EXHIBIT 10.49
FIRST LOAN MODIFICATION AGREEMENT
(BUILDING FACILITY)
THIS AGREEMENT made this 5th day of September, 1996, but effective as
of September 9, 1996 (the "Effective Date"), by and among BANK OF HAWAII, a
Hawaii banking corporation, whose principal place of business and post office
address is 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000 and X.X. Xxx 0000,
Xxxxxxxx, Xxxxxx 00000 (the "Bank") and X. XXXXXX HOMES, INC., a Delaware
corporation, whose principal place of business is 000 Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxx 00000 (the "Borrower").
R E C I T A L S
A. Bank made available to Borrower a revolving building construction
facility (the "Building Facility") evidenced by a revolving note dated August
31, 1995 in the amount of TWENTY-FIVE MILLION AND NO/100 DOLLARS
($25,000,000.00)(the "Note") made pursuant to a Revolving Loan Agreement
(Building) dated August 31, 1995 (the "Loan Agreement").
B. Repayment of the Note is secured by the following collateral
documents (collectively, the "Collateral Documents"):
1. First Mortgage, Security Agreement and Financing Statement made
by and between Borrower, as mortgagor, and Bank, as mortgagee, recorded in the
Bureau of Conveyances of the State of Hawaii as Document No. 95-115642.
2. Financing Statement made by and between Borrower, as debtor, and
Bank, as secured party, recorded in said Bureau as Document No. 95-115643.
3. An unrecorded Assignment of Sales Contracts, Escrow Deposits and
Escrow Agreement made by Borrower in favor of Bank dated August 31, 1995.
4. An unrecorded Hazardous Materials Indemnity Agreement dated
August 31, 1995, made by Borrower in favor of Bank.
C. Borrower has requested, and Bank has agreed, to modify and amend
the terms of the Note, the Loan Agreement and the Collateral Documents in the
manner hereinafter set forth.
D. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned thereto in the Loan Agreement.
NOW, THEREFORE, in consideration of a loan fee of $6,250.00, the
receipt of which is hereby acknowledged, the parties hereto agree that the Note,
the Loan Agreement and the Collateral Documents be and the same are hereby
amended as follows:
1. Section 1.1 on page 1 of the Loan Agreement shall be amended in
its entirety to read as follows:
1.1 COMMITMENTS. Subject to and upon the terms and conditions set
forth herein (including, but not limited to, Sections 1.1 (a) and (b) below
and Section 1.4), the Bank agrees at any time and from time to time prior
to the Maturity Date to make loans (each such loan herein referred to as a
"Loan" and collectively all such loans are herein called the "Loans") to
the Borrower of up to the Building Loan Commitment on a revolving loan
basis. Each Loan (a) may be repaid and reborrowed in accordance with the
provisions hereof, (b) shall not exceed in principal amount, together
with the then aggregate outstanding principal amount of all other Loans
made by the Bank at any time outstanding, the Building Loan Commitment,
and (c) shall mature and be payable on the Maturity Date.
a. TRANCHES. The Bank will establish two tranches under the
Facility--one tranche for the purposes stated in Section 1.5(a) hereof (the
"Project Tranche") and the other tranche for borrowings to be used for
purposes stated in Section 1.5(b) hereof (the "Working Capital Tranche").
Borrower may, with respect to a Loan made under the Working Capital Tranche,
repay and reborrow in accordance with the terms and conditions hereof
PROVIDED that no funds borrowed and repaid may be reborrowed unless the
repayment was from sources other than proceeds from the Project. Loans under
both the Project Tranche and the Working Capital Tranche shall be available
until the Working Capital Maturity Date, at which time the Working Capital
Commitment (defined in Section 1.1(b) below) shall be terminated and the full
amount of the Facility (subject to Section 1.4 hereof) shall thereafter be
considered the Project Tranche and available only for Project Tranche
purposes, as described in Section 1.5(a).
b. WORKING CAPITAL COMMITMENT. The aggregate principal amount at any
one time outstanding under the Working Capital Tranche shall not exceed TWO
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($2,500,000.00)(the
"Working Capital Commitment"); further, the aggregate of the Working
Capital Tranche under this Facility plus the working capital commitment
under the Infrastructure Facility shall not exceed FOUR MILLION AND NO/100
DOLLARS ($4,000,000.00) provided, further, that Lender shall not be
obligated to make any advance under the Working Capital Tranche unless the
Guarantor would be liable under the Guaranty for repayment thereof.
2. Section 1.2(b) on page 1 of the Loan Agreement shall be amended
in its entirety to read as follows:
(b) RECORDS OF LOANS. The Bank shall maintain such records of its
making of each Loan under the Project Tranche or the Working Capital
Tranche, repayment of principal thereof and interest thereon and other
information relating thereto as the Bank shall deem appropriate in
accordance with its customary
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practices, which records shall constitute PRIMA FACIE evidence thereof.
Failure to maintain such records shall not limit or otherwise affect the
obligation of the Borrower hereunder or under the Note, and payments of
principal or interest by the Borrower shall not be affected thereby.
Although the Note shall be dated the date hereof, interest in respect
thereof shall be payable only for the periods during which Loans are
evidenced thereby and although the stated principal amount of the Note
shall be equal to the Building Loan Commitment. The Note shall be
enforceable with respect to the Borrower's obligation to pay principal
thereunder and interest thereon only to the extent of the aggregate unpaid
principal amount of the Loans at the time evidenced thereby.
3. Section 1.5 on page 3 of the Loan Agreement shall be amended in
its entirety to read as follows:
1.5 PURPOSES.
(a) PROJECT TRANCHE PURPOSES. Subject to any and all restrictions
herein, the proceeds of the Loans made under the Project Tranche shall be
used by the Borrower: (y) to pay (or reimburse Borrower for cash
expenditures of Borrower for) the costs of constructing the On-site
Improvements and Units and (z) with respect to the first Loan only, an
amount acceptable to the Bank to pay (or reimburse Borrower for cash
expenditures of Borrower for) the costs of constructing the Infrastructure.
(b) WORKING CAPITAL TRANCHE PURPOSES. Subject to any and all
restrictions herein, the proceeds of the Loans made under the Working
Capital Tranche shall be used by the Borrower to pay (or reimburse Borrower
for cash expenditures of Borrower) for the cost of general overhead as well
as interest and fees for this Facility.
4. Section 2.1 on page 3 of the Loan Agreement shall be amended in
its entirety to read as follows:
2.1 RATE OF INTEREST. From and after September 9, 1996, until the
Maturity Date (whether by acceleration or otherwise), the Borrower agrees to pay
interest in respect of the outstanding principal amount of each Loan made prior
to September 9, 1996 and each Loan thereafter made under either the Project
Tranche or the Working Capital Tranche at a floating rate per annum which shall
be equal to the Base Rate in effect from time to time plus one-half percentage
(0.5%) point and shall increase or decrease as and when and in the amount which
the Base Rate shall increase or decrease.
5. Section 3.1(c)(i) on page 4 of the Loan Agreement shall be
amended in its entirety to read as follows:
(i) Effective as of September 5, 1996, upon the closing of the sale
of each Unit, a mandatory principal payment in an amount equal to 100%
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of the Net Sales Proceeds from the sale of each such Unit shall be payable.
Two-thirds of each such mandatory principal payment shall be applied to the
project tranche under this Facility and the remaining balance shall be
applied to the Project Tranche under the Infrastructure Facility; provided
that, if at any time, either of the Facilities has no outstanding principal
balance under their respective project tranche, the payment shall be
applied to the project tranche under the other Facility; and provided,
further, that if there are no outstanding balances under the project
tranche of either Facility, the payment shall be applied to the outstanding
balance of the working capital tranche under either, or both, of the
Facilities, as determined by Lender.
6. Section 3.1(c) on page 4 of the Loan Agreement shall be amended
in its entirety to read as follows:
(c) MATURITY. On the Working Capital Maturity Date (or any
acceleration thereof) the entire remaining unpaid principal balance of all Loans
made under the Working Capital Tranche, together with all accrued and unpaid
interest and all charges thereon, shall be due and payable in full. On the
Maturity Date (or any acceleration thereof) the entire remaining unpaid
principal balance of all Loans, together with all accrued and unpaid interest
and all charges thereon, shall be due and payable in full.
7. The following paragraph shall be added as Section 3.1(d) on page
4 of the Loan Agreement:
(d) REPAYMENT OF LOAN(S) UNDER WORKING CAPITAL TRANCHE. Each
repayment of a Loan made under the Working Capital Tranche must be
accompanied by a notice in the form of EXHIBIT J attached hereto specifying
that the payment is for a Loan made under the Working Capital Tranche.
Unless accompanied by such notice, Lender may apply the repayment to Loans
outstanding under the Project Tranche.
8. Section 5.3(b) on page 9 of the Loan Agreement shall be amended
in its entirety to read as follows:
(b) REQUEST FOR LOAN. The Bank shall have received a Request for
Loan which: shall specify whether the Loan is to be made under the Project
Tranche or under the Working Capital Tranche; shall be delivered no later
than ten (10) Business Days prior to the date of the requested Loan; and
shall include a certificate executed by the Responsible Officer stating
that: (w) all costs for which reimbursement is sought have been paid or
will be paid prior to the next Loan, (x) the representations and warranties
of the Borrower contained in Section 8 of this Agreement are true and
correct on and as of such date, with the same force and effect as if made
on such date, (y) no Default or Event of Default has occurred and is
continuing as of such date or is foreseeable, and (z) no material adverse
change has occurred since the date of this Agreement in the financial
condition, operations or business of the Borrower since the Effective
Date.
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9. Section 6.19 on page 16 of the Loan Agreement shall be
amended in its entirety to read as follows:
6.19 INVESTMENT LIMITATIONS. The Borrower shall not, without the
Bank's prior written consent, make any additional investments in any of its
projects exceeding: (a) $750,000.00 with respect to any one Existing
Project, or (b) $1,000,000.00 in the aggregate with respect to all Existing
Projects. Additionally, any additional investments in new projects, either
directly or indirectly, including any phase (other than Phase I) of the
Project, shall be prohibited without the prior written consent of the Bank.
10. A new Section 7.13 is hereby added to the Loan Agreement to
read as follows:
7.13 GUARANTY. The Guarantor denies liability under, or attempts to
revoke, or otherwise impairs the Guaranty or the Guarantor fails to perform
or observe any obligation under the Guaranty and such failure is not cured
within thirty (30) days after the Bank provides notice thereof to the
Borrower.
11. Section 8.15 on page 25 of the Loan Agreement shall be
amended in its entirety to read as follows:
8.15. USE OF PROCEEDS. Proceeds of Loans made under the Project
Tranche shall be used solely for the purposes described in Section 1.5(a)
and proceeds of Loans made under the Working Capital Tranche shall be used
solely for the purposes described in Section 1.5(b).
12. The following term definitions shall be added to the Loan
Agreement:
"GUARANTOR" shall mean X. Xxxxxx and Company, Limited.
"GUARANTY" shall mean the Guaranty to be executed by Guarantor in favor of
the Bank.
"WORKING CAPITAL MATURITY DATE" shall mean April 30, 1997.
13. EXHIBIT I of the Loan Agreement shall be deleted in its
entirety and the EXHIBIT I attached hereto substituted in lieu thereof.
14. All references to the Loan Agreement in the Note and the
Collateral Documents shall be deemed to mean the Loan Agreement as hereby
amended.
It is further agreed that:
1. Except as specifically amended hereby, all other terms,
conditions, and provisions contained in the Note, the Loan Agreement and the
Collateral Documents shall remain in full force and effect and unchanged.
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2. This Agreement shall be considered null and void unless the
Bank receives an executed copy of this Agreement by September 9, 1996.
IN WITNESS WHEREOF, the parties have executed these presents as
of the day and year first above written.
Lender: Borrower:
BANK OF HAWAII, a Hawaii corporation X. XXXXXX HOMES, INC., a Delaware
corporation
By /s/ Xxxx X. Xxxxx By /s/ X. X. Xxxxxxxx
---------------------------------- -----------------------------------
Name: Xxxx X. Xxxxx Name: X. X. Xxxxxxxx
Title: Asst. Vice President Title: President and CEO
By /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Sr. Vice President and CFO
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EXHIBIT I
_________________, 19__
Bank of Hawaii
X.X. Xxx 0000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxx
Construction & Income Property Loan Dept. #366
Re: LOAN REQUEST
Gentlemen:
This is the written request of X. Xxxxxx Homes, Inc. ("Borrower") to Bank
of Hawaii ("Lender") to advance $__________________ from the $25,000,000
revolving construction loan established under the Revolving Loan Agreement
(Building)(the "Loan Agreement"), Note, and Mortgage dated August 31, 1995, as
amended.
The amount requested is to be drawn under the specified tranche and is for
the following:
/ / PROJECT TRANCHE
$_____________ to be applied to the payment of construction costs for
which we attach the contractor's application for payment, respective lien
waiver, and contractor and architect's written opinion; and
$_____________ to be applied to the payment of other construction
related costs for which invoices marked as paid or other evidence of payment (if
appropriate) are attached, ____________________________________________________.
/ / WORKING CAPITAL TRANCHE
$_____________ to be applied to bank's interest and/or fees.
$_____________ for general overhead.
By signing this loan request, I acknowledge that all representations and
warranties of the Borrower as stated in the Loan Agreement are in full force
and
effect, and that the amount available for my future borrowing under the loan is
reduced by the principal amount of this advance.
Very truly yours,
X. XXXXXX HOMES, INC.
By __________________________
Name:
Title:
By __________________________
Name:
Title:
EXHIBIT J
_______________, 19__
Bank of Hawaii
X.X. Xxx 0000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxx
Construction & Income Property Loan Dept. #366
Re: LOAN PAYMENT
Gentlemen:
The payment in the amount of $_____________ being made today by X. Xxxxxx
Homes, Inc. ("Borrower") to Bank of Hawaii ("Lender") under the $25,000,000
revolving construction loan established under the Revolving Loan Agreement
(Building)(the "Loan Agreement"), Note, and Mortgage dated August 31, 1995, as
amended, is to be applied to the Working Capital Tranche.
Very truly yours,
X. XXXXXX HOMES, INC.
By ____________________________
Name:
Title:
By ____________________________
Name:
Title:
