GUARANTY
THIS GUARANTY, made this 25th day of July, 1997, by X. XXXXXX AND
COMPANY, LIMITED, a Hawaii corporation, (the "Guarantor"), to and for the
benefit of BANK OF HAWAII (the "Bank").
R E C I T A L S:
A. The Bank made available to X. XXXXXX HOMES, INC., a Delaware
corporation (the "Borrower") a revolving infrastructure construction facility
(the "Infrastructure Facility") evidenced by a revolving note dated August 31,
1995 in the amount of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) (the
"Infrastructure Note") made pursuant to a Revolving Loan Agreement
(Infrastructure) dated August 31, 1995 (the "Infrastructure Loan Agreement").
B. The Bank made available to Borrower a revolving building construction
facility (the "Building Facility") evidenced by a revolving note dated August
31, 1995 in the amount of TWENTY-FIVE MILLION AND NO/100 DOLLARS
($25,000,000.00) (the "Building Note") made pursuant to a Revolving Loan
Agreement (Building) dated August 31, 1995 (the "Building Loan Agreement").
C. Repayment of the Infