EXHIBIT 10.47
LOAN AGREEMENT ($20,000,000.00 Term Loan)
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THIS is an agreement (the "Agreement") made this 8th day of September,
2000, by FIRST HAWAIIAN BANK, a Hawaii corporation, as lender, and ALOHA
AIRGROUP, INC., a Hawaii corporation, as borrower.
RECITALS:
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1. Aloha Airgroup, Inc., a Hawaii corporation, and BancWest Corporation,
a Delaware corporation ("BWE"), along with other individuals and entities,
entered into that certain Purchase Agreement dated September 8, 2000 (the
"Purchase Agreement") relating to the sale and purchase of certain Series C 10%
Senior Exchangeable Preferred Stock issued by Aloha Airgroup, Inc. BWE
purchased 20,000 shares of such stock (the "BWE Preferred Shares") in
accordance with the Purchase Agreement.
2. Pursuant to the terms of the Purchase Agreement, Aloha Airgroup, Inc.,
has elected to exchange the BWE Preferred Shares into Senior Secured Guaranteed
Floating Rate Notes. Such notes shall be represented by one (1) promissory note
in favor of BWE, in the principal amount of $20,000,000.00, a true and correct
copy of which is attached to this Agreement as Exhibit "1" and made a part
hereof (the "Note").
3. BWE has negotiated with First Hawaiian Bank, a Hawaii corporation, to
sell and assign the Note to First Hawaiian Bank.
4. First Hawaiian Bank has agreed to purchase and accept an assignment of
the Note from BWE, upon the satisfaction of certain conditions, including,
without limitation, the execution and delivery of this Agreement by Aloha
Airgroup, Inc.
5. Aloha Airgroup, Inc., deems it to be to its own financial benefit that
First Hawaiian Bank purchase and accept an assignment of the Note.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and intending to be legally bound thereby, Aloha Airgroup, Inc., and
First Hawaiian Bank hereby agree as follows:
AGREEMENT:
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SECTION 1. DEFINITIONS.
As used in this Agreement, each of the following terms shall have the
meaning set forth below with respect thereto:
"AGENCY FEE" means a fee payable annually by the Borrower to the Lender,
as provided in the side letter agreement referred to in Section 5.5 of this
Agreement.
"BORROWER" means Aloha Airgroup, Inc., a Hawaii corporation.
"CAPITAL LEASE" means any lease of any property (whether real, personal or
mixed) which, in conformity with GAAP, is or should be accounted for as a
Capital Lease on a balance sheet.
"CASH FLOW" means, with respect to the Consolidated Group, the sum of (a)
the net income of the Consolidated Group (excluding non-recurring gains and
losses), PLUS (b) the sum of the following, to the extent deducted in
determining net income: (i) depreciation and amortization allowances, (ii)
interest expense (including imputed interest on Capital Leases), (iii) deferred
taxes and (iv) rent expenses, and LESS (c) the change in the excess of non-cash
current assets over current liabilities (other than those pertaining to the
current portion of long term debt and accrued interest and taxes) calculated on
a rolling four quarters basis and computed at the end of each Quarter.
"CLOSING DATE" means the date on which the Lender determines that all of
the conditions set forth in Section 4 of this Agreement have been satisfied.
"CONSOLIDATED GROUP" means Aloha Airgroup, Inc., and the Subsidiaries.
"DEBT TO WORTH RATIO" means, with respect to the Consolidated Group,
Total Liabilities divided by Tangible Net Worth.
"DEBT SERVICE" means the sum of regularly scheduled principal payments,
interest payments, payments under Capital Leases, dividends declared and
payable (if permitted under the provisions of this Agreement), and rent expense
payments made by the Borrower, calculated on a rolling four quarters basis and
computed at the end of each Quarter.
"EVENT OF DEFAULT" means any of the events described in Section 6.1 of
this Agreement.
"FACILITY FEE" means a fee payable annually by the Borrower to the Lender,
as provided in the side letter agreement referred to in Section 5.6 of this
Agreement.
"FIXED CHARGE COVERAGE RATIO" means, with respect to the Consolidated
Group, Cash Flow divided by Debt Service.
"GAAP" means generally accepted accounting principles.
"GUARANTOR" means Aloha Airlines, Inc., a Delaware corporation.
"GUARANTY" means that certain Guaranty dated the date of this Agreement,
executed by the Guarantor in favor of the Lender, guaranteeing the due and
punctual payment of the Note, and the observance and performance by the
Borrower of all of the Borrower's obligations under the Loan Documents.
"LENDER" means First Hawaiian Bank, a Hawaii corporation.
"LIMITED GUARANTOR" means, individually and collectively, (a) Aloha
Securities & Investment Company, a Hawaii limited partnership, and (b) Sheridan
Ing Partners Hawaii, a Hawaii limited partnership.
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"LIMITED GUARANTY" means individually and collectively, (a) that certain
Limited Guaranty dated the date of this Agreement, executed by Aloha Securities
& Investment Company, in favor of the Lender, guaranteeing the due and punctual
payment of $7,500,000.00 of the Note, upon the terms and conditions more
particularly set forth therein; and (b) that certain Limited Guaranty dated the
date of this Agreement, executed by Sheridan Ing Partners Hawaii, guaranteeing
the due and punctual payment of $2,500,000.00 of the Note, upon the terms and
conditions more particularly set forth therein.
"LINE OF CREDIT AGREEMENT" means that certain Amended and Restated Loan
Agreement -1996, dated December 31, 1996, executed by and between Aloha
Airlines, Inc., as borrower, and First Hawaiian Bank and other lenders, as
lenders, as the same has been or may hereafter be amended.
"LOAN" means the indebtedness owed by the Borrower to the Lender in the
principal amount of TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00),
together with interest thereon, as evidenced by and as set forth in the Note.
"LOAN DOCUMENTS" means all of the documents and instruments executed by or
for the benefit of the Borrower in connection with the Loan, including, without
limitation, this Agreement, the Note, the Guaranty, the Limited Guaranty, the
Stock Pledge, and the Security Agreement; provided, however, that the
Participation Rights Agreement is not included within the definition of Loan
Documents.
"LOAN FEE" means a fee in the principal amount of $150,000.00, payable by
the Borrower to the Lender, on or before the Closing Date, as provided in
Section 5.7 of this Agreement.
"MATURITY DATE" means (a) September 8, 2008, or (b) the date, following
the occurrence of an Event of Default, on which the Lender notifies the
Borrower that the entire principal balance of the Loan, together with all
accrued interest thereon, and all fees, charges, expenses and other sums
payable under this Agreement and the other Loan Documents, shall become due and
payable.
"NOTE" means the Promissory Note dated September 8, 2000, executed by the
Borrower in favor of BWE, evidencing the Borrower's agreement to repay the
principal balance of the Loan, together with interest thereon, as provided
therein. At the Closing Date, the Note will be assigned by BWE to First
Hawaiian Bank.
"PARTICIPANT" means another lender or lenders that has or have agreed to
purchase a participating interest in the Loan and the Loan Documents from the
Lender.
"PARTICIPATION RIGHTS AGREEMENT" means that certain Participation Rights
Agreement dated the date of this Agreement, executed by First Hawaiian Bank and
Aloha Airgroup, Inc.
"PARTICIPATION RIGHTS" means those certain participation rights in favor
of BWE and/or First Hawaiian Bank more particularly described in the
Participation Rights Agreement.
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"PREFERRED SHARES" means the Series C 10% Senior Exchangeable Preferred
Stock issued by the Borrower pursuant to the Purchase Agreement.
"PURCHASE AGREEMENT" means the Purchase Agreement described in Recital 1
above, as the same may be amended, supplemented or otherwise modified from time
to time.
"QUARTER" means any one of the following three-calendar-month periods in
any calendar year: April 1 to and including June 30; July 1 to and including
September 30; October 1 to and including December 31; and January 1 to and
including March 31.
"SECURITY AGREEMENT" means that certain security agreement executed
concurrently herewith by and between Aloha Airlines, Inc., and the Lender,
which shall effect an assignment to the Lender of, and grant to the Lender a
valid and subsisting first security interest in and to the items of collateral
described therein.
"SERIES B PREFERRED STOCK" means the Series B Cumulative
Convertible Participating Preferred Stock issued by the Borrower.
"STOCK PLEDGE" means that certain Stock Pledge and Security Agreement
dated the date of this Agreement, executed by the Borrower and the Lender,
pledging to the Lender the Borrower's stock in Aloha Airlines, Inc.
"STRUCTURING FEE" means a fee in the principal amount of $150,000.00,
payable by the Borrower to the Lender, on or before the Closing Date, as
provided in Section 5.8 of this Agreement.
"SUBSIDIARIES" means Aloha Airlines, Inc., a Delaware corporation, Aloha
IslandAir, Inc., a Delaware corporation, and any other corporations or limited
liability companies which are wholly owned by the Borrower or by a Subsidiary
of the Borrower.
"TANGIBLE NET WORTH" means the excess of Total Assets of the
Consolidated Group over Total Liabilities of the Consolidated Group, as
determined in accordance with GAAP.
"TOTAL ASSETS" means all items of property owned by the Consolidated Group
which, in accordance with GAAP, would be included as an asset on the balance
sheet as of the date to which assets are to be determined, EXCLUDING, HOWEVER,
(a) all assets which would be classified as intangible assets under GAAP, such
as, goodwill (whether representing the excess of cost over book value of assets
acquired or otherwise), patents, trademarks, trade names, copyrights,
franchises, and deferred charges (including, without limitation, organization
costs, and research and development costs), (b) treasury stock and minority
interests in subsidiaries, (c) cash set apart and held in a sinking or other
analogous fund established for the purpose of redemption or other retirement of
capital stock, (d) to the extent not already deducted from total assets,
reserves for depreciation, depletion, obsolescence or amortization of
properties and all other reserves or appropriations of retained earnings which,
in accordance with GAAP, should be established in connection with the business
conducted by the relevant corporation, and (e) any evaluation or other write-up
in book value of assets subsequent to December 31, 2000.
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"TOTAL LIABILITIES" means the principal amount of all items of
indebtedness and other obligations of the Consolidated Group which, in
accordance with GAAP, would be included as a liability on the balance sheet as
of the date to which liabilities are to be determined, including, without
limitation, (1) indebtedness for borrowed money or for the deferred purchase
price of property or services, (ii) obligations as lessee under leases which
shall have been or should be, in accordance with GAAP, recorded as Capital
Leases, (iii) reserves for loan losses and (iv) obligations under direct or
indirect guarantees (except for letters of credit securing workers'
compensation insurance and leases, completion bonds and guaranties, insurance
bonds, customs bonds, litigation bonds, bonds issued in favor of airline
clearinghouses (such as ARC), improvement bonds, and warranty and maintenance
bonds required in the ordinary course of business) and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise assure a creditor
against loss in respect of, indebtedness or obligations of others (other than
the Series B Preferred Stock and the Preferred Shares, to the extent the same
may be deemed to constitute a liability of the Borrower).
SECTION 2. THE LOAN.
2.1 AMOUNT. Effective as of the Closing Date, the Borrower acknowledges
that it is indebted to the Lender in the principal amount of TWENTY MILLION AND
NO/100 DOLLARS ($20,000,000.00), as evidenced by the Note. The Borrower hereby
consents to the assignment of the Note by BWE to the Lender.
2.2 INTEREST. Interest on the principal balance of the Loan shall accrue
as provided in the Note.
2.3 PAYMENTS. The Borrower shall pay to the Lender interest only during
the first three (3) years of the Loan, and principal and interest during the
last five (5) years of the Loan, all as provided in the Note. The Borrower
shall repay the unpaid principal balance of the Loan, all accrued but unpaid
interest thereon, and all fees, charges and other sums payable under the Loan
Documents, to the Lender on the Maturity Date. The Borrower may prepay
principal on the terms and conditions set forth in the Note. No amount of
principal, once repaid or prepaid, may be reborrowed.
2.4 SECURITY. The Borrower will deliver, or cause to be delivered, to
the Lender on or before the Closing Date, among other items which may be
reasonably required by the Lender:
(a) the Security Agreement, together with a Uniform Commercial Code
Financing Statement perfecting the security interest granted to the
Lender in the Security Agreement; and
(b) the Stock Pledge.
2.5 GUARANTY; LIMITED GUARANTY. The Borrower will deliver, or cause to
be delivered, to the Lender on or before the Closing Date, the Guaranty, duly
executed by the Guarantor, and each Limited Guaranty, duly executed by each of
the Limited Guarantors.
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2.6 CLOSING. Closing of the Loan shall be subject to the satisfaction of
all of the conditions precedent set forth in Section 4 of this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES BY THE BORROWER. The Borrower
represents and warrants to the Lender that:
3.1 ORGANIZATION, STANDING AND AUTHORITY OF BORROWER. The Borrower is a
Hawaii corporation, duly registered, validly existing and in good standing
under the laws of the State of Hawaii, and has all requisite power and
authority to carry on the business and to own the property that it now carries
on and owns. The Borrower has all requisite power and authority to execute and
deliver the 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 the Borrower and, to the extent
required by law, by the stockholders of the Borrower, and no other corporate
action of the Borrower is requisite to the execution and delivery of the Loan
Documents.
3.2 ORGANIZATION, STANDING AND AUTHORITY OF SUBSIDIARIES.
(a) Aloha Airlines, Inc., is a Delaware corporation, duly registered,
validly existing and in good standing under the laws of the State of Delaware,
is authorized to do business in the State of Hawaii, and has all requisite
power and authority to carry on the business and to own the property that it
now carries on and owns. Aloha Airlines, Inc., has all requisite 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 Aloha Airlines,
Inc., and, to the extent required by law, by the stockholders of Aloha
Airlines, Inc., and no other corporate action of Aloha Airlines, Inc., is
requisite to the execution and delivery of the Guaranty.
(b) Aloha IslandAir, Inc., is a Delaware corporation, duly registered,
validly existing and in good standing under the laws of the State of Delaware,
is authorized to do business in the State of Hawaii, and has all requisite
power and authority to carry on the business and to own the property that it
now carries on and owns.
3.3 TAX RETURNS AND PAYMENTS. All tax returns and reports of the Borrower
and the Subsidiaries required by law to be filed have been duly filed, and all
taxes, assessments, contributions, fees and other governmental charges (other
than those presently payable without penalty or interest and those which have
been disclosed to the Lender but which are currently being contested in good
faith) upon the Borrower or the Subsidiaries, or upon its or their properties
or assets or income, which are due and payable, have been paid.
3.4 LITIGATION. There is, to the knowledge of the Borrower, no action,
suit, proceeding or investigation pending at law or in equity or before any
federal, state, territorial, municipal or other governmental department,
commission, board, bureau, agency or instrumentality or threatened against or
affecting the Borrower or the Subsidiaries (including the Guarantor), which
might materially adversely affect the Borrower's ability to perform its
obligations under the Loan Documents or the Guarantor's ability to perform its
obligations under the Guaranty.
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3.5 BORROWER'S COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME. The
Borrower is not in violation of or in default with respect to any term or
provision of its Articles of Incorporation or Bylaws or any material mortgage,
indenture, contract, agreement or instrument applicable to the Borrower or by
which it may be bound; and the execution, delivery, performance of and
compliance with each and all of the Loan Documents will not result in any such
violation or be in conflict with or constitute a default under any such term or
provision or result in the creation of any mortgage, lien or charge on any of
the properties or assets of the Borrower not contemplated by this Agreement;
and there is no term or provision of its Articles of Incorporation or Bylaws,
or any mortgage, indenture, contract, agreement or instrument applicable to the
Borrower or by which it may be bound, which may materially adversely affect the
business or prospects or condition (financial or other) of the Borrower or of
any of its properties or assets.
3.6 GUARANTOR'S COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME. The
Guarantor is not in violation of or in default with respect to any term or
provision of its Certificate of Incorporation or Bylaws or any material
mortgage, indenture, contract, agreement or instrument applicable to the
Guarantor or by which it may be bound; and the execution, delivery, performance
of and compliance with the Guaranty will not result in any such violation or be
in conflict with or constitute a default under any such term or provision or
result in the creation of any mortgage, lien or charge on any of the properties
or assets of the Guarantor not contemplated by this Agreement; and there is no
term or provision of its Certificate of Incorporation or Bylaws, or any
mortgage, indenture, contract, agreement or instrument applicable to the
Guarantor or by which it may be bound, which may materially adversely affect
the business or prospects or condition (financial or other) of the Guarantor or
of any of its properties or assets.
3.7 COMPLIANCE WITH LAW. To the best of the Borrower's knowledge, 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, or judgment of any court or governmental
instrumentality, domestic or foreign.
3.8 GOVERNMENTAL AUTHORIZATION. No consent, approval or authorization of,
or registration, declaration or filing with, any governmental or public body or
authority in connection with the valid execution and delivery of each of the
Loan Documents (including the Limited Guaranty or the Guaranty) is required or,
if required, such consent, approval, order or authorization shall have been
obtained prior to the Closing Date.
3.9 FINANCIAL STATEMENTS. All financial statements heretofore delivered
to the Lender by the Borrower or the Subsidiaries are true and correct in all
respects, and fairly represent the financial condition of the Borrower and the
Subsidiaries as of the dates thereof; and no material, adverse changes have
occurred in the financial condition reflected therein since the respective
dates thereof to the Closing Date.
3.10 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 Loan. The Borrower will indemnify and hold the
Lender harmless from any and all claims of brokers or other claims for
commissions or fees in connection with the Loan and will further hold the
Lender harmless and indemnify the Lender against all losses, damages, costs and
charges (including
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attorneys' fees) which the Lender may sustain because of such claims or in
consequence of defending against such claims.
