of
the Note, and the observance and performance of the Borrower's obligations under
the Loan Documents.
"GUARANTY OBLIGATION" means, as applied to any Person, any
direct or indirect liability of that Person with respect to any Indebtedness,
lease, dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person, whether or not contingent (a) to purchase, repurchase
or otherwise acquire such primary obligations or any property constituting
direct or indirect security therefor, or (b) to advance or provide funds (i) for
the payment or discharge of any such primary obligation, or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income or
financial condition of the primary obligor, or (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (d) otherwise to assure or hold harmless the holder
of any such primary obligation against loss in respect thereof; in each case
(a), (b), (c) or (d), including arrangements wherein the rights and remedies of
the holder of the primary obligation are limited to repossession or sale of
certain property of such Person. The amount of any Guaranty Obligation shall be
deemed equal to the stated or determinable amount of the primary obligation in
respect of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof.
Notwithstanding the foregoing, if the primary obligor is a Subsidiary of the
Borrower, the term "Guaranty Obligation" shall not include any direct or
indirect liability of the Borrower with respect to any primary obligation of
such Subsidiary, which the Borrower itself would not otherwise be prohibited
from assuming or limited in undertaking, pursuant to the terms of this
Agreement.
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"IAO PARKSIDE" means the 480-unit low-rise condominium project
being developed by Iao Partners on 28 acres of land located in Wailuku, Hawaii.
"IAO PARTNERS" means the joint venture, registered as a Hawaii
general partnership, formed by and between the Borrower (with a 50% general
partnership interest) and X. Xxxxxx Homes, Inc. (with a 50% general partnership
interest).
"INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness for borrowed money (including Subordinated Debt); (b) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than accounts payable and accrued expenses as set
forth in the consolidated financial statements of the Borrower and its
Subsidiaries entered into in the ordinary course of business pursuant to
ordinary terms); (c) all non-contingent reimbursement or payment obligations
with respect to Surety Instruments; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses;
(e) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to property acquired by such Person (even though the rights and remedies of the
seller under such agreement in the event of default are limited to repossession
or sale of such property); (f) all capital lease obligations; (g) all net
obligations with respect to Rate Contracts; and (h) all indebtedness referred to
in clauses (a) through (g) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any lien upon or in property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, but does not include any indebtedness referred to
in clauses (a) through (g) above incurred by a Person as a joint venture partner
of any Joint Venture, or such indebtedness owed by one member of the Borrower's
consolidated group to another member of such consolidated group.
"INDEMNIFIED PERSON" has the meaning specified in Section 10.05.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section
10.05.
"INSOLVENCY PROCEEDINGS" means, in respect of any Person (a) any
case, action or proceeding before any court or other Governmental Authority
relating to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general assignment for
the benefit of creditors, composition, marshalling of assets for creditors, or
other similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; in each case (a) and (b) undertaken under
U.S. Federal, State or foreign law, including the Bankruptcy Code (11 U.S.C.
Section 101, ET SEQ.).
"INTER-BANK AGREEMENT" means an agreement executed by and among
the Administrative Agent, as administrative and co-syndication agent for the
Banks, the Agent as documentation and co-syndication agent for the Banks, and
the Banks, which shall supplement the provisions of Article IX hereof, relative
to the administration of the credit facility established by this Agreement.
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"INTEREST COVERAGE RATIO" means, with respect to the Borrower
and its Subsidiaries, consolidated earnings before impairment loss recognized
pursuant to Financial Accounting Standards Board Statement No. 121, interest
expense (including Capitalized Interest expensed during the applicable period),
depreciation, taxes and amortization, divided by total consolidated interest
incurred.
"INTEREST PAYMENT DATE" means, with respect to any Prime Rate
Advance, the first day of each calendar month; with respect any LIBO Rate
Advance having an Interest Period of one month, the last day of the Interest
Period applicable to such Advance; and, with respect to any other LIBO Rate
Advance, the first day of each calendar month, AND the last day of each Interest
Period applicable to such Advance.
"INTEREST PERIOD" means, with respect to any LIBO Rate Advance,
the period commencing on the Business Day such LIBO Rate Advance is disbursed or
continued or on the Conversion Date on which a Prime Rate Advance is converted
to a LIBO Rate Advance and ending on the date one (1), two (2), three (3) or six
(6) months thereafter, as selected by the Borrower, in its Notice of Borrowing
or Notice of Conversion/Continuation;
PROVIDED THAT:
(i) if any Interest Period pertaining to a LIBO Rate
Advance would otherwise end on a day which is not a Business
Day, that Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period pertaining to a LIBO Rate
Advance that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall
end on the last Business Day of the calendar month at the end of
such Interest Period; and
(iii) no Interest Period shall extend beyond the
Termination Date.
"ISSUANCE" means the issuance of a Letter of Credit hereunder at
the request of the Borrower and for the account of the Borrower or its
Subsidiaries, pursuant to Section 2.05.
"ISSUING BANK" means any Bank or any Affiliate of any Bank,
other than the Administrative Agent, which issues a Letter of Credit hereunder
at the request of the Borrower and for the account of the Borrower or its
Subsidiaries, in accordance with a requirement by the beneficiary of such Letter
of Credit, and pursuant to Section 2.05.
"JOINT VENTURE" means a general partnership, duly registered and
validly existing under the laws of any of the Authorized States, which is formed
for the purpose of developing one or more specific real estate projects.
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"KULALEI PROPERTY" means 193 improved subdivided lots in the Ewa
by Xxxxxx development in Ewa, Oahu, Hawaii.
"LAND UNDER DEVELOPMENT" means all land in the Authorized States
owned by the Borrower or its Subsidiaries as part of their respective real
estate development business, on which grading or construction of on-site
infrastructure improvements has begun, and for which all necessary zoning and
large-lot subdivision approvals have been obtained and are in full force and
effect, but for which construction of the residential improvements thereon has
not begun.
"LENDING OFFICE" means, with respect to any Bank, the office or
offices of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "LIBO Lending Office", as the case may be, opposite its name on the
applicable signature page hereto, or such other office or offices of such Bank
as it may from time to time notify the Borrower and the Administrative Agent.
"LETTERS OF CREDIT" means standby letters of credit issued by
the Administrative Agent or the Issuing Bank, at the request of the Borrower and
for the account of the Borrower or its Subsidiaries, pursuant to the terms and
conditions set forth in Article II of this Agreement.
"LEVERAGE RATIO" means total Indebtedness of the Borrower and
its Subsidiaries, on a consolidated basis, including all Quantifiable Contingent
Liabilities, but not including all accounts payables and accrued expenses as set
forth in the consolidated financial statements of the Borrower and its
Subsidiaries entered into in the ordinary course of business pursuant to
ordinary terms; divided by Consolidated Tangible Net Worth. The initial
Leverage Ratio will be determined by the Banks at the Closing Date and such
determination shall be effective for the next Quarter following the Closing
Date; thereafter, the Leverage Ratio for each succeeding Quarter will be
determined as of the end of the preceding Quarter (such determination to be made
no later than seventy-five (75) days after the end of such preceding Quarter,
based upon the Leverage Ratio Certificate provided to the Administrative Agent
by the Borrower, pursuant to Section 6.02(e) of this Agreement, and verified by
the Administrative Agent to its satisfaction). The Administrative Agent shall
promptly notify the Borrower, and each Bank of each determination of the
Leverage Ratio. Any determination of the Leverage Ratio shall be conclusively
deemed to be correct unless objected to by the Borrower, or the Majority Banks
within five (5) Business Days after receipt of such notification.
"LEVERAGE RATIO/INTEREST COVERAGE RATIO/BASE GRID CERTIFICATE"
means a certificate more particularly described in Section 6.02(e) of this
Agreement.
"LEVERAGE RATIO (1997)" means total Indebtedness of the Borrower
and its Subsidiaries, on a consolidated basis, including all accounts payables
and accrued expenses as set forth in the consolidated financial statements of
the Borrower and its Subsidiaries entered into in the ordinary course of
business pursuant to ordinary terms and all Quantifiable Contingent Liabilities,
divided by Consolidated Tangible Net Worth.
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"LIBO RATE" means, for each Interest Period in respect of LIBO
Rate Advances comprising part of the same Borrowing, either (i) the rate of
interest per annum (rounded upward to the nearest 1/16th of 1%) equal to the
rate for deposits in U.S. dollars with a maturity approximately equal to such
Interest Period which appears on the Telerate Screen LIBO Page (or such other
display page on the Telerate System as may replace such page) as of 11:00 a.m.
(London time) on the day that is two (2) Business Days prior to the day on which
the applicable Interest Period is to begin, or (ii) if no such rate of interest
appears on the Telerate Screen LIBO Page for such specified Interest Period, the
rate of interest per annum equal to the rate for deposits in U.S. Dollars with a
maturity occurring immediately before or immediately after such specified
Interest Period, whichever is higher, as determined by the Administrative Agent
from the Telerate Screen LIBO Page (or such other display page on the Telerate
System as may replace such page) at approximately 11:00 a.m. (London time) on
the day that is two (2) Business Days prior to the day on which the applicable
Interest Period is to begin. Any LIBO Rate determined on the basis of the rate
displayed on the Telerate Screen LIBO Page in accordance with the foregoing
provisions of this paragraph shall be subject to corrections, if any, made in
such rate and displayed by the Telerate System within one hour of the time when
such rate is first displayed by such service.
"LIBO RATE "A" ADVANCE" means any outstanding LIBO Rate Advance
during a time when the Leverage Ratio and the Interest Coverage Ratio then in
effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is less than 1.35 to 1 and the Interest
Coverage Ratio is greater than 2.00 to 1; or
(ii) the Leverage Ratio is less than 1.50 to 1 and the Interest
Coverage Ratio is greater than 2.50 to 1.
"LIBO RATE "B" ADVANCE" means any outstanding LIBO Rate Advance
during a time when the Leverage Ratio and the Interest Coverage Ratio then in
effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is less than or equal to 1.35 to 1 and
the Interest Coverage Ratio is greater than or equal to 1.75 to 1, but less than
2.00 to 1; or
(ii) the Leverage Ratio is less than or equal to 1.50 to 1 and
the Interest Coverage Ratio is greater than or equal to 2.00 to 1, but less than
2.50 to 1; or
(iii) the Leverage Ratio is less than or equal to 1.60 to 1 and
the Interest Coverage Ratio is greater than or equal to 2.50 to 1.
"LIBO RATE "C" ADVANCE" means any outstanding LIBO Rate Advance
during a time when the Leverage Ratio and the Interest Coverage Ratio then in
effect (computed on a Quarterly basis in advance) are as follows:
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(i) the Leverage Ratio is greater than 1.35 to 1, but less
than or equal to 1.50 to 1, and the Interest Coverage Ratio is greater than or
equal to 1.75 to 1, but less than 2.00 to 1; or
(ii) the Leverage Ratio is greater than 1.50 to 1, but less
than or equal to 1.60 to 1, and the Interest Coverage Ratio is greater than or
equal to 2.00 to 1, but less than 2.50 to 1.
"LIBO RATE ADVANCE" means an Advance that bears interest based
on the LIBO Rate.
"LOAN DOCUMENTS" means this Agreement, the Note, the Guaranty,
and all documents delivered to the Administrative Agent in connection herewith
or therewith.
"MAJORITY BANKS" means at any time Banks then holding 75% or
more of the Aggregate Commitment.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means (a) a material impairment of the
ability of the Borrower or its Subsidiaries on a consolidated basis to perform
under any Loan Document and avoid any Event of Default; or (b) a material
adverse effect upon the legality, validity, binding effect or enforceability of
any Loan Document.
"MODEL HOMES" means all condominium units and one-to-four family
residences in the Authorized States owned by the Borrower or its Subsidiaries as
part of their respective real estate development business, which are used as
models or sales offices to market a particular real estate development project.
"MULTI-EMPLOYER PLAN" means a "multi-employer plan" (within the
meaning of Section 4001(a)(3) of ERISA) to which any member of the Controlled
Group makes, is making, or is obligated to make, contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"NOTE" means the promissory note, as amended and restated, and
dated the date of this Agreement, executed by the Borrower in favor of the
Administrative Agent (as agent for the Banks), evidencing the Borrower's
agreement to repay all amounts outstanding under the Aggregate Commitment,
together with all interest thereon, as provided therein.
"NOTICE OF BORROWING" means a notice given by the Borrower, to
the Administrative Agent pursuant to Section 2.03, in substantially the form of
EXHIBIT A-1.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the
Borrower, to the Administrative Agent pursuant to Section 2.06, in substantially
the form of EXHIBIT B.
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"NOTICE OF SWING-LINE BORROWING" means a notice given by the
Borrower, to the Administrative Agent pursuant to Section 2.04, in substantially
the form of EXHIBIT A-2.
"OBLIGATIONS" means all Advances, Swing-Line Advances and other
Indebtedness, loans, debts, fees, charges, liabilities, obligations, covenants
and duties owing by the Borrower to any Bank, the Administrative Agent, or any
other Person required to be indemnified, that arises under this Agreement or any
Loan Document, whether or not for the payment of money, whether arising by
reason of an extension of credit, loan, guaranty, indemnification or in any
other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due now existing or
hereafter arising and however acquired.
"OTHER TAXES" has the meaning specified in subsection 3.01(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any of its principal functions under ERISA.
"PARTICIPANT" has the meaning specified in subsection 10.08(a).
"PERMITTED INDEBTEDNESS" means:
(i) the Country Club Village Subordinate Mortgage;
(ii) the existing Indebtedness and obligations of the
Borrower as a joint venture partner in Iao Partners (including
any Indebtedness of Iao Partners for which there is recourse to
the Borrower); PROVIDED, HOWEVER, that the Borrower shall be
permitted, after March 31, 1997, (A) to incur additional
Indebtedness as a joint venture partner of Iao Partners, (B) to
make additional net investments in Iao Partners, and (C) to make
additional net advances to Iao Partners, in amounts which shall
not exceed $5,000,000.00, in the aggregate, for all such
indebtedness, investments and advances described in (A), (B) and
(C) above;
(iii) the existing Subordinated Debt of the Borrower
(including the Borrower's existing subordinated convertible
debentures) in the amount of $57,500,000.00;
(iv) Indebtedness, not to exceed $10,000,000 in the
aggregate, created or arising under a conditional sale or other
title retention agreement, or incurred as purchase money
financing, with respect to property acquired by the Borrower or
any of its Subsidiaries; provided that the rights and remedies
of the seller under such agreement in the event of default are
limited to repossession or sale of such property;
(v) Indebtedness to the extent incurred upon the
indorsement of an instrument in order to negotiate the same, and
for taxes, assessments, governmental
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charges, or levies to the extent that payment thereof shall not at
the time be required to be made;
(vi) Indebtedness and Guaranty Obligations (except for
indemnification of sureties issuing bonds in connection with the
Borrower's or any of its Subsidiaries' real estate development
businesses), not to exceed $10,000,000 in the aggregate, incurred in
the ordinary course of the Borrower's and its Subsidiaries' real
estate development businesses;
(vii) Premium Payments;
(viii) Guaranty Obligations (a) incurred in respect of
indemnification of sureties for the issuance of bonds in connection
with the Borrower's or any of its Subsidiaries' real estate
development businesses and (b) associated with the acquisition of
Melody Homes, Inc. and Melody Mortgage Co. by the Borrower;
(ix) the Senior Notes and any guaranties thereof by any
Guarantor;
(x) the Guaranty; and
(xi) Indebtedness in respect of the Aggregate Commitment
hereunder.
"PERMITTED INVESTMENT" means
(a) the creation of or investment in a wholly-owned
Subsidiary of the Borrower which is used exclusively as an exchange
vehicle to facilitate a like-kind exchange under Section 1031 of the
Code;
(b) loan receivables from sales incentive programs, not to
exceed $10,000,000.00;
(c) any one of the following dollar denominated investments,
maturing within one year from the date of acquisition, selected by
the Borrower:
(i) marketable direct obligations issued or
unconditionally guaranteed by the United States government or
issued by any agency thereof and backed by the full faith and
credit of the United States;
(ii) marketable direct obligations issued by any
state of the United States or any political subdivision of
any such state or any public instrumentality thereof and, at
the time of acquisition, having the highest credit rating
obtainable from either Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc. ("S&P") or Xxxxx'x Investors
Service, Inc. ("Moody's");
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(iii) commercial paper or corporate promissory
notes bearing at the time of acquisition the highest
credit rating either of S&P or Moody's issued by United
States, Australian, Canadian, European or Japanese bank
holding companies or industrial or financial companies
(other than an Affiliate of the Borrower);
(iv) certificates of deposit issued by and
bankers acceptances of and interest bearing deposits
with any Bank, or any commercial bank having capital and
surplus of at least $500,000,000 or the equivalent and
which issues (or the parent of which issues) commercial
paper or other short term securities bearing the highest
credit rating obtainable from either S&P or Moody's; and
(v) money market funds organized under the
laws of the United States or any state thereof that
invest solely in any of the foregoing investments
permitted under clauses (i), (ii), (iii) and (iv);
(d) the acquisition of the remaining 51% interest in SSHI LLC, a
Delaware limited liability company ("Xxxxxxxx"), pursuant to the terms
of that certain Interest Purchase Agreement dated as of July 31, 1997,
entered into by and among SSHI LLC, Xxxxx Xxxxxxxx, Xxxxxxxx
Construction, Inc., the Borrower and SHLR of Washington, Inc.. Upon the
acquisition of the majority ownership interest in Xxxxxxxx by the
Borrower, (i) Xxxxxxxx shall be considered a Subsidiary of the Borrower
and shall be subject to the provisions of Section 6.12 herein, (ii) the
Unencumbered real estate assets of Xxxxxxxx may be included in the
determination of the Borrowing Base, and (iii) the Borrower shall be
permitted to make additional investments in Stafford for the purpose of
repaying Xxxxxxxx'x existing indebtedness and fund the ongoing
operations of Xxxxxxxx;
(e) a $1,000,000 non-recourse capital investment in the Ranch at
South Pointe, LLC, through SHLR of Colorado, Inc.; and
(f) the investment (including advances and guaranties) in
unconsolidated Subsidiaries of the Borrower or joint ventures (in which
the Borrower is a joint venture partner) which are involved in home
building in the principal markets of the Borrower or its Subsidiaries,
provided such investment shall not exceed $10,000,000 in the aggregate
subsequent to December 31, 1997.
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture or
Governmental Authority.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower, any of its Subsidiaries or any member of the
Controlled Group sponsors or maintains or to which the Borrower, any of its
Subsidiaries or any member of the Controlled Group makes, is making or is
obligated to make contributions.
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"PREMIUM PAYMENTS" means (i) payments that are to be made by
the Borrower to Amfac Property Development Corp., if the average sales price
for or number of homes built by the Borrower on parcels of land in the
Waikele master-planned community exceeds the applicable amount set forth in
the purchase agreement between the Borrower and Amfac Property Development
Corp. for such parcels; (ii) payments that are to be made by the Borrower to
Xxxxxx Homes, Ltd., if the Borrower sells certain homes located on the
Kulalei Property at a premium over the price of certain other homes located
elsewhere at the Kulalei Property, pursuant to that certain Amended and
Restated Purchase and Sale Agreement dated November 20, 1995; and (iii)
payments that are to be made by the Borrower to HCI (America) Inc., in the
event the Borrower constructs more than 580 units in Country Club Village.
