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EXHIBIT 10.46
THIRD MODIFICATION AGREEMENT
The Third Modification Agreement ("Third Modification") is entered into as
of the 20th day of June, 2000 ("Agreement"), between Tokai Bank of California, a
California banking corporation (individually referred to as "Tokai" and a
"Lender" and in its capacity as Agent for Lenders, the "Agent"), and
Xxxxxxx-Xxxxxx, Inc., a Delaware corporation ("KW"), Xxxxxxx-Xxxxxx
International, Inc., a California corporation ("KWI"), Xxxxxxx-Xxxxxx
Properties, Ltd., a Delaware corporation ("KWPL"), and K-W Properties, Inc., a
California corporation ("KWP") (individually and collectively, "Borrower") with
reference to the following facts:
RECITALS
A. Borrower, Lenders and Agent are parties to a certain Revolving Loan
Agreement dated as of July 2, 1999 (as amended, "Loan Agreement"), providing for
a line of credit in the aggregate principal sum of $15,000,000 ("Credit").
B. Borrower's obligations to Tokai, as a Lender under the Loan Agreement
are further evidenced by a certain Promissory Note dated July 2, 1999 ("Note"),
in the original principal sum of $10,000,000 ("Tokai's Commitment").
The aforementioned Loan Agreement and Note and all other documents and
instruments executed in connection therewith are hereinafter individually and
collectively referred to as the "Loan Documents."
C. The Loan Agreement and the Note have heretofore been amended and/or
modified pursuant to the following:
1. That certain Modification Agreement dated as of November 15,
1999, by and among Tokai (acting as Agent and Lender), KW, KWI, KWPL and KWP.
2. That certain Second Modification Agreement dated as of February
28, 2000 by and among Tokai (acting as Agent and Lender), KW, KWI, KWPL and KWP.
D. Borrower has requested that Agent and Lenders amend the Loan Documents
to provide for, among other things, an extension of the Maturity Date, and to
permit Borrower to obtain additional credit from GATX and AON (collectively,
"Third Party Lender").
E. Agent and Lenders are willing to amend the Loan Documents subject to
the terms and conditions hereinafter set forth.
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this Agreement
shall have the meaning given to them in the Loan Agreement.
2. Amendments to Loan Agreement.
2.1 In Section 1.1 of the Loan Agreement, the definition of "Maturity
Date" is amended in its entirety to read as follows:
"Maturity Date" means the earlier of June 30, 2002 and the date
on which a Change of Control occurs.
2.2 Section 4.8(f) of the Loan Agreement is amended in its entirety
to read as follows:
"(f) As soon as available, but in any event, within thirty (30)
days of the end of each calendar year, projections by KW of the
Financial Statements for KW and its subsidiaries, including
projections for each business segment of such entities, for the
succeeding calendar year on a quarterly basis, and on an annual basis
for the following two (2) calendar years. These Financial Statements
may be Borrower prepared."
2.3 Section 4.8(m) of the Loan Agreement is amended to read as
follows:
"(m) As soon as available, but in any event, within fifteen (15)
days of the end of each calendar quarter, the following reports in
format acceptable to Agent: (i) an acquisition report setting forth
(x) the terms of each real estate and business acquisition, (y) income
and expense projections for such acquisition, and (z) if applicable,
the anticipated timing and amount for disposition of such asset; (ii)
a budget variance report setting forth income, expense and
income/expense ratios by business segment, and (iii) a report setting
forth all investments by Borrower, including with Affiliates and other
related parties and non-affiliates."
2.4 The first full sentence of Section 4.13 of the Loan Agreement is
amended to read as follows:
"Except as provided in this Section 4.13 or in Section 4.17 below,
Borrower shall not have outstanding or incur any direct or contingent
liabilities (other than to
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Lenders), or become liable for the liabilities of others, without Lenders'
written consent."
2.5. Section 4.13(d) of the Loan Agreement is amended to read as follows:
"(d) Liabilities and lines of credit in existence on the date of this
Agreement disclosed in writing to Lenders and the Third Party Loan (as
hereinafter defined) in accordance with Section 4.17, provided however,
that, without the prior consent of Agent, at no time shall the aggregate
amount of unsecured debt of KW and its subsidiaries exceed $33,000,000.00,
including the lines of credit provided under this Agreement and by
East-West Bank, plus the Third Party Loan.
2.6 Article 4 of the Loan Agreement is amended to add a new Section 4.17
to read as follows:
"4.17 Permitted Additional Debt. Notwithstanding anything to the
contrary contained in Section 4.13, Borrower shall be permitted to obtain a
loan ("Third Party Loan") from GATX and AON (collectively, "Third Party
Lender"), subject to the satisfaction of each and all of the following
conditions, any or all of which may be waived, in whole or in part by
Agent, in its sole opinion and judgment, and all of which conditions must
be satisfied (or waived by Agent) by no later than June 30, 2000:
(a) The Third Party Loan shall be in such amount and on such
terms and conditions as are approved in writing by Agent, which
approval may be given or withheld in Agent's sole opinion and
judgment;
(b) Borrower, at its sole expense, delivers, deposits or causes
to be delivered or deposited with Agent, true and complete copies of
all loan documents and other documents to be executed or given by or
on behalf of Borrower in connection with the Third Party Loan ("Third
Party Loan Documents");
(c) The Third Party Loan Documents shall have been reviewed and
approved in writing by Agent, which approval may be given or withheld
in Agent's sole opinion and judgment, and the Third Party Loan
Documents shall contain such revisions and modifications as Agent
shall require, in its sole opinion and judgment;
(d) If requested by Agent, an intercreditor agreement in form
and content satisfactory to Agent, in its sole opinion and judgment,
shall be entered into by and among Third Party Lender, Lenders, Agent,
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Borrower and such other Persons as Agent shall require, in
its sole option and judgment; and
(e) If any of the documents executed or given by or on
behalf of KW in connection with its line of credit with
East-West Bank ("East-West Loan Documents") are to be amended
or modified by reason of or in connection with the Third Party
Loan (including, without limitation, any amendments to or
modifications with respect to any financial covenants given by
Borrower to East-West Bank), then: (i) such proposed
amendments and any agreements relating thereto shall be
presented to Agent and shall be approved in writing by Agent,
which approval may be given or withheld in Agent's sole
opinion and judgment, and (ii) such proposed amendments and
any agreements relating thereto, if approved in writing by
Agent, shall be executed prior to or concurrently with this
Third Modification."
2.7 Article 4 of the Loan Agreement is amended to add a new
Section 4.18 to read as follows:
"4.18 Additional Provisions Regarding Third Party Loan. If the
Third Party Loan is obtained by Borrower in accordance with Section
4.17, then each of the following shall apply:
(a) Borrower shall, in addition to the financial
covenants set forth in Section 4.11 and any other covenants or
requirements under this Agreement, comply with each and all of
the financial covenants contained in the Third Party Loan
Documents.
(b) If any of the financial covenants contained in the
East-West Loan Documents are amended or modified by reason of
or in connection the Third Party Loan, then Borrower shall, in
addition to the financial covenants set forth in Section 4.11
and any other covenants or requirements under this Agreement,
comply with each and all of the financial covenants contained
in the East-West Loan Documents, as amended or modified."
2.8 Article 5 of the Loan Agreement is amended to add a new
Section 5.1(r) to read as follows:
"(r) If the Third Party Loan shall be obtained by
Borrower, (i) KW shall fail to pay any principal of, premium
or interest on or any other amount payable to Third Party
Lender under the Third Party Loan when the same becomes due
and payable (whether at scheduled maturity, or by
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required prepayment, acceleration, demand or otherwise); or
(ii) any other event shall occur or condition shall exist
under any of the Third Party Loan Documents if the effect of
such event or condition is to permit the acceleration of the
maturity of amounts owed under the Third Party Loan (whether
or not such acceleration occurs)."
3. Amendment to Note.
3.1 In Section 1.7 of the Note, the term "two hundred (200)
Basis Points" is hereby amended and changed to "three hundred (300) Basis
Points."
3.2 In Section 1.10 is amended in its entirety to read as
follows:
"1.10 "Maturity Date" means the earlier of June 30, 2002
and the date on which a Change of Control (as defined in the
Loan Agreement) occurs."
4. Representations and Warranties. Borrower hereby represents and
warrants to Agent and Lenders that: (i) no default specified in the Loan
Agreement and no event which with notice or lapse of time, or both, would
become such a default has occurred and is continuing; (ii) the representations
and warranties of Borrower pursuant to the Loan Agreement are true on and as of
the date hereof as if made on and as of said date; (iii) the making and
performance by Borrower of this Agreement have been duly authorized by all
necessary action; (iv) no consent, approval, authorization, permit or license
is required in connection with the making or performance of the Loan Agreement
as amended hereby; and (v) not less than $5,000,000.00 of the proceeds from the
Third Party Loan shall be paid to Lender to reduce the amount outstanding under
the Credit.
5. Conditions Precedent. This Amendment will be effective when Agent
receives the following items, in form and content acceptable to Agent in its
sole opinion and judgment:
5.1 Evidence that Borrower has authority to carry out the
transactions contemplated by this Agreement.
5.2 Lenders shall have received from Borrower, an amount equal to
all attorneys' fees and out-of-pocket expenses incurred by Lenders in
connection with the negotiation, preparation, execution, delivery, and
administration of this Agreement and any matter related thereto.
5.3 Such other documents as may be required by Agent.
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6. Effect of Agreement. Except as provided in this Agreement, all of the
terms and conditions of the Loan Agreement shall remain in full force and
effect, and are hereby reaffirmed and ratified in their entirety.
7. No Further Advances. The parties agree that Lender will not make any
further advances under the Credit until such time as the parties agree to
further modifications to the Loan Agreement, including, but not limited, to
making certain covenants in the Third Party Loan Documents and East-West Loan
Documents consistent with those contained in the Loan Agreement.
This Agreement is executed as of the date first above written.
"Lender" and "Agent"
Tokai Bank of California, a California
banking corporation
By: /s/ XXXXXXX XXXXXX
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Name: Xxxxxxx Xxxxxx
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Title: Regional Vice President
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"Borrower"
Xxxxxxx-Xxxxxx, Inc., a Delaware
corporation
By: /s/ XXXXXXX XXXX
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Name: Xxxxxxx Xxxx
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Title: EVP CFO
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Xxxxxxx-Xxxxxx, International, Inc., a
California corporation
By: /s/ XXXXXXX XXXX
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Name:
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Title: Director
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Xxxxxxx-Xxxxxx Properties, Ltd., a
Delaware corporation
By: /s/ XXXXXXX XXXX
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Name:
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Title: Director
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K-W Properties, Inc., a California
corporation
By: /s/ XXXXXXX XXXX
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Name:
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Title: Director
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