3.11 CHARACTER OF REPRESENTATIONS AND WARRANTIES. None of the financial
statements or any certificate or statement furnished to the Lender by or on
behalf of the Borrower or the Subsidiaries in connection with the Loan, and
none of the representations and warranties in this Agreement, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein or herein not misleading. To
the best knowledge of the Borrower, there is no fact which materially adversely
affects or in the future (so far as the Borrower can now foresee) may
materially adversely affect the ability of the Borrower to observe or perform
its obligations under the Loan Documents, or of the Guarantor to observe or
perform its obligations under the Guaranty, which has not been set forth herein
or in a certificate or opinion of counsel or other written statement furnished
to the Lender by or on behalf of the Borrower or the Guarantor.
SECTION 4. CONDITIONS TO CLOSING.
The Lender's agreement to purchase and accept an assignment of the Note is
subject to the fulfillment, to its satisfaction, of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The representations
and warranties contained in Section 3 of this Agreement and otherwise made by
or on behalf of the Borrower or the Subsidiaries (including the Guarantor) in
connection with the Loan, shall be true and correct as of the Closing Date,
with the same effect as if made at such time.
4.2 EXECUTION OF LOAN DOCUMENTS; EXECUTION OF PARTICIPATION RIGHTS
AGREEMENT. The Borrower shall have delivered to the Lender and the Lender shall
have approved, (a) all of the Loan Documents, duly executed by the appropriate
parties, and (b) the Participation Rights Agreement, duly executed by the
Borrower.
4.3 EXPENSES. The Borrower shall have paid to the Lender on the Closing
Date all of the fees and expenses provided for in Section 5.4 which are due and
payable as of the Closing Date.
4.4 FEES. The Borrower shall have paid to the Lender on the Closing Date
the amounts of the Agency Fee, the Facility Fee, the Loan Fee and the
Structuring Fee, provided for in Sections 5.5, 5.6, 5.7 and 5.8, of this
Agreement, respectively, which are due and payable as of the Closing Date.
4.5 NO EVENT OF DEFAULT. There shall exist at the Closing Date, no
condition or event which would constitute an Event of Default or which, after
notice or lapse of time, or both, would constitute an Event of Default.
4.6 INSOLVENCY, BANKRUPTCY, ETC. Neither the Borrower, the Limited
Guarantor nor the Guarantor shall have become insolvent; or made an assignment
for the benefit of creditors; or failed generally to pay its debts as they
become due; or become the subject of an order for relief in an involuntary case
under the bankruptcy laws as now or hereafter constituted, and such order shall
remain in effect and unstayed for a period of sixty (60) consecutive days; or
commenced a voluntary
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case under the bankruptcy laws as now or hereafter constituted; or filed any
petition or answer seeking for itself any arrangement, composition, adjustment,
liquidation, dissolution or similar relief to which it may be entitled under
any present or future statute, law or regulation; or filed any answer admitting
the material allegations of any petition filed against it in any such
proceedings; or sought or consented to or acquiesced in the appointment of, or
taking possession by, any custodian, trustee, receiver or liquidator of it or
of all or a substantial part of its properties or assets; or taken any action
looking to its dissolution or liquidation; or within sixty (60) days after
commencement of any proceedings against it seeking any arrangement,
composition, adjustment, liquidation, dissolution or similar relief to which it
may be entitled under any present or future statute, law or regulation, such
proceeding shall not have been dismissed; or within sixty (60) days after the
appointment of, or taking possession by, any custodian, trustee, receiver or
liquidator of any or of all or a substantial part of its properties or assets,
without its consent or acquiescence, any such appointment or possession shall
not have been vacated or terminated.
4.7 OPINION OF COUNSEL. The Borrower shall have delivered to the Lender
and the Lender shall have approved, an opinion of legal counsel for the
Borrower, the Limited Guarantor and the Guaranty, in substantially the form set
forth in Exhibit "2" attached hereto and made a part hereof.
4.8 CURRENT FINANCIAL STATEMENTS. The Borrower, the Limited Guarantor and
the Guarantor shall have delivered current financial statements satisfactory to
the Lender, showing that no adverse changes have occurred in their respective
financial conditions since the date of the financial statements previously
delivered to the Lender.
4.9 PRO FORMA PROJECTIONS. The Borrower shall have provided to the
Lender, and the Lender shall have approved, (a) an eight (8) year projection of
operations, statement of cash flow and balance sheet for the Consolidated
Group; and (b) an eight (8) year fleet schedule for Aloha Airlines, Inc., and
Aloha IslandAir, Inc., containing the Borrower's best estimate of aircraft
replacement and expansion for such air carriers.
4.10 CONDITIONS ARE SOLELY FOR BENEFIT OF THE LENDER. All conditions set
forth in this Section 4 are imposed solely and exclusively for the benefit of
the Lender, its successors and assigns, and no other person shall have standing
to require satisfaction of such conditions in accordance with their terms, and
no other person shall, under any circumstances, be deemed to be the beneficiary
of such conditions, any or all of which may be freely waived, in whole or in
part, by the Lender at any time if, in its sole judgment, the Lender deems it
advisable to do so.
SECTION 5. OTHER COVENANTS OF THE BORROWER.
The Borrower covenants and agrees with the Lender as follows:
5.1 INFORMATION. The Borrower shall (a) furnish directly to the Lender
with reasonable promptness such data and information, financial or otherwise,
concerning the Borrower and/or its Subsidiaries as from time to time may
reasonably be requested by the Lender, including, but not limited to, any
filings made with the Securities and Exchange Commission; (b) promptly notify
the Lender of any condition or event which constitutes a breach or event of
default of any covenant, condition, warranty, representation or provision of
any of the Loan Documents, and of any materially
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adverse change in the financial condition or operations of the Borrower or the
Guarantor; and (c) furnish directly to the Lender not more than sixty (60) days
after the end of each Quarter a "compliance certificate", signed by an
authorized executive officer of the Borrower, to the effect that the signer has
reviewed the relevant terms of this Agreement, and the other Loan Documents,
and has made, or caused to be made under his or her supervision, a review of
the transactions and condition of the Borrower and its Subsidiaries during such
Quarter, and that such review has not disclosed the occurrence during such
period, and that the signer does not have knowledge of the existence as at the
date of such certificate, of any Event of Default, or, if any Event of Default
has occurred or exists, specifying the nature and period of existence thereof
and what action the Borrower has taken or is taking or proposes to take with
respect thereto.
5.2 PAYMENT OF TAXES. The Borrower shall pay or cause to be paid all
taxes, assessments, and other governmental charges levied upon any of its
properties or assets, or in respect of its income, before the same become
delinquent, except that the Borrower will have the right to contest assessments
and other charges in the manner provided in Section 6.2.
5.3 INDEMNIFICATION OF THE LENDER. The Borrower shall indemnify and hold
the Lender harmless from any and all claims asserted against the Lender by any
person, entity or governmental authority arising out of or in connection with
the Loan except for claims arising out of the Lender's gross negligence or
wilful misconduct. The Lender shall be entitled to appear in any action or
proceeding to defend itself against such claims, and all reasonable costs
incurred by the Lender in connection therewith, including reasonable attorneys'
fees, shall be reimbursed by the Borrower to the Lender within ten (10) days
after presentment, as provided in Section 5.4. Any failure to so reimburse the
Lender within the specified time period shall constitute an Event of Default
under this Agreement, and the unreimbursed amount shall bear interest at the
default rate specified in the Note.
The Lender shall, at its sole option, be entitled to settle or compromise
any asserted claim against it, and such settlement shall be binding upon the
Borrower for purposes of this indemnification. Payment thereof by the Lender,
or the payment by the Lender of any judgment or claim successfully perfected
against the Lender, shall bear interest at the default rate specified in the
Note until paid, and shall be payable upon demand of the Lender. The agreements
contained in this section shall survive repayment of the Loan and termination
of this Agreement.
5.4 EXPENSES. Whether or not the transactions hereby contemplated shall
be consummated, the Borrower shall assume and pay upon demand of the Lender:
(a) All reasonable out-of-pocket expenses incurred by the Lender in
connection with the making and continued administration of any portion of the
Loan, including, but not limited to, the reasonable fees and disbursements and
expenses of legal counsel for the Lender;
(b) Any and all advances or payments made by the Lender pursuant to
this Agreement or any of the other Loan Documents, and other similar or
dissimilar reasonable expenses and charges in connection with the
administration, servicing or collection of any portion of the Loan including
restructuring of the Loan, all of which shall constitute an additional
liability owing by the Borrower to the Lender; and
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(c) All costs and expenses, including, but not limited to, reasonable
attorneys' fees, incurred by the Lender as a result of an Event of Default or
for the purpose of negotiating a resolution of any default (whether by means of
refinancing or otherwise and whether or not successful) or for the purpose of
effecting collection of the amounts outstanding under the Loan, principal,
interest, fees and charges, or any other sums required to be paid by the
Borrower pursuant to any of the Loan Documents, when the same shall become due
and payable (whether at the stated maturity thereof or upon any acceleration of
the maturity thereof).
5.5 AGENCY FEE. The Borrower shall pay the Agency Fee to the Lender in
accordance with the terms of that certain side letter agreement executed
concurrently herewith by and between the Borrower and the Lender.
5.6 FACILITY FEE. The Borrower shall pay the Facility Fee to the Lender
in accordance with the terms of that certain side letter agreement executed
concurrently herewith by and between the Borrower and the Lender.
5.7 LOAN FEE. The Borrower shall pay the entire Loan Fee ($150,000.00) to
the Lender on or before the Closing Date.
5.8 STRUCTURING FEE. The Borrower shall pay the entire Structuring Fee
($150,000.00) to the Lender on or before the Closing Date.
5.9 MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Consolidated Group shall
at all times maintain a Tangible Net Worth of not less than $22,772,000.00,
plus (i) 50% of the cumulative annual consolidated net profit (before
dividends) of the Consolidated Group, beginning with the year ended December
31, 2000, without deduction for any annual loss, and (ii) 75% of the amount
received from any infusion of new equity or issuance of new capital stock.
5.10 MINIMUM FIXED CHARGE COVERAGE RATIO. The Consolidated Group shall at
all times maintain a minimum Fixed Charge Coverage Ratio of not less than
1.30 to 1.
5.11 MAXIMUM DEBT TO WORTH RATIO. The Consolidated Group shall at all
times maintain a Debt to Worth Ratio which shall not exceed 5.00 to 1.
5.12 FINANCIAL STATEMENTS. The Borrower shall furnish to the Lender the
following:
(a) as soon as available, but not later than sixty (60) days after
the end of each Quarter, company-prepared quarterly consolidated financial
statements of the Consolidated Group for such Quarter, prepared in accordance
with GAAP, and the compliance certificate referred to in Section 5.1(c) of
this Agreement, together with a calculation of the Tangible Net Worth, the
Fixed Charges Coverage Ratio and the Debt to Worth Ratio for the Consolidated
Group, for such Quarter.
(b) as soon as available, but not later than one hundred twenty (120)
days after the end of each fiscal year of the Borrower, (i) consolidated
audited financial statements of the Borrower, for such fiscal year, prepared in
accordance with GAAP, and accompanied by the opinion of independent certified
public accountants of recognized standing, containing no qualifications, or
11
only such qualification as are reasonably acceptable to the Lender, and (ii)
internal, companyprepared consolidating financial statements of the Borrower,
including the operations of the Subsidiaries.
(c) as soon as available, but not later than sixty (60) days after
the end of each Quarter, an aging report of accounts receivable for each member
of the Consolidated Group.
(d) as soon as available, but not later than March 1 of each calendar
year, the projected consolidated financial statements of the Borrower for such
calendar year.
5.13 INSURANCE. The Borrower shall maintain and shall cause its
Subsidiaries to maintain at all times during the term of the Loan such
insurance as is normally carried by prudent air carriers engaged in the same or
similar business as the Borrower, and its Subsidiaries.
5.14 RESTRICTION ON PAYMENTS TO SHAREHOLDERS. Neither the Borrower nor its
Subsidiaries shall declare, pay or make any dividend or distribution (in cash,
property or obligations) on any shares of any class of capital stock (now or
hereafter outstanding) of the Borrower or its Subsidiaries, or apply any of its
funds, property or assets to the purchase, redemption, sinking fund or other
retirement of, or agree to purchase or redeem any shares of any class of
capital stock (now or hereafter outstanding) of the Borrower or its
Subsidiaries, or any warrants, options or other rights with respect to any
shares of any class of capital stock (now or hereafter outstanding) of the
Borrower or its Subsidiaries, provided, however, that nothing in this Section
5.14 shall prohibit or restrict the Borrower's ability to perform its
obligations under Section 7.9 of the Purchase Agreement.
5.15. NEGATIVE COVENANTS. The Borrower shall not incur or suffer to be
created or incurred or to exist, and shall not permit the Guarantor to incur or
suffer to be created or incurred or to exist, any encumbrance, mortgage,
security interest, pledge, lien or charge of any kind upon any of its 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/or the Guarantor may create or incur or suffer
to be created or incurred or to exist: (a) any existing encumbrance, mortgage,
security interest, pledge, lien or charge; (b) any new encumbrance, mortgage,
security interest, pledge, lien or charge which arises out of any refinancing,
extension, renewal or refunding of any existing indebtedness, provided that
such indebtedness is not increased and such indebtedness is not secured by any
additional assets; (c) any purchase money encumbrance, mortgage, security
interest, pledge, lien or charge which arises out of financing for the purchase
of a new asset, provided that such indebtedness is not secured by any
additional assets; (d) liens for taxes, assessments, governmental charges or
claims, statutory liens arising in the ordinary course of business, liens
incurred or deposits made in connection with workers' compensation,
unemployment insurance, and other types of social security, liens incurred or
deposits made to secure the performance of tenders, bids, leases, statutory or
regulatory obligations, bankers' acceptances, surety and appeal bonds,
government contracts, performance and return-of-money bonds, easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the
12
ordinary course of business of the Borrower or any of its Subsidiaries; and (e)
any encumbrance, mortgage, security interest, pledge, lien or charge incurred
in the ordinary course of business.
SECTION 6. DEFAULT; REMEDIES ON DEFAULT.
6.1 EVENTS OF DEFAULT. If and for so long as any of the following events
(herein called "Events of Default") shall occur:
(a) The Borrower shall default in the payment of principal or
interest under the Note when the same becomes due; or
(b) The Borrower shall default in the performance of or compliance
with any term, covenant, condition or provision contained in any of the Loan
Documents, and such default shall not have been remedied within twenty (20)
days after the Lender notifies the Borrower in writing of such default; or
(c) The Borrower shall become insolvent, or shall make an assignment
for the benefit of creditors or shall fail generally to pay its debts as they
become due; or the Borrower shall become the subject of an order for relief in
an involuntary case under the bankruptcy laws as now or hereafter constituted,
and such order shall remain in effect and unstayed for a period of sixty (60)
consecutive days, or shall commence a voluntary case under the bankruptcy laws
as now or hereafter constituted, or shall file any petition or answer seeking
for itself any arrangement, composition, adjustment, liquidation, dissolution
or similar relief to which it may be entitled under any present or future
statute, law or regulation, or shall file any answer admitting the material
allegations of any petition filed against it in any such proceedings; or the
Borrower shall seek or consent to or acquiesce in the appointment of or taking
possession by, any custodian, trustee, receiver or liquidator of it or of all
or a substantial part of its properties or assets; or the Borrower shall take
action looking to its dissolution or liquidation; or within sixty (60) days
after commencement of any proceedings against the Borrower seeking any
arrangement, composition, adjustment, liquidation, dissolution or similar
relief to which it may be entitled under any present or future statute, law or
regulation, such proceedings shall not have been dismissed; or within sixty
(60) days after the appointment of, or taking possession by, any custodian,
trustee, receiver or liquidator of any or of all or a substantial part of its
properties or assets, without the consent or acquiescence of the Borrower, any
such appointment or possession shall not have been vacated or terminated; or
(d) The Guaranty shall be repudiated or breached, or any event
described in subsection (c) above shall occur with respect to the Guarantor; or
(e) The Limited Guaranty shall be repudiated or breached, or any
event described in subsection (c) above shall occur with respect to either
Limited Guarantor, provided, however, that if the Limited Guaranty terminates
on August 30, 2002, in accordance with its terms, such termination shall not
constitute a repudiation hereunder; or
(f) Any representation made by or on behalf of the Borrower or the
Guarantor herein or by the Limited Guarantor in the Limited Guaranty, or
otherwise in writing in connection
13
with the Loan shall prove to have been false or incorrect in any material
respect on the date as of which such representation was made; or
(g) A final judgment which alone exceeds $2,500,000.00 in amount
shall be rendered against the Borrower or the Guarantor and shall not be
covered by insurance reasonably satisfactory to the Lender, or be discharged or
have execution thereof stayed pending appeal within thirty (30) days after
entry of such judgment or shall not be discharged within thirty (30) days after
the expiration of any such stay; or
(h) The Borrower or the Guarantor shall default under any Capital
Lease, or under any agreement respecting deferred payment for goods, or under
any agreement involving the extension of credit to which the Borrower or the
Guarantor is a party (if such default gives the holder of the obligation the
right to accelerate the indebtedness) and such default shall not be waived or
remedied within the time permitted for the remedying of such default under the
applicable document; or
(i) The Borrower or the Guarantor shall fail to comply with any
financial covenant contained in any Capital Lease, or any agreement respecting
deferred payment for goods, or any agreement involving the extension of credit
to which the Borrower or the Guarantor is a party (whether or not such
agreement is hereafter amended or terminated) and such failure shall not be
waived or remedied within the time permitted for the remedying of such failure
under the applicable document; or
j) The Guarantor shall cease to be an air carrier operating under a
certificate of convenience and necessity from the United States Department of
Transportation; or
(k) There occurs any adverse change in the business, assets or
general financial condition of the Borrower or the Limited Guarantor or the
Guarantor which has or, in the reasonable opinion of the Lender, could have, a
material adverse effect upon the ability of the Borrower to observe and perform
its obligations under the Loan Documents, or a material adverse effect upon the
ability of the Limited Guarantor to observe and perform its obligations under
the Limited Guaranty, or a material adverse effect upon the ability of the
Guarantor to observe and perform its obligations under the Guaranty; or
(l) Any "Event of Default" shall have occurred under the Line of
Credit Agreement (unless the same is remedied within any cure period provided
for therein);
THEN, AND IN ANY SUCH EVENT, in addition to all remedies conferred by law,
the Lender shall have the option to declare the Note to be due and payable,
whereupon the entire aggregate unpaid principal balance under the Note, all
accrued but unpaid interest thereon, and all fees, charges and other sums
payable under the Loan Documents, shall forthwith mature and become due and
payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, and upon such maturity by acceleration or
otherwise, all such principal, interest, fees, charges and other sums, shall
bear interest at the rate provided in the Note to be paid following an Event of
Default.
14
6.2 RIGHT OF CONTEST. The Borrower shall have the right to contest in
good faith any claim, demand, levy or assessment by a third party the assertion
of which would constitute an Event of Default hereunder; PROVIDED, HOWEVER, any
such contest shall be prosecuted diligently and in a manner not prejudicial to
the Lender hereunder; and, upon demand by the Lender, the Borrower shall make
suitable provision by payment to the Lender or by bond satisfactory to the
Lender for the possibility that the contest will be unsuccessful. Such
provision shall be made within ten (10) days after demand therefor and, if made
by payment of funds to the Lender, the amount so deposited shall be disbursed
in accordance with the resolution of the contest either to the Borrower or the
adverse claimant.
6.3 MARSHALLING. The Borrower hereby waives any and all rights to require
any security given hereunder to be marshalled and agrees and acknowledges that
after the occurrence of any Event of Default, the Lender may, in its sole and
absolute discretion, proceed to enforce its rights under the Loan Documents and
to realize on any or all of the security for the repayment of the amounts
outstanding under the Loan or any portion or portions thereof, irrespective of
the differing nature of such security and whether or not the same constitutes
real or personal property.
SECTION 7. MISCELLANEOUS PROVISIONS.
7.1 AUTHORITY TO FILE NOTICES. The Borrower irrevocably appoints,
constitutes and designates the Lender its attorney-in-fact to file for record
any notice that the Lender reasonably deems necessary or desirable to protect
its interests hereunder or under any of the Loan Documents. Such power shall be
deemed coupled with an interest and shall be irrevocable while any sum remains
due and owing under any of the Loan Documents, or any obligation of the
Borrower thereunder remains unperformed.
7.2 ACTIONS. The Lender shall have the right to commence, appear in or
defend any action or proceeding purporting to affect the rights, duties or
liabilities of the parties hereunder, or the amounts outstanding under the
Loan, whether or not an Event of Default has occurred hereunder. In connection
therewith, the Lender may incur and pay reasonable costs and expenses,
including, but not limited to, reasonable attorneys' fees. The Borrower shall
pay to the Lender all such expenses upon demand made therefor.
7.3 TIMELINESS. TERM OF AGREEMENT; SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. Time is of the essence of this Agreement. This Agreement shall
continue in full force and effect until all indebtedness of the Borrower to the
Lender under the other Loan Documents shall have been paid in full, all
obligations of the Borrower under this Agreement and the Loan Documents have
been observed and performed, and all obligations of the Lender under this
Agreement and the other Loan Documents have been terminated. All
representations and warranties contained herein or made in writing by or on
behalf of the Borrower in connection with the Loan shall survive the execution
and delivery of the Loan Documents and any investigation at any time made by,
through or on behalf of the Lender. All statements contained in any certificate
or other instrument delivered to the Lender on behalf of the Borrower pursuant
hereto or otherwise in connection with the Loan shall constitute
representations and warranties hereunder.
15
7.4 AMENDMENTS AND WAIVERS. Neither this Agreement nor any provision
hereof may be amended, waived, discharged or terminated orally, but only by an
instrument in writing, signed by the party against whom enforcement of the
amendment, waiver, discharge or termination is sought.
7.5 REMEDIES ARE CUMULATIVE. All rights, powers and remedies herein given
to the Lender are cumulative and not alternative, are in addition to all
rights, powers and remedies afforded by statutes or rules of law and may be
exercised concurrently, independently, or successively in any order whatsoever.
Without limiting the generality of the foregoing, the Lender may enforce any
one or more of the Loan Documents without enforcing all of them concurrently or
in any particular order.
7.6 NO WAIVER. No failure, forbearance or delay on the part of the Lender
in exercising any power or right under any of the Loan Documents shall operate
as a waiver of the same or any other power or right, and no single or partial
exercise of any such power or right shall preclude any other or further
exercise thereof or the exercise of any other such power or right.
7.7 NO JOINT VENTURE. The execution of this Agreement, the purchase of
the Note by the Lender, and the exercise of any rights hereunder, are not
intended, and shall not be construed, to create a partnership or joint venture
between the Lender and the Borrower.
7.8 NOTICES. All notices, requests, demands or documents which are
required or permitted to be given or served hereunder shall be in writing and
personally delivered, or sent by registered or certified mail addressed or sent
by facsimile as follows:
TO BORROWER at: 000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Executive Vice President-Finance &
Planning and Chief Financial Officer
FAX: (000) 000-0000
TO LENDER at: First Hawaiian Bank
000 XXXXXX XXXXXX
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President Corporate Banking Division
FAX: (000) 000-0000
The addresses may be changed from time to time by the addressee by serving
notice as heretofore provided. Service of such notice or demand shall be deemed
complete on the date of actual delivery as shown by the addressee's registry or
certification receipt or at the expiration of the second day after the date of
mailing, whichever is earlier in time.
The Borrower hereby irrevocably authorizes the Lender to accept facsimile
("FAX") transmissions of such notices, requests, demands and documents,
provided such transmission is signed by an officer of the Borrower authorized
to do so in a corporate resolution. The Borrower shall and does hereby hold the
Lender harmless from, and indemnify the Lender against, any loss, cost,
expense, claim or demand which may be incurred by or asserted against the
Lender by virtue
16
of the Lender acting upon any such notices, requests, demands or documents
transmitted in accordance with the above provisions. The Borrower shall confirm
any such FAX transmission separately by telephone conference between the Lender
and the individuals signing such FAX transmission, and shall thereafter
transmit to the Lender the actual "hard copy" of the notice, request, demand or
document in question.
7.9 WAIVER OF JURY TRIAL. The Borrower hereby knowingly, voluntarily and
intentionally waives any right it may have to a jury trial in any legal
proceeding which may be hereafter instituted by the Lender or the Borrower to
assert any of their respective claims arising out of or relating to any of the
Loan Documents or any other agreement, instrument or document contemplated
thereby. In such event, the Borrower, at the request of the Lender, shall cause
its attorney of record to effectuate such waiver in compliance with the Hawaii
Rules of Civil Procedure, as the same may be amended from time to time.
7.10 ENTIRE AGREEMENT. The Loan Documents constitute all of the agreements
between the parties relating to the Loan and supercede all other prior or
concurrent oral or written letters, agreements or understandings. Without
limiting the generality of the foregoing, the provisions of this Agreement
supercede all inconsistent provisions contained in the Purchase Agreement and
in the event of any discrepancy between the provisions of this Agreement and
the Purchase Agreement the provisions of this Agreement shall control.
7.11 ASSIGNMENT; PARTIES IN INTEREST. THE Borrower shall not assign its
interest in this Agreement without the prior written consent of the Lender,
which consent may be withheld by the Lender in its sole and absolute
discretion. The Lender may assign its interest in this Agreement or any portion
thereof, with the prior written consent of the Borrower; provided, however,
that the consent of the Borrower shall not be unreasonably withheld. The Lender
may, upon notice to the Borrower, at any time sell to one or more Participants
participating interests in its share of the Loan PROVIDED, HOWEVER, that (i)
the Lender's obligations under this Agreement shall remain unchanged, (ii) the
Lender shall remain solely responsible for the performance of such obligations,
and (iii) the Borrower shall continue to deal solely and directly with the
Lender in connection with its rights and obligations under this Agreement and
the other Loan Documents. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors and assigns, whether or not
hereinabove so expressed and, in particular, shall inure to the benefit of and
be enforceable by the holder or holders from time to time of the Note or any
part thereof or interest therein.
7.12 HEADINGS OF PARAGRAPHS. The headings of paragraphs and subparagraphs
herein are inserted only for convenience and reference and shall in no way
define, limit or describe the scope or intent of any provision of this
Agreement.
7.13 APPLICABLE LAW. This Agreement is executed and delivered in and shall
be construed and enforced in accordance with the laws of the State of Hawaii.
7.14 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same
17
instrument, and in making proof of this Agreement, it shall not be necessary to
produce or account for more than one such counterpart.
7.15 SEVERABILITY. If any provision of this Agreement or the other Loan
Documents is held to be invalid or unenforceable, the validity and
enforceability of the other provisions of this Agreement and the other Loan
Documents will remain unaffected.
7.16 TERMS AND CONDITIONS OF THIS AGREEMENT SUPPLEMENT OTHER LOAN
DOCUMENTS. The terms and conditions of this Agreement and the covenants,
representations and warranties of the Borrower under this Agreement shall not
be deemed to supersede, amend or modify the obligations and duties of the
Borrower under the other Loan Documents. The terms and conditions of this
Agreement and the covenants, representations and warranties of the Borrower
hereunder merely supplement, and do not supplant or supersede, provisions of
similar effect or subject matter in the other Loan Documents.
7.17 AGENTS. In exercising any rights under this Agreement or the other
Loan Documents, the Lender may act through its employees, agents or independent
contractors; provided that the Lender shall remain responsible for the actions
of such employees and agents.
7.18 CONSENT BY THE LENDER. Whenever the consent of the Lender is required
by the terms of this Agreement, except where the granting of such consent is
reserved to the Lender in its sole judgment, option or discretion, such consent
shall not be unreasonably or arbitrarily withheld.
7.19 LENDER'S RIGHT OF SETOFF. Upon the occurrence of any Event of
Default, or if the Lender shall be served with garnishee process, whether or
not the Borrower shall be in default hereunder at the time, the Lender may, but
shall not be required to, set off any indebtedness owing by the Lender to the
Borrower against any indebtedness under the Loan Documents, without prejudice
to any other rights or remedies of the Lender thereunder.
7.20 CONFIDENTIALITY. Notwithstanding the provisions of Section 15.9 of
the Purchase Agreement, the Lender's obligations regarding non-disclosure of
"information" about the Borrower or any Subsidiary shall only apply to
information designated by the Borrower as "Confidential" at the time such
information is provided to the Lender, and the Lender shall be released from
any and all restrictions on the disclosure of any such information if an Event
of Default has occurred and is continuing hereunder.
18
IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement on the day and year first above stated.
FIRST HAWAIIAN BANK
By /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
Its Vice President
Lender
ALOHA AIRGROUP, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Its President and CEO
By /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxx
Its EVP, CFO and Treasurer
Borrower
19
NOTE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE
COMPANY OR ANY SUBSIDIARY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2),(3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (E) OR (F) PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii)IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
EXHIBIT "1"
ALOHA AIRGROUP INC.
SENIOR SECURED GUARANTEED FLOATING RATE NOTES DUE SEPTEMBER 8, 2008
NO._______ Dated: September 8, 2000
$20,000,000.00
FOR VALUE RECEIVED, the undersigned, ALOHA AIRGROUP, INC., a Hawaii
corporation (the "Company"), HEREBY PROMISES TO PAY to BANCWEST CORPORATION, a
Delaware corporation, or its registered assigns, the principal amount of TWENTY
MILLION AND N0/100 U.S. Dollars (US$20,000,000.00), or such lesser unpaid
principal amount as shall be outstanding hereunder, together with interest at
the applicable rate set forth below.
Payments of principal of, and interest on, this Note are payable in
lawful money of the United States of America at the place designated therefor
as set forth in Section 9.1 of the Purchase Agreement (as defined below), or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Purchase Agreement referred to below.
Whenever any payment under this Note 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 payment of interest.
This Note is one of a series of Senior Secured Guaranteed Floating
Rate Notes due September 8, 2008 (collectively, the "NOTES") originally issued
or to be issued in an aggregate principal amount of up to $40,000,000 pursuant
to the Purchase Agreement dated as of September 8, 2000 (as amended,
supplemented or otherwise modified from time to time, the "PURCHASE AGREEMENT";
capitalized terms not otherwise defined herein having the same meanings as
specified in the Purchase Agreement) between the Company and the respective
purchasers of the Company's Series C 10% Senior Exchangeable Preferred Stock
(the "PREFERRED SHARES") (collectively, the "PURCHASERS") named therein and
pursuant to the Certificate of Designation relating to the Preferred Shares
(the "CERTIFLICATE OF DESIGNATION").
1. DEFINITIONS
As used in this Note, the following terms shall have the following
meanings:
(a) "ONE-MONTH LIBOR RATE" means the average of the offered rates of
interest (rounded upward, if necessary, to the next higher 1/16th of 1 %)
which appear on the Telerate Screen LIBO Page as of 11:00 a.m. London Time
on the day that is two (2) LIBOR Business Days prior to the day on which
the applicable Interest Period is to begin, for deposits, in U.S Dollars,
for a period of one month.
2
(b) "TWO-MONTH LIBOR RATE" means the average of the offered rates of
interest (rounded upward, if necessary, to the next higher 1/16th of 1 %)
which appear on the Telerate Screen LIBO Page as of 11:00 a.m. London Time
on the day that is two (2) LIBOR Business Days prior to the day on which
the applicable Interest Period is to begin, for deposits, in U.S.
Dollars, for a period of two months.
(c) "THREE-MONTH LIBOR RATE" means the average of the offered rates of
interest (rounded upward, if necessary, to the next higher 1/16th of 1 %)
which appear on the Telerate Screen LIBO Page as of 11:00 a.m. London Time
on the day that is two (2) LIBOR Business Days prior to the day on which the
applicable Interest Period is to begin, for deposits, in U.S.
Dollars, for a period of three months.
(d) "BUSINESS DAY" means a day on which the banks are open for business
in the state of Hawaii.
(e) "CONSOLIDATION" has the meaning set forth in the
Purchase Agreement.
(f) "INTEREST PERIOD" means the period commencing on the date
designated in the applicable Notice of Selection of Interest Rate, and
ending one, two or three months thereafter, as specified in such Notice of
Selection of Interest Rate, provided that: (i) any Interest Period which
would otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day, unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the
previous Business Day; (ii) any Interest Period which 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 a calendar month; and
(iii) no Interest Period shall extend beyond the Maturity Date.
(g) "LIBOR BUSINESS DAY" means a day on which London banks are open
for business for trading inter-bank U.S. Dollar deposits.
(h) "NOTICE OF SELECTION OF INTEREST RATE" means a Notice of Selection
of Interest Rate described in paragraph 2 below.
(i) "PRIME RATE" means the lending rate of interest per annum announced
publicly by the First Hawaiian Bank from time to time 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.
(j) "PRINCIPAL BALANCE" means the outstanding principal balance of
this Note.
(k) "QUARTER" means any one of the following three-calendar-month
periods in any calendar year: April 1 to and including June 30; July 1 to
and including September 30; October 1 to and including December 31; and
January 1 to and including March 31.
3
(l) "TANGIBLE NET WORTH" has the meaning set forth in the Purchase
Agreement.
2. INTEREST RATE
This Note shall bear interest in accordance with the following terms:
(a) From the issue date of this Note until the end of the Quarter
immediately following the Issue Date, at a fluctuating rate per annum equal
to one-fourth of one (.25) percentage point higher than the Prime Rate in
effect from time to time during such period. Each change in such fluctuating
rate shall take effect simultaneously with the corresponding change in the
Prime Rate.
(b) From the end of the Quarter immediately following the Issue Date
until the third anniversary of the Issue Date:
(i) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of $38,000,000
or more, at the Company's option, the One-Month LIBOR Rate, the
Two-Month LIBOR Rate or the Three-Month LIBOR Rate, plus, in each case,
2.25%. If the Company selects the One-Month LIBOR Rate as the rate upon
which interest shall be based, interest shall accrue for an Interest
Period of one month. If the Company selects the Two-Month LIBOR Rate or
the Three-Month LIBOR Rate as the rate upon which interest shall be
based, interest shall accrue for an Interest Period of two months or
three months, respectively. In each case described in this paragraph
(b)(i), interest shall be computed on the basis of a 360-day year.
(ii) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of at least
$30,000,000 but less than $38,000,000, at a fluctuating rate per annum
equal to one-fourth of one (.25) percentage point higher than the Prime
Rate in effect from time to time during such period. Each change in
such fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
(iii) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of at least
$23,000,000 but less than $30,000,000, at a fluctuating rate per annum
equal to one-half of one (.50) percentage point higher than the Prime
Rate in effect from time to time during such period. Each change in
such fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
(iv) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of at least
$16,000,000 but
4
less than $23,000,000, at a fluctuating rate per annum equal to
three-fourths of one (.75) percentage point higher than the Prime Rate
in effect from time to time during such period. Each change in such
fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
(v) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of less than
$16,000,000, at a fluctuating rate per annum equal to one and one-half
(1.50) percentage points higher than the Prime Rate in effect from time
to time during such period. Each change in such fluctuating rate shall
take effect simultaneously with the corresponding change in the Prime
Rate.
(c) From the third anniversary of the Issue Date until the fifth
anniversary of the Issue Date:
(i) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of $38,000,000
or more, at the Company's option, the One-Month LIBOR Rate, the
Two-Month LIBOR Rate or the Three-Month LIBOR Rate, plus, in each case,
2.75%. If the Company selects the One-Month LIBOR Rate as the rate upon
which interest shall be based, interest shall accrue for an Interest
Period of one month. If the Company selects the Two-Month LIBOR Rate or
the Three-Month LIBOR Rate as the rate upon which interest shall be
based, interest shall accrue for an Interest Period of two months or
three months, respectively. In each case described in this paragraph
(c)(i), interest shall be computed on the basis of a 360-day year.
(ii) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of at least
$30,000,000 but less than $38,000,000, at a fluctuating rate per annum
equal to three-fourths of one (.75) percentage point higher than the
Prime Rate in effect from time to time during such period. Each change
in such fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
(iii) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of at least
$23,000,000 but less than $30,000,000, at a fluctuating rate per annum
equal to one (1.00) percentage point higher than the Prime Rate in
effect from time to time during such period. Each change in such
fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
5
(iv) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of at least
$16,000,000 but less than $23,000,000, at a fluctuating rate per annum
equal to one and one-fourth (1.25) percentage points higher than the
Prime Rate in effect from time to time during such period. Each change
in such fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
(v) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of less than
$16,000,000 at a fluctuating rate per annum equal to two (2.00)
percentage points higher than the Prime Rate in effect from time to
time during such period. Each change in such fluctuating rate shall
take effect simultaneously with the corresponding change in the Prime
Rate.
(d) From the fifth anniversary of the Issue Date until the stated
maturity date of this Note:
(i) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of $38,000,000
or more, at a fluctuating rate per annum equal to one-fourth of one
(.25) percentage point higher than the Prime Rate in effect from time
to time during such period. Each change in such fluctuating rate shall
take effect simultaneously with the corresponding change in the Prime
Rate.
(ii) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of at least
$30,000,000 but less than $38,000,000, at a fluctuating rate per annum
equal to one (1.00) percentage point higher than the Prime Rate in
effect from time to time during such period. Each change in such
fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
(iii) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of at least
$23,000,000 but less than $30,000,000, at a fluctuating rate per annum
equal to one and one-fourth (1.25) percentage points higher than the
Prime Rate in effect from time to time during such period. Each change
in such fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
(iv) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of at least
$16,000,000 but
6
less than $23,000,000, at a fluctuating rate per annum equal to one
and one-half (1.50) percentage points higher than the Prime Rate in
effect from time to time during such period. Each change in such
fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
(v) If the Company has a Consolidated Tangible Net Worth for the
Quarter immediately preceding the date of determination of less than
$16,000,000 at a fluctuating rate per annum equal to two and
one-fourth (2.25) percentage points higher than the Prime Rate in
effect from time to time during such period. Each change in such
fluctuating rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
(e) In the case of (b)(1) and (c)(1) above, the Company shall, not
less than three Business Days prior to the date on which the One-Month
LIBOR Rate, Two-Month LIBOR Rate or Three-Month LIBOR Rate is to commence,
select the rate at which interest shall accrue by advising the holder of
this Note and delivering to the holder a written Notice of Selection of
Interest Rate in the form attached hereto as Exhibit 1. If the Company
fails to deliver a new Notice of Selection of Interest Rate at least three
Business Days prior to the end of the current Interest Period, the Company
shall be deemed to have selected the Prime Rate as the applicable rate for
the period commencing the day after the end of the current Interest Period
until the date which is three Business Days after the Company delivers to
the holder of this Note a valid written Notice of Selection of Interest
Rate. If the Company selects the One-Month LIBOR Rate, Two-Month LIBOR
Rate or Three-Month LIBOR Rate and no rates appear on the Telerate Screen
LIBO Page for the selected Interest Period, the Company shall be deemed to
have selected the Prime Rate as the applicable rate for the period
commencing on the date of such determination until the date which is three
Business Days after the Company delivers to the holder of this Note a valid
written Notice of Selection of Interest Rate for a LIBOR rate and the
applicable rate does appear on the Telerate Screen LIBO Page for the
selected Interest Period.
(f) Interest based on the Prime Rate shall be computed on the basis
of a 365-day year.
3. PAYMENTS, MATURITY DATE
Whenever interest is based on the Prime Rate, such interest shall be
payable monthly, on the first Business Day of each month. Whenever interest is
based upon the One-Month LIBOR
7
Rate, the Two-Month LIBOR Rate or the Three-Month LIBOR Rate, payment shall be
made at the end of the Interest Period.
4. REPAYMENT
Starting on the third anniversary of the Issue Date, the Company
shall, in addition to applicable interest payments, make monthly principal
payments equal to 1.67% of the original principal amount of the Note until the
stated maturity of this Note, whereupon all unpaid principal and all accrued
but unpaid interest, shall be due and payable.
5. PREPAYMENTS
The Company may make prepayments of principal without a prepayment
charge at any time when interest is based on the Prime Rate, and at the end of
the applicable Interest Period when interest is based on the One-Month LIBOR
Rate, the Two-Month LIBOR Rate, or the Three-Month LIBOR Rate. Any prepayment
shall be applied against the principal sum outstanding and shall not postpone
the due date of any subsequent monthly payment or change the amount of any
subsequent monthly payment.
6. DEFAULT
If the Company shall default in the payment of principal, interest or
other fees or charges when due under this Note, or if the Company shall default
in the performance of or compliance with any term, covenant, condition or
provision required to be performed or complied with by the Company under any
other agreement or security instrument executed by the Company in connection
with this Note (this Note and all such other agreements and instruments being
hereinafter called the "Loan Documents") and such default shall not have been
remedied during the period the Company is required to remedy such default,
then, and in any such event, the holder hereof shall have the option to declare
the unpaid principal sum of this Note, together with all interest accrued
thereon, and all fees, charges and other sums payable under the Loan Documents,
to be immediately due and payable, and such principal sum and interest, and all
such fees, charges and other sums, shall thereupon become and be due and
payable without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, and, upon such maturity, by acceleration or
otherwise, the unpaid principal balance, all accrued but unpaid interest, and
all such fees, charges and other sums shall thereafter bear interest until
fully paid at a rate per annum equal to four (4) percentage points higher than
the rate that would otherwise be in effect from time to time under this Note.
Failure to exercise this option shall not constitute a waiver of the right to
exercise the same in the event of the same or any subsequent default.
8
7. LATE CHARGES
If any payment hereunder shall not have been paid within ten (10)
days after the same becomes due and payable, the holder of this Note, in
addition to its other remedies, may collect, and the Company shall pay on
demand, a late charge equal to five percent (5%) of the amount overdue.
This Note shall be governed by, and construed in accordance with, the
laws of the State of Hawaii.
ALOHA AIRGROUP, INC.
By _____________________________
Name: Xxxxx X. Xxxxxx
Title: President and CEO
By _____________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: EVP, CFO and Treasurer
9
EXHIBIT "1"
NOTICE OF SELECTION OF INTEREST RATE
To: [Holder]
Date: ________________________
We refer to the above-captioned Note and hereby:
(1) give you notice that we wish to select
[ ] the One-Month LIBOR Rate
[ ] the Two-Month LIBOR Rate
[ ] the Three-Month LIBOR Rate
(2) confirm that the selection of the interest rate for such
advance is within our corporate powers and has been validly authorized by
appropriate corporation action; that no Event of Default has occurred and
no event has occurred which, with the giving of notice and/or the lapse of
time would constitute an Event of Default; and
(3) confirm that the Company has a Consolidated Tangible Net
Worth for the Quarter immediately preceding the date of determination of
$38,000,000 or more.
Terms defined in the Note shall have the same meanings in this
Notice.
ALOHA AIRGROUP, INC.
By:_____________________________________
Its:
By:_____________________________________
Its:
10
ALLONGE
Pay to the Order of FIRST HAWAIIAN BANK,
without recourse, warranty or representation
BANCWEST CORPORATION
By__________________________________
Xxxx X. Xxxx
Its Vice President and Chief Credit Officer
By__________________________________
Xxxxxx X. Xxxx
Its Executive Vice President and Chief Financial Officer
Date:_______________________________
EXHIBIT "2"
Opinion of Counsel
[To Be Attached]
GUARANTY
WHEREAS, ALOHA AIRGROUP, INC., a Hawaii corporation (the "Company"),
has issued 20,000 shares of Series C 10% Exchangeable Preferred Stock (the
"Preferred Shares") to BancWest Corporation, a Delaware corporation, pursuant
to the terms and provisions of that certain Purchase Agreement dated as of
September 8, 2000 (the "Purchase Agreement"); and
WHEREAS, the Purchase Agreement provides that the Preferred Shares
will be exchangeable, at the Company's option, into Senior Secured Guaranteed
Floating Rate Notes (the "Notes") at $1,000 for each Preferred Share; and
WHEREAS, the Company has exercised its option to exchange the
Preferred Shares held by BancWest Corporation into the Notes; and
WHEREAS, BancWest Corporation has agreed to sell and assign the Notes
to First Hawaiian Bank, a Hawaii corporation ("FHB"), and FHB has agreed to
purchase and accept an assignment of the Notes; and
WHEREAS, upon such assignment, FHB will become a registered holder of
the Notes in the aggregate amount of $20,000,000.00; and
WHEREAS, the Purchase Agreement provides that the Company will, at the
request of any holder of at least $15,000,000.00 of Notes, cause ALOHA
AIRLINES, INC., a Delaware corporation (the "Guarantor"), to enter into a
Guaranty of the Notes containing such terms and provisions as may be required
by such holder;
NOW, THEREFORE, pursuant to the provisions of the Purchase Agreement,
and in consideration of FHB's agreement to purchase and accept an assignment of
the Notes, as described above, the Guarantor hereby agrees as follows:
The Guarantor hereby unconditionally and irrevocably guarantees to
FHB, and to each holder of any interest in the Notes (each holder of any
interest in the Notes being hereinafter collectively and individually called
the "Holder") that: (i) the Company will duly and punctually repay all amounts
outstanding under the Notes, together with interest thereon, in accordance with
the provisions thereof and of that certain Loan Agreement executed concurrently
herewith by the Company and FHB (the "Loan Agreement"), whether at maturity, or
by acceleration or otherwise, all at the times and place and at the rate and in
the currency described therein; (ii) the Company will duly and punctually
observe and perform each and every agreement, covenant and condition on its
part to be observed or performed under the "Loan Documents" defined in the Loan
Agreement; and (iii) the Guarantor will pay to the Holder, promptly after
demand, the costs and expenses, including, but not limited to, attorneys' fees,
incurred in connection with enforcing the rights of the Holder against the
Guarantor following any default in the due observance or performance of any
agreement, covenant or condition on the part of the Company to be performed or
observed under the Loan Documents.
For the consideration aforesaid, the Guarantor hereby further
covenants and agrees as follows:
1. UNCONDITIONAL AND ABSOLUTE GUARANTY. This is an unconditional and
absolute guaranty of payment and not merely a guaranty of collection, and if
for any reason, any duty, agreement or obligation of the Company contained in
any of the Loan Documents shall not be observed or performed by it, or if any
amounts or any part thereof payable under or in connection with any of the Loan
Documents shall not be paid in full when and as due and payable, the Guarantor
undertakes promptly to observe and perform or cause to be observed and
performed each of such duties, agreements and obligations and to pay forthwith
such amounts to the Holder, regardless of any defense or setoff or counterclaim
which the Company may have or assert, and regardless of whether or not any
Holder or anyone on behalf of such Holder shall have instituted any suit,
action or proceeding or exhausted its remedies or taken any steps to enforce
any rights against any of such parties or any other person to compel any such
performance or to collect all or part of any such amounts, either pursuant to
the Loan Documents, or at law or in equity, and regardless of any other
condition or contingency.
2. WAIVER. The Guarantor hereby unconditionally waives any and all
statutory and common law suretyship defenses that now or hereafter may be
available to the Guarantor, to the extent permitted by applicable law,
including, without limitation (a) any requirement that any Holder in the event
of any default by the Company first make demand upon, or seek to enforce
remedies against, the Company or any other guarantor or any security or
collateral held by FHB at any time, or to pursue any other remedy in its power,
before being entitled to payment from the Guarantor of the amounts payable by
the Guarantor hereunder, or before proceeding against the Guarantor; (b) any
defense that may arise by reason of (i) the revocation or repudiation of this
Guaranty by the Guarantor, or the revocation or repudiation of any of the Loan
Documents by the Company or any other person or entity, (ii) the failure of FHB
to file or enforce a claim against the estate (either in administration,
bankruptcy or any other proceeding) of the Company or any other person or
entity, or (iii) the invalidity, irregularity or unenforceability in whole or
in part of the Notes or any of the other Loan Documents or any other document,
instrument, or agreement referred to therein, or any limitation on the
liability of the Company thereunder, or any limitation on the method or terms
of payment thereunder, which may now or hereafter be caused or imposed in any
manner whatsoever; (c) diligence, presentment, demand for payment, protest,
notice of discharge, notice of acceptance of this Guaranty, and indulgences and
notices of any other kind whatsoever; (d) any defense based upon an election of
remedies (including, if available, an election to proceed by non-judicial
foreclosure) by FHB which destroys or otherwise impairs any subrogation rights
of the Guarantor or the right of the Guarantor to proceed against the Company
for reimbursement, or both; (e) any defense based upon any taking, modification
or release of any collateral or guaranties for the indebtedness of the Company
under the Notes, or any failure to perfect any security interest in, or the
taking of any other action or the failure to take any other action with respect
to any collateral securing the payment of such indebtedness or the performance
of the obligations (including payment obligations) of the Company under the
Loan Documents; (f) any rights or defenses based upon an offset by the
Guarantor against any obligation now or hereafter owed to the Guarantor by the
Company; or (g) any right of appraisement with regard to the value of any
collateral which FHB may apply as a credit to the obligations of the Company,
through foreclosure or otherwise, and agrees that the determination by an
independent appraiser appointed by FHB of the value of such collateral shall be
binding upon the Guarantor for all purposes; it being the intention hereof that
the Guarantor shall remain fully liable, as principal, until the full payment
of the indebtedness under the Notes, and full performance of all the
obligations (including payment obligations) of the Company under the Loan
-2-
Documents, notwithstanding any act, omission or thing which might otherwise
operate as a legal or equitable discharge of the Guarantor.
3. NO RELEASE OF GUARANTY. The obligations, covenants, agreements
and duties of the Guarantor under this Guaranty shall not be released,
affected, stayed or impaired, without the written consent of the Holder, by (a)
any assignment, indorsement or transfer, in whole or in part, of the Notes,
although made without notice to or the consent of the Guarantor; or (b) any
waiver by the Holder of the performance or observance by the Company or the
Guarantor of any of the agreements, covenants, terms or conditions contained in
the Loan Documents; or (c) any extension of the time for payment of any amounts
payable under or in connection with the Loan Documents or of the time for
performance by the Company or the Guarantor of any other obligations under or
arising out of the Loan Documents or any extension or renewal thereof; or (d)
the modification or amendment (whether material or otherwise) of any duty,
agreement or obligation of the Company set forth in the Loan Documents; or (e)
the voluntary or involuntary liquidation, sale or other disposition of all or
substantially all of the assets of the Company or the Guarantor; or (f) any
receivership, insolvency, bankruptcy, reorganization, dissolution or other
similar proceedings, affecting the Company or the Guarantor or any of their
assets; or (g) any release of any property from the lien and security interest
created by any of the Loan Documents or the acceptance of additional or
substitute property as security under the Loan Documents; or (h) the release or
discharge of the Company from the observance or performance of any agreement,
covenant, term or condition contained in the Loan Documents; or (i) any action
which the Holder may take or omit to take by virtue of the Loan Documents or
through any course of dealing with the Company; or (j) the addition of a new
guarantor (the Guarantor acknowledging that certain shareholders of the Company
will be providing limited guaranties to FHB with respect to the Company's
obligations under the Notes and the other Loan Documents, but that the Holder
has no obligation to seek to enforce any remedies against any of such limited
guarantors before being entitled to payment from the Guarantor of the entire
amount guaranteed hereunder); or (k) any change in the status or structure of
the Company, including any change by incorporation, merger or consolidation;
(l) any change in the composition of the Company, including, without
limitation, any addition of, removal of, replacement for or substitution of any
officer or stockholder of the Company (if the Company is a corporation), any
addition of, removal of, replacement for or substitution of any general or
limited partner of the Company (if the Company is a partnership), or any
addition of, removal of, replacement for or substitution of any member of the
Company (if the Company is a limited liability company or partnership); or (m)
the operation of law or any other cause, whether similar or dissimilar to the
foregoing, PROVIDED, HOWEVER, that notwithstanding the foregoing, no such
waiver, extension, modification or amendment shall without the consent of the
Guarantor increase the principal amount of the Notes, or increase the interest
rate payable thereon, or increase any premium payable upon redemption thereof,
or shorten the stated maturity thereof, except in accordance with the express
provisions of the Notes and the Loan Documents.
4. WAIVER OF SUBROGATION. The Guarantor hereby waives any and all
right the Guarantor may have to be subrogated to the right of the Holder to
receive payments or distributions of assets of the Company following any
payment made by the Guarantor on this Guaranty, unless and until all amounts
payable under the Notes have been paid and all other amounts payable under this
Guaranty shall have been paid in full, and the Holder shall have received an
opinion from counsel to the Guarantor, acceptable to the Holder, that the
payment of all amounts due under the Notes does
-3-
not constitute a payment which may be avoided or recovered directly or
indirectly from the Holder as a preference, fraudulent transfer or otherwise in
any bankruptcy, reorganization or insolvency proceeding of or against the
Company. If (i) the Guarantor shall make payment to any Holder under this
Guaranty, (ii) all amounts under the Notes and any amounts payable under this
Guaranty shall have been paid in full, (iii) the maturity date of the Notes
shall have occurred, and (iv) the Holder shall have received an opinion from
counsel to the Guarantor, acceptable to the Holder, that the payment of all
amounts due under the Notes does not constitute a payment which may be avoided
or recovered directly or indirectly from the Holder as a preference, fraudulent
transfer or otherwise in any bankruptcy, reorganization or insolvency
proceeding of or against the Company, the Holder will, at the Guarantor's
request and expense, execute and deliver to the Guarantor appropriate
documents, necessary to evidence the transfer by subrogation to the Guarantor
of an interest resulting from such payment made by the Guarantor pursuant to
this Guaranty.
5. SUBORDINATION OF INDEBTEDNESS; BANKRUPTCY OF COMPANY. Any
indebtedness of the Company now or hereafter held by the Guarantor is hereby
subordinated to the indebtedness of the Company to the Holder; and, upon the
request of the Holder, such indebtedness of the Company to the Guarantor shall
be collected, enforced and received by the Guarantor as trustee for the Holder
and shall be paid over to the Holder on account of the indebtedness of the
Company to the Holder without reducing or affecting in any manner the liability
of the Guarantor under the other provisions of this Guaranty.
6. CLAIMS IN BANKRUPTCY. The Guarantor will file all claims against
the Company in any bankruptcy or other proceeding in which the filing of claims
is required or permitted by law upon any indebtedness of the Company to the
Guarantor or claim against the Company by the Guarantor, and the Guarantor
hereby assigns to FHB all rights of the Guarantor thereunder. If the Guarantor
does not file any such claim, FHB, as attorney-in-fact for the Guarantor, is
hereby authorized to do so in the name of the Guarantor or, in FHB's
discretion, to assign the claim and to cause proof of claim to be filed in the
name of FHB's nominee. FHB or its nominee shall have the sole right to accept
or reject any plan proposed in such proceeding and to take any other action
which a party filing a claim is entitled to take. In all such cases, whether in
administration, bankruptcy or otherwise, the person or persons authorized to
pay such claim shall pay to FBB the full amount payable on such claim up to the
amounts due under this guaranty, and, to the full extent necessary for that
purpose, the Guarantor hereby assigns to FHB all of the Guarantor's rights to
any such payments or distributions to which the Guarantor would otherwise be
entitled; provided, however, that the Guarantor's obligations hereunder shall
not be satisfied except to the extent that FHB receives cash by reason of any
such payment or distribution. If FHB receives anything hereunder other than
cash, the same shall be held as collateral for the payment of all amounts due
under this Guaranty.
7. LITIGATION, CHANGE IN GUARANTOR'S FINANCIAL CONDITION. The
Guarantor will promptly notify FHB of any material adverse litigation to which
the Guarantor becomes a party and any adverse change in the Guarantor's
financial condition which might impair or diminish the value of this Guaranty
to the Holder as an assurance of the repayment of the indebtedness of the
Company to the Holder. In the event of any such adverse change which so impairs
or diminishes the value of this Guaranty, the Guarantor will, upon request of
FHB, promptly furnish or make available to the Holder such satisfactory
additional security in such manner as the Holder may reasonably request
-4-
to compensate for such adverse change. The Guarantor shall promptly furnish the
Holder with such information, financial or otherwise, as the Holder may from
time to time request concerning the Guarantor.
8. CONDITION OF COMPANY. The Guarantor is fully aware of the
financial condition of the Company and is executing and delivering this
Guaranty based solely upon the Guarantor's own independent investigation of all
matters pertinent hereto, and is not relying in any manner upon any
representation or statement of FHB. The Guarantor represents and warrants that
the Guarantor is in a position to obtain and the Guarantor hereby assumes full
responsibility for obtaining, any additional information concerning the
Company's financial condition and any other matter pertinent hereto as the
Guarantor may desire, and the Guarantor is not relying upon or expecting FHB to
furnish to the Guarantor any information now or hereafter in FHB's possession
concerning the same or any other matter. By executing this Guaranty, the
Guarantor knowingly acknowledges and accepts the full range of risks
encompassed within a contract of this type. The Guarantor shall have no right
to require FHB to obtain or disclose any information with respect to the
indebtedness under the Notes or the obligations of the Company under the Loan
Documents, the financial condition or character of the Company, the Company's
ability to pay such indebtedness or perform such obligations, the existence of
any collateral or security for any or all of such indebtedness or such
obligations, the existence or non-existence of any other guaranties of all or
any part of such indebtedness or such obligations, or any action or non-action
on the part of FHB, the Company, or any other person, or any other matter, fact
or occurrence whatsoever.
9. BANKRUPTCY. Until all indebtedness under the Notes has been paid
to the Holder, and all obligations under the Loan Documents have been
performed, the Guarantor shall not, without the prior written consent of the
Holder, commence or join with any other person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against the Company. The
obligations of the Guarantor under this Guaranty shall not be altered, limited
or affected by any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of the Company or by any defense which the Company may have by
reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding. The Guarantor acknowledges and agrees that
any interest on the indebtedness under the Notes which accrues after the
commencement of any such proceeding (or, if interest on any portion of such
indebtedness ceases to accrue by operation of law by reason of the commencement
of said proceeding, such interest as would have accrued on any such portion of
such indebtedness if said proceeding had not been commenced) shall be included
in the indebtedness guaranteed by the Guarantor hereunder, since it is the
intention of the parties that the amount of the indebtedness which is
guaranteed by the Guarantor pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve the Company of any
portion of such indebtedness. The Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay to the Holder, or allow the claim of the
Holder in respect of, any such interest accruing after the date on which such
proceeding is commenced. In the event that all or any portion of such
indebtedness is paid or all or any part of the obligations under the Loan
Documents are performed by the Company, the obligations of the Guarantor
hereunder shall continue and remain in full force and effect in the event that
all or any part of such payment or performance is avoided or recovered directly
or indirectly from the Holder as a preference, fraudulent transfer or otherwise
in such proceeding.
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10. REMEDIES, CUMULATIVE. The rights and remedies of the Holder
hereunder and under the Loan Documents are cumulative and not exclusive and may
be exercised in whole or in part and in any order and at any time or times as
the Holder shall determine. All security of any kind or nature received or
receivable by the Holder for the repayment of the indebtedness evidenced by the
Note may be applied in any manner or order determined by the Holder except as
expressly provided otherwise in the Loan Documents.
11. AMENDMENTS, CONTINUING LIABILITY. The terms of this Guaranty may
not be modified or amended except by a written agreement executed by the
Guarantor with the consent in writing of the Holder. The obligations of the
Guarantor under this Guaranty shall be continuing obligations and a separate
cause of action shall be deemed to arise in respect of each default hereunder.
The Guarantor will from time to time deliver, upon request of the Holder,
satisfactory acknowledgments of the Guarantor's continued liability hereunder.
12. RECEIPT AND EXAMINATION OF LOAN DOCUMENTS. The Guarantor hereby
acknowledges that it has received and examined copies of the Loan Documents,
the observance and performance of which by the Company are hereby guaranteed.
13. NOTICES. Any notice or demand to be given or served hereunder
shall be in writing and personally delivered, or sent by registered or
certified mail addressed as follows:
To FHB at: First Hawaiian Bank
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President Corporate
Banking Division
FAX: (000) 000-0000
To GUARANTOR at: 000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Executive Vice President-Finance
& Planning and Chief Financial
Officer
FAX: (000) 000-0000
Any such address may be changed from time to time by the addressee by serving
notice to the other party as above provided. Service of such notice or demand
shall be deemed complete on the date of actual delivery or at the expiration of
the second day after the date of mailing if mailed in Hawaii, whichever is
earlier.
14. PARTIES IN INTEREST. All covenants, agreements, terms and
conditions in this Guaranty contained shall be binding on the Guarantor and the
Guarantor's successors and assigns, and shall bind, inure to the benefit of and
be enforceable by the Holder from time to time.
15. GOVERNING LAW; SEVERABILITY. This Guaranty shall for all purposes
be construed in accordance with the laws of the State of Hawaii. The Guarantor
hereby irrevocably and
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unconditionally submits, for purposes of any action or proceeding which the
Holder may bring to enforce this Guaranty, to the jurisdiction of the courts of
the State of Hawaii and the Federal District Court for the District of Hawaii.
The submission to such jurisdiction shall not prevent the Holder from
commencing any such action or proceeding in any other court having
jurisdiction. If any provision of this Guaranty is held to be invalid or
unenforceable, the validity or enforceability of the other provision shall
remain unaffected.
16. TERMS OF THIS GUARANTY SUPERCEDE ANY OTHER GUARANTY. The Guarantor
hereby acknowledges and agrees that the terms, covenants, conditions and
provisions contained in this Guaranty supercede the terms, covenants,
conditions and provisions contained in the "Guarantee of Aloha Airlines"
endorsed on the Notes, and that the guarantee obligations of the Guarantor with
respect to FHB shall be governed exclusively by the terms, covenants,
conditions and provisions contained in this Guaranty.
17. PARAGRAPH HEADINGS. The headings of paragraphs herein are inserted
only for convenience and shall in no way define, describe or limit the scope or
intent of any provision of this Guaranty.
18. TERMINATION. This Guaranty shall terminate upon the payment of all
amounts due under the Loan Documents; provided, however, that if all or any
portion of the amounts due under the Loan Documents are paid by or on behalf of
the Company, the obligations of the Guarantor hereunder shall continue and
remain in full force and effect in the event that all or any part of such
payment is avoided or recovered directly or indirectly from the Holder as a
preference, fraudulent transfer or otherwise in any bankruptcy, reorganization
or insolvency proceeding of or against the Company.
IN WITNESS WHEREOF, the Guarantor has executed this instrument as of
September 8, 2000.
ALOHA AIRLINES, INC.
By /s/ Xxxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxx
Its President and CEO
By /s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Xxxxxx X. Xxxxxxxxx
Its EVP, CFO and Treasurer
-7-
LIMITED GUARANTY
(Sheridan Ing Partners Hawaii)
WHEREAS, ALOHA AIRGROUP, INC., a Hawaii corporation (the "Company"),
has issued 20,000 shares of Series C 10% Exchangeable Preferred Stock (the
"Preferred Shares") to BancWest Corporation, a Delaware corporation, pursuant
to the terms and provisions of that certain Purchase Agreement dated as of
September 8, 2000 (the "Purchase Agreement"); and
WHEREAS, the Purchase Agreement provides that the Preferred Shares
will be exchangeable, at the Company's option into Senior Secured Guaranteed
Floating Rate Notes (the "Notes") at $1,000 for each Preferred Share; and
WHEREAS, the Company has exercised its option to exchange the
Preferred Shares held by BancWest Corporation into the Notes; and
WHEREAS, BancWest Corporation has agreed to sell and assign the Notes
to First Hawaiian Bank, a Hawaii corporation ("FHB"), and FHB has agreed to
purchase and accept an assignment of the Notes, upon the terms and conditions
set forth in that certain Loan Agreement dated September 8, 2000 (the "Loan
Agreement"), but subject to the condition, among others, that SHERIDAN ING
PARTNERS HAWAII, a Hawaii limited partnership (the "Limited Guarantor") execute
and deliver this Limited Guaranty to FHB; and
WHEREAS, the Limited Guarantor deems it to be to its own financial
benefit that FHB purchase and accept an assignment of the Notes; and
WHEREAS, in addition to purchasing the Notes, FHB and certain
additional lenders (the "Lenders") have made available to Aloha Airlines, Inc.,
a Delaware corporation (the "Airline"), a revolving line of credit in the
principal amount of $30,000,000 (the "Line of Credit") in accordance with that
certain Amended and Restated Loan Agreement - 1996 dated December 31, 1996, as
amended, which will be further amended pursuant to that certain Fifth Amendment
to Amended and Restated Loan Documents dated September 8, 2000 (the "Line of
Credit Agreement") to, among other matters, reduce the commitment thereunder
to $20,000,000; and
WHEREAS, the Limited Guarantor deems it to be to its own financial
benefit that the Lenders enter into said Fifth Amendment to Amended and
Restated Loan Documents;
NOW, THEREFORE, in consideration of FHB's agreement to purchase and
accept an assignment of the Notes, and in consideration of the Lenders'
agreement to enter into said fifth Amendment to Amended and Restated Loan
Documents, as described above, the Limited Guarantor hereby agrees as follows:
1. GUARANTY; AMOUNT GUARANTEED. The Limited Guarantor hereby
unconditionally and irrevocably, guarantees to FHB, and to each holder of any
interest in the Notes, and to each participant in the Line of Credit (each
holder of any interest in the Notes, and each participant in the Line of
Credit, being hereinafter collectively and individually called the "Holder"),
that (a) if the Company fails to pay any amounts of principal or interest under
the Notes as and when the same become due and payable, whether at maturity, by
acceleration or otherwise, or (b) if the Airline fails to pay any amounts of
principal or interest under the Line of Credit as and when the same become
due and payable, whether at maturity, by acceleration or otherwise, or (c) if
the Company or the Airline undertakes or suffers any "Bankruptcy Action" (as
hereinafter defined), THEN, AND IN ANY SUCH EVENT, the Limited Guarantor will
pay to the Holder, promptly after demand therefor, all amounts outstanding
under the Notes and all amounts outstanding under the Line of Credit,
regardless of any defense or setoff or counterclaim which the Company or the
Airline may have or assert, and regardless of whether or not any Holder or
anyone on behalf of such Holder shall have instituted any suit, action or
proceeding or exhausted its remedies or taken any steps to collect all or part
of any such amounts, whether at law or in equity, and regardless of any other
condition or contingency; PROVIDED, HOWEVER, that notwithstanding anything
contained in this Limited Guaranty to the contrary, the obligations of the
Limited Guarantor hereunder shall in no event, circumstance or contingency ever
exceed the sum of TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($2,500,000.00), hereinafter called the "Amount Guaranteed"; AND PROVIDED,
FURTHER, HOWEVER, that notwithstanding the limitation on such obligations, FHB
shall have the right, in its sole and absolute discretion, to allocate the
Amount Guaranteed to the amounts due under the Notes (principal, interest, fees
and charges) and/or to the amounts due under the Line of Credit (principal,
interest, fees and charges) in any amounts and in any order chosen by FHB. This
Limited Guaranty shall only become operational if (i) amounts under the Notes
or the Line of Credit have become due and payable as a result of a payment
default listed under Section 6.1 of the Loan Agreement or Section 7.1 of the
Line of Credit Agreement, respectively, or (ii) the Company or the Airline
undertakes or suffers any Bankruptcy Action. Notwithstanding anything in this
Limited Guaranty to the contrary, any payment made by the Limited Guarantor to
FHB under this Limited Guaranty, shall reduce the Amount Guaranteed on a
"dollar for dollar" basis.
As used herein, the term "Bankruptcy Action" shall mean any of the
following: (i) if the Company or the Airline shall become insolvent, or make an
assignment for the benefit of creditors, or become the subject of an order for
relief in an involuntary case under the bankruptcy laws as now or hereafter
constituted, and such order shall remain in effect and unstayed for a period of
sixty (60) consecutive days, or (ii) the Company or the Airline shall commence
a voluntary case under the bankruptcy laws as now or hereafter constituted, or
shall file any petition or answer seeking for itself any arrangement,
composition, adjustment, liquidation, dissolution or similar relief to which it
may be entitled under any present or future statute, law or regulation, or file
any answer admitting the material allegations of any petition filed against it
in any such proceedings, or (iii) the company or the Airline shall seek or
consent to or acquiesce in the appointment of or taking possession by, any
custodian, trustee, receiver or liquidator of it or of all or a substantial
part of its properties or assets, or take action looking to its dissolution or
liquidation, or (iv) within sixty (60) days after commencement of any
proceedings against the Company or the Airline seeking any arrangement,
composition, adjustment, liquidation, dissolution or similar relief to which
the Company or the Airline may be entitled under any present or future statute,
law or regulation, such proceedings shall not have been dismissed; or (v)
within sixty (60) days after the appointment of, or taking possession by, any
custodian, trustee, receiver or liquidator of any or of all or a substantial
part of the Company's or the Airline's properties or assets, without the
consent or acquiescence of the Company or the Airline, any such appointment or
possession shall not have been vacated or terminated.
Notwithstanding the foregoing or anything herein to the contrary,
the benefits of this Limited Guaranty will not be available until the Holder
has made a written demand for payment on
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the Company, the Airline and all guarantors and the time period for payment in
such demand has expired.
2. TERM OF THIS LIMITED GUARANTY. This Limited Guaranty shall
terminate on August 30, 2002 (the "Termination Date"), at 5:00 p.m., Hawaii
Standard Time, unless extended by the mutual agreement of the Limited Guarantor
and FHB; provided, however, that if all or any portion of the indebtedness
under the Notes or the indebtedness under the Line of Credit is paid by or on
behalf of the Company or the Airline on or before the Termination Date, the
obligations of the Limited Guarantor hereunder shall continue and remain in
fall force and effect in the event that all or any part of such payment is
avoided or recovered directly or indirectly from the Holder as a preference,
fraudulent transfer or otherwise in any bankruptcy, reorganization or
insolvency proceeding of or against the Company or the Airline.
3. WAIVER. The Limited Guarantor hereby unconditionally waives any and
all statutory and common law suretyship defenses that now or hereafter may be
available to the Limited Guarantor, including, without limitation (a) any
requirement that any Holder in the event of any default by the Company or the
Airline, except as otherwise set forth in this Limited Guaranty, first make
demand upon, or seek to enforce remedies against, the Company or the Airline or
any other guarantor or any security or collateral held by FHB at any time, or
to pursue any other remedy in its power, before being entitled to payment from
the Limited Guarantor of the amounts payable by the Limited Guarantor
hereunder, up to the Amount Guaranteed, or before proceeding against the
Limited Guarantor; (b) any defense that may arise by reason of (i) the
revocation or repudiation of this Limited Guaranty by the Limited Guarantor, or
the revocation or repudiation of any loan documents by the Company or the
Airline or any other person or entity, (ii) the failure of FHB to file or
enforce a claim against the estate (either in administration, bankruptcy or any
other proceeding) of the Company or the Airline or any other person or entity,
or (iii) the invalidity, irregularity or unenforceability in whole or in part
of the Notes or any document, instrument, or agreement executed by the Company
or the Airline in connection with the Notes or the Line of Credit, or any
limitation on the liability of the Company or the Airline thereunder, or any
limitation on the method or terms of payment thereunder, which may now or
hereafter be caused or imposed in any manner whatsoever; (c) diligence,
presentment, demand for payment, protest, notice of discharge, notice of
acceptance of this Limited Guaranty, and indulgences and notices of any other
kind whatsoever; (d) any defense based upon an election of remedies (including,
if available, an election to proceed by non-judicial foreclosure) by FHB which
destroys or otherwise impairs any subrogation rights of the Limited Guarantor
or the right of the Limited Guarantor to proceed against the Company or the
Airline for reimbursement, or both; (e) any defense based upon any taking,
modification or release of any collateral or guaranties for the indebtedness of
the Company under the Notes or the Airline under the Line of Credit, or any
failure to perfect any security interest in, or the taking of any other action
or the failure to take any other action with respect to any collateral securing
the payment of such indebtedness; (f) any rights or defenses based upon an
offset by the Limited Guarantor, against any obligation now or hereafter owed
to the Limited Guarantor, by the Company or the Airline, including, without
limitation, any Senior Secured Guaranteed Floating Rate Notes held by the
Limited Guarantor; or (g) any right of appraisement with regard to the value of
any collateral which FHB may apply as a credit to the obligations of the
Company or the Airline, through foreclosure or otherwise, and agree that the
determination by an independent appraiser appointed by FHB of the value of such
collateral shall be binding upon the Limited Guarantor for all purposes; it
being the
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intention hereof that the Limited Guarantor shall remain fully liable, as
principal, for the Amount Guaranteed, until the full payment of the
indebtedness under the Notes and the full payment of the indebtedness under the
Line of Credit, subject to the termination provisions of Paragraph 2 hereof,
notwithstanding any act, omission or thing which might otherwise operate as a
legal or equitable discharge of the Limited Guarantor.
4. NO RELEASE OF GUARANTY. The obligations, covenants, agreements and
duties of the Limited Guarantor under this Limited Guaranty shall not be
released, affected, stayed or impaired, without the written consent of the
Holder, by (a) any assignment, endorsement or transfer, in whole or in part, of
the Notes or any interest in the Line of Credit, although made without notice
to or the consent of the Limited Guarantor; or (b) any waiver by the Holder of
the performance or observance by the Company, the Airline or the Limited
Guarantor of any of the agreements, covenants, terms or conditions contained in
any loan documents executed by any of them in connection with the Notes or the
Line of Credit; or (c) any extension of the time for payment of any amounts
payable under or in connection with the Notes of the Line of Credit or any
renewal thereof; or (d) the modification or amendment (whether material or
otherwise) of any duty, agreement or obligation of the Company or the Airline
under the Notes or the Line of Credit; or (e) the voluntary or involuntary
liquidation, sale or other disposition of all or substantially all of the
assets of the Company, the Airline or any of the Limited Guarantor; or (f) any
receivership, insolvency, bankruptcy, reorganization, dissolution or other
similar proceedings, affecting the Company, the Airline or any of the Limited
Guarantor or any of their assets; or (g) any release of any property from
securing payment of the Notes or the Line of Credit or the acceptance of
additional or substitute property as security therefor; or (h) the release or
discharge of the Company or the Airline from the observance or performance of
any agreement, covenant, term or condition contained in any loan documents
executed by either of them in connection with the Notes or the Line of Credit;
or (i) any action which the Holder may take or omit to take by virtue of such
loan documents or through any course of dealing with the Company or the
Airline; or (j) the addition of a new guarantor or guarantors (the Limited
Guarantor acknowledging that Aloha Airlines, Inc., will be providing a full
guaranty to FHB with respect to the Company's obligations under the Notes, but
that the Holder has no obligation to seek to enforce any remedies against Aloha
Airlines, Inc., before being entitled to payment from the Limited Guarantor of
the entire Amount Guaranteed hereunder); or (k) any change in the status or
structure of the Company or the Airline, including any change by incorporation,
merger or consolidation; (l) any change in the composition of the Company or
the Airline, including, without limitation, any addition of, removal of,
replacement for or substitution of any officer or stockholder of the Company or
the Airline; or (m) the operation of law or any other cause, whether similar or
dissimilar to the foregoing, PROVIDED, HOWEVER, that notwithstanding the
foregoing, no such waiver, extension, modification or amendment shall without
the consent of the Limited Guarantor increase the principal amount of the Notes
or the Line of Credit, or increase the interest rate payable thereon, or
increase any premium payable upon redemption thereof, or shorten the stated
maturity thereof, except in accordance with the express provisions of the loan
documents executed by the Company or the Airline in connection with the Notes
and the Line of Credit; AND PROVIDED FURTHER that nothing contained in this
Paragraph 4 shall affect the limitations on the obligations of the Limited
Guarantor set forth in Paragraph 1 hereof (relating to the Amount Guaranteed)
and in Paragraph 2 hereof (relating to the Termination Date).
-4-
5. WAIVER OF SUBROGATION. The Limited Guarantor hereby waives any and
all right the Limited Guarantor may have to be subrogated to the right of the
Holder to receive payments or distributions of assets of the Company or the
Airline following any payment made by the Limited Guarantor, on this Limited
Guaranty, unless and until all amounts payable under the Notes have been paid
and all other amounts payable under this Limited Guaranty shall have been paid
in full, the Line of Credit shall have expired or been terminated, and the
Holder shall have received an opinion from counsel to the Limited Guarantor,
acceptable to the Holder that the payment of all amounts due under the Notes
and the Line of Credit does not constitute a payment which may be avoided or
recovered directly or indirectly from the Holder as a preference, fraudulent
transfer or otherwise in any bankruptcy, reorganization or insolvency
proceeding of or against the Company or the Airline. If (i) the Limited
Guarantor shall make payment to any Holder under this Limited Guaranty, (ii)
all amounts under the Notes and any amounts payable under this Limited Guaranty
shall have been paid in full, (iii) the maturity date of the Notes shall have
occurred, and the commitment of the Company under the Line of Credit shall have
been terminated, and (iv) the Holder shall have received an opinion from
counsel to the Limited Guarantor, acceptable to the Holder that the payment of
all amounts due under the Notes and the Line of Credit does not constitute a
payment which may be avoided or recovered directly or indirectly from the
Holder as a preference, fraudulent transfer or otherwise in any bankruptcy,
reorganization or insolvency proceeding of or against the Company or the
Airline, the Holders will, at the Limited Guarantor's request and expense,
execute and deliver to the Limited Guarantor appropriate documents, necessary
to evidence the transfer by subrogation to the Limited Guarantor of an interest
resulting from such payment made by such Limited Guarantor pursuant to this
Limited Guaranty.
6. SUBORDINATION OF INDEBTEDNESS; BANKRUPTCY OF COMPANY. Any
indebtedness of the Company or the Airline now or hereafter held by the Limited
Guarantor (including, without limitation, any Senior Secured Guaranteed
Floating Rate Note held by the Limited Guarantor), is hereby subordinated to
the indebtedness of the Company and the Airline to the Holder; and, upon the
request of the Holder, such indebtedness of the Company or the Airline to the
Limited Guarantor shall be collected, enforced and received by the Limited
Guarantor as trustee for the holder and shall be paid over to the holder on
account of the indebtedness of the Company and the Airline to the Holder
without reducing or affecting in any manner the liability of the Limited
Guarantor under the other provisions of this Limited Guaranty.
7. CLAIMS IN BANKRUPTCY. The Limited Guarantor will file all claims
against the Company and/or the Airline in any bankruptcy or other proceeding in
which the filing of claims is required or permitted by law upon any
indebtedness of the Company or the Airline to the Limited Guarantor or claim
against the Company or the Airline by the Limited Guarantor, and the Limited
Guarantor hereby assigns to FHB all rights of the Limited Guarantor thereunder.
If the Limited Guarantor does not file any such claim, FHB, as attorney-in-fact
for the Limited Guarantor, is hereby authorized to do so in the name of the
Limited Guarantor or, in FHB's discretion, to assign the claim and to cause
proof of claim to be filed in the name of FHB's nominee. FHB or its nominee
shall have the sole right (as assignee of all rights of the Limited Guarantor
pursuant to this Section 7) to accept or reject any plan proposed in such
proceeding and to take any other action which a party filing a claim is
entitled to take. In all such cases, whether in administration, bankruptcy or
otherwise, the person or persons authorized to pay such claim shall pay to FHB
the full amount payable on such claim up to the amounts due under this Limited
Guaranty, and, to the full extent
-5-
necessary for that purpose, the Limited Guarantor hereby assigns to FHB all of
the Limited Guarantor's rights to any such payments or distributions to which
the Limited Guarantor would otherwise be entitled; provided, however, that the
Limited Guarantor's obligations hereunder shall not be satisfied except to the
extent that FHB receives cash by reason of any such payment or distribution. If
FHB receives anything hereunder other than cash, the same shall be held as
collateral for the payment of all amounts due under this Limited Guaranty.
8. LITIGATION; CHANGE IN LIMITED GUARANTOR'S FINANCIAL CONDITION. The
Limited Guarantor will promptly notify FHB of any litigation to which the
Limited Guarantor becomes a party which is not covered by insurance, and any
adverse change in the Limited Guarantor's financial condition, either of which
might materially impair or diminish the value of this Limited Guaranty to the
Holder as an assurance of the repayment of the indebtedness of the Company or
the Airline to the Holder. The Limited Guarantor shall promptly furnish the
Holder with such information, financial or otherwise, as the Holder may from
time to time reasonably request concerning the Limited Guarantor.
9. CONDITION OF COMPANY AND AIRLINE. The Limited Guarantor is fully
aware of the financial condition of the Company and the Airline and is
executing and delivering this Limited Guaranty based solely upon the Limited
Guarantor's own independent investigation of all matters pertinent hereto, and
is not relying in any manner upon any representation or statement of FHB. The
Limited Guarantor represents and warrants that the Limited Guarantor is in a
position to obtain and the Limited Guarantor hereby assumes full responsibility
for obtaining, any additional information concerning the Company's and the
Airline's financial condition and any other matter pertinent hereto as the
Limited Guarantor may desire, and the Limited Guarantor is not relying upon or
expecting FHB to furnish to the Limited Guarantor any information now or
hereafter in FHB's possession concerning the same or any other matter. By
executing this Limited Guaranty, the Limited Guarantor knowingly acknowledges
and accepts the full range of risks encompassed within a contract of this type.
The Limited Guarantor shall have no right to require FHB to obtain or disclose
any information with respect to the indebtedness under the Notes or the Line of
Credit, the financial condition or character of the Company or the Airline, the
Company's or the Airline's ability to pay such indebtedness, the existence of
any collateral or security for any or all of such indebtedness, the existence
or non-existence of any other guaranties of all or any part of such
indebtedness, or any action or non-action on the part of FHB, the Company, the
Airline, or any other person, or any other matter, fact or occurrence
whatsoever.
10. FINANCIAL COVENANT; NEGATIVE COVENANTS.
(a) The Limited Guarantor shall at all times herein maintain
a minimum "Net Worth" of at least $5,000,000.00. As used herein, the term "Net
Worth" shall mean the excess of the Limited Guarantor's total assets over the
Limited Guarantor's total liabilities, as determined in accordance with
accounting principles consistently applied by the Limited Guarantor and as set
forth in the financial statements dated December 31, 1999, previously delivered
to the Lender.
(b) As soon as available, but not later than one hundred
twenty (120) days after the end of each fiscal year, the Limited Guarantor
shall provide to the Lender financial statements of the Limited Guarantor,
which are acceptable to the Lender.
-6-
(c) At all times herein, the Limited Guarantor shall not,
without the prior written consent of FHB, (i) directly or indirectly make or
commit to make any loan, advance, guaranty or extension of credit to any
corporation, association, partnership, organization or individual affiliated
with the Limited Guarantor; or (ii) sell, transfer, hypothecate, assign or
convey any asset, or interest therein, of the Limited Guarantor; except in the
ordinary course of the Limited Guarantor's business.
11. BANKRUPTCY. Until all indebtedness under the Notes and the Line of
Credit has been paid to the Holder, or the Termination Date, whichever occurs
first, the Limited Guarantor shall not, without the prior written consent of
the Holder, commence or join with any other person in commencing any
bankruptcy, reorganization or insolvency proceedings of or against the Company
or the Airline. The obligations of the Limited Guarantor under this Limited
Guaranty shall not be altered, limited or affected by any proceeding, voluntary
or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of the Company or the Airline, or by
any defense which the Company or the Airline may have by reason of the order,
decree or decision of any court or administrative body resulting from any such
proceeding. The Limited Guarantor acknowledges and agrees that any interest on
the indebtedness under the Notes or the Line of Credit which accrues after the
commencement of any such proceeding (or, if interest on any portion of such
indebtedness ceases to accrue by operation of law by reason of the commencement
of said proceeding, such interest as would have accrued on any such portion of
such indebtedness if said proceeding had not been commenced) shall be included
in the indebtedness guaranteed by the Limited Guarantor hereunder, since it is
the intention of the parties that the amount of the indebtedness which is
guaranteed by the Limited Guarantor pursuant to this Limited Guaranty should be
determined without regard to any rule of law or order which may relieve the
Company or the Airline of any portion of such indebtedness. The Limited
Guarantor will permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to pay to
the Holder, or allow the claim of the Holder in respect of, any such interest
accruing after the date on which such proceeding is commenced.
12. REPRESENTATIONS AND WARRANTIES.
(a) ORGANIZATION, STANDING AND AUTHORITY OF LIMITED GUARANTOR.
The Limited Guarantor is a Hawaii limited partnership, duly registered, validly
existing and in good standing under the laws of the State of Hawaii, and has
all requisite power and authority to carry on the business and to own the
property that it now carries on and owns. The Limited Guarantor has all
requisite power and authority to execute and deliver this Limited Guaranty and
to observe and perform all of the provisions and conditions hereof. The
execution and delivery of this Limited Guaranty have been duly authorized by
the general partners of the Limited Guarantor, and no other partnership action
of the Limited Guarantor is requisite to the execution and delivery of this
Limited Guaranty.
(b) TAX RETURNS AND PAYMENTS. All tax returns and reports of
the Limited Guarantor required by law to be filed have been duly filed, and all
taxes, assessments, contributions, fees and other governmental charges (other
than those presently payable without penalty or interest and those which have
been disclosed to the Lender but which are currently being contested in good
faith) upon the Limited Guarantor, or upon its properties or assets or income,
which are due and payable, have been paid.
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(c) LITIGATION. There is, to the knowledge of the Limited
Guarantor, no action, suit, proceeding or investigation pending at law or in
equity or before any federal, state, territorial, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
or threatened against or affecting the Limited Guarantor, which might
materially adversely affect the Limited Guarantor's ability to perform its
obligations under this Limited Guaranty.
(d) LIMITED GUARANTOR'S COMPLIANCE WITH OTHER INSTRUMENTS,
NONE BURDENSOME. The Limited Guarantor is not in violation of or in default
with respect to any term or provision of its Partnership Agreement or any
material mortgage, indenture, contract, agreement or instrument applicable to
the Limited Guarantor or by which it may be bound; and the execution, delivery,
performance of and compliance with this Limited Guaranty will not result in any
such violation or be in conflict with or constitute a default under any such
term or provision or result in the creation of any mortgage, lien or charge on
any of the properties or assets of the Limited Guarantor not contemplated by
this Limited Guaranty; and there is no term or provision of its Partnership
Agreement, or any mortgage, indenture, contract, agreement or instrument
applicable to the Limited Guarantor or by which it may be bound, which may
materially adversely affect the business or prospects or condition (financial
or other) of the Limited Guarantor or of any of its properties or assets.