"PRIME RATE" means, for any day, the lending rate of interest
announced publicly from time to time by First Hawaiian Bank as its "prime
interest rate", which rate shall not necessarily be the best or lowest rate
charged by First Hawaiian Bank from time to time. Any change in the prime
interest rate announced by First Hawaiian Bank shall take effect at the opening
of business on the day specified in the public announcement of such change.
"PRIME RATE "A" ADVANCE" means any outstanding Prime Rate
Advance during a time when the Leverage Ratio and the Interest Coverage Ratio
then in effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is less than 1.35 to 1 and the Interest
Coverage Ratio is greater than 2.00 to 1; or
(ii) the Leverage Ratio is less than 1.50 to 1 and the Interest
Coverage Ratio is greater than 2.50 to 1.
"PRIME RATE "B" ADVANCE" means any outstanding Prime Rate
Advance during a time when the Leverage Ratio and the Interest Coverage Ratio
then in effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is less than or equal to 1.35 to 1 and
the Interest Coverage Ratio is greater than or equal to 1.75 to 1, but less than
2.00 to 1; or
(ii) the Leverage Ratio is less than or equal to 1.50 to 1 and
the Interest Coverage Ratio is greater than or equal to 2.00 to 1, but less than
2.50 to 1; or
(iii) the Leverage Ratio is less than or equal to 1.60 to 1 and
the Interest Coverage Ratio is greater than or equal to 2.50 to 1.
"PRIME RATE "C" ADVANCE" means any outstanding Prime Rate
Advance during a time when the Leverage Ratio and the Interest Coverage Ratio
then in effect (computed on a Quarterly basis in advance) are as follows:
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(i) the Leverage Ratio is greater than 1.35 to 1, but less
than or equal to 1.50 to 1, and the Interest Coverage Ratio is greater than or
equal to 1.75 to 1, but less than 2.00 to 1; or
(ii) the Leverage Ratio is greater than 1.50 to 1, but less
than or equal to 1.60 to 1, and the Interest Coverage Ratio is greater than or
equal to 2.00 to 1, but less than 2.50 to 1.
"PRIME RATE ADVANCE" means an Advance or a Swing-Line Advance
that bears interest based on the Prime Rate.
"QUANTIFIABLE CONTINGENT LIABILITIES" means, with respect to the
Borrower and its Subsidiaries, an estimated loss from a loss contingency
recognized pursuant to Financial Accounting Standards Board Statement No. 5.
"QUARTER" means any one of the following three-calendar-month
periods in any calendar year: April 1 through June 30; July 1 through September
30; October 1 through December 31; and January 1 through March 31.
"RATE CONTRACTS" means swap agreements (as such term is defined
in Section 101 of the Bankruptcy Code (11 U.S.C. Section 101 ET SEQ.) and any
other agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.
"REAL ESTATE DEVELOPMENT ASSETS" means, at any date, the GAAP
consolidated book value of inventories, at such date, as set forth as "Real
Estate Inventories" in the consolidated financial statements of the Borrower and
its Subsidiaries, including Unentitled Land, Unimproved Land, Land Under
Development, Unsold Homes Under Construction, Completed Unsold Homes, Completed
Unsold Homes Over 180 Days, and Contracted Homes.
"REAL ESTATE INDEBTEDNESS" means the total amount of: (1) the
Aggregate Commitment; (2) the existing Subordinated Debt of the Borrower
(including the Borrower's existing subordinated convertible debentures) in the
amount of $57,500,000.00; (3) the Senior Notes; and (4) other indebtedness, as
may be permitted by the Banks, in connection with the development of any Real
Estate Development Assets.
"REPORTABLE EVENT" means, as to any Plan, (a) any of the events
set forth in Section 4043(b) of ERISA or the regulations thereunder, other than
any such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC, (b) a withdrawal from a Plan described
in Section 4063 of ERISA, or (c) a cessation of operations described in Section
4062(e) of ERISA.
"REQUEST FOR ISSUANCE OF LETTER OF CREDIT" means a notice given
by the Borrower, to the Administrative Agent pursuant to Section 2.05, in
substantially the form of EXHIBIT C.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each
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case applicable to or binding upon the Person or any of its property or to which
the Person or any of its property is subject.
"RESPONSIBLE OFFICER" of the Borrower or any of its Subsidiaries
means the chief executive officer, the president, or the chief financial officer
of the Borrower or such Subsidiary, or any other officer having substantially
the same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer, the controller, or the
treasurer of the Borrower, or any other officer having substantially the same
authority and responsibility.
"REVOLVING COMMITMENT", with respect to each Bank, has the
meaning specified in Section 2.01.
"SENIOR NOTES" means the 9% Senior Notes maturing 2008, in the
principal amount of US$100,000,000 issued by the Borrower pursuant to that
certain Prospectus dated July 7, 1998.
"SOLVENT" means, as to any Person at any time, that (a) the fair
value of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code (11 U.S.C. Section 101 ET SEQ.) and, in the
alternative, for purposes of the Hawaii Uniform Fraudulent Transfer Act; (b) the
present fair saleable value of the property of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured; (c) such Person is able to realize
upon its property and pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof; but
does not include a Joint Venture.
"SUBORDINATED DEBT" means Indebtedness of the Borrower or its
Subsidiaries (including subordinated debentures and subordinated convertible
debentures) to another lender or creditor who has expressly agreed by virtue of
documents or instruments acceptable to the Majority Banks, that the Indebtedness
of such entity to such lender or creditor is subordinated to the Obligations of
the Borrower hereunder, and that such lender or creditor will not demand or
assert payment of any portion of such lender's or creditor's Indebtedness until
the Obligations of the Borrower hereunder have been paid in full.
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"SURETY INSTRUMENTS" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"SWING-LINE ADVANCE" means a disbursement of loan proceeds in
connection with a Swing-Line Borrowing, pursuant to the terms and conditions set
forth in Article II of this Agreement, and shall consist of Prime Rate Advances
only.
"SWING-LINE BORROWING" means a borrowing hereunder consisting of
Swing-Line Advances made to the Borrower on the same day by the Administrative
Agent pursuant to Section 2.04.
"TANGIBLE NET WORTH" of a Person means such Person's total
assets (exclusive of goodwill, patents, trademarks, trade names, organization
expense, treasury shares, unamortized debt discount and premium, and other like
intangibles), less all liabilities (including accrued and deferred income taxes
and subordinated liabilities).
"TAXES" has the meaning specified in subsection 3.01(a).
"TERMINATION DATE" means July 1, 2001, unless extended by the
Banks pursuant to subsection 2.09.
"UNENCUMBERED" when used to describe real property owned by the
Borrower or any of its Subsidiaries, means property which is not subject to any
lien, whether the same is recorded, unrecorded, springing, resulting from a
court judgment or arbitration award, or otherwise; PROVIDED, (i) that the filing
of an application for mechanic's or materialman's lien on such real property
under Chapter 507, Hawaii Revised Statutes, or such similar statutes under the
laws of the other Authorized States, shall not prevent such property from being
Unencumbered, as long as the Borrower or its Subsidiaries are diligently
defending or causing another party in interest to defend such application; (ii)
that the attachment of any such lien to any such property shall not prevent such
property from being Unencumbered, as long as the Borrower or its Subsidiaries
have filed a bond, sufficient to discharge such lien, with the clerk of the
applicable court, as provided in Section 507-43, Hawaii Revised Statutes, or
such similar statutes under the laws of the other Authorized States; and (iii)
that the recording of any lien by the obligee of any Premium Payment against
property for which a Premium Payment is required and has not been paid, shall
not prevent such property from being Unencumbered, as long as the Borrower or
its Subsidiaries have filed a bond, in form and substance satisfactory to the
Majority Banks, in an amount equal to no less than 125% of the claimed amount of
the lien.
"UNENTITLED LAND" means all land in the Authorized States owned
by the Borrower or its Subsidiaries as part of their respective real estate
development business, that does not have residential zoning, or that does have
residential zoning but does not have the provision of potable water, sewage, or
other utilities available to the boundary of such land.
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"UNFUNDED PENSION LIABILITIES" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used by
that Plan's actuaries for funding that Plan pursuant to Section 412 of the Code
for the applicable plan year.
"UNIMPROVED LAND" means all Entitled Land in the Authorized
States owned by the Borrower or its Subsidiaries as part of their respective
real estate development business, on which no construction of on-site
infrastructure improvements has begun.
"UNSOLD HOMES UNDER CONSTRUCTION" means all condominium units
and one-to-four family residences (including Model Homes) in the Authorized
States owned by the Borrower or its Subsidiaries as part of their respective
real estate development business, for which building permits have been issued
and construction has commenced (and not been abandoned), but not completed, and
for which there is no written contract of sale with an unrelated third party
purchaser. Construction will be considered to have "commenced" when the slab or
foundation for the condominium building or one-to-four family residence has been
completed.
1.02 OTHER INTERPRETIVE PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto. The meaning of defined terms shall be equally applicable to the
singular and plural forms of the defined terms. Terms (including uncapitalized
terms) not otherwise defined herein and that are defined in the Uniform
Commercial Code of Hawaii shall have the meanings therein described.
(b) THE AGREEMENT. The words "hereof", "herein",
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, section, schedule and exhibit references are to this
Agreement unless otherwise specified.
(c) CERTAIN COMMON TERMS.
(i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(d) PERFORMANCE; TIME. Whenever any performance obligation
hereunder (other than a payment obligation) shall be stated to be due or
required to be satisfied on a day other than a Business Day, such performance
shall be made or satisfied on the next succeeding Business Day. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until" each mean
"to but excluding", and the word "through" means "to and including." If any
provision of this Agreement
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refers to any action taken or to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be interpreted to encompass any
and all means, direct or indirect, of taking, or not taking. such action.
(e) CONTRACTS. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) LAWS. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or regulation.
(g) CAPTIONS. The captions and headings of this Agreement
are for convenience of reference only and shall not affect the interpretation of
this Agreement.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge
that this Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters, and
that such limitations, tests and measurements are cumulative and must each be
performed, except as expressly stated to the contrary in this Agreement.
(i) INTERPRETATION. This Agreement is the result of
negotiations among and has been reviewed by counsel to the Administrative Agent,
the Borrower, its Subsidiaries and other parties, and is the product of all
parties hereto. Accordingly, this Agreement and the other Loan Documents shall
not be construed against the Banks or the Administrative Agent merely because of
the Administrative Agent's or Banks' involvement in the preparation of such
documents and agreements.
1.03 ACCOUNTING PRINCIPLES.
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" refer to such fiscal
year of the Borrower.
ARTICLE II
THE CREDITS
2.01 AMOUNTS AND TERMS OF COMMITMENTS. Each Bank severally agrees,
on the terms and conditions hereinafter set forth, to make Advances to the
Borrower from time to time on any Business Day during the period from the
Closing Date to the Termination Date (as the same may be extended pursuant to
Section 2.09 hereof); and the Administrative Agent agrees, on the terms
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and conditions hereinafter set forth, to make Swing-Line Advances to the
Borrower from time to time on any Business Day during the period from the
Closing Date to the Termination Date (as the same may be extended pursuant to
Section 2.09 hereof); and the Administrative Agent and the Issuing Bank
agree, on the terms and conditions hereinafter set forth, to issue Letters of
Credit for the account of the Borrower from time to time on any Business Day
during the period from the Closing Date to the Termination Date (as the same
may be extended pursuant to Section 2.09 hereof). The aggregate amount of
each Bank's obligation to make Advances, together with such Bank's share of
funding for any Letter of Credit upon negotiation by the beneficiary thereof,
shall not exceed at any time the amount set forth opposite such Bank's name
in SCHEDULE 1 under the heading "Commitment", and the aggregate amount of the
Administrative Agent's obligation to make Advances and Swing-Line Advances,
together with the Administrative Agent's share of funding for any Letter of
Credit upon negotiation by the beneficiary thereof, shall not exceed at any
time the amount set forth opposite the Administrative Agent's name in
SCHEDULE 1 under the heading "Commitment" (such amount, as the same may be
reduced pursuant to the terms of this Agreement, being such Bank's "Revolving
Commitment"); PROVIDED, HOWEVER, that, after giving effect to any Borrowing,
any Swing-Line Borrowing or any Issuance, the aggregate principal amount of
all outstanding Advances, all outstanding Swing-Line Advances, and all
outstanding Letters of Credit shall not exceed the amount of the Aggregate
Commitment. Within the limits of the Aggregate Commitment, and subject to
the other terms and conditions hereof, the Borrower may borrow, prepay, and
reborrow.
2.02 DETERMINATION OF BORROWING BASE; RESTRICTION ON ADVANCES,
SWING-LINE ADVANCES AND LETTERS OF CREDIT. The Administrative Agent will
determine the initial Borrowing Base at the Closing Date, calculated as of
August 31, 1998, and evidenced by a Borrowing Base Certificate delivered by
the Borrower, to the Administrative Agent no later than September 30, 1998.
Such determination shall be effective for the first month following the
Closing Date. Thereafter, the Borrowing Base for each succeeding month will
be determined by the Administrative Agent, calculated as of the end of the
preceding month, evidenced by the Borrowing Base Certificate provided to the
Administrative Agent by the Borrower, pursuant to Section 6.02(c) of this
Agreement, and verified by the Administrative Agent to its satisfaction. The
Administrative Agent shall promptly notify the Borrower and each Bank of each
determination by the Administrative Agent of the Borrowing Base. Any
determination of the Borrowing Base by the Administrative Agent shall be
conclusively deemed to be correct unless objected to by the Borrower or the
Majority Banks within five (5) Business Days of the receipt of such
determination. The aggregate amount of all Advances and Swing-Line Advances
outstanding hereunder, and all Letters of Credit issued and outstanding
hereunder, shall not exceed the Borrowing Base, as determined by the
Administrative Agent for any succeeding month, less the outstanding principal
amount of the Senior Notes, and shall in no event exceed the amount of the
Aggregate Commitment. In the event the Borrowing Base, for any month, as
determined by the Administrative Agent hereunder, less the principal amount
of the Senior Notes, is less than the aggregate amount of all outstanding
Advances
and Swing-Line Advances and all issued and outstanding Letters of Credit at
the date of such determination, the Borrower shall, within fifteen (15)
Business Days of the receipt of notification by the Administrative Agent,
repay Advances or Swing-Line Advances and/or repay or cash collateralize
issued and outstanding Letters of Credit, in such amounts as may be necessary
to reduce the aggregate amount of all outstanding Advances and Swing-Line
Advances and all issued and outstanding Letters of Credit, to the amount of
the newly-determined Borrowing Base, less the principal amount of the Senior
Notes.
2.03 PROCEDURE FOR BORROWING.
(a) Each Borrowing shall be made upon the Borrower's
irrevocable written notice delivered to the Administrative Agent in accordance
with Section 10.02 in the form of a Notice of Borrowing (which notice must be
received by the Administrative Agent prior to 10:00 a.m. Honolulu, Hawaii time)
(i) four Business Days prior to the requested Borrowing date, in the case of
LIBO Rate Advances; and (ii) one Business Day prior to the requested Borrowing
date, in the case of Prime Rate Advances, specifying:
(A) whether the Borrowing is to be comprised of LIBO
Rate Advances and/or Prime Rate Advances;
(B) the amount of the Borrowing; PROVIDED that LIBO
Rate Advances shall be in an aggregate minimum principal amount of Two
Million Dollars ($2,000,000) or any integral multiple of One Hundred
Thousand Dollars ($100,000) in excess thereof; and that Prime Rate
Advances shall be in an aggregate minimum principal amount of One
Hundred Thousand Dollars ($100,000) or any integral multiple of One
Hundred Thousand Dollars ($100,000) in excess thereof;
(C) the requested Borrowing date, which shall be a
Business Day; and
(D) if the requested Borrowing consists of one or
more LIBO Rate Advances, the duration of the Interest Period applicable
thereto; PROVIDED HOWEVER, that if the Notice of Borrowing shall fail to
specify the duration of the Interest Period for any such LIBO Rate
Advances, such Interest Period shall be three (3) months.
(b) Upon receipt of the Notice of Borrowing, the
Administrative Agent will promptly notify each Bank thereof and of the amount of
such Bank's Commitment Percentage of the Borrowing.
(c) Each Bank will make the amount of its Commitment
Percentage of the Borrowing available to the Administrative Agent for the
account of the Borrower at the Administrative Agent's Payment Office by 11:00
a.m. Honolulu, Hawaii time on the Borrowing date requested by the Borrower in
funds immediately available to the Administrative Agent. The proceeds of all
such Advances will then be made available to the Borrower by the Administrative
Agent at such office by crediting the account of the Borrower on the books of
First Hawaiian Bank or such other accounts as the Borrower, may specify, with
the aggregate of the amounts made available to the Administrative Agent by the
Banks and like funds as received by the Administrative Agent.
(d) The proceeds from Advances shall be used for general
corporate purposes, including working capital, set aside letters for bonding
purposes, development and land acquisition
-23-
in the Authorized States and, subject to the prior written approval of the
Majority Banks in their sole discretion, other states, and not in contravention
of any provision of this Agreement or any Requirement of Law.
(e) Unless the Majority Banks shall otherwise agree, during
the existence of a Default or Event of Default, all LIBO Rate Advances shall
automatically be converted into Prime Rate Advances. The Borrower shall
reimburse each Bank and hold each Bank harmless from any loss or expense which
such Bank may sustain or incur as a consequence of any such conversion of a LIBO
Rate Advance to a Prime Rate Advance on a day that is not the last day of the
Interest Period for such LIBO Rate Advance, as provided in Section 3.04 below.
(f) After giving effect to any Borrowing, there shall not be
more than five (5) LIBO Rate Advances in effect.
2.04 PROCEDURE FOR SWING-LINE BORROWING.
(a) Each Swing-Line Borrowing shall be made upon the
Borrower's irrevocable written notice delivered to the Administrative Agent in
accordance with Section 10.02 in the form of a Notice of Swing-Line Borrowing
(which notice must be received by the Administrative Agent prior to 11:00 a.m.
Honolulu, Hawaii time) on or before the requested Swing-Line Borrowing date,
specifying:
(A) the amount of the Swing-Line Borrowing, which
shall be in an aggregate minimum principal amount of Ten Thousand
Dollars ($10,000); and
(B) the requested Swing-Line Borrowing date, which
shall be a Business Day.
(b) All Swing-Line Advances shall be made by the
Administrative Agent alone, for its own account, and no other Bank shall be
required or permitted to participate in, or otherwise disburse any portion of,
any Swing-Line Advance; provided, however, that the Administrative Agent shall
convert, no less than semi-monthly, all Swing-Line Advances into an Advance,
upon one (1) Business Day's written notice given by the Administrative Agent to
each Bank (with a copy of such notice being given to the Borrower), if the
outstanding balance of all Swing-Line Advances is $1,000,000 or more, and (iii)
all Swing-Line Advances shall automatically be converted into Advances upon the
occurrence of a Default or an Event of Default.
(c) The Administrative Agent will notify each Bank, no less
than semi-monthly, of a Swing-Line Borrowing, and will notify each Bank of any
repayment of a Swing-Line Borrowing by the Borrower, from its own funds, as
described in subsection 2.04(b)(i) above.
(d) If the Administrative Agent shall convert a Swing-Line
Advance into an Advance, the Administrative Agent will notify each Bank of such
conversion, of the amount of such Bank's Commitment Percentage therein, and the
date (which shall be not less than one (1)
-24-
Business Day after the date of such notification) for such conversion (with a
copy of such notification being given to the Borrower). Each Bank will
thereupon make the amount of its Commitment Percentage therein available to
the Administrative Agent at the Administrative Agent's Payment Office by
11:00 a.m. Honolulu, Hawaii time, on the date specified in such notice, in
funds immediately available to the Administrative Agent. The proceeds
received from the Banks will be used by the Administrative Agent to reimburse
itself for the former Swing-Line Advance so converted.
(e) The proceeds from Swing-Line Advances shall be used for
general corporate purposes, including working capital, development and land
acquisition in the Authorized States and, subject to the prior written approval
of the Majority Banks in their sole discretion, other states, and may also be
used to repay Prime Rate Advances upon approval of the Administrative Agent, and
not in contravention of any provision of this Agreement or any Requirement of
Law.
(f) The aggregate amount of all Swing-Line Advances
outstanding at any one time may not exceed Five Million Dollars ($5,000,000),
and the amount available to the Borrower for Advances shall be reduced by the
aggregate amount of all Swing-Line Advances outstanding at any one time.
(g) All Swing-Line Advances shall be Prime Rate Advances.
All Swing-Line Advances that have been converted into Advances as described in
subsection 2.04(d) above, shall be Prime Rate Advances, unless and until the
Borrower has converted the same into LIBO Rate Advances, in accordance with
Section 2.06(a)(i) hereof.
2.05 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT.
(a) Each Issuance shall be made upon the Borrower's
irrevocable written request delivered to the Administrative Agent in accordance
with Section 10.02 in the form of a Request for Issuance of Letter of Credit
(which request must be received by the Administrative
-25-
Agent prior to 11:00 a.m. Honolulu, Hawaii time), together with an Application
and Agreement for Standby Letter of Credit in the form attached hereto as
EXHIBIT D (as the same may be revised by the Administrative Agent from time to
time), or in a form that is acceptable to the Issuing Bank, no less than five
(5) Business Days prior to the requested Issuance date, if the Issuance is by
the Administrative Agent, or no less than ten (10) Business Days prior to the
requested Issuance date, if the Issuance is by the Issuing Bank.
(b) Upon receipt of the Request for Issuance of Letter of
Credit, the Administrative Agent will promptly notify each Bank thereof. The
Issuing Bank will immediately notify the Administrative Agent upon the Issuance
of a Letter of Credit.
(c) Upon any negotiation of an outstanding Letter of Credit
by the beneficiary thereof, the Issuing Bank shall notify the Administrative
Agent and the Administrative Agent will promptly notify each Bank of such
negotiation, and of the amount of such Bank's Commitment Percentage thereof.
Each Bank will make the amount of its Commitment Percentage of the negotiated
Letter of Credit available to the Administrative Agent at the Administrative
Agent's Payment Office by 11:00 a.m. Honolulu, Hawaii time on the date requested
by the Administrative Agent in funds immediately available to the Administrative
Agent. The proceeds received from the Banks will be used by the Administrative
Agent to pay the beneficiary of the Letter of Credit upon such negotiation, or
to reimburse the Administrative Agent or the Issuing Bank, as applicable, for
such amounts if payment to such beneficiary has already been made.
(d) Unless all of the Banks shall otherwise agree, (i) no
Letter of Credit shall have an expiry date later than the Termination Date; (ii)
no Letter of Credit shall contain an automatic renewal clause or feature; and
(iii) no Letter of Credit shall be issued for credit enhancement, provided,
however, that Letters of Credit may be issued to the Borrower to comply with
capital requirements for the Captive Insurance Subsidiary.
The aggregate amount of all Letters of Credit issued and outstanding at
any one time may not exceed Ten Million Dollars ($10,000,000), and the amount
available to the Borrower for Advances and Swing-Line Advances shall be reduced
by the aggregate amount of all Letters of Credit issued and outstanding at any
one time. In addition to the Letter of Credit Fee payable by the Borrower
pursuant to Section 2.11(d) of this Agreement, the Borrower shall, at the time
of the Issuance of each Letter of Credit, pay to the Administrative Agent or the
Issuing Bank, as applicable, its standard letter of credit issuance fee. Upon
the negotiation of any Letter of Credit by the beneficiary thereof, the amount
drawn thereunder shall become and be deemed an Advance under and subject to the
terms and provisions of this Agreement relating to Advances. Upon the
occurrence of an Event of Default hereunder, the Borrower shall deposit with the
Administrative Agent cash in an amount sufficient to fully collateralize all
outstanding Letters of Credit as of such date, and if the Borrower shall fail to
do so, the full amount of such outstanding Letters of Credit shall become and be
deemed an Advance under and subject to the terms and provisions of this
Agreement relating to Advances. The Letters of Credit shall be issued to
support performance requirements and obligations of the Borrower or its
Subsidiaries in connection with their real estate development businesses in the
Authorized States (including any required deposits for like-kind exchanges under
Section 1031 of the Code), and to support capital and performance
-26-
requirements and obligations of the Captive Insurance Subsidiary, and not in
contravention of any provision of this Agreement or any Requirement of Law.
2.06 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Borrower may upon irrevocable written notice to the
Administrative Agent in accordance with subsection 2.06(b):
(i) elect to convert on any Business Day, any Prime
Rate Advance (other than a Swing-Line Advance), or any part thereof in
an amount not less than $2,000,000, or that is an integral multiple of
$100,000 in excess thereof, into LIBO Rate Advances; or
(ii) elect to convert on the last day of any Interest
Period applicable thereto any LIBO Rate Advances (or any part hereof in
an amount not less than $100,000, or that is an integral multiple of
$100,000 in excess thereof) into a Prime Rate Advance; or
(iii) elect to continue on the last day of any
Interest Period applicable thereto any LIBO Rate Advances (or any part
thereof in an amount not less than $2,000,000, or that is an integral
multiple of $100,000 in excess thereof);
PROVIDED, that if the aggregate amount of any LIBO Rate Advance in respect of
any Borrowing shall have been reduced, by payment, prepayment, or conversion of
part thereof to be less than $2,000,000, such LIBO Rate Advance shall
automatically convert into a Prime Rate Advance, and on and after such date the
right of the Borrower to continue such Advance as, and convert such Advance
into, a LIBO Rate Advance, shall terminate.
(b) The Borrower shall deliver a Notice of
Conversion/Continuation in accordance with Section 10.02 to be received by the
Administrative Agent no later than 10:00 a.m., Honolulu, Hawaii time at least
(i) four Business Days prior to the Conversion Date or Continuation Date, if the
Advances are to be converted into or continued as LIBO Rate Advances; and (ii)
one Business Day in advance of the Conversion Date, if the Advances are to be
converted into Prime Rate Advances, specifying:
(i) the proposed Conversion Date or Continuation
Date;
(ii) the aggregate amount of Advances to be converted
or continued;
(iii) the nature of the proposed conversion or
continuation; and
(iv) if applicable, the duration of the requested
Interest Period.
(c) If upon the expiration of any Interest Period applicable
to LIBO Rate Advances, the Borrower failed to select timely a new Interest
Period to be applicable to such LIBO Rate Advances, or if any Default or Event
of Default shall then exist, the Borrower shall
-27-
be deemed to have elected to convert such LIBO Rate Advances into Prime Rate
Advances effective as of the expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the
Administrative Agent will promptly notify each Bank thereof, or, if no timely
notice is provided by the Borrower, the Administrative Agent will promptly
notify each Bank of the details of any automatic conversion. All conversions
and continuations shall be made pro rata among the Banks according to the
respective outstanding principal amounts of the Advances held by each Bank with
respect to which the notice was given.
(e) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any
Advances, there shall not be more than five (5) LIBO Rate Advances in effect.
(f) The Borrower shall reimburse each Bank and hold each
Bank harmless from any loss or expense which such Bank may sustain or incur as a
consequence of any conversion of a LIBO Rate Advance to a Prime Rate Advance on
a day that is not the last day of the Interest Period for such LIBO Rate
Advance, as provided in Section 3.04 below.
2.07 OPTION TO REQUEST AN INCREASE; VOLUNTARY TERMINATION OR
REDUCTION OF COMMITMENTS.
(a) The Borrower shall have a one time option, during the term
of the Credit Facility, to submit a written request to the Administrative Agent
and the Banks for an increase, in an amount up to $30,000,000, to the Aggregate
Commitment, such that the Aggregate Commitment may be increased up to a maximum
amount of $120,000,000; provided, however, that the Banks shall have no
obligation to approve such request. The Borrower shall provide the
Administrative Agent with such information and materials as the Administrative
Agent and the Banks may require for their review and consideration of the
Borrower's request. Upon the concurrence of all of the Banks, in their sole and
absolute discretion, the Aggregate Commitment shall be increased by the amount
approved by all of the Banks; provided, however, that if any Bank does not
concur to the increase (the "Non-Concurring Bank"), any of the other Banks may
elect to acquire and assume all or a part of such Non-Concurring Bank's share of
the increase; provided, further, however, that the Aggregate Commitment shall
not exceed $120,000,000 and such increase shall be subject to all such terms and
conditions as the Banks may require, and the Loan Documents shall be amended in
accordance therewith.
(b) The Borrower may, (i) at the end of any Quarter and upon
not less than five Business Days' prior notice to the Administrative Agent
(which shall promptly notify each Bank thereof), terminate the Aggregate
Commitment, or (ii) only on a one time basis and if the Aggregate Commitment has
been increased as provided in subsection 2.07(a) for a period of at least six
months, at the end of any Quarter and upon not less than five Business Days'
prior notice to the Administrative Agent (which shall promptly notify each Bank
thereof), permanently reduce the Aggregate Commitment by an aggregate minimum
amount of $10,000,000 or any integral multiple of $10,000,000 in excess thereof,
up to an aggregate maximum amount of $30,000,000;
-28-
PROVIDED that no such termination or reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Advances or Swing-Line
Advances made on the effective date thereof, the then outstanding principal
amount of all Advances, Swing-Line Advances and Letters of Credit issued and
outstanding would exceed the amount of the Aggregate Commitment then in
effect and, PROVIDED, FURTHER, that once reduced in accordance with this
Section, the Aggregate Commitment may not be increased without the written
approval of the Administrative Agent and each Bank. Any reduction of the
Aggregate Commitment shall be applied to each Bank's Revolving Commitment in
accordance with such Bank's Commitment Percentage. All accrued interest, and
all accrued fees described in Section 2.11 hereof, to, but not including, the
effective date of any reduction or termination of the Aggregate Commitment,
shall be paid on the effective date of such reduction or termination. The
Borrower shall reimburse each Bank and hold each Bank harmless from any loss
or expense which such Bank may sustain or incur as a consequence of any
reduction or termination of the Aggregate Commitment which is effective, with
respect to a LIBO Rate Advance, on a day that is not the last day of the
Interest Period for such LIBO Rate Advance, as provided in Section 3.04 below.
2.08 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. Subject to Section 3.04, the
Borrower may, at any time or from time to time, (i) prepay LIBO Rate Advances in
whole or in part, upon at least three Business Days' prior notice, by the
Borrower, to the Administrative Agent, in amounts of $1,000,000 or any integral
multiple of $100,000 in excess thereof (PROVIDED that after any such prepayment,
the balance of any such LIBO Rate Advance shall be $2,000,000 or any integral
multiple of $100,000 in excess thereof), (ii) prepay Prime Rate Advances (other
than Swing-Line Advances) in whole or in part, upon at least one Business Day's
prior notice, by the Borrower to the Administrative Agent, in the amount of or
greater than $15,000,000, and (iii) prepay Swing-Line Advances or Prime Rate
Advances, in an amount less than $15,000,000, in whole or in part without prior
notice to the Administrative Agent. Any such notice of prepayment shall specify
the date and amount of such prepayment and whether such prepayment is of Prime
Rate Advances, or LIBO Rate Advances, or any combination thereof. Such notice
for prepayment of LIBO Rate Advances shall not thereafter be revocable by the
Borrower, and the Administrative Agent will promptly notify each Bank thereof
and of such Bank's Commitment Percentage of such prepayment. If such notice for
prepayment of LIBO Rate Advances is given by the Borrower, the Borrower shall
make such prepayment, and the payment amounts specified in such notice shall be
due and payable on the date specified therein, together with accrued interest to
each such date on the amount prepaid and any amounts required pursuant to
Section 3.04. The Borrower shall reimburse each Bank and hold each Bank
harmless from any loss or expense which such Bank may sustain or incur as a
consequence of any prepayment of a LIBO Rate Advance, on a day that is not the
last day of the Interest Period for such LIBO Rate Advance, as provided in
Section 3.04 below.
(b) MANDATORY PREPAYMENTS. If the Borrower or any of its
Subsidiaries sells (other than a sale to the Borrower or any other Subsidiary)
any portion of any property or assets of the Borrower or any of its Subsidiaries
for $10,000,000.00 or more, or if the Borrower or any of its Subsidiaries sells,
in a single transaction, all or substantially all of the property or assets of
-29-
the Borrower or of any of its Subsidiaries, the Borrower shall use 100% of
the proceeds of such sale (the "Sale Proceeds") to prepay any Advances,
subject to Section 3.04. If the Sale Proceeds are used to prepay LIBO Rate
Advances in whole or in part, then the Borrower shall provide at least three
Business Days' prior notice to the Administrative Agent, of such prepayment
and such prepayments shall be in amounts of $1,000,000 or any integral
multiple of $100,000 in excess thereof (PROVIDED that after any such
prepayment, the balance of any such LIBO Rate Advance shall be $2,000,000 or
any integral multiple of $100,000 in excess thereof; unless the total
Advances outstanding after giving effect to any other prepayments required by
this section, is less than $2,000,000, in which case, the LIBO Rate Advances
outstanding shall be reduced by the balance of the such prepayment). Such
notice for prepayment of LIBO Rate Advances shall not thereafter be revocable
by the Borrower, and the Administrative Agent will promptly notify each Bank
thereof and of such Bank's Commitment Percentage of such prepayment. If such
notice for prepayment of LIBO Rate Advances is given by the Borrower, the
Borrower shall make such prepayment, and the payment amounts specified in
such notice shall be due and payable on the date specified therein, together
with accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.04. The Borrower shall reimburse each Bank
and hold each Bank harmless from any loss or expense which such Bank may
sustain or incur as a consequence of any prepayment of a LIBO Rate Advance,
on a day that is not the last day of the Interest Period for such LIBO Rate
Advance, as provided in Section 3.04 below. If the Sale Proceeds are used to
prepay Prime Rate Advances (other than Swing-Line Advances) in whole or in
part, then the Borrower shall provide at least one Business Day's prior
notice to the Administrative Agent, and such prepayments may be made in any
amounts. Prepayments of Swing-Line Advances in whole or in part may be made
without prior notice to the Administrative Agent.
2.09 REPAYMENT; EXTENSION OF TERMINATION DATE.
(a) The Borrower shall, on the Termination Date, repay to
the Banks in full the aggregate principal amount of all outstanding Advances,
and all accrued interest thereon, and shall repay to the Administrative Agent in
full the aggregate principal amount of all outstanding Swing-Line Advances, and
all accrued interest thereon, shall pay to the Banks all fees, charges and other
sums outstanding hereunder on the Termination Date.
(b) Notwithstanding the foregoing, upon the request of the
Borrower made not earlier than April 1, 1999, and not earlier than April 1st of
each subsequent year, and not later than June 30, 1999, and not later than June
30th of each subsequent year, and the concurrence of all of the Banks, in their
sole and absolute discretion, the Termination Date may be extended for an
additional period of one year; provided, however, and except for any request to
extend the Termination Date made in 1999, that the Borrower shall have, in the
immediately preceding year, exercised its option, and all of the Banks shall
have concurred, to extend the Termination Date; provided, further, if any Bank
does not concur in the extension of the Termination Date (the "Dissenting
Bank"), the Borrower may:
(i) request that the Dissenting Bank continue its
Commitment Percentage until the original Termination Date; or
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(ii) request one or more of the other Banks (the
"Non-Dissenting Banks") to acquire and assume all or part of such Dissenting
Bank's Advances and Revolving Commitment, which request may be granted or
denied in such Non-Dissenting Bank's sole discretion; or
(iii) designate a replacement bank or financial
institution to acquire and assume all or part of such Dissenting Bank's Advances
and Revolving Commitment (a "REPLACEMENT BANK"); or
(iv) notwithstanding the provisions of Section 2.07(b),
permanently reduce the Aggregate Commitment by the aggregate amount of such
Dissenting Bank's Advances and Revolving Commitment, by prepaying the amount of
such Dissenting Bank's Advances and all accrued interest and fees and
reimbursing such Dissenting Bank and holding such Dissenting Bank harmless from
any loss or expense which such Dissenting Bank may sustain or incur as a
consequence of such reduction of the Aggregate Commitment which is effective,
with respect to a LIBO Rate Advance, on a day that is not the last day of the
Interest Period for such LIBO Rate Advance, as provided in Section 3.04 below.
Any acquisition of a Dissenting Bank's Advances and Revolving Commitment,
designation of a Replacement Bank or reduction of the Aggregate Commitment shall
be subject to the prior written consent of the Administrative Agent (which
consent shall not be unreasonably withheld), and shall be effective upon such
consent. In the event of the replacement of a Dissenting Bank, such Dissenting
Bank agrees to assign without recourse its rights and obligations hereunder to
the Replacement Bank upon payment by the Replacement Bank to the Dissenting Bank
of the principal amount of such Dissenting Banks's outstanding Advances and any
accrued and unpaid interest thereon, and any other amounts owed to such
Dissenting Bank and to execute and deliver to the Administrative Agent an
assignment and acceptance in form and substance reasonably satisfactory to the
Administrative Agent and such Dissenting Bank evidencing such assignment and the
acceptance by the Replacement Bank of such Dissenting Bank's obligations
hereunder. The designation of a Replacement Bank shall not affect the
Borrower's obligations to such Dissenting Bank hereunder.
(c) As a condition to such extension as provided
hereinabove, the Banks may require the Borrower to pay an extension fee, in an
amount to be determined by the Banks and agreed to by the Borrower.
2.10 INTEREST.
(a) Subject to subsection (c) of this Section, each LIBO
Rate "A" Advance, each LIBO Rate "B" Advance, each LIBO Rate "C" Advance, each
Prime Rate "A" Advance, each Prime Rate "B" Advance and each Prime Rate "C"
Advance shall bear interest on the outstanding principal amount thereof, from
the date when made until it becomes due, at a rate per annum equal to the LIBO
Rate or the Prime Rate, as the case may be, PLUS, the Applicable Margin.
-31-
(b) Interest on each Advance and on each Swing-Line Advance
shall be paid in arrears on each Interest Payment Date. Interest shall also be
paid on any portion of Advances or Swing-Line Advances prepaid pursuant to
Sections 2.07(b) and 2.08; provided, however, that interest on Prime Rate
Advances shall be paid in arrears on the Interest Payment Date immediately
following the date of such prepayment. Interest shall be paid on demand during
the existence of any Event of Default.