(e) FINANCIAL STATEMENTS. All financial statements heretofore
delivered to the Lender by the Limited Guarantor are true and correct in all
respects, and fairly represent the financial condition of the Limited Guarantor
as of the dates thereof; and no material, adverse changes have occurred in the
financial condition reflected therein since the respective dates thereof to the
Closing Date.
(f) CHARACTER OF REPRESENTATIONS AND WARRANTIES. None of the
financial statements or any certificate or statement furnished to the Lender by
or on behalf of the Limited Guarantor in connection with the Loan, and none of
the representations and warranties in this Limited Guaranty, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein or herein not misleading. To
the best knowledge of the Limited Guarantor, there is no fact which materially
adversely affects or in the future (so far as the Limited Guarantor can now
foresee) may materially adversely affect the ability of the Limited Guarantor
to observe or perform its obligations under this Limited Guaranty, which has
not been set forth herein or in a certificate or opinion of counsel or other
written statement furnished to the Lender by or on behalf of the Limited
Guarantor.
13. REMEDIES, CUMULATIVE. The rights and remedies of the Holder
hereunder and under all documents, instruments and agreements executed by or
for the benefit of the company or the Airline in connection with the Notes or
the Line of Credit are cumulative and not exclusive and may be exercised in
whole or in part and in any order and at any time or times as the Holder shall
determine. All security of any kind or nature received or receivable by the
Holder for the repayment of the indebtedness under the Notes or the Line of
Credit may be applied in any manner or order determined by the Holder.
14. AMENDMENTS; CONTINUING LIABILITY. The terms of this Limited
Guaranty may not be modified or amended except by a written agreement executed
by the Limited Guarantor with the
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consent in writing of the Holder. The obligations of the Limited Guarantor
under this Limited Guaranty shall be continuing obligations and a separate
cause of action shall be deemed to arise in respect of each default hereunder.
15. RECEIPT AND EXAMINATION OF NOTES AND OTHER DOCUMENTS. The Limited
Guarantor hereby acknowledges that it has received and examined copies of the
Notes, and all other documents, instruments and agreements executed by or for
the benefit of the Company or the Airline in connection with the Notes or the
Line of Credit.
16. NOTICES. Any notice or demand to be given or served hereunder
shall be in writing and personally delivered, or sent by registered or
certified mail addressed as follows:
To FHB at: First Hawaiian Bank
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President, Corporate Banking Division
Fax: (000) 000-0000
To LIMITED GUARANTOR at:
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxxx Xxx
Any such address may be changed from time to time by the addressee by serving
notice to the other party as above provided. Service of such notice or demand
shall be deemed complete on the date of actual delivery or at the expiration of
the second day after the date of mailing if mailed in Hawaii, whichever is
earlier.
17. PARTIES IN INTEREST. All covenants, agreements, terms and
conditions in this Limited Guaranty contained shall be binding on the Limited
Guarantor and its successors, successors in trust, and assigns, and shall bind,
inure to the benefit of and be enforceable by the Holder from time to time.
18. GOVERNING LAW; SEVERABILITY. This Limited Guaranty shall for all
purposes be construed in accordance with the laws of the State of Hawaii. The
Limited Guarantor hereby irrevocably and unconditionally submits, for purposes
of any action or proceeding which the Holder may bring to enforce this Limited
Guaranty, to the jurisdiction of the courts of the State of Hawaii and the
Federal District Court for the District of Hawaii. The submission to such
jurisdiction shall not prevent the Holder from commencing any such action or
proceeding in any other court having jurisdiction. If any provision of this
Limited Guaranty is held to be invalid or unenforceable, the validity or
enforceability of the other provision shall remain unaffected.
19. PARAGRAPH HEADINGS. The headings of paragraphs herein are inserted
only for convenience and shall in no way define, describe or limit the scope or
intent of any provision of this Limited Guaranty.
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IN WITNESS WHEREOF, the Limited Guarantor has executed this instrument
as of September 8, 2000.
SHERIDAN ING PARTNERS HAWAII
By /s/ Xxxxxx K.Y. Ing
----------------------------------
Xxxxxx K.Y. Ing
Co-Trustee of the Sheridan Ing FLP Trust
Its General Partner
By /s/ Xxxxxxx K.M. Ing
----------------------------------
Xxxxxxx K.M. Ing
Co-Trustee of the Sheridan Ing FLP Trust
Its General Partner
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LIMITED GUARANTY
(Aloha Securities & Investment Company)
WHEREAS, ALOHA AIRGROUP, INC., a Hawaii corporation (the "Company"),
has issued 20,000 shares of Series C 10% Exchangeable Preferred Stock (the
"Preferred Shares") to BancWest Corporation, a Delaware corporation, pursuant
to the terms and provisions of that certain Purchase Agreement dated as of
September 8, 2000 (the "Purchase Agreement"); and
WHEREAS, the Purchase Agreement provides that the Preferred Shares
will be exchangeable, at the Company's option, into Senior Secured Guaranteed
Floating Rate Notes (the "Notes") at $1,000 for each Preferred Share; and
WHEREAS, the Company has exercised its option to exchange the
Preferred Shares held by BancWest Corporation into the Notes; and
WHEREAS, BancWest Corporation has agreed to sell and assign the Notes
to First Hawaiian Bank, a Hawaii corporation ("FHB"), and FHB has agreed to
purchase and accept an assignment of the Notes, upon the terms and conditions
set forth in that certain Loan Agreement dated September 8, 2000 (the "Loan
Agreement"), but subject to the condition, among others, that ALOHA SECURITIES
& INVESTMENT COMPANY, a Hawaii limited partnership (the "Limited Guarantor")
execute and deliver this Limited Guaranty to FHB; and
WHEREAS, the Limited Guarantor deems it to be to its own financial
benefit that FHB purchase and accept an assignment of the Notes; and
WHEREAS, in addition to purchasing the Notes, FHB and certain
additional lenders (the "Lenders") have made available to Aloha Airlines, Inc.,
a Delaware corporation (the "Airline"), a revolving line of credit in the
principal amount of $30,000,000 (the "Line of Credit"), in accordance with
that certain Amended and Restated Loan Agreement - 1996 dated December 31,
1996, as amended, which will be further amended pursuant to that certain Fifth
Amendment to Amended and Restated Loan Documents dated September 8, 2000 (the
"Line of Credit Agreement") to, among other matters, reduce the commitment
thereunder to $20,000,000; and
WHEREAS, the Limited Guarantor deems it to be to its own financial
benefit that the Lenders enter into said Fifth Amendment to Amended and
Restated Loan Documents;
NOW, THEREFORE, in consideration of FHB's agreement to purchase and
accept an assignment of the Notes, and in consideration of the Lenders'
agreement to enter into said Fifth Amendment to Amended and Restated Loan
Documents, as described above, the Limited Guarantor hereby agrees as follows:
1. GUARANTY; AMOUNT GUARANTEED. The Limited Guarantor hereby
unconditionally and irrevocably, guarantees to FHB, and to each holder of any
interest in the Notes, and to each participant in the Line of Credit (each
holder of any interest in the Notes, and each participant in the Line of
Credit, being hereinafter collectively and individually called the "Holder"),
that (a) if the Company fails to pay any amounts of principal or interest under
the Notes as and when the same become due and payable, whether at maturity, by
acceleration or otherwise, or (b) if the Airline fails to pay any amounts of
principal or interest under the Line of Credit as and when the same become
due and payable, whether at maturity, by acceleration or otherwise, or (c) if
the Company or the Airline undertakes or suffers any "Bankruptcy Action" (as
hereinafter defined), THEN, AND IN ANY SUCH EVENT, the Limited Guarantor will
pay to the Holder, promptly after demand therefor, all amounts outstanding
under the Notes and all amounts outstanding under the Line of Credit,
regardless of any defense or setoff or counterclaim which the Company or the
Airline may have or assert, and regardless of whether or not any Holder or
anyone on behalf of such Holder shall have instituted any suit, action or
proceeding or exhausted its remedies or taken any steps to collect all or part
of any such amounts, whether at law or in equity, and regardless of any other
condition or contingency; PROVIDED, HOWEVER, that notwithstanding anything
contained in this Limited Guaranty to the contrary, the obligations of the
Limited Guarantor hereunder shall in no event, circumstance or contingency ever
exceed the sum of SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($7,500,000.00), hereinafter called the "Amount Guaranteed"; AND PROVIDED,
FURTHER, HOWEVER, that notwithstanding the limitation on such obligations, FHB
shall have the right, in its sole and absolute discretion, to allocate the
Amount Guaranteed to the amounts due under the Notes (principal, interest, fees
and charges) and/or to the amounts due under the Line of Credit (principal,
interest, fees and charges) in any amounts and in any order chosen by FHB. This
Limited Guaranty shall only become operational if (i) amounts under the Notes
or the Line of Credit have become due and payable as a result of a payment
default listed under Section 6.1 of the Loan Agreement or Section 7.1 of the
Line of Credit Agreement, respectively, or (ii) the Company or THE Airline
undertakes or suffers any Bankruptcy Action.
As used herein, the term "Bankruptcy Action" shall mean any of the
following: (i) if the Company or the Airline shall become insolvent, or make an
assignment for the benefit of creditors, or become the subject of an order for
relief in an involuntary case under the bankruptcy laws as now or hereafter
constituted, and such order shall remain in effect and unstayed for a period of
sixty (60) consecutive days, or (ii) the Company or the Airline shall commence
a voluntary case under the bankruptcy laws as now or hereafter constituted, or
shall file any petition or answer seeking for itself any arrangement,
composition, adjustment, liquidation, dissolution or similar relief to which it
may be entitled under any present or future statute, law or regulation, or file
any answer admitting the material allegations of any petition filed against it
in any such proceedings, or (iii) the company or the Airline shall seek or
consent to or acquiesce in the appointment of or taking possession by, any
custodian, trustee, receiver or liquidator of it or of all or a substantial
part of its properties or assets, or take action looking to its dissolution. or
liquidation, or (iv) within sixty (60) days after commencement of any
proceedings against the Company or the Airline seeking any arrangement,
composition, adjustment, liquidation, dissolution or similar relief to which
the Company or the Airline may be entitled under any present or future statute,
law or regulation, such proceedings shall not have been dismissed; or (v)
within sixty (60) days after the appointment of, or taking possession by, any
custodian, trustee, receiver or liquidator of any or of all or a substantial
part of the Company's or the Airline's properties or assets, without the
consent or acquiescence of the Company or the Airline, any such appointment or
possession shall not have been vacated or terminated.
Notwithstanding the foregoing or anything herein to the contrary, the
benefits of this Limited Guaranty will not be available until the Holder has
made a written demand for payment on the Company, the Airline and all
guarantors, and the time period for payment in such demand has lapsed.
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2. TERM OF THIS LIMITED GUARANTY. This Limited Guaranty shall
terminate on August 30, 2002 (the "Termination Date"), at 5:00 p.m., Hawaii
Standard Time, unless extended by the mutual agreement of the Limited Guarantor
and FHB; provided, however, that if all or any portion of the indebtedness
under the Notes or the indebtedness under the Line of Credit is paid by or on
behalf of the Company or the Airline on or before the Termination Date, the
obligations of the Limited Guarantor hereunder shall continue and remain in
full force and effect in the event that all or any part of such payment is
avoided or recovered directly or indirectly from the Holder as a preference,
fraudulent transfer or otherwise in any bankruptcy, reorganization or
insolvency proceeding of or against the Company or the Airline.
3. WAIVER. The Limited Guarantor hereby unconditionally waives any and
all statutory and common law suretyship defenses that now or hereafter may be
available to the Limited Guarantor, including, without limitation (a) any
requirement that any Holder in the event of any default by the Company or the
Airline first make demand upon, or seek to enforce remedies against, the
Company or the Airline or any other guarantor or any security or collateral
held by FHB at any time, or to pursue any other remedy in its power, before
being entitled to payment from the Limited Guarantor of the amounts payable by
the Limited Guarantor hereunder, up to the Amount Guaranteed, or before
proceeding against the Limited Guarantor; (b) any defense that may arise by
reason of (i) the revocation or repudiation of this Limited Guaranty by the
Limited Guarantor, or the revocation or repudiation of any loan documents by
the Company or the Airline or any other person or entity, (ii) the failure of
FHB to file or enforce a claim against the estate (either in administration,
bankruptcy or any other proceeding) of the Company or the Airline or any other
person or entity, or (iii) the invalidity, irregularity or unenforceability in
whole or in part of the Notes or any document, instrument, or agreement
executed by the Company or the Airline in connection with the Notes or the Line
of Credit, or any limitation on the liability of the Company or the Airline
thereunder, or any limitation on the method or terms of payment thereunder,
which may now or hereafter be caused or imposed in any manner whatsoever; (c)
diligence, presentment, demand for payment, protest, notice of discharge,
notice of acceptance of this Limited Guaranty, and indulgences and notices of
any other kind whatsoever; (d) any defense based upon an election of remedies
(including, if available, an election to proceed by non-judicial foreclosure)
by FHB which destroys or otherwise impairs any subrogation rights of the
Limited Guarantor or the right of the Limited Guarantor to proceed against the
Company or the Airline for reimbursement, or both; (e) any defense based upon
any taking, modification or release of any collateral or guaranties for the
indebtedness of the Company under the Notes or the Airline under the Line of
Credit, or any failure to perfect any security interest in, or the taking of
any other action or the failure to take any other action with respect to any
collateral securing the payment of such indebtedness; (f) any rights or
defenses based upon an offset by the Limited Guarantor, against any obligation
now or hereafter owed to the Limited Guarantor, by the Company or the Airline,
including, without limitation, any Senior Secured Guaranteed Floating Rate
Notes held by the Limited Guarantor; or (g) any right of appraisement with
regard to the value of any collateral which FHB may apply as a credit to the
obligations of the Company or the Airline, through foreclosure or otherwise,
and agree that the determination by an independent appraiser appointed by FHB
of the value of such collateral shall be binding upon the Limited Guarantor for
all purposes; it being the intention hereof that the Limited Guarantor shall
remain fully liable, as principal, for the Amount Guaranteed, until the full
payment of the indebtedness under the Notes and the full payment of the
indebtedness under the Line of Credit, subject to the termination provisions of
Paragraph 2
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hereof, notwithstanding any act, omission or thing which might otherwise
operate as a legal or equitable discharge of the Limited Guarantor.
4. NO RELEASE OF GUARANTY. The obligations, covenants, agreements and
duties of the Limited Guarantor under this Limited Guaranty shall not be
released, affected, stayed or impaired, without the written consent of the
Holder, by (a) any assignment, indorsement or transfer, in whole or in part, of
the Notes or any interest in the Line of Credit, although made without notice
to or the consent of the Limited Guarantor; or (b) any waiver by the Holder of
the performance or observance by the Company, the Airline or the Limited
Guarantor of any of the agreements, covenants, terms or conditions contained in
any loan documents executed by any of them in connection with the Notes or the
Line of Credit; or (c) any extension of the time for payment of any amounts
payable under or in connection with the Notes of the Line of Credit or any
renewal thereof; or (d) the modification or amendment (whether material or
otherwise) of any duty, agreement or obligation of the Company or the Airline
under the Notes or the Line of Credit; or (e) the voluntary or involuntary
liquidation, sale or other disposition of all or substantially all of the
assets of the Company, the Airline or any of the Limited Guarantor; or (f) any
receivership, insolvency, bankruptcy, reorganization, dissolution or other
similar proceedings, affecting the Company, the Airline or any of the Limited
Guarantor or any of their assets; or (g) any release of any property from
securing payment of the Notes or the Line of Credit or the acceptance of
additional or substitute property as security therefor; or (h) the release or
discharge of the Company or the Airline from the observance or performance of
any agreement, covenant, term or condition contained in any loan documents
executed by either of them in connection with the Notes or the Line of Credit;
or (i) any action which the Holder may take or omit to take by virtue of such
loan documents or through any course of dealing with the Company or the
Airline; or (j) the addition of a new guarantor or guarantors (the Limited
Guarantor acknowledging that Aloha Airlines, Inc., will be providing a full
guaranty to FHB with respect to the Company's obligations under the Notes, but
that the Holder has no obligation to seek to enforce any remedies against Aloha
Airlines, Inc., before being entitled to payment from the Limited Guarantor of
the entire Amount Guaranteed hereunder); or (k) any change in the status or
structure of the Company or the Airline, including any change by incorporation,
merger or consolidation; (l) any change in the composition of the Company or
the Airline, including, without limitation, any addition of, removal of,
replacement for or substitution of any officer or stockholder of the company or
the Airline; or (m) the operation of law or any other cause, whether similar or
dissimilar to the foregoing, PROVIDED, HOWEVER, that notwithstanding the
foregoing, no such waiver, extension, modification or amendment shall without
the consent of the Limited Guarantor increase the principal amount of the Notes
or the Line of Credit, or increase the interest rate payable thereon, or
increase any premium payable upon redemption thereof, or shorten the stated
maturity thereof, except in accordance with the express provisions of the loan
documents executed by the Company or the Airline in connection with the Notes
and the Line of Credit; AND PROVIDED FURTHER that nothing contained in this
Paragraph 4 shall affect the limitations on the obligations of the Limited
Guarantor set forth in Paragraph 1 hereof (relating to the Amount Guaranteed)
and in Paragraph 2 hereof (relating to the Termination Date).