(c) During the existence of any Event of Default, the
Borrower agrees to pay interest on any unpaid principal or other amount payable
hereunder or under any of the other Loan Documents, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable on
demand, at a fluctuating rate per annum equal to the Prime Rate PLUS four
percent (4%).
(d) Anything herein to the contrary notwithstanding, the
obligations of the Borrower hereunder shall be subject to the limitation that
payments of interest shall not be required, for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by the respective Bank would be contrary to the
provisions of any law applicable to such Bank limiting the highest rate of
interest which may be lawfully contracted for, charged or received by such Bank,
and in such event the Borrower shall pay such Bank interest at the highest rate
permitted by law applicable to such Bank.
2.11 FEES.
(a) EXTENSION FEES. The Borrower shall pay to the
Administrative Agent on the Closing Date, for the account of each Bank,
extension fees in an amount equal to two-tenths of one per cent (0.20%) of the
amount of such Bank's Revolving Commitment (for an aggregate fee of
$180,000.00).
(b) COMMITMENT FEE. The Borrower shall pay to the
Administrative Agent for the account of each Bank a non-refundable commitment
fee in the following percentage per annum on the amount of such Bank's Revolving
Commitment, computed on a Quarterly basis in advance, based upon the Leverage
Ratio and the Interest Coverage Ratio then in effect (for example, the
commitment fee due on April 1 shall be computed based upon the Leverage Ratio
then in effect, which in such case would be as of the previous December 31),
commencing on the Closing Date, and continuing on the first Business Day of each
Quarter until the Termination Date:
(i) if on the first day of such Quarter:
(A) the Leverage Ratio is less than 1.35 to 1
and the Interest Coverage Ratio is greater than 2.00 to 1; or
(B) the Leverage Ratio is less than 1.50 to 1
and the Interest Coverage Ratio is greater than 2.50 to 1;
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then the percentage for the commitment fee shall be equal to 0.125%;
(ii) if on the first day of such Quarter:
(A) the Leverage Ratio is less than or equal to
1.35 to 1 and the Interest Coverage Ratio is greater than or
equal to 1.75 to 1, but less than 2.00 to 1; or
(B) the Leverage Ratio is less than or equal to
1.50 to 1 and the Interest Coverage Ratio is greater than or
equal to 2.00 to 1, but less than 2.50 to 1; or
(c) the Leverage Ratio is less than or equal to
1.60 to 1 and the Interest Coverage Ratio is greater than or
equal to 2.50 to 1;
then the percentage for the commitment fee shall be equal to 0.18%; and
(iii) if on the first day of such Quarter:
(A) the Leverage Ratio is greater than 1.35 to
1, but less than or equal to 1.50 to 1, and the Interest
Coverage Ratio is greater than or equal to 1.75 to 1, but less
than 2.00 to 1; or
(B) the Leverage Ratio is greater than 1.50 to
1, but less than or equal to 1.60 to 1, and the Interest
Coverage Ratio is greater than or equal to 2.00 to 1, but less
than 2.50 to 1;
then the percentage for the commitment fee shall be equal to 0.25%;
PROVIDED, HOWEVER, that (1) if the Borrower fails to provide the Leverage
Ratio/Interest Coverage Ratio/Base Grid Certificate as required in Section
6.02(e), and the Administrative Agent is unable to determine the Leverage Ratio
for such Quarter, then the percentage for the commitment fee for such Quarter
shall be 0.25%, or (2) if an Event of Default has occurred, then the percentage
for the commitment fee for the Quarter immediately following such Event of
Default, and for each subsequent Quarter as long as such Event of Default is
continuing, shall be 0.25%.
(c) UNUSED FACILITY FEES. The Borrower shall pay to the
Administrative Agent for the account of each Bank an unused facility fee equal
to one-fifth of one percent (0.20%) per annum of the amount equal to the
difference between (i) such Bank's Revolving Commitment (less such Bank's
Commitment Percentage of any issued and outstanding Letters of Credit) and (ii)
such Bank's Commitment Percentage of the outstanding principal balance of all
Advances made hereunder, computed on a daily balance basis in arrears,
commencing as of the Closing Date, and becoming due and payable on the last
Business Day of each Quarter, with the final payment to be made on the
Termination Date; PROVIDED HOWEVER that in the case of the Administrative Agent,
the unused facility fee shall be equal to one-fifth of one percent (0.20%) of
the amount equal to the difference between (i) the Administrative Agent's
Revolving Commitment (less the
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Administrative Agent's Commitment Percentage of any issued and outstanding
Letters of Credit) and (ii)(A) the Administrative Agent's Commitment
Percentage of the outstanding principal balance of all Advances made
hereunder and (B) 100% of the outstanding principal balance of all Swing-Line
Advances made hereunder, computed on a daily balance basis in arrears,
commencing as of the Closing Date and becoming due and payable on the last
Business Day of each Quarter, with the final payment to be made on the
Termination Date.
(d) LETTER OF CREDIT FEES. The Borrower shall pay to the
Administrative Agent or the Issuing Bank, as applicable, upon the Issuance
hereunder of each new Letter of Credit, or upon the extension hereunder of each
existing Letter of Credit, a letter of credit fee in an amount equal to one and
one-fourth percent (1.25%) of the amount of such Letter of Credit. For Letters
of Credit issued by the Administrative Agent, the Administrative Agent will
retain 20% of such letter of credit fee (i.e., .25% of the amount of such Letter
of Credit) for its own account, and will remit the balance of such fee to each
Bank (including the Administrative Agent) pro rata in accordance with such
Bank's Revolving Commitment. For Letters of Credit issued by the Issuing Bank,
the Issuing Bank may retain 20% of such letter of credit fee (i.e., .25% of the
amount of such Letter of Credit) for its own account, and will remit the balance
to the Administrative Agent, who will then remit the same to each Bank
(including the Issuing Bank and the Administrative Agent) pro rata in accordance
with such Bank's Revolving Commitment.
(e) AGENCY FEE; STRUCTURING FEE. The Borrower shall pay
to the Administrative Agent for the Administrative Agent's own account an
agency fee in the amount and at the times set forth in a letter agreement
between the Borrower and the Administrative Agent dated September 30, 1998.
The Borrower shall also pay to the Agents for their own respective accounts a
structuring fee in the amount and at the times set forth in a letter
agreement between the Borrower and the Agents dated September 30, 1998.
2.12 COMPUTATION OF FEES AND INTEREST.
(a) The fees described in Section 2.11 above shall be
calculated on the basis year of 365 days, and actual days elapsed; provided,
however, all fees for Letters of Credit shall be calculated based upon a year of
360 days.
(b) All computations of interest payable in respect of Prime
Rate Advances shall be made on the basis of a year of 365 days, and actual days
elapsed. All computations of interest payable in respect of LIBO Rate Advances
shall be made on the basis of a 360-day year and actual days elapsed. Interest
and fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(c) The Administrative Agent will, with reasonable
promptness, notify the Borrower and the Banks of each determination of the
Borrowing Base, of the Leverage Ratio and the Interest Coverage Ratio; PROVIDED
that any failure to do so shall not relieve the Borrower of any liability
hereunder or provide the basis for any claim against the Administrative Agent.
Any change in the interest rate on an Advance or a Swing-Line Advance resulting
from a change in the Prime Rate shall become effective as of the opening of
business on the day on which such
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change in the Prime Rate becomes effective. Any change in the interest rate
on an Advance or a Swing-Line Advance resulting from a change in the Leverage
Ratio and the Interest Coverage Ratio (and the resultant Applicable Margin)
shall become effective as of the opening of business on the first day of the
month following the determination of the Leverage Ratio and the Interest
Coverage Ratio. The Administrative Agent will with reasonable promptness
notify the Borrower and the Banks of the effective date and the amount of
each such change; PROVIDED that any failure to do so shall not relieve the
Borrower of any liability hereunder or provide the basis for any claim
against the Administrative Agent.
2.13 PAYMENTS BY THE BORROWER.
(a) All payments (including prepayments) to be made by the
Borrower on account of principal, interest, fees and other amounts required
hereunder shall be made without set-off, recoupment or counterclaim; shall,
except with respect to payments relating to Swing-Line Advances, and as
otherwise expressly provided herein, be made to the Administrative Agent for the
ratable account of the Banks at the Administrative Agent's Payment Office; and
shall be made in U.S. Dollars and in immediately available funds, no later than
9:00 a.m. Honolulu, Hawaii time on the date specified herein for payments on, or
of, Advances, and no later than 1:00 p.m. Honolulu, Hawaii time on the date
specified herein for payments on, or of, Swing-Line Advances. The
Administrative Agent will promptly distribute to each Bank its Commitment
Percentage (or other applicable share as expressly provided herein) of such
principal, interest, fees or other amounts, in like funds as received; provided
however that the Administrative Agent shall retain all payments made by the
Borrower on, or of, Swing-Line Advances for the Administrative Agent's own
account. Any payment which is received by the Administrative Agent later than
9:00 a.m. Honolulu, Hawaii time and any payment on, or of, Swing-Line Advances
which is received by the Administrative Agent later than 1:00 p.m. Honolulu,
Hawaii time, shall be deemed to have been received on the immediately succeeding
Business Day and any applicable interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be; subject to
the provisions set forth in the definition of "Interest Period" herein.
(c) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Banks hereunder that the Borrower will not make such payment in full as and when
required hereunder, the Administrative Agent may assume that the Borrower has
made such payment in full to the Administrative Agent on such date in
immediately available funds and the Administrative Agent may (but shall not be
so required), in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent the Borrower shall not have made such payment in full to the
Administrative Agent, each Bank shall repay to the Administrative Agent on
demand such amount distributed to such Bank, together with interest thereon for
each day from the date such amount is distributed to such Bank until the date
such
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Bank repays such amount to the Administrative Agent, at the Federal Funds
Rate as in effect for each such day.
2.14 PAYMENTS BY THE BANKS TO THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have received
notice from a Bank at least one Business Day prior to the date of any proposed
Borrowing, conversion of a Swing-Line Advance to an Advance, or negotiation of a
Letter of Credit, that such Bank will not make available to the Administrative
Agent as and when required hereunder the amount of that Bank's Commitment
Percentage thereof, the Administrative Agent may assume that each Bank has made
such amount available to the Administrative Agent in immediately available funds
on such date and the Administrative Agent may (but shall not be so required), in
reliance upon such assumption, make available to the appropriate party on such
date a corresponding amount. If and to the extent any Bank shall not have made
its full amount available to the Administrative Agent in immediately available
funds and the Administrative Agent in such circumstances has made available to
the appropriate party such amount, that Bank shall on the next Business Day
following such date make such amount available to the Administrative Agent,
together with interest at the Federal Funds Rate for and determined as of each
day during such period. A notice of the Administrative Agent submitted to any
Bank with respect to amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available, such payment to the
Administrative Agent shall constitute such Bank's Advance on such date for all
purposes of this Agreement. If, with respect to a Borrowing, such amount is not
made available to the Administrative Agent on the next Business Day following
the date of such Borrowing, the Administrative Agent shall notify the Borrower
of such failure to fund and, upon demand by the Administrative Agent, the
Borrower shall pay such amount to the Administrative Agent for the
Administrative Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Advances comprising such Borrowing.
(b) The failure of any Bank to make any Advance on the date
of any proposed Borrowing, conversion of Swing-Line Advance to an Advance, or
negotiation of a Letter of Credit, shall not relieve any other Bank of any
obligation hereunder to make an Advance on the date thereof, but no Bank shall
be responsible for the failure of any other Bank to make the Advance to be made
by such other Bank on the date thereof. The Administrative Agent shall take
such action as the Administrative Agent deems advisable, or as the
Administrative Agent may be directed by the Majority Banks, pursuant to the
Inter-Bank Agreement, to cause such Bank to make such Advance, or to cause one
or more of the other Banks to acquire and assume such Bank's Advances and
Revolving Commitment, or to designate a replacement bank or financial
institution to acquire and assume such Bank's Advances and Revolving Commitment.
2.15 SHARING OF PAYMENTS, ETC. If, other than with respect to
Swing-Line Advances made by the Administrative Agent, or other than as expressly
provided elsewhere herein, any Bank shall obtain on account of the Advances made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its Commitment Percentage of
payments on account of the Advances obtained by all the Banks, such
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Bank shall forthwith (a) notify the Administrative Agent of such fact, and
(b) purchase from the other Banks such participations in the Advances made by
them as shall be necessary to cause such purchasing Bank to share the excess
payment ratably with each of them; PROVIDED, HOWEVER, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank
shall repay to the purchasing Bank the purchase price paid therefor, together
with an amount equal to such paying Bank's Commitment Percentage (according
to the proportion of (i) the amount of such paying Bank's required repayment
to (ii) the total amount so recovered from the purchasing Bank) of any
interest or other amount paid or payable by the purchasing Bank in respect of
the total amount so recovered. The Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off but subject to Section 10.09) with respect to
such participation as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will
keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased pursuant to this Section and will
in each case notify the Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Subject to subsection 3.01(g), any and all payments by
the Borrower to each Bank or the Administrative Agent under this Agreement shall
be made free and clear of, and without deduction or withholding for, any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each Bank
and the Administrative Agent, such taxes (including income taxes or franchise
taxes) as are imposed on or measured by each Bank's net income by the
jurisdiction under the laws of which such Bank or the Administrative Agent, as
the case may be, is organized or maintains a Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Borrower shall pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents (hereinafter referred to as "Other
Taxes").
(c) Subject to subsection 3.01(g), the Borrower shall
indemnify and hold harmless each Bank and the Administrative Agent for the full
amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 3.01) paid by any Bank or
the Administrative Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefor or with respect thereto, whether
or not such Taxes or Other Taxes were correctly or legally asserted. Payment
under this indemnification
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shall be made within 30 days from the date any Bank or the Administrative
Agent makes written demand therefor. If any Taxes or Other Taxes for which
the Borrower have provided an indemnity to any Bank or the Administrative
Agent under this subsection 3.01(c) are found to be incorrectly or illegally
assessed, then, upon the request of the Borrower, such Bank or Administrative
Agent will take such action, if any, as such Bank or the Administrative Agent
may determine in its discretion, exercised in good faith, to be commercially
reasonable to obtain a refund of such Taxes or Other Taxes and shall promptly
remit to the Borrower any refund which the Bank or the Administrative Agent
receives, after deducting from such refund all costs and expenses incurred
(including reasonable attorneys' fees and expenses and allocated costs of
internal legal services) in collecting such refund.
(d) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Bank or the Administrative Agent, then, subject to subsection
3.01(g):
(i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.01) such Bank
or the Administrative Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been
made;
(ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(e) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the Administrative
Agent.
(f) Each Bank which is a foreign person (i.e., a person
other than a United States Person for United States Federal income tax purposes)
agrees that:
(i) it shall, no later than the Closing Date (or, in
the case of a Bank which becomes a party hereto pursuant to Section
10.08 after the Closing Date, the date upon which the Bank becomes a
party hereto) deliver to the Borrower through the Administrative Agent
two accurate and complete signed originals of Internal Revenue Service
Form 4224 or any successor thereto ("Form 4224"), or two accurate and
complete signed originals of Internal Revenue Service Form 1001 or any
successor thereto ("Form 1001"), as appropriate, in each case indicating
that the Bank is on the date of delivery thereof entitled to receive
payments of principal, interest and fees under this Agreement free from
withholding of United States Federal income tax;
(ii) if at any time the Bank makes any changes
necessitating a new Form 4224 or Form 1001, it shall with reasonable
promptness deliver to each of the Borrower
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through the Administrative Agent in replacement for, or in addition to,
the forms previously delivered by it hereunder, two accurate and
complete signed originals of Form 4224; or two accurate and complete
signed originals of Form 1001, as appropriate, in each case indicating
that the Bank is on the date of delivery thereof entitled to receive
payments of principal, interest and fees under this Agreement free from
withholding of United States Federal income tax;
(iii) it shall, before or promptly after the
occurrence of any event (including the passing of time but excluding any
event mentioned in (ii) above) requiring change in or renewal of the
most recent Form 4224 or Form 1001 previously delivered by such Bank,
deliver to the Borrower through the Administrative Agent two accurate
and complete original signed copies of Form 4224 or Form 1001 in
replacement for the forms previously delivered by the Bank; and
(iv) it shall, promptly upon the Borrower's or the
Administrative Agent's reasonable request to that effect, deliver to the
Borrower or the Administrative Agent (as the case may be) such other
forms or similar documentation as may be required from time to time by
any applicable law, treaty, rule or regulation in order to establish
such Bank's tax status for withholding purposes.
(g) The Borrower will not be required to pay any additional
amounts in respect of United States Federal income tax pursuant to subsection
3.01(d) to any Bank for the account of any Lending Office of such Bank:
(i) if the obligation to pay such additional amounts
would not have arisen but for a failure by such Bank to comply with its
obligations, if any, under subsection 3.01(f) in respect of such Lending
Office;
(ii) if such Bank shall have delivered to the
Borrower a Form 4224 in respect of such Lending Office pursuant to
subsection 3.01(f), and such Bank shall not at any time be entitled to
exemption from deduction or withholding of United States Federal income
tax in respect of payments by the Borrower hereunder for the account of
such Lending Office for any reason other than a change in United States
law or regulations or in the official interpretation of such law or
regulations by any governmental authority charged with the
interpretation or administration thereof (whether or not having the
force of law) after the date of delivery of such Form 4224; or
(iii) if the Bank shall have delivered to the Borrower
a Form 1001 in respect of such Lending Office pursuant to subsection
3.01(f), and such Bank shall not at any time be entitled to exemption
from deduction or withholding of United States Federal income tax in
respect of payments by the Borrower hereunder for the account of such
Lending Office for any reason other than a change in United States law
or regulations or any applicable tax treaty or regulations or in the
official interpretation of any such law, treaty or regulations by any
governmental authority charged with the interpretation or
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administration thereof (whether or not having the force of law) after
the date of delivery of such Form 1001.
(h) If the Borrower is required to pay additional amounts to
any Bank or the Administrative Agent pursuant to subsection 3.01(d), then such
Bank shall use its reasonable best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank.
3.02 ILLEGALITY.
(a) If any Bank shall determine that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its Lending Office to make LIBO Rate Advances, then, on notice
thereof by the Bank to the Borrower through the Administrative Agent, the
obligation of that Bank to make LIBO Rate Advances shall be suspended until that
Bank shall have notified the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exists.
(b) If a Bank shall determine that it is unlawful to
maintain any LIBO Rate Advance, the Borrower shall prepay in full all LIBO Rate
Advances of that Bank then outstanding, together with interest accrued thereon,
either on the last day of the Interest Period thereof if that Bank may lawfully
continue to maintain such LIBO Rate Advances to such day, or immediately, if
that Bank may not lawfully continue to maintain such LIBO Rate Advances,
together with any amounts required to be paid in connection therewith pursuant
to Section 3.04.
(c) If the Borrower is required to prepay any LIBO Rate
Advance immediately as provided in subsection 3.02(b), then concurrently with
such prepayment, the Borrower shall borrow from the Affected Bank, in the amount
of such repayment, a Prime Rate Advance.
(d) If the obligation of any Bank to make or maintain LIBO
Rate Advances has been terminated, the Borrower may elect, by giving notice to
that Bank through the Administrative Agent that all Advances which would
otherwise be made by that Bank as LIBO Rate Advances shall be instead Prime Rate
Advances.
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3.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Bank shall determine that, due to either (i) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements to the extent included the calculation of the
LIBO Rate) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), enacted after
the Closing Date, there shall be any increase in the cost to such Bank of
agreeing to make or making, funding or maintaining any LIBO Rate Advances, then
the Borrower shall be liable for, and shall from time to time, upon demand
therefor by such Bank (with copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Bank, additional amounts
as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Bank (or its Lending Office) or any corporation controlling
such Bank, with any Capital Adequacy Regulation affects or would affect the
amount of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired return on capital) such Bank determines that the amount of such capital
is increased as a consequence of its commitment to extend credit under this
Agreement, or loans, advances, credits or obligations under this Agreement,
then, upon demand of such Bank (with a copy to the Administrative Agent), the
Borrower shall upon demand pay to such Bank, from time to time as specified by
such Bank, additional amounts sufficient to compensate such Bank for such
increase. Notwithstanding the above, the Borrower shall not be required to pay
to any Bank any amount under this subsection 3.03(b) which reflects compensation
for such increased capital requirement which was effective more than 180 days
prior to the date of such demand, unless such increased capital requirement is
made retroactive by such (i) Capital Adequacy Regulation, (ii) change therein,
(iii) change in the interpretation or administration thereof, or (iv) compliance
with any Capital Adequacy Regulation.
(c) Any Bank claiming reimbursement or compensation pursuant
to this Section 3.03 shall deliver to the Borrower (with a copy to the
Administrative Agent) a certificate setting forth in reasonable detail the
amount payable to such Bank under this Section 3.03 and the basis therefor and
such certificate shall be rebuttable presumptive evidence of such amount.
3.04 FUNDING LOSSES. The Borrower agrees to reimburse each Bank and
to hold each Bank harmless from any loss or expense which such Bank may sustain
or incur as a consequence of:
(a) the failure of the Borrower to make any payment or
mandatory prepayment of principal of any LIBO Rate Advance (including payments
made after any acceleration thereof);
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(b) the failure of the Borrower to borrow, continue or
convert an Advance after the Borrower has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Borrower to make any prepayment after
the Borrower has given a notice in accordance with Section 2.08;
(d) the conversion pursuant to Section 2.03(e) or Section
2.06 of any LIBO Rate Advance to a Prime Rate Advance on a day that is not the
last day of the respective Interest Period;
(e) the termination or reduction in the Aggregate Commitment
which is effective, with respect to a LIBO Rate Advance, on a day that is not
the last day of the Interest Period for such LIBO Rate Advance, as provided in
Section 2.07(b); or
(f) the prepayment (including pursuant to Section 2.08) of a
LIBO Rate Advance on a day which is not the last day of the Interest Period with
respect thereto;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBO Rate Advances hereunder or from
fees payable to terminate the deposits from which such funds were obtained, such
amount or amounts to include, without limitation, an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the amount so
prepaid, not prepaid, not paid, not borrowed, not continued or converted, or
converted at the time of such action or failure to act for the period from the
date of such action or failure to act to the last day of the then current
Interest Period (or, in the case of a failure to borrow, continue or convert,
the Interest Period which would have commenced on the date of such failure) at
the LIBO Rate in effect for such Interest Period over (ii) the amount of
interest which would accrue to such Bank on such amount by placing such amount
on deposit for a comparable period with leading banks in the London Interbank
Market. Such Bank shall deliver to the Borrower (with a copy to the
Administrative Agent) a certificate setting forth in reasonable detail the
amount of such loss, cost or expense and the basis therefor which shall be
rebuttable presumptive evidence of the amount of such loss, cost or expense.
Solely for purposes of calculating amounts payable by the Borrower to the Banks
under this Section 3.04 and under subsection 3.03(a), each LIBO Rate Advance
made by a Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the LIBO Rate
plus the Applicable Margin for such LIBO Rate Advance by a matching deposit or
other borrowing in the London Interbank Market for a comparable amount and for a
comparable period, whether or not such LIBO Rate Advance is in fact so funded.
3.05 INABILITY TO DETERMINE RATES. If the Majority Banks shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the LIBO Rate for any requested Interest Period with respect to a
proposed LIBO Rate Advance or that the LIBO Rate applicable pursuant to
subsection 2.10(a) for any requested Interest Period with respect to a proposed
LIBO Rate Advance does not adequately and fairly reflect the cost to such Banks
of funding such Advance, the Administrative Agent will forthwith give notice of
such determination
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to the Borrower and each Bank. Thereafter, the obligation of the Banks to
make or maintain LIBO Rate Advances hereunder shall be suspended until the
Administrative Agent upon the instruction of the Majority Banks revokes such
notice in writing. Upon receipt of such notice, the Borrower may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by
it. If the Borrower does not revoke such notice, the Banks shall make,
convert or continue the Advances, as proposed by the Borrower, in the amount
specified in the applicable notice submitted by the Borrower, but such
Advances shall be made, converted or continued as Prime Rate Advances instead
of LIBO Rate Advances.
3.06 SUBSTITUTION OF BANKS. Upon the receipt by the Borrower from
any Bank (an "AFFECTED BANK") of a claim for compensation pursuant to Section
3.01 or Section 3.03, or a notice to the Borrower through the Administrative
Agent under Section 3.02(a), unless the Borrower and the Affected Bank have
reached an agreement or are negotiating toward reaching an agreement relative to
alleviating the impact of such claim for compensation or such notice on the
Borrower, the Borrower may: (i) request one or more of the other Banks to
acquire and assume all or part of such Affected Bank's Advances and Revolving
Commitment, which request may be granted or denied in such Bank's sole
discretion; or (ii) designate a replacement bank or financial institution (the
"Substitute Bank") to acquire and assume all or part of such Affected Bank's
Advances and Revolving Commitment. Any such designation of a Substitute Bank
under clause (ii) shall be subject to the prior written consent of the
Administrative Agent (which consent shall not be unreasonably withheld). In the
event of the replacement of an Affected Bank, such Affected Bank agrees to
assign without recourse its rights and obligations hereunder to the Substitute
Bank upon payment by the Substitute Bank to the Affected Bank of the principal
amount of such Affected Banks's outstanding Advances and any accrued and unpaid
interest thereon, and any other amounts owed to such Affected Bank and to
execute and deliver to the Administrative Agent an assignment and acceptance in
form and substance reasonably satisfactory to the Administrative Agent and such
Affected Bank evidencing such assignment and the acceptance by the Substitute
Bank of such Affected Bank's obligations hereunder. The designation of a
Substitute Bank shall not affect the Borrower's obligations to such Affected
Bank hereunder.
3.07 SURVIVAL. The agreements and obligations of the Borrower in
this Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS TO CLOSING. The obligation of each Bank to make its
Revolving Commitment available to the Borrower hereunder is subject to the
condition that the Administrative Agent shall have received on or before the
Closing Date all of the following, in form and substance satisfactory to the
Administrative Agent and each Bank and in sufficient copies for each Bank:
(a) CREDIT AGREEMENT. This Agreement executed by the
Borrower, the Administrative Agent and each of the Banks.
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(b) OTHER LOAN DOCUMENTS. The Note executed by the
Borrower, in favor of the Administrative Agent, as agent for the Banks, the
Guaranty executed by the Guarantors, the Inter-Bank Agreement executed by the
Banks and the Agents, and all other Loan Documents.
(c) RESOLUTIONS: INCUMBENCY.
(i) Copies of the resolutions of the board of
directors of the Borrower approving and authorizing the execution,
delivery and performance by the Borrower of this Agreement, and the
other Loan Documents to be delivered hereunder by the Borrower,
certified as of the Closing Date by the Secretary or an Assistant
Secretary of the Borrower; and
(ii) Copies of the resolutions of the respective
board of directors of the Guarantors approving and authorizing the
execution, delivery and performance by the Guarantors of the Guaranty,
certified as of the Closing Date by the Secretary or an Assistant
Secretary of such Guarantor; and
(iii) Certificates of the Secretary or Assistant
Secretary of the Borrower and each Guarantor certifying the names and
true signatures of the officers of such entity authorized to execute,
deliver and perform this Agreement, and all other Loan Documents to be
delivered hereunder.
(d) LEGAL OPINION. An opinion of Counsel to the Borrower
and the Guarantors and addressed to the Administrative Agent and the Banks,
substantially in the form of EXHIBIT E.
(e) PAYMENT OF FEES. The Borrower shall have paid all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with fees and disbursements of counsel for First
Hawaiian Bank.
(f) CERTIFICATES. A Borrowing Base Certificate dated
September 15, 1998, an initial Leverage Ratio/Interest Coverage Ratio/Base Grid
Certificate, and a compliance certificate signed by a Responsible Officer of
the Borrower, dated as of the Closing Date, stating that:
(i) the representations and warranties contained
in Article V are true and correct on and as of such date, as though
made on and as of such date;
(ii) no Default or Event of Default exists or would
result from the initial Borrowing; and
(iii) there has occurred since August 31, 1998, no
event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect.
(g) FINANCIAL STATEMENTS. Unaudited consolidated financial
statements of the Borrower and its Subsidiaries as of June 30, 1998.
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(h) CERTIFICATE OF GOOD STANDING. A certificate of good
standing for the Borrower and each Guarantor, issued by the appropriate agency
of the state of incorporation for such entity and, if qualified to do business
in the State of Hawaii, by the Director of the Department of Commerce and
Consumer Affairs of the State of Hawaii, as of no earlier than April 1, 1998.
(i) TAX CLEARANCE CERTIFICATE. A tax clearance certificate
for the Borrower and each Guarantor, issued as of no earlier than April 1, 1998,
by the appropriate agency of the state of incorporation for such entity and, if
qualified to do business in the State of Hawaii, by the Department of Taxation
of the State of Hawaii, certifying that all taxes due to the respective state by
such entity, up to and including the date of such certificate, have been paid.
(j) OTHER DOCUMENTS. Such other approvals, opinions,
documents or materials as the Administrative Agent or any Bank may reasonably
request.
4.02 CONDITIONS TO ALL BORROWINGS, SWING-LINE BORROWINGS AND ISSUANCE
OF LETTERS OF CREDIT. The obligation of each Bank to make any Advance hereunder
(including its initial Advance), or to continue or convert any Advance pursuant
to section 2.06, or of the Administrative Agent to make any Swing-Line Advance
hereunder, or of the Administrative Agent or the Issuing Bank to issue any
Letter of Credit hereunder, is subject to the satisfaction of the following
conditions precedent on the relevant date therefor:
(a) NOTICE OF BORROWING OR CONTINUATION/CONVERSION. The
Administrative Agent shall have received a Notice of Borrowing or a Notice of
Swing-Line Borrowing or a Request for Issuance of Letter of Credit or a Notice
of Continuation/Conversion, as applicable;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Borrower herein, and by the
Guarantors in the Guaranty, shall be true and correct on and as of such date,
with the same effect as if made on and as of such date (except to the extent
such representations and warranties expressly refer to an earlier date, in which
case they shall be true and correct as of such earlier date); and
(c) NO EXISTING DEFAULT. No Default or Event of Default
shall exist or shall result from such Borrowing or continuation or conversion.
Each Notice of Borrowing, Notice of Swing-Line Borrowing, Request for Issuance
of Letter of Credit and Notice of Continuation/Conversion submitted by the
Borrower, hereunder shall constitute a representation and warranty by the
Borrower hereunder, as of the applicable effective date thereof, that the
conditions in this Section 4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
each Bank that:
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5.01 ORGANIZATION, STANDING AND AUTHORITY.
(a) XXXXXXX HOMES, INC.: Xxxxxxx Homes, Inc. is a Delaware
corporation, validly existing and in good standing under the laws of the State
of Delaware, is registered to do business and in good standing in the State of
Hawaii, is solvent, and has all requisite corporate power and authority to carry
on the business and to own the property that it now carries on and owns.
Xxxxxxx Homes, Inc. has all requisite corporate power and authority to execute
and deliver this Agreement and the other Loan Documents and to observe and
perform all of the provisions and conditions thereof. The execution and
delivery of the Loan Documents have been duly authorized by the board of
directors of Xxxxxxx Homes, Inc., and no other corporate action of or for such
company is requisite to the execution and delivery of this Agreement and the
other Loan Documents.
(b) XXXXXXX HOMES OF CALIFORNIA, INC.: Xxxxxxx Homes of
California, Inc. is a California corporation, validly existing and in good
standing under the laws of the State of California, is solvent, and has all
requisite corporate power and authority to carry on the business and to own the
property that it now carries on and owns. Xxxxxxx Homes of California, Inc. has
all requisite corporate power and authority to execute and deliver the Guaranty
and to observe and perform all of the provisions and conditions thereof. The
execution and delivery of the Guaranty have been duly authorized by the board of
directors of Xxxxxxx Homes of California, Inc., and no other corporate action of
or for such company is requisite to the execution and delivery of the Guaranty.
(c) XXXXXXX HOMES OF OREGON, INC.: Xxxxxxx Homes of Oregon,
Inc. is an Oregon corporation, validly existing and in good standing under the
laws of the State of Oregon, is solvent, and has all requisite corporate power
and authority to carry on the business and to own the property that it now
carries on and owns. Xxxxxxx Homes of Oregon, Inc. has all requisite corporate
power and authority to execute and deliver the Guaranty and to observe and
perform all of the provisions and conditions thereof. The execution and
delivery of the Guaranty have been duly authorized by the board of directors of
Xxxxxxx Homes of Oregon, Inc., and no other corporate action of or for such
company is requisite to the execution and delivery of the Guaranty.
(d) XXXXXXX HOMES OF WASHINGTON, INC.: Xxxxxxx Homes of
Washington, Inc. is a Washington corporation, validly existing and in good
standing under the laws of the State of Washington, is solvent, and has all
requisite corporate power and authority to carry on the business and to own the
property that it now carries on and owns. Xxxxxxx Homes of Washington, Inc. has
all requisite corporate power and authority to execute and deliver the Guaranty
and to observe and perform all of the provisions and conditions thereof. The
execution and delivery of the Guaranty have been duly authorized by the board of
directors of Xxxxxxx Homes of Washington, Inc., and no other corporate action of
or for such company is requisite to the execution and delivery of the Guaranty.
(e) MELODY HOMES, INC.: Melody Homes, Inc. is a Delaware
corporation, validly existing and in good standing under the laws of the State
of Delaware, and the State of Colorado, as applicable, is solvent, and has all
requisite corporate power and authority to carry on the
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business and to own the property that it now carries on and owns. Melody
Homes, Inc. has all requisite corporate power and authority to execute and
deliver the Guaranty and to observe and perform all of the provisions and
conditions thereof. The execution and delivery of the Guaranty have been
duly authorized by the board of directors of Melody Homes, Inc., and no other
corporate action of or for such company is requisite to the execution and
delivery of the Guaranty.
(f) XXXXXXX REALTY/MAUI, INC.: Xxxxxxx Realty/Maui, Inc. is a
Hawaii corporation, validly existing and in good standing under the laws of the
State of Hawaii, is solvent, and has all requisite corporate power and authority
to carry on the business and to own the property that it now carries on and
owns. Xxxxxxx Realty/Maui, Inc. has all requisite corporate power and authority
to execute and deliver the Guaranty and to observe and perform all of the
provisions and conditions thereof. The execution and delivery of the Guaranty
have been duly authorized by the board of directors of Xxxxxxx Realty/Maui,
Inc., and no other corporate action of or for such company is requisite to the
execution and delivery of the Guaranty.
(g) XXXXXXX REALTY/OAHU, INC.: Xxxxxxx Realty/Oahu, Inc. is a
Hawaii corporation, validly existing and in good standing under the laws of the
State of Hawaii, is solvent, and has all requisite corporate power and authority
to carry on the business and to own the property that it now carries on and
owns. Xxxxxxx Realty/Oahu, Inc. has all requisite corporate power and authority
to execute and deliver the Guaranty and to observe and perform all of the
provisions and conditions thereof. The execution and delivery of the Guaranty
have been duly authorized by the board of directors of Xxxxxxx Realty/Oahu,
Inc., and no other corporate action of or for such company is requisite to the
execution and delivery of the Guaranty.
(h) LOKELANI CONSTRUCTION CORPORATION: Lokelani Construction
Corporation is a Delaware corporation, validly existing and in good standing
under the laws of the State of Delaware, is registered to do business and in
good standing in the State of Hawaii, is solvent, and has all requisite
corporate power and authority to carry on the business and to own the property
that it now carries on and owns. Lokelani Construction Corporation has all
requisite corporate power and authority to execute and deliver the Guaranty and
to observe and perform all of the provisions and conditions thereof. The
execution and delivery of the Guaranty have been duly authorized by the board of
directors of Lokelani Construction Corporation, and no other corporate action of
or for such company is requisite to the execution and delivery of the Guaranty.
(i) MELODY MORTGAGE CO.: Melody Mortgage Co. is a Colorado
corporation, validly existing and in good standing under the laws of the State
of Colorado, is solvent, and has all requisite corporate power and authority to
carry on the business and to own the property that it now carries on and owns.
Melody Mortgage Co. has all requisite corporate power and authority to execute
and deliver the Guaranty and to observe and perform all of the provisions and
conditions thereof. The execution and delivery of the Guaranty have been duly
authorized by the board of directors of Melody Mortgage Co., and no other
corporate action of or for such company is requisite to the execution and
delivery of the Guaranty.
(j) SHLR OF WASHINGTON, INC.: SHLR of Washington, Inc. is a
Washington corporation, validly existing and in good standing under the laws of
the State of Washington, is solvent, and has all requisite corporate power and
authority to carry on the business and to own
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the property that it now carries on and owns. SHLR of Washington, Inc. has
all requisite corporate power and authority to execute and deliver the
Guaranty and to observe and perform all of the provisions and conditions
thereof. The execution and delivery of the Guaranty have been duly
authorized by the board of directors of SHLR of Washington, Inc., and no
other corporate action of or for such company is requisite to the execution
and delivery of the Guaranty.
(k) SHLR OF UTAH, INC.: SHLR of Utah, Inc. is a Utah
corporation, validly existing and in good standing under the laws of the State
of Utah, is solvent, and has all requisite corporate power and authority to
carry on the business and to own the property that it now carries on and owns.
SHLR of Utah, Inc. has all requisite corporate power and authority to execute
and deliver the Guaranty and to observe and perform all of the provisions and
conditions thereof. The execution and delivery of the Guaranty have been duly
authorized by the board of directors of SHLR of Utah, Inc., and no other
corporate action of or for such company is requisite to the execution and
delivery of the Guaranty.
(l) SHLR OF COLORADO, INC.: SHLR of Colorado, Inc. is a
Colorado corporation, validly existing and in good standing under the laws of
the State of Colorado, is solvent, and has all requisite corporate power and
authority to carry on the business and to own the property that it now carries
on and owns. SHLR of Colorado, Inc. has all requisite corporate power and
authority to execute and deliver the Guaranty and to observe and perform all of
the provisions and conditions thereof. The execution and delivery of the
Guaranty have been duly authorized by the board of directors of SHLR of
Colorado, Inc., and no other corporate action of or for such company is
requisite to the execution and delivery of the Guaranty.
5.02 TAX RETURNS AND PAYMENTS. All material tax returns and reports
of the Borrower and its Subsidiaries required by law to be filed have been duly
filed, and all taxes, assessments, contributions, fees and other governmental
charges the liability for which could exceed $100,000 (other than those
presently payable without penalty or interest and those which have been
disclosed to the Banks but which are currently being contested in good faith)
upon the Borrower or any of its Subsidiaries or upon the properties or assets or
income of the Borrower or its Subsidiaries, which are due and payable, have been
paid.
5.03 LITIGATION. There is, to the knowledge of the Borrower, no
action, suit, proceeding or investigation pending at law or in equity or before
any Governmental Authority, or threatened against or affecting the Borrower or
its Subsidiaries, an adverse ruling in which would or might constitute a
Material Adverse Effect.
5.04 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME. Neither the
Borrower nor any of its Subsidiaries are in violation of or in default with
respect to any term or provision of its Articles of Incorporation or Bylaws, and
neither the Borrower or any of its Subsidiaries is, to the best knowledge of the
Borrower, in violation of or in default with respect to any term or provision of
any mortgage, indenture, contract, agreement or instrument applicable to it or
by which it may be bound; and the execution, delivery, performance of and
compliance with each and all of the Loan Documents by the Borrower and the
Guaranty by the Subsidiaries will not result in any such violation, or be in
conflict with or constitute a default under any such term or provision, or
result
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in the creation of any mortgage, lien or charge on any of the properties or
assets of the Borrower or its Subsidiaries; and there is no term or provision
of the Borrower's or any Subsidiaries' Articles of Incorporation or Bylaws,
or any mortgage, indenture, contract, agreement or instrument applicable to
the Borrower or its Subsidiaries or by which the Borrower or any Subsidiary
may be bound, which may adversely affect the business or prospects or
condition (financial or other) of the Borrower, any of its Subsidiaries, or
any of their respective properties or assets.
5.05 COMPLIANCE WITH LAW. The consummation of the transactions
contemplated by the Loan Documents will not conflict with or result in a
breach of any law, statute, ordinance, regulation, order, writ, injunction,
judgment of any court or governmental instrumentality, domestic or foreign,
applicable to the Borrower or its Subsidiaries.
5.06 GOVERNMENTAL AUTHORIZATION. No consent, approval or
authorization of, or registration, declaration or filing with, any
Governmental Authority in connection with the valid execution and delivery of
each of the Loan Documents is required or, if required, such consent,
approval, order or authorization shall have been obtained prior to the
Closing Date.
5.07 FINANCIAL STATEMENTS. All financial statements heretofore
delivered to the Banks by the Borrower and its Subsidiaries are true and
correct in all respects, and fairly represent the financial condition of the
subjects thereof as of the dates thereof; and no material, adverse changes
have occurred in the financial condition reflected therein since the dates
thereof.
5.08 BROKERS, FINDERS AND AGENTS. The Borrower has not employed
or engaged any broker, finder or agent who may claim a commission or fee or
other compensation with respect to the Aggregate Commitment or the
transactions described herein. Without in any way limiting the generality of
Section 10.05 of this Agreement, the Borrower will indemnify and hold each
Bank harmless from any and all claims of brokers or other claims for
commissions or fees in connection with the Aggregate Commitment and the
transactions described herein, and will further hold each Bank harmless and
indemnify each Bank against all losses, damages, costs and charges (including
attorneys' fees) which such Bank may sustain because of such claims or in
consequence of defending against such claims.
5.09 COMPLIANCE WITH FUNDING STANDARDS. The Borrower and each
Subsidiary has fulfilled its obligations under the minimum funding standards
of ERISA and the Code with respect to each Plan in which it is a member and
is in compliance in all material respects with the currently applicable
provisions of ERISA and the Code, and has not incurred any liability to the
PBGC.
5.10 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the
Advances are intended to be and shall be used solely for the purposes set
forth in and permitted by this Agreement, and are intended to be and shall be
used in compliance with Section 7.01. Neither the Borrower nor any of its
Subsidiaries is generally engaged in the business of purchasing or selling
Margin Stock or extending credit for the purpose of purchasing or carrying
Margin Stock.
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5.11 NO MATERIAL ADVERSE EFFECT. Since September 30, 1998
there has been no Material Adverse Effect.
5.12 REGULATED ENTITIES. None of the Borrower, any Subsidiary of
the Borrower or any Person controlling the Borrower or any of its
Subsidiaries is (a) an "Investment Company" within the meaning of the
Investment Company Act of 1940; or (b) subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, any state public
utilities code, or any other Federal or state statute or regulation limiting
its ability to incur Indebtedness.
5.13 FULL DISCLOSURE. None of the representations or warranties
made by the Borrower or any of its Subsidiaries in the Loan Documents as of
the date such representations and warranties are made or deemed made, and
none of the statements contained in each exhibit, report, statement or
certificate furnished by or on behalf of the Borrower or any of its
Subsidiaries in connection with the Loan Documents (including the offering
and disclosure materials delivered by or on behalf of the Borrower to the
Banks prior to the Closing Date), contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which
they are made, not misleading as of the time when made or delivered.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Bank shall
have any commitment to extend credit hereunder, or any Advance, Swing-Line
Advance, or Letter of Credit shall remain unpaid or unsatisfied, unless the
Majority Banks waive compliance in writing:
6.01 FINANCIAL STATEMENTS. The Borrower shall deliver to the
Administrative Agent in form and detail satisfactory to the Administrative
Agent and the Majority Banks, with sufficient copies for each Bank:
(a) as soon as available, but not later than ninety (90)
days after the end of each fiscal year, (i) a copy of the Borrower's annual
10-K Report filed with the Securities and Exchange Commission, which includes
a copy of the audited consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such year and the related consolidated
statements of income, shareholders' equity and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, and accompanied by the opinion of a
nationally-recognized independent public accounting firm which report shall
state that such consolidated financial statements represent fairly the
financial position and results of operations as of the end of and for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years, (such opinion shall not be qualified or limited because of a
restricted or limited examination by such accountant of any material portion
of the records of the Borrower or its Subsidiaries); and (ii) a copy of the
consolidating reports of the Borrower and all of its Subsidiaries;
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(b) as soon as available, but not later than forty-five
(45) days after the end of each Quarter, (i) a copy of the Borrower's
quarterly 10-Q Report filed with the Securities and Exchange Commission,
which includes a copy of the unaudited consolidated balance sheets of the
Borrower and its Subsidiaries as of the end of such Quarter and the related
consolidated statements of income, shareholders' equity and cash flows for
the period commencing on the first day and ending on the last day of such
Quarter, and certified by an appropriate Responsible Officer of the Borrower
as being complete and correct and fairly presenting, in accordance with
Article 10 of SEC Regulation S-X, the consolidated financial position and the
consolidated results of operations of the Borrower and its Subsidiaries; and
(ii) a copy of the consolidating reports of the Borrower and all of its
Subsidiaries;
(c) not later than five (5) days after the filing
thereof, copies of all reports and registration statements which the Borrower
files with the Securities and Exchange Commission or any national securities
exchange.
6.02 CERTIFICATES; OTHER INFORMATION. The Borrower shall furnish
to the Administrative Agent, with sufficient copies for each Bank:
(a) not later than forty-five (45) days after the end of
each Quarter, a certificate of a Responsible Officer of the Borrower, in the
form of EXHIBIT F-1 stating that, to the best of such officer's knowledge,
the Borrower and its Subsidiaries during such period, have observed and
performed all of their covenants and other agreements, and satisfied every
condition contained in this Agreement to be observed, performed or satisfied
by the Borrower and its Subsidiaries and that such officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate, which, where a Default or Event of Default is specified, shall
set forth the details of the occurrence referred to therein, state what
action the Borrower or its Subsidiaries propose to take with respect thereto
and at what time, and describe with particularity any and all applicable
clauses or provisions of this Agreement which have been breached or violated,
together with a calculation of (i) the percentage of common stock in the
Borrower owned by Xxxxx X. Xxxxxxx as of the end of such Quarter, (ii) the
minimum Consolidated Tangible Net Worth of the Borrower and its Subsidiaries
as of the end of such Quarter, (iii) the Consolidated Net Earnings for the
Borrower and its Subsidiaries during such Quarter, (iv) the amount of and net
proceeds received from any Equity Offering (other than the exercise of an
employee stock option) or conversion of a subordinated convertible debenture
consummated or effected during such Quarter, (v) Real Estate Development
Assets, Real Estate Indebtedness, and the Development Ratio for the Borrower
and its Subsidiaries as of the end of such Quarter, and (vi) the Capitalized
Interest for the Borrower and its Subsidiaries as of the end of such Quarter,
showing, for each item (i) through (vii) above, the comparison between such
Quarter and previous Quarters (beginning with the Quarter ending June 30,
1998).
(b) not later than forty-five (45) days after the end of
each Quarter a certificate of a Responsible Officer of the Borrower, in the
form of EXHIBIT F-2 for each project in which the Borrower or any of its
Subsidiaries has an investment, relating to the status of all Unentitled Land
(location, purchase price, number of lots and entitlement schedule),
Unimproved Land (location, number of lots and development schedule), and Land
Under Development (location and status of development), as of the end of the
previous Quarter.
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(c) not later than fifteen (15) days after the end of
each month, provided, however, that if the end of such month is also the end
of a Quarter, then not later than twenty-five (25) days after the end of such
month, a certificate of a Responsible Officer of the Borrower, in the form of
EXHIBIT F-3 for each project in which the Borrower or any of its Subsidiaries
has an investment, relating to the status of all Unsold Homes Under
Construction (location and number of homes), Completed Unsold Homes (location
and number of homes), Completed Unsold Homes Over 180 Days (location and
number of homes), and Contracted Homes (location, number of homes and status
of sales), as of the end of the previous month.
(d) not later than fifteen (15) days after the end of
each month, provided, however, that if the end of such month is also the end
of a Quarter, then not later than twenty-five (25) days after the end of such
month, a Borrowing Base Certificate of a Responsible Officer of the Borrower,
in the form of EXHIBIT F-4, containing a detailed listing and a summary of
all Real Estate Development Assets, as of the end of the previous month.
(e) not later than forty-five (45) days after the end of
each Quarter, a Leverage Ratio/Interest Coverage Ratio/Base Grid Certificate
of a Responsible Office of the Borrower, in the form of EXHIBIT F-5,
containing a calculation of the total Indebtedness of the Borrower and its
Subsidiaries, and the Consolidated Tangible Net Worth of the Borrower and its
Subsidiaries, as of the end of the previous Quarter, based on balance sheet
information prepared in accordance with GAAP.
(f) as soon as available, but not later than ninety (90)
days after the end of each fiscal year, a projected consolidated balance
sheet of the Borrower and its Subsidiaries for the next three (3) fiscal
years, prepared on a Quarterly basis, and the related projected consolidated
statements of income, shareholders' equity and cash flows for such fiscal
years, setting forth in each case in comparative form the figures for the
previous fiscal year (whether such figures for such previous fiscal year were
actual or projected).
(g) promptly, such additional business, financial,
corporate affairs and other information as the Administrative Agent, at the
request of any Bank, may from time to time reasonably request.
6.03 NOTICES. The Borrower shall promptly notify each Bank
through the Administrative Agent:
(a) (i) of the occurrence of any Default or Event of
Default, (ii) of the occurrence or existence of any event or circumstance
that foreseeably is likely to become a Default or Event of Default, and (iii)
of the occurrence or existence of any event or circumstance that would cause
the condition to Borrowing, conversion or continuation set forth in
subsection 4.02(b) not to be satisfied if a Borrowing, conversion or
continuation were requested on or after the date of such event or
circumstance;
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(b) of any breach or non-performance of, or any default
under, any contractual obligation (including a contractual obligation by
which any of its property is bound) of the Borrower or any of its Subsidiary
which could result in a Material Adverse Effect;
(c) of the commencement of, or any material development
in, any litigation or proceeding affecting the Borrower or any of its
Subsidiary which, if adversely determined, would reasonably be expected to
have a Material Adverse Effect; or in which the relief sought is an
injunction or other stay of the performance of this Agreement; and
(d) of any Material Adverse Effect subsequent to the date
of the most recent audited financial statements of the Borrower delivered to
the Banks pursuant to this Agreement;
Each notice pursuant to this Section shall be accompanied by
a written statement by a Responsible Officer of the Borrower setting forth
details of the occurrence referred to therein, and stating what action the
Borrower proposes to take with respect thereto and at what time. Each notice
under subsection 6.03(a) shall describe with particularity any and all
clauses or provisions of this Agreement that have been breached or violated.
6.04 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause
its Subsidiaries to, pay and discharge as the same shall become due and
payable, all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are
being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by the Borrower or such
Subsidiary;
(b) all lawful claims which, if unpaid, would by law
become a lien upon its property; and
(c) all Indebtedness, as and when due and payable, but
subject to the restrictions contained in Section 7.05 of this Agreement.
6.05 COMPLIANCE WITH LAWS. The Borrower shall comply, and shall
cause each of its Subsidiaries to comply, in all material respects with all
Requirements of Law of any Governmental Authority having jurisdiction over
them or their business (including the Federal Fair Labor Standards Act), the
breach of which would have a Material Adverse Effect, except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.06 INSPECTION OF PROPERTY AND BOOKS AND PROCEEDS. The Borrower
shall maintain and shall cause each of its Subsidiaries to maintain books,
accounts, and records in accordance with GAAP and permit employees or agents
of the Administrative Agent and any Bank, at any reasonable time, to inspect
their properties, and permit employees or agents of the Administrative Agent
and any Bank, at any reasonable time, once per Quarter, to examine and audit
their books, accounts, and records and make copies and memoranda thereof, at
such Bank's expense, at such
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reasonable times during normal business hours, upon reasonable advance notice
to the Borrower; PROVIDED, HOWEVER, when an Event of Default exists the
Administrative Agent or any Bank may do any of the foregoing at the expense
of the Borrower at any time during normal business hours and without advance
notice.
6.07 MINIMUM TANGIBLE NET WORTH. The Borrower shall maintain the
Consolidated Tangible Net Worth, as at the end of each Quarter, at a level
equal to or greater than (a) $138,000,000, plus (b) fifty percent (50%) of
Consolidated Net Earnings cumulative since January 1, 1998, provided that in
no event shall such amount be decreased as a result of any losses sustained
after such date, plus (c) ninety percent (90%) of net proceeds received from
any Equity Offering, and from any conversion of a subordinated convertible
debenture, consummated or effected after the Closing Date.
6.08 PRESERVATION OF CORPORATE EXISTENCE. The Borrower shall, and
shall cause each Subsidiary to, maintain its corporate existence in good
standing under the laws of the jurisdiction in which it is incorporated and
in which it conducts business, and shall not, without the prior written
consent of the Majority Banks, make any material amendment to, or
modification of, or terminate, its constituent documents, true and correct
copies of which the Borrower represents have been provided to the Banks.
6.09 APPRAISAL. Independent FIRREA appraisals may be requested
from the Borrower, and the Borrower shall provide such appraisals, if
required to conform with FDICIA guidelines or other banking laws, rules or
regulations.
6.10 AUTHORIZED STATES. The Borrower shall restrict its business,
and shall cause each Subsidiary to restrict its business, except as provided
below, only to the Authorized States. If the Borrower wishes to obtain the
consent of the Majority Banks for any proposed deviation from the above, the
Borrower shall furnish the Administrative Agent, and the Administrative Agent
shall forward to the Banks: (i) a copy of the proposed plan of expansion
beyond the Authorized States, (ii) a pro forma budget and cash flow
projection for the proposed expansion, (iii) supporting market studies and
projections as deemed necessary by the Majority Banks, and (iv) supporting
appraisals and/or market evaluations, if required by the Majority Banks. The
Administrative Agent shall advise the Borrower of the decision by the
Majority Banks within thirty (30) days after the receipt by the
Administrative Agent of all of the required items described above.
6.11 QUARTERLY MEETINGS. The Borrower shall meet quarterly with
the Banks, either in person or by telephone conference call, on such dates
and at such times as may be mutually agreeable, provided, however, that such
meeting shall held no later than forty-five (45) days after the end of each
Quarter, to discuss the progress of the Borrower in comparison to the
Business Plan.
6.12 SUBSIDIARIES. Each Subsidiary of the Borrower shall
unconditionally and jointly and severally guarantee the obligations of the
Borrower under the Loan Documents pursuant to the Guaranty. The guarantee
obligations of each Guarantor will be a Permitted Indebtedness and senior to
all Subordinated Debt, but PARI PASSU with any guaranties of such Subsidiary
provided
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in support of the Senior Notes. To the extent that the Borrower or its
Subsidiaries are permitted under this Agreement to incorporate or otherwise
form new Subsidiaries, the Borrower agrees that such new Subsidiary shall be
added as a Guarantor under this Agreement and the Guaranty, and shall execute
such Guaranty; provided, however, that the Captive Insurance Subsidiary shall
not be subject to this section.
6.13 YEAR 2000 COVENANT. The Borrower shall reasonably take
appropriate actions to ensure that the Borrower and its Subsidiaries are Year
2000 Compliant in a timely manner, but in no event later than June 30, 1999,
except to the extent that the failure to be Year 2000 Compliant could not
reasonably be expected to have a material adverse effect on the Borrower's or
its Subsidiaries' business and operations or to have a material adverse
economic impact upon the Borrower or its Subsidiaries. The term "Year 2000
Compliant" shall mean, in regard to any property or entity, that all
software, hardware, equipment, goods or systems utilized by or material to
the physical operations, business operations, or financial reporting of such
property or entity (collectively, the "Systems") will properly perform date
sensitive functions before, during and after the year 2000. In furtherance
of this covenant, the Borrower, in addition to any other necessary actions,
shall perform a comprehensive review and assessment of all material Systems
of the Borrower and its Subsidiaries, and shall adopt a detailed plan, with
itemized budget, for the testing, remediation, and monitoring of such
Systems. In addition, the Borrower shall make reasonable inquiries of and
request reasonable validation that each of the following are similarly Year
2000 Compliant: (a) all major tenants or other major entities from which the
Borrower or its Subsidiaries receives payments; and (b) all major
contractors, suppliers, service providers and vendors of the Borrower and/or
its Subsidiaries. As used in the previous sentence, "major" shall mean
entities the failure of which to be Year 2000 Compliant would have a material
adverse effect on the Borrower's or its Subsidiaries' business and
operations, or a material adverse economic impact upon the Borrower or its
Subsidiaries. The Borrower, within thirty business days of the
Administrative Agent's written request, shall provide to the Administrative
Agent such certifications or other evidence of the Borrower's compliance with
the terms of this paragraph as the Administrative Agent may from time to time
reasonably require.
ARTICLE VII
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as any Bank
shall have any commitment to extend credit hereunder, or any Advance,
Swing-Line Advance, or Letter of Credit shall remain unpaid or unsatisfied,
unless the Majority Banks waive compliance in writing:
7.01 USE OF PROCEEDS. The Borrower shall not and shall not suffer
or permit any of its Subsidiaries to use any portion of the proceeds of any
Advance, directly or indirectly, (i) to purchase or carry Margin Stock, (ii)
to repay or otherwise refinance indebtedness of the Borrower or others
incurred to purchase or carry Margin Stock, (iii) to extend credit for the
purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the
Securities Exchange Act of 1934 and regulations promulgated under such act.