5. WAIVER OF SUBROGATION. The Limited Guarantor hereby waives any and
all right the Limited Guarantor may have to be subrogated to the right of the
Holder to receive payments or distributions of assets of the Company or the
Airline following any payment made by the Limited Guarantor, on this Limited
Guaranty, unless and until all amounts payable under the Notes have been
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paid and all other amounts payable under this Limited Guaranty shall have been
paid in full, the Line of Credit shall have expired or been terminated, and the
Holder shall have received an opinion from counsel to the Limited Guarantor,
acceptable to the Holder that the payment of all amounts due under the Notes
and the Line of Credit does not constitute a payment which may be avoided or
recovered directly or indirectly from the Holder as a preference, fraudulent
transfer or otherwise in any bankruptcy, reorganization or insolvency
proceeding of or against the Company or the Airline. If (i) the Limited
Guarantor shall make payment to any Holder under this Limited Guaranty, (ii)
all amounts under the Notes and any amounts payable under this Limited Guaranty
shall have been paid in full, (iii) the maturity date of the Notes shall have
occurred, and the commitment to the Company under the Line of Credit shall have
been terminated, and (iv) the Holder shall have received an opinion from
counsel to the Limited Guarantor, acceptable to the Holder that the payment of
all amounts due under the Notes and the Line of Credit does not constitute a
payment which may be avoided or recovered directly or indirectly from the
Holder as a preference, fraudulent transfer or otherwise in any bankruptcy,
reorganization or insolvency proceeding of or against the Company or the
Airline, the Holders will, at the Limited Guarantor's request and expense,
execute and deliver to the Limited Guarantor appropriate documents, necessary
to evidence the transfer by subrogation to the Limited Guarantor of an interest
resulting from such payment made by such Limited Guarantor pursuant to this
Limited Guaranty.
6. SUBORDINATION OF INDEBTEDNESS, BANKRUPTCY OF COMPANY. Any
indebtedness of the Company or the Airline now or hereafter held by the Limited
Guarantor (including, without limitation, any Senior Secured Guaranteed
Floating Rate Note held by the Limited Guarantor), is hereby subordinated to
the indebtedness of the Company and the Airline to the Holder; and, upon the
request of the Holder, such indebtedness of the Company or the Airline to the
Limited Guarantor shall be collected, enforced and received by the Limited
Guarantor as trustee for the Holder and shall be paid over to the Holder on
account of the indebtedness of the Company and the Airline to the Holder
without reducing or affecting in any manner the liability of the Limited
Guarantor under the other provisions of this Limited Guaranty.
7. CLAIMS IN BANKRUPTCY. The Limited Guarantor will file all claims
against the Company and/or the Airline in any bankruptcy or other proceeding in
which the filing of claims is required or permitted by law upon any
indebtedness of the Company or the Airline to the Limited Guarantor or claim
against the Company or the Airline by the Limited Guarantor, and the Limited
Guarantor hereby assigns to FHB all rights of the Limited Guarantor thereunder.
If the Limited Guarantor does not file any such claim, FHB, as attorney-in-fact
for the Limited Guarantor, is hereby authorized to do so in the name of the
Limited Guarantor or, in FHB's discretion,, to assign the claim and to cause
proof of claim to be filed in the name of FHB's nominee. FHB or its nominee
shall have the sole right (as assignee of all rights of the Limited Guarantor
pursuant to this Section 7) to accept or reject any plan proposed in such
proceeding and to take any other action which a party filing a claim is
entitled to take. In all such cases, whether in administration, bankruptcy or
otherwise, the person or persons authorized to pay such claim shall pay to FHB
the full amount payable on such claim up to the amounts due under this Limited
Guaranty, and, to the full extent necessary for that purpose, the Limited
Guarantor hereby assigns to FHB all of the Limited Guarantor's rights to any
such payments or distributions to which the Limited Guarantor would otherwise
be entitled; provided, however, that the Limited Guarantor's obligations
hereunder shall not be satisfied except to the extent that FHB receives cash by
reason of any such payment or
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distribution. If FHB receives anything hereunder other than cash, the same
shall be held as collateral for the payment of all amounts due under this
Limited Guaranty.
8. LITIGATION; CHANGE IN LIMITED GUARANTOR'S FINANCIAL CONDITION. The
Limited Guarantor will promptly notify FHB of (i) any litigation to which the
Limited Guarantor becomes a party (which is not covered by insurance), and (ii)
any adverse change in the Limited Guarantor's financial condition, either of
which might materially impair or diminish the value of this Limited Guaranty to
the Holder as an assurance of the repayment of the indebtedness of the Company
or the Airline to the Holder. The Limited Guarantor shall promptly furnish the
Holder with such information, financial or otherwise, as the Holder may from
time to time request concerning the Limited Guarantor.
9. CONDITION OF COMPANY AND AIRLINE. The Limited Guarantor is fully
aware of the financial condition of the Company and the Airline and is
executing and delivering this Limited Guaranty based solely upon the Limited
Guarantor's own independent investigation of all matters pertinent hereto, and
is not relying in any manner upon any representation or statement of FHB. The
Limited Guarantor represents and warrants that the Limited Guarantor is in a
position to obtain and the Limited Guarantor hereby assumes full responsibility
for obtaining, any additional information concerning the Company's and the
Airline's financial condition and any other matter pertinent hereto as the
Limited Guarantor may desire, and the Limited Guarantor is not relying upon or
expecting FHB to furnish to the Limited Guarantor any information now or
hereafter in FHB's possession concerning the same or any other matter. By
executing this Limited Guaranty, the Limited Guarantor knowingly acknowledges
and accepts the full range of risks encompassed within a contract of this type.
The Limited Guarantor shall have no right to require FHB to obtain or disclose
any information with respect to the indebtedness under the Notes or the Line of
Credit, the financial condition or character of the Company or the Airline, the
Company's or the Airline's ability to pay such indebtedness, the existence of
any collateral or security for any or all of such indebtedness, the existence
or non-existence of any other guaranties of all or any part of such
indebtedness, or any action or non-action on the part of FHB, the Company, the
Airline, or any other person, or any other matter, fact or occurrence
whatsoever.
10. FINANCIAL COVENANT; NEGATIVE COVENANTS.
(a) The Limited Guarantor shall at all times herein maintain a
minimum "Net Worth" of at least $15,000,000.00. As used herein, the term
"Net Worth" shall mean the excess of the Limited Guarantor's total assets
over the Limited Guarantor's total liabilities, as determined in accordance
with accounting principles consistently applied by the Limited Guarantor and
as set forth in the financial statements dated December 31, 1999, previously
delivered to the Lender.
(b) As soon as available, but not later than one hundred twenty
(120) days after the end of each fiscal year, the Limited Guarantor shall
provide to the Lender financial statements of the Limited Guarantor, which
are acceptable to the Lender.
(c) At all times herein, the Limited Guarantor shall not,
without the prior written consent of FHB, (i) directly or indirectly make or
commit to make any loan, advance, guaranty or extension of credit to any
corporation, association, partnership, organization or individual affiliated
-6-
distribution. If FHB receives anything hereunder other than cash, the same
shall be held as collateral for the payment of all amounts due under this
Limited Guaranty.
8. LITIGATION; CHANGE IN LIMITED GUARANTOR'S FINANCIAL CONDITION.
The Limited Guarantor will promptly notify FHB of (i) any litigation to which
the Limited Guarantor becomes a party (which is not covered by insurance),
and (ii) any adverse change in the Limited Guarantor's financial condition,
either of which might materially impair or diminish the value of this Limited
Guaranty to the Holder as an assurance of the repayment of the indebtedness
of the Company or the Airline to the Holder. The Limited Guarantor shall
promptly furnish the Holder with such information, financial or otherwise, as
the Holder may from time to time request concerning the Limited Guarantor.
9. CONDITION OF COMPANY AND AIRLINE. The Limited Guarantor is fully
aware of the financial condition of the Company and the Airline and is
executing and delivering this Limited Guaranty based solely upon the Limited
Guarantor's own independent investigation of all matters pertinent hereto,
and is not relying in any manner upon any representation or statement of FHB.
The Limited Guarantor represents and warrants that the Limited Guarantor is
in a position to obtain and the Limited Guarantor hereby assumes full
responsibility for obtaining, any additional information concerning the
Company's and the Airline's financial condition and any other matter
pertinent hereto as the Limited Guarantor may desire, and the Limited
Guarantor is not relying upon or expecting FHB to furnish to the Limited
Guarantor any information now or hereafter in FHB's possession concerning the
same or any other matter. By executing this Limited Guaranty, the Limited
Guarantor knowingly acknowledges and accepts the full range of risks
encompassed within a contract of this type. The Limited Guarantor shall have
no right to require FHB to obtain or disclose any information with respect to
the indebtedness under the Notes or the Line of Credit, the financial
condition or character of the Company or the Airline, the Company's or the
Airline's ability to pay such indebtedness, the existence of any collateral
or security for any or all of such indebtedness, the existence or
non-existence of any other guaranties of all or any part of such
indebtedness, or any action or non-action on the part of FHB, the Company,
the airline, or any other person, or any other matter, fact or occurrence
whatsoever.
10. FINANCIAL COVENANT; NEGATIVE COVENANTS.
(a) The Limited Guarantor shall at all times herein maintain a
minimum "Net Worth" of at least $15,000,000.00. As used herein, the term
"Net Worth" shall mean the excess of the Limited Guarantor's total assets
over the Limited Guarantor's total liabilities, as determined in accordance
with accounting principles consistently applied by the Limited Guarantor and
as set forth in the attached financial statements dated
______________________.
(b) As soon as available, but not later than one hundred twenty
(120) days after the end of each fiscal year, the Limited Guarantor shall
provide to the Lender financial statements of the Limited Guarantor, which
are acceptable to the Lender.
(c) At all times herein, the Limited Guarantor shall not, without
the prior written consent of FHB, (i) directly or indirectly make or commit
to make any loan, advance, guaranty or extension of credit to any
corporation, association, partnership, organization or individual affiliated
-6-
with the Limited Guarantor; or (ii) sell, transfer, hypothecate, assign or
convey any asset, or interest therein, of the Limited Guarantor; except in the
ordinary course of the Limited Guarantor's business.
11. BANKRUPTCY. Until all indebtedness under the Notes and the Line
of Credit has been paid to the Holder, or the Termination Date, whichever
occurs first, the Limited Guarantor shall not, without the prior written
consent of the Holder, commence or join with any other person in commencing
any bankruptcy, reorganization or insolvency proceedings of or against the
Company or the Airline. The obligations of the Limited Guarantor under this
Limited Guaranty shall not be altered, limited or affected by any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of the Company or the Airline, or
by any defense which the Company or the Airline may have by reason of the
order, decree or decision of any court or administrative body resulting from
any such proceeding. The Limited Guarantor acknowledges and agrees that any
interest on the indebtedness under the Notes or the Line of Credit which
accrues after the commencement of any such proceeding (or, if interest on any
portion of such indebtedness ceases to accrue by operation of law by reason
of the commencement of said proceeding, such interest as would have accrued
on any such portion of such indebtedness if said proceeding had not been
commenced) shall be included in the indebtedness guaranteed by the Limited
Guarantor hereunder, since it is the intention of the parties that the amount
of the indebtedness which is guaranteed by the Limited Guarantor pursuant to
this Limited Guaranty should be determined without regard to any rule of law
or order which may relieve the Company or the Airline of any portion of such
indebtedness. The Limited Guarantor will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or
similar person to pay to the Holder, or allow the claim of the Holder in
respect of, any such interest accruing after the date on which such
proceeding is commenced.
12. REPRESENTATIONS AND WARRANTIES.
(a) ORGANIZATION, STANDING AND AUTHORITY OF LIMITED GUARANTOR.
The Limited Guarantor is a Hawaii limited partnership, duly registered,
validly existing and in good standing under the laws of the State of Hawaii,
and has all requisite power and authority to carry on the business and to own
the property that it now carries on and owns. The Limited Guarantor has all
requisite power and authority to execute and deliver this Limited Guaranty
and to observe and perform all of the provisions and conditions hereof. The
execution and delivery of this Limited Guaranty have been duly authorized by
the general partner of the Limited Guarantor, and no other partnership action
of the Limited Guarantor is requisite to the execution and delivery of this
Limited Guaranty.
(b) TAX RETURNS AND PAYMENTS. All tax returns and reports of
the Limited Guarantor required by law to be filed have been duly filed, and all
taxes, assessments, contributions, fees and other governmental charges (other
than those presently payable without penalty or interest and those which have
been disclosed to the Lender but which are currently being contested in good
faith) upon the Limited Guarantor, or upon its properties or assets or income,
which are due and payable, have been paid.
(c) LITIGATION. There is, to the knowledge of the Limited
Guarantor, no action, suit, proceeding or investigation pending at law or in
equity or before any federal, state, territorial,
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municipal or other governmental department, commission, board, bureau, agency
or instrumentality or threatened against the Limited Guarantor, which might
materially adversely affect the Limited Guarantor's ability to perform its
obligations under this Limited Guaranty.
(d) LIMITED GUARANTOR'S COMPLIANCE WITH OTHER INSTRUMENTS,
NONE BURDENSOME. The Limited Guarantor is not in violation of or in default
with respect to any term or provision of its Partnership Agreement or any
material mortgage, indenture, contract, agreement or instrument to which the
Limited Guarantor is bound; and the execution, delivery, performance of and
compliance with this Limited Guaranty will not result in any such violation or
be in conflict with or constitute a default under any such term or provision or
result in the creation of any mortgage, lien or charge on any of the properties
or assets of the Limited Guarantor not contemplated by this Limited Guaranty;
and there is no term or provision of its Partnership Agreement, or any
mortgage, indenture, contract, agreement or instrument to which the Limited
Guarantor is bound, which may materially adversely affect the financial
condition of the Limited Guarantor.
(e) FINANCIAL STATEMENTS. All financial statements heretofore
delivered to the Lender by the Limited Guarantor are true and correct in all
respects, and fairly represent the financial condition of the Limited Guarantor
as of the dates thereof; and no material, adverse changes have occurred in the
financial condition reflected therein since the respective dates thereof.
(f) CHARACTER OF REPRESENTATIONS AND WARRANTIES. None of the
financial statements or any certificate or statement furnished to the Lender by
or on behalf of the Limited Guarantor in connection with the Limited Guaranty,
and none of the representations and warranties in this Limited Guaranty,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein or herein not
misleading. To the best knowledge of the Limited Guarantor, there is no fact
which materially adversely affects or may materially adversely affect the
ability of the Limited Guarantor to observe or perform its obligations under
this Limited Guaranty, which has not been set forth herein or in a certificate
or opinion of counsel or other written statement furnished to the Lender by or
on behalf of the Limited Guarantor.
13. REMEDIES, CUMULATIVE. The rights and remedies of the Holder
hereunder and under all documents, instruments and agreements executed by or
for the benefit of the company or the Airline in connection with the Notes or
the Line of Credit are cumulative and not exclusive and may be exercised in
whole or in part and in any order and at any time or times as the Holder shall
determine. All security of any kind or nature received or receivable by the
Holder for the repayment of the indebtedness under the Notes or the Line of
Credit may be applied in any manner or order determined by the Holder.
14. AMENDMENTS, CONTINUING LIABILITY. The terms of this Limited
Guaranty may not be modified or amended except by a written agreement executed
by the Limited Guarantor with the consent in writing of the Holder. The
obligations of the Limited Guarantor under this Limited Guaranty shall be
continuing obligations and a separate cause of action shall be deemed to arise
in respect of each default hereunder.
15. RECEIPT AND EXAMINATION OF NOTES AND OTHER DOCUMENTS. The Limited
Guarantor hereby acknowledges that it has received and examined copies of the
Notes, and all other documents,
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instruments and agreements executed by or for the benefit of the Company or the
Airline in connection with the Notes or the Line of Credit.
16. NOTICES. Any notice or demand to be given or served hereunder
shall be in writing and personally delivered, or sent by registered or
certified mail addressed as follows:
To FHB at: First Hawaiian Bank
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Vice President, Corporate Banking Division
Fax: (000) 000-0000
To LIMITED GUARANTOR at:
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxx X. Xxxxx
Any such address may be changed from time to time by the addressee by serving
notice to the other party as above provided. Service of such notice or demand
shall be deemed complete on the date of actual delivery or at the expiration of
the second day after the date of mailing if mailed in Hawaii, whichever is
earlier.
17. PARTIES IN INTEREST. All covenants, agreements, terms and
conditions in this Limited Guaranty contained shall be binding on the Limited
Guarantor and its successors, successors in trust, and assigns, and shall
bind, inure to the benefit of and be enforceable by the Holder from time to
time.
18. GOVERNING LAW; SEVERABILITY. This Limited Guaranty shall for all
purposes be construed in accordance with the laws of the State of Hawaii. The
Limited Guarantor hereby irrevocably and unconditionally submits, for purposes
of any action or proceeding which the Holder may bring to enforce this Limited
Guaranty, to the jurisdiction of the courts of the State of Hawaii and the
Federal District Court for the District of Hawaii. The submission to such
jurisdiction shall not prevent the Holder from commencing any such action or
proceeding in any other court having jurisdiction. If any provision of this
Limited Guaranty is held to be invalid or unenforceable, the validity or
enforceability of the other provision shall remain unaffected.
19. PARAGRAPH HEADINGS. The headings of paragraphs herein are inserted
only for convenience and shall in no way define, describe or limit the scope or
intent of any provision of this Limited Guaranty.
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IN WITNESS WHEREOF, the Limited Guarantor has executed this instrument
as of September 8, 2000.
ALOHA SECURITIES & INVESTMENT COMPANY
By Aloha Investment Company, Inc.
Its General Partner
By /s/ Xxxx Xxxxx
---------------------------------
Xxxx Xxxxx
Its Vice President
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