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7.02 LEVERAGE RATIO.
(a) Effective as of June 30, 1998, the Borrower shall not,
and shall not permit its Subsidiaries to, allow the Leverage Ratio (1997),
measured as of the end of the Quarter ending June 30, 1998, to exceed 1.35 to
1.
(b) Subject to the Base Grid as provided in subsection
7.02(c), the Borrower shall not, and shall not permit its Subsidiaries to,
allow the Leverage Ratio, measured as of the end of the Quarter ending
September 30, 1998, and as of the end of each Quarter thereafter, to exceed
1.60 to 1.
(c) Notwithstanding the requirements of the Leverage Ratio
provided hereinabove and the Interest Coverage Ratio provided in Section
7.04, the Borrower shall not, and shall not permit its Subsidiaries to,
exceed the Base Grid parameters as provided below:
(i) if the Interest Coverage Ratio is greater than or
equal to 1.75 to 1, but less than 2.00 to 1, then the Leverage
Ratio shall be less than or equal to 1.35 to 1;
(ii) if the Interest Coverage Ratio is greater than or
equal to 2.00 to 1, but less than 2.50 to 1, then the Leverage
Ratio shall be less than or equal to 1.50 to 1; and
(iii) if the Interest Coverage Ratio is greater than or
equal to 2.50 to 1, then the Leverage Ratio shall be less than
or equal to 1.60 to 1.
The Borrower shall have the option to exceed the Base Grid
parameters for two consecutive Quarters (the "Carve-Out Period") upon written
notice to the Administrative Agent, provided the following conditions are
satisfied:
(1) during the Carve-Out Period, the Borrower shall
not, and shall not permit its Subsidiaries to, allow the Interest Coverage
Ratio to be less than 1.75 to 1;
(2) during the Carve-Out Period, the Borrower shall
not, and shall not permit its Subsidiaries to, allow the Leverage Ratio to
exceed 1.60 to 1;
(3) the Administrative Agent and the Majority Banks
shall have approved the Borrower's financial statements, certificates (as
required by Sections 6.01 and 6.02), demonstrating the Borrower's compliance
with all other financial covenants contained in Section 7.02 for the
Carve-Out Period, and the Borrower's plan to return to compliance with the
Base Grid parameters; and
(4) the Borrower shall be in compliance with the
Base Grid parameters at the end of the Carve-Out Period.
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If the Borrower exercises this option, the Borrower shall be
required to maintain compliance with the Base Grid parameters for a period of at
least four consecutive Quarters before it may be permitted to exercise the
option again.
7.03 DEVELOPMENT RATIO. The Borrower shall not, and shall not permit
its Subsidiaries to, allow the Development Ratio, measured as of the end of each
Quarter, to be less than 1.50 to 1.
7.04 INTEREST COVERAGE RATIO. Subject to the Base Grid as provided
in Section 7.02(c), the Borrower shall not, and shall not permit its
Subsidiaries to, allow the Interest Coverage Ratio, measured as of the end of
each Quarter on a rolling four (4) Quarters basis, to be less than 1.75 to 1.
7.05 NO REPAYMENT OF SUBORDINATED DEBT. The Borrower shall not repay
or permit any of its Subsidiaries to repay any of the Subordinated Debt, without
the prior written consent of the Banks, which consent may be withheld in the
sole discretion of any Bank.
7.06 ADDITIONAL INDEBTEDNESS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, assume, or become or remain liable
for or committed to incur, directly or indirectly, any Indebtedness or Guaranty
Obligation in excess of an aggregate amount of $10,000,000, other than the
Permitted Indebtedness.
7.07 ADDITIONAL INVESTMENTS AND ACQUISITIONS. The Borrower shall
not, and shall not permit any of its Subsidiaries to, except as provided below,
directly or indirectly, invest in, purchase or acquire any interest in real
property (fee or leasehold) or any stocks, bonds, notes, debentures or other
securities of or acquire by purchase or otherwise all or substantially all of
the business or assets, or stock, partnership interests or other evidence of
ownership (beneficial or otherwise) or make any other investment in, any
corporation, association, partnership, organization or individual; or directly
or indirectly, make or commit to make any loan, advance, guaranty or extension
of credit to any corporation, association, partnership, organization or
individual; or directly or indirectly, assume, endorse, be or become liable for,
or guarantee directly or indirectly any debt or obligation of any corporation,
association, partnership, organization or individual; PROVIDED HOWEVER, that
notwithstanding the foregoing, the Borrower and its Subsidiaries may:
(a) make other real estate investments or acquisitions, not in
contravention of any provision of this Agreement or any Requirement of Law, and
the total capital commitment (the "Total Project Investment") and the capital
commitment outstanding at any one time (the "Peak Net Investment") for which
shall not exceed the following designated amounts for a single project (multiple
phases of a project are considered in the aggregate and not as separate
projects):
State Peak Net Investment Total Project Investment
----- ------------------- ------------------------
Hawaii $50,000,000 $75,000,000
Colorado $30,000,000 $75,000,000
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California $25,000,000 $75,000,000
Washington $20,000,000 $50,000,000
Oregon $20,000,000 $50,000,000
Utah $20,000,000 $50,000,000
(The Borrower and the Banks acknowledge that, as of the Closing Date, the
Borrower has existing agreements for real estate investments or acquisitions
which are excluded from this provision.)
(b) make other investments in an amount which shall not exceed
$2,000,000 in a Captive Insurance Subsidiary;
(c) make any other Permitted Investment, without the necessity
of obtaining the consent of the Majority Banks; and
(d) make such guaranties as may be necessary in support of the
Senior Notes.
If the Borrower wishes to obtain the consent of the Majority Banks for any
proposed deviation from the above, the Borrower shall furnish to the
Administrative Agent, and the Administrative Agent shall forward to the Banks:
(i) a copy of all contracts to be entered into by the Borrower or its
Subsidiaries with respect to the proposed transaction, (ii) a pro forma budget
and cash flow projection for the proposed transaction, (iii) supporting market
studies and projections as deemed necessary by the Majority Banks, and (iv)
supporting appraisals and/or market evaluations, if required by the Majority
Banks. The Administrative Agent shall advise the Borrower of the decision by
the Majority Banks within thirty (30) days after the receipt by the
Administrative Agent of all of the required items described above.
7.08 INVENTORY RESTRICTIONS.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, acquire or obtain any interest in, or contract to acquire or
obtain any interest in, any Unentitled Land.
(b) The Borrower shall not, and shall any permit any of its
Subsidiaries to, allow their inventory of Completed Unsold Homes to exceed the
applicable levels set forth in SCHEDULE 2 attached hereto.
(c) The Borrower shall not, and shall not permit any of its
Subsidiaries to, allow its inventory of Unimproved Land to exceed 35% of the
GAAP consolidated net book value of "Real Estate Inventories" in the
consolidated financial statements of the Borrower and its Subsidiaries, the
balance of which is included in the Borrowing Base calculation, as of the end of
each month.
7.09 NEGATIVE PLEDGE. The Borrower and/or any of its Subsidiaries
shall not create, incur, assume, or suffer to exist any lien, encumbrance,
mortgage, security interest, pledge, or charge of any kind (including. without
limitation, any negative pledge, or any "secret",
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"springing", or other unrecorded lien) upon any of their property or assets
of any character, whether now owned or hereafter acquired, or transfer any of
such property or assets for the purpose of subjecting the same to the payment
of any indebtedness or performance of any other obligation, or acquire or
have an option to acquire any property or assets upon conditional sale or
other title retention agreement, device or arrangement; provided, however,
that the Borrower and its Subsidiaries may create or incur or suffer to be
created or incurred or to exist: (i) liens for taxes or assessments for
governmental charges or levies if payment thereof shall not at the time be
required to be made; (ii) liens in respect of pledges and deposits under
workers' compensation laws or similar legislation, and in respect of pledges
or deposits in connection with appeal or similar bonds incidental to the
conduct of litigation; (iii) liens incidental to the conduct of the business
of the Borrower and its Subsidiaries not incurred in connection with the
borrowing of money or the obtaining of advances or credit and which do not in
the aggregate materially detract from the value of their assets or property;
(iv) mechanics' and materialmen's liens which have attached pursuant to
Chapter 507, Hawaii Revised Statutes, as long as the Borrower or its
Subsidiaries have filed a bond, sufficient to discharge such lien, with the
clerk of the applicable circuit court, as provided in Section 507-43, Hawaii
Revised Statutes; and (v) liens specifically allowed with respect to
"Permitted Indebtedness". This negative pledge shall not apply to any
portion of the Borrower's or any of its Subsidiaries' property or assets
transferred, assigned or conveyed upon due consideration to a "Third Party
Purchaser". As used herein, the term "Third Party Purchaser" shall mean any
individual, partnership, corporation, business trust, joint stock company,
trust, unincorporated association, joint venture or governmental authority,
other than the Borrower or any of its Subsidiaries, Waiakoa Estates
Subdivision Joint Venture, Iao Partners, Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx,
Xxxxxx X. Goth, Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxx
X. Xxxxx, Xxxxx Xxxxx or Xxx Xxxxx.
7.10 NO HIGH-RISE CONSTRUCTION. The Borrower shall not, and shall
not permit its Subsidiaries to, engage in any development of a residential or
commercial building having more than four (4) stories, other than Country Club
Village.
7.11 [Reserved]
7.12 TRANSFER OF ASSETS TO CAPTIVE INSURANCE SUBSIDIARY. Except as
may be permitted in Section 7.07, the Borrower or any of its Subsidiaries shall
not transfer any assets or property to any of the Borrower's Subsidiaries,
without the prior written consent of the Banks, which consent may be withheld by
the Banks in their sole discretion.
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ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an
"Event of Default":
(a) NON-PAYMENT. The Borrower fails to pay, when and as
required to be paid herein, (i) any amount of principal of any Advance or
Swing-Line Advance; or (ii) any interest, fee or other amount payable
hereunder or pursuant to any other Loan Document, unless such failure to pay
such interest, fee or other charge is remedied within five (5) Business Days
after the due date therefor; or
(b) REPRESENTATION OR WARRANTY. Any representation or
warranty by the Borrower made or deemed made herein or which is contained in any
certificate, document or financial or other statement by or on behalf of the
Borrower, furnished at any time under this Agreement, shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. The Borrower fails to perform or
observe any term, covenant or agreement contained in Section 7.01; or
(d) OTHER DEFAULTS. Except as provided in subsection
8.01(l) below, the Borrower fails to perform or observe any other covenant
contained in this Agreement or any other Loan Document, and such default shall
continue unremedied for a period of 45 days after the earlier of (i) the date
upon which a Responsible Officer of the Borrower knew of such failure or (ii)
the date upon which written notice thereof is given to the Borrower by the
Administrative Agent or any Bank; or
(e) CROSS-DEFAULT. The Borrower or any Subsidiary of the
Borrower (i) fails to make any payment in respect of any other Indebtedness
or Guaranty Obligation having an aggregate principal amount for the Borrower
and such Subsidiaries (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicate
credit arrangement) of more than $5,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise), if the
effect of such failure is to cause the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent
on behalf of such holder or holders or beneficiary or beneficiaries) to
declare such Indebtedness to be due and payable prior to its stated maturity,
or such Guaranty Obligation to become due and payable or to demand additional
collateral therefor; or (ii) fails to perform or observe in any material
respect any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any
Indebtedness or Guaranty Obligation, if the effect of such failure is to
cause the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to declare such
Indebtedness to be due and payable prior to its stated maturity, or such
Guaranty Obligation to become due and payable or to demand additional
collateral therefor; or (iii) fails to make any payment in respect of or
perform or
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observe in any material respect any other condition or covenant of the Senior
Notes, if the effect is an event of default under the Senior Notes; or
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Borrower or any
of its Subsidiaries (i) ceases or fails to be Solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course, except, in connection with a merger or acquisition of substantially all
of the assets of such Subsidiary by the Borrower or another Subsidiary of the
Borrower; (iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Borrower or any of its
Subsidiaries, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of such party's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Borrower or any of its Subsidiaries admits the material
allegations of a petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) the Borrower or any of its Subsidiaries acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its property or business; or
(h) ERISA.
(i) there shall exist an accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, with respect to any Plan (other than a
Multi-employer Plan) which does or would be reasonably expected to have
a Material Adverse Effect;
(ii) there shall occur a Reportable Event with
respect to any Plan (other than a Multi-employer Plan) which does or
would be reasonably expected to have a Material Adverse Effect;
(iii) any liability to the PBGC shall be incurred by
the Borrower or any of its Subsidiaries with respect to any Plan (other
than a Multi-employer Plan) which does or would be reasonably expected
to have a Material Adverse Effect;
(iv) The Borrower or any of its Subsidiaries shall
incur any withdrawal liability under Title IV of ERISA with respect to
any Multi-employer Plan which does or would be reasonably expected to
have a Material Adverse Effect; or
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(i) MONETARY JUDGMENTS. One or more non-interlocutory
judgments, orders or decrees shall be entered against the Borrower or any of its
Subsidiaries involving in the aggregate (existing at any one time for such
entity) a liability (not fully covered by independent third-party insurance) as
to any single or related series of transactions, incidents or conditions, of
$5,000,000 or more, and the same shall remain unsatisfied, unvacated, unbonded
or unstayed pending appeal for a period of 60 days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against the Borrower or any of its Subsidiaries which
does or would reasonably be expected to have a Material Adverse Effect, and
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(k) LOSS OF LICENSES. Any Governmental Authority shall
revoke or fail to renew any license, permit or franchise of the Borrower or any
Subsidiary of the Borrower, which revocation or failure to renew does or would
reasonably be expected to have a Material Adverse Effect, or any such entity
shall for any reason lose any license, permit or franchise, and such loss does
or would reasonably be expected to have a Material Adverse Effect; or any such
entity shall suffer the imposition of any restraining order, escrow, suspension
or impound of funds in connection with any proceeding (judicial or
administrative) with respect to any license, permit or franchise and such
imposition does or would reasonably be expected to have a Material Adverse
Effect; or
(l) COMPLETED UNSOLD HOMES. The Borrower fails to perform
or observe any term, covenant or agreement contained in Section 7.08(b), and
such failure shall remain unremedied by the end of the next succeeding Quarter
after the earlier of (i) the date upon which a Responsible Officer of the
Borrower knew of such failure or (ii) the date upon which written notice thereof
is given to the Borrower by the Administrative Agent or any Bank (the "cure
period"); provided however that following any such failure and during any such
cure period, a Responsible Officer of the Borrower shall provide the
Administrative Agent with a weekly status report of all Completed Unsold Homes;
and provided further that if at any time during such cure period the number of
Completed Unsold Homes exceeds 110% of the level set forth in SCHEDULE 2, then
the cure period shall automatically be terminated, and an Event of Default
hereunder shall be deemed to have occurred.
(m) OWNERSHIP/MANAGEMENT. (i) Xxxxx X. Xxxxxxx shall fail
at any time to retain ownership and direct control of at least thirty percent
(30%) of the common stock of the Borrower; or (ii) Xxxxx X. Xxxxxxx shall fail
at any time to retain his position as chairman of the board, chief executive
officer and president of the Borrower, or to remain active and involved in the
management of, and formation of policy for, the Borrower; PROVIDED, HOWEVER,
that the death or disability of Xxxxx X. Xxxxxxx shall not constitute an Event
of Default hereunder if the Board of Directors of the Borrower shall, within a
reasonable time thereafter, appoint a successor chairman of the board, chief
executive officer, and president of the Borrower, subject to the approval of the
Majority Banks, which approval shall not be unreasonably withheld.
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(n) ADVERSE CHANGE. There shall occur a Material Adverse
Effect, and the existence thereof shall continue unremedied for a period of 30
days after the earlier of (i) the date upon which a Responsible Officer of the
Borrower knew of the occurrence of the event resulting in such Material Adverse
Effect or (ii) the date upon which written notice thereof is given to the
Borrower by the Administrative Agent or any Bank.
8.02 REMEDIES. If any Event of Default occurs, the Administrative
Agent shall, at the request of the Majority Banks,
(a) declare the Revolving Commitment of each Bank, and any
obligation of such Bank to make Advances hereunder, and any obligation of the
Administrative Agent to make Swing-Line Advances or to issue Letters of Credit
hereunder, to be terminated, whereupon such Revolving Commitments and
obligations shall forthwith be terminated;
(b) declare the amounts of all issued and outstanding
Letters of Credit to be outstanding Advances hereunder (unless the Borrower
shall have deposited with the Administrative Agent cash in an amount sufficient
to fully collateralize all outstanding Letters of Credit as of such date, as
provided in Section 2.05 hereof) and declare the unpaid principal amount of all
outstanding Advances, all interest accrued and unpaid thereon, all Swing-Line
Advances, all interest accrued and unpaid thereon, and all other amounts owing
or payable hereunder or under any other Loan Document, including any fees,
charges and other sums payable pursuant to Section 2.11 hereof or otherwise, to
be immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
and
(c) exercise on behalf of itself and the Banks all rights
and remedies available to it and the Banks under the Loan Documents or
applicable law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in paragraph
(f) or (g) of Section 8.01 (in the case of clause (i) of paragraph (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Advances and of the Administrative Agent to make Swing-Line Advances
shall automatically terminate and the unpaid principal amount of all outstanding
Advances (including the amount of all issued and outstanding Letters of Credit
which shall be automatically deemed to be Advances, unless the Borrower shall
have deposited with the Administrative Agent cash in an amount sufficient to
fully collateralize all outstanding Letters of Credit as of such date, as
provided in Section 2.05 hereof) and all outstanding Swing-Line Advances, and
all interest and other amounts as aforesaid, shall automatically become due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrower, and without further act of
the Administrative Agent or any Bank.
8.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
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ARTICLE IX
THE AGENTS
9.01 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints, designates and authorizes each of the Agents to take such action on
such Bank's behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, neither Agent shall have any duties or responsibilities,
except those expressly set forth herein, nor shall any Agent have or be deemed
to have any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against either
Agent.
9.02 DELEGATION OF DUTIES. The Agents may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agents shall not be responsible to the
Banks for the negligence or misconduct of any agent or attorney-in-fact that it
selects with reasonable care, except to the extent such negligence or misconduct
is determined to be gross negligence or willful misconduct.
9.03 LIABILITY OF THE AGENTS. None of the Agent-Related Persons
shall (i) be liable to any of the Banks for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document (except for such Agent-Related Person's own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Banks
for any recital, statement, representation or warranty made by the Borrower, any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Borrower, its Subsidiaries or any other party to any Loan Document to
perform its obligation hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Borrower, or any Subsidiary or any Affiliate of the
Borrower.
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9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Banks (or all of the Banks where this Agreement expressly so provides)
as it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Banks against any and all liability and expense which
may be incurred by it (other than any portion of such liability or expense
resulting solely from the Administrative Agent's gross negligence or willful
misconduct) by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Banks (or all of the Banks
where this Agreement expressly so provides) and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the
conditions specified in Section 4.01, each Bank that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter either sent by the Administrative Agent to
such Bank for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory to
such Bank.
9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Banks, unless the Administrative Agent shall have received written notice from a
Bank or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Banks. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
requested by the Majority Banks in accordance with Article VIII; PROVIDED,
HOWEVER, that unless and until the Administrative Agent shall have received any
such request, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall reasonably deem advisable.
9.06 CREDIT DECISION. Each Bank expressly acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it and that
no act by the Administrative Agent hereafter taken, including any review of the
affairs of the Borrower, and each of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Bank. Each Bank represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent and based on
such documents
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and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower, and each of its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into
this Agreement and extend credit to the Borrower hereunder. Each Bank also
represents that it will, independently and without reliance upon the
Administrative Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly herein required to
be furnished to the Banks by the Administrative Agent (which shall be deemed
to include documents delivered to the Administrative Agent with sufficient
copies for each Bank pursuant to Sections 4.01, 6.01 and 6.02), the
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
the Borrower which may come into the possession of any of the Agent-Related
Persons.
9.07 INDEMNIFICATION. Whether or not the transactions
contemplated hereby shall be consummated, the Banks shall indemnify upon
demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to
do so), ratably from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind whatsoever which may at any time (including at any
time following the repayment of the Advances and the termination or
resignation of the Administrative Agent) be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action
taken or omitted by any such Person under or in connection with any of the
foregoing; PROVIDED, HOWEVER, that no Bank shall be liable for the payment of
the Agent-Related Persons of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Person's gross negligence or willful
misconduct. Without limiting the foregoing, but subject to the proviso in
the immediately preceding sentence, each Bank shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including fees and disbursements for counsel,
allocated costs for internal legal services, and disbursements of internal
counsel) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or
referred to herein to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. Without
limiting the generality of the foregoing, if the Internal Revenue Service or
any other Governmental Authority of the United States or other jurisdiction
asserts a claim that the Administrative Agent did not properly withhold tax
from amounts paid to or for the account of any Bank (because the appropriate
form was not delivered, was not properly executed, or because such Bank
failed to notify the Administrative Agent of a change in circumstances
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which rendered the exemption from or reduction of, withholding tax
ineffective, or for any other reason) such Bank shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by
the Administrative Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, together with all
costs and expenses and attorneys' fees (including fees and disbursements of
counsel, allocated costs of internal legal services, and all disbursements of
internal counsel). The obligation of the Banks in this Section shall survive
the payment of all Obligations hereunder.
9.08 ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. First Hawaiian
Bank and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory or other business with
the Borrower, and any and all Subsidiaries and Affiliates of the Borrower as
though First Hawaiian Bank were not the Administrative Agent hereunder and
without notice to or consent of the Banks. With respect to its Advances, First
Hawaiian Bank shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not the Administrative
Agent, and the terms "Bank" and "Banks" shall include First Hawaiian Bank in its
individual capacity.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may,
and at the request of all of the other Banks shall, resign as Administrative
Agent upon 30 days' notice to the Banks. If the Administrative Agent shall
resign as Administrative Agent under this Agreement, the Banks (other than the
Administrative Agent) holding 66% of the balance of the Aggregate Commitment
(i.e., the Aggregate Commitment less the Revolving Commitment held by the
Administrative Agent) shall, with the approval of the Borrower, appoint from
among the Banks a successor agent for the Banks. If no successor agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Banks and
the Borrower, a successor agent from among the Banks. Upon the acceptance of
its appointment as successor agent hereunder, such successor agent shall succeed
to all the rights, powers and duties of the retiring Administrative Agent and
the term "Administrative Agent" shall mean such successor agent and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor agent has accepted appointment as Administrative
Agent by the date which is 30 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as a
successor agent is appointed, as provided for above.
9.10 DOCUMENTATION AGENT. Bank of America NT&SA in its capacity as
the Documentation Agent shall not have any duties or responsibilities except
those that may be required from time to time by the Administrative Agent and
accepted in writing by Bank of America NT&SA.
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ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks and the Borrower and acknowledged by
the Administrative Agent, and then such waiver shall be effective only in the
specific instance and for the specific purpose for which given; PROVIDED,
HOWEVER, that no such waiver, amendment, or consent shall, unless in writing and
signed by all the Banks and the Borrower and acknowledged by the Administrative
Agent, do any of the following:
(a) increase the amount of or extend the term of the
Revolving Commitment of any Bank (or reinstate any commitment terminated
pursuant to subsection 8.02(a)) or subject any Bank to any additional
obligations;
(b) postpone or delay any date fixed for any payment of
principal, interest, fees or other amounts due to the Banks (or any of them)
hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Advance, or of any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the Commitment Percentage or the percentage of
the Aggregate Commitment which shall be required for the Banks or any of them to
take any action hereunder;
(e) amend this Section 10.01 or Section 2.15 or any
provision providing for consent or other action by all Banks;
(f) discharge any Guarantor;
(g) amend any of the Events of Default set forth in Section
8.01; or
(h) amend the definition of Majority Banks;
and, PROVIDED FURTHER, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Majority Banks
or all the Banks, as the case may be, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document.
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10.02 NOTICES
(a) All notices, requests and other communications provided
for hereunder shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission), provided that any matter
transmitted by the Borrower by facsimile (i) shall be immediately confirmed by a
telephone to the recipient at the number specified on the applicable signature
page hereof, and (ii) shall be followed promptly by a hard copy original
thereof, and, provided further that any notice, request or other communications
by the Borrower hereunder shall be signed by a Responsible Officer of the
Borrower, and mailed, faxed or delivered, to the address or facsimile number
specified for notices on the applicable signature page hereof; or, if directed
to the Borrower or the Administrative Agent, to such other address as shall be
designated by such party in a written notice to the other parties, and if
directed to each other party, at such other address as shall be designated by
such party in a written notice to the Borrower and the Administrative Agent.
(b) All such notices, requests and communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date deposited
into the U.S. mail, or if delivered, upon delivery.
(c) The Borrower acknowledges and agrees that any agreement
of the Administrative Agent and the Banks at Article II to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of the Borrower. The Administrative Agent and the Banks shall be
entitled to rely on the authority of any Person purporting to be a Person
authorized by the Borrower to give such notice and the Administrative Agent and
the Banks shall not have any liability to the Borrower or any other Person on
account of any action taken or not taken by the Administrative Agent or the
Banks in reliance upon such telephonic or facsimile notice. The obligation of
the Borrower to repay the Advances shall not be affected in any way or to any
extent by any failure by the Administrative Agent and the Banks to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Banks of a confirmation which is at variance with
the terms understood by the Administrative Agent and the Banks to be contained
in the telephonic or facsimile notice.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Bank, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
10.04 COSTS AND EXPENSES. The Borrower shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) pay or reimburse First Hawaiian Bank (including First
Hawaiian Bank in its capacity as Administrative Agent) within five Business Days
after demand (subject to subsection 4.01(d)) for all reasonable out-of-pocket
costs and expenses incurred by First Hawaiian
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Bank (including in its capacity as Administrative Agent) in connection with
the development, preparation, delivery, administration and execution of, and
any amendment, supplement, waiver or modification to (in each case, whether
or not consummated), this Agreement, any other Loan Document and any other
documents prepared in connection herewith or therewith, and the consummation
of the transactions contemplated hereby and thereby, including the reasonable
fees and disbursements of counsel, with respect thereto; and
(b) pay or reimburse each Bank and the Administrative Agent
within five Business Days after demand (subject to subsection 4.01(d)) for all
reasonable costs and expenses incurred by them, in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
(including in connection with any "workout" or restructuring regarding the
Advances, and including in any Insolvency Proceeding or appellate proceeding)
under this Agreement, any other Loan Document, and any such other documents,
including reasonable fees and disbursements of counsel, the allocated costs of
internal legal services and disbursements of internal counsel incurred by the
Administrative Agent and any Bank.
The agreements in this Section shall survive payment of all other Obligations.
10.05 INDEMNITY. Whether or not the transactions contemplated hereby
shall be consummated: the Borrower shall pay and indemnify and hold harmless
each Bank, the Administrative Agent and each of their respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges, expenses
and disbursements (including all fees and disbursements of counsel, the
allocated costs of internal legal services, and disbursements of internal legal
counsel) of any kind or nature whatsoever arising from claims brought by third
parties (except for such Indemnified Person's own gross negligence or willful
misconduct) with respect to and to the extent arising from the Borrower's
execution, delivery, enforcement or performance of this Agreement and any other
Loan Documents, or the Borrower's use of the proceeds of the Advances, or
arising from the action or failure to act of the Borrower, any of its
Subsidiaries or their respective officers, directors, employees, counsel, agents
or attorneys-in-fact (all the foregoing, collectively, the "Indemnified
Liabilities"). The agreements in this Section shall survive payment of all
other Obligations.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Administrative
Agent nor the Banks shall be under any obligation to xxxxxxxx any assets in
favor of the Borrower or any other Person or against or in payment of any or all
of the Obligations. To the extent that the Borrower makes a payment or payments
to the Administrative Agent or the Banks, or the Administrative Agent or the
Banks exercise their rights of set-off, and such payment or payments or the
proceeds of such enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
in its discretion) to be repaid to a trustee, receiver or any other party in
connection with any Insolvency Proceeding, or otherwise, then to the extent of
such recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or set-off had not occurred.
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10.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that (i) the Borrower may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent and each Bank, (ii) the
Administrative Agent may not assign or transfer any of its rights or obligations
except as provided in Section 9.09, and (iii) no Bank may assign its rights and
obligations except (a) as provided in Section 3.06, (b) that each Bank may
assign its rights and obligations to an Affiliate of such Bank with the prior
written consent of the Administrative Agent and the Borrower (which consent
shall not be unreasonably withheld), (c) that each Bank may sell participating
interests as provided in Section 10.08, and (d) as provided in Section 2.09.
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Upon notice to the Administrative Agent and the
Borrower, any Bank may, as long as no Event of Default has occurred or is
occurring, sell to one or more commercial banks or other Persons not Affiliates
of the Borrower (a "Participant") participating interests in any Advances, the
Revolving Commitment of that Bank and the other interests of that Bank (the
"originating Bank") hereunder and under the other Loan Documents, PROVIDED,
HOWEVER, that the Borrower shall have no additional expense as a result of such
participation, and PROVIDED, FURTHER, that (i) the originating Bank's
obligations under this Agreement shall remain unchanged, (ii) the originating
Bank shall remain solely responsible for the performance of such obligations,
(iii) the Borrower and the Administrative Agent shall continue to deal solely
and directly with the originating Bank in connection with the originating Bank's
rights and obligations under this Agreement and the other Loan Documents, and
(iv) no Bank shall transfer or grant any participating interest under which the
Participant shall have rights to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan Document. In the case
of any participation, the Participant shall be entitled to the benefit of
Sections 3.01, 3.03 and 10.05 as though it were also a Bank hereunder, and not
have any other rights under this Agreement, or any of the other Loan Documents,
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation; except that, if amounts outstanding under
this Agreement are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement.
(b) Each Bank agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" by the Borrower and provided to it by
the Borrower or any Subsidiaries of the Borrower, or by the Administrative Agent
on the Borrower's or such Subsidiary's behalf, in connection with this Agreement
or any other Loan Document, and neither such Bank nor any of its Affiliates
shall disclose any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement, except to the extent such
information was or becomes generally available to the public other than as a
result of a disclosure by such Bank; PROVIDED, HOWEVER, that
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any Bank may disclose such information (A) at the request or pursuant to any
requirement of any Governmental Authority to which such Bank is subject or in
connection with an examination of such Bank by any such authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to
the extent reasonably required in connection with any litigation or
proceeding to which the Administrative Agent, any Bank or their respective
Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document;
and (F) to such Bank's independent auditors and other professional advisors.
Notwithstanding the foregoing, the Borrower authorizes each Bank to disclose
to any assignee and proposed assignee, and to any Participant and any
prospective Participant, such financial and other information in such Bank's
possession concerning the Borrower or its Subsidiaries which has been
delivered to the Administrative Agent or the Banks pursuant to this Agreement
or which has been delivered to the Administrative Agent or the Banks by the
Borrower in connection with the Banks' credit evaluation of the Borrower
prior to entering into this Agreement; PROVIDED that, unless otherwise agreed
by the Borrower, such recipient agrees in writing to such Bank to keep such
information confidential to the same extent required of the Banks hereunder.
(c) Notwithstanding any other provision contained in this
Agreement or any other Loan Document to the contrary, any Bank may assign all or
any portion of the Advances made by it to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation A of the Federal
Reserve Board and any Operating Circular issued by such Federal Reserve Bank,
provided that any payment in respect of such assigned Advances made by the
Borrower to or for the account of the assigning or pledging Bank in accordance
with the terms of this Agreement shall satisfy the Borrower's obligations
hereunder in respect of such assigned Advances to the extent of such payment.
No such assignment shall release the assigning Bank from its obligations
hereunder.
10.09 SET-OFF. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists, each Bank is authorized at any
time and from time to time, without prior notice to the Borrower, any such
notice being waived by the Borrower to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing to, such Bank to or for the credit or the account of the Borrower against
any and all Obligations owing to such Bank, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Banks shall have
made demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured. Each Bank agrees promptly to notify
the Borrower and the Administrative Agent after any such set-off and application
made by such Bank; PROVIDED, HOWEVER, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each
Bank under this Section are in addition to the other rights and remedies
(including other rights of set-off) which such Bank may have.
10.10 AUTOMATIC DEBITS OF FEES. Upon approval by the Borrower of any
invoice with respect to any fee, or any other cost or expense (including fees
and disbursements of counsel, the allocated costs of internal legal services and
disbursements of internal counsel) due and payable to the Administrative Agent
under the Loan Documents, the Borrower hereby irrevocably
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authorizes the Administrative Agent to debit any deposit account of the
Borrower with the Administrative Agent in an amount such that the aggregate
amount debited from all such deposit accounts does not exceed such fee or
other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due,
such debits will be reversed (in whole or in part, in the Administrative
Agent's sole discretion) and such amount not debited shall be deemed to be
unpaid. No such debit under this Section shall be deemed a setoff.
10.11 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank
shall notify the Administrative Agent in writing of any changes in the
address to which notices to such Bank should be directed, of addresses of any
of its Lending Offices, of payment instructions in respect of all payments to
be made to it hereunder and of such other administrative information as the
Administrative Agent shall reasonably request.
10.12 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement in any number of separate counterparts, each
of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the
same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.13 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement
required hereunder.
10.14 NO THIRD PARTIES BENEFITTED. This Agreement is made and
entered into for the sole protection and legal benefit of the Borrower, the
Banks and the Administrative Agent, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection
with, this Agreement or any of the other Loan Documents. Neither the
Administrative Agent nor any Bank shall have any obligation to any Person not
a party to this Agreement or other Loan Documents.
10.15 TIME. Time is of the essence as to each term or provision of
this Agreement and each of the other Loan Documents.
10.16 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF HAWAII; PROVIDED THAT THE BORROWER,
THE ADMINISTRATIVE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
STATE OF HAWAII OR OF THE UNITED STATES FOR THE DISTRICT
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OF HAWAII, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT, AND THE BANKS IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS EACH WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY HAWAII LAW.
10.17 WAIVER OF JURY TRIAL. THE BORROWER, THE BANKS AND THE
ADMINISTRATIVE AGENT EACH WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER,
THE BANKS AND THE ADMINISTRATIVE AGENT EACH AGREES THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY ARE WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 [Reserved]
10.19 ENTIRE AGREEMENT. This Agreement (together with the Exhibits
and Schedules attached hereto), and the other Loan Documents, embodies the
entire agreement and understanding among the Borrower, the Banks and the
Administrative Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the
subject matter hereof and thereof; PROVIDED, that the agency fee letter
agreement referenced in subsection 2.11(e) shall govern the payment by the
Borrower to the Administrative Agent of such agency fee, and that the
relationship between the Administrative Agent and the Banks, and among the
Banks themselves, shall also be subject to the terms and provisions of the
Inter-Bank Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
XXXXXXX HOMES, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
"Borrower"
FIRST HAWAIIAN BANK, as Administrative
Agent and Co-Syndication Agent
By /s/ Xxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Real Estate Loan Officer
ADDRESS FOR PAYMENTS:
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Commercial Real Estate Division
ADDRESS FOR NOTICES:
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Commercial Real Estate Division
BANK OF AMERICA NT&SA, as Documentation
Agent and Co-Syndication Agent
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
ADDRESS FOR NOTICES:
Bank of America National Trust and Savings
Association
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
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FIRST HAWAIIAN BANK, as a Bank
By /s/ Xxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Real Estate Loan Officer
ADDRESS FOR NOTICES:
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Commercial Real Estate Division
DOMESTIC AND OFFSHORE LENDING OFFICE:
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Commercial Real Estate Division
ADDRESS FOR PAYMENTS:
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Commercial Real Estate Division
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BANK OF AMERICA NT&SA, as a Bank
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
ADDRESS FOR NOTICES:
Bank of America National Trust and
Savings Association
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
DOMESTIC AND OFFSHORE LENDING OFFICE:
Bank of America National Trust and
Savings Association
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxx
ADDRESS FOR PAYMENTS:
-00-
XXXX XXX, XXXXXXX, NA
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
ADDRESS FOR NOTICES:
Bank One, Arizona, N.A.
Corporate Real Estate
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
DOMESTIC AND OFFSHORE LENDING OFFICE:
Bank One, Arizona, N.A.
Corporate Real Estate
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
ADDRESS FOR PAYMENTS:
Bank One, Arizona, N.A.
Real Estate Loan Administration
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Real Estate Loan Administration
AZ1-1328
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BANK BOSTON, NA
By /s/ Xxxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
ADDRESS FOR NOTICES:
BANKBOSTON, N.A.
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, XX 00000
DOMESTIC AND OFFSHORE LENDING OFFICE:
BANKBOSTON, N.A.
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, XX 00000
ADDRESS FOR PAYMENTS:
BANKBOSTON, N.A.
Commercial Loan Services
000 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
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BANK OF HAWAII
By /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
ADDRESS FOR NOTICES:
Bank of Hawaii
CIPLD #000
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxx
DOMESTIC AND OFFSHORE LENDING OFFICE:
Bank of Hawaii
CIPLD #366
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxx
ADDRESS FOR PAYMENTS:
Bank of Hawaii
CIPLD #000
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxx
-80-
AND the undersigned Guarantors consent to the foregoing amendments
and reaffirms their obligations under those certain Guaranties dated
September 30, 1998 (the "Guaranty"), and covenants that the
execution and delivery of the Second Amended and Restated Credit Agreement
shall not in any way affect, impair or diminish their obligations under the
Guaranty.
As of the date hereof, the Guarantors have no claims, defenses or
offsets against the Lender or against the Guarantors' obligations under the
Guaranty, whether in connection with the negotiations for or closing of the
Credit Facility or any prior amendments thereof, of the Second Amended and
Restated Credit Agreement, or otherwise, and if any such claims, defenses or
offsets exist, they are hereby irrevocably waived and released.
XXXXXXX HOMES OF CALIFORNIA, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
XXXXXXX HOMES OF OREGON, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
XXXXXXX HOMES OF WASHINGTON, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
MELODY HOMES, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
XXXXXXX REALTY/MAUI, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
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XXXXXXX REALTY/OAHU, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
LOKELANI CONSTRUCTION CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
MELODY MORTGAGE CO.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
SHLR OF WASHINGTON, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
SHLR OF UTAH, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
SHLR OF COLORADO, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: VP Finance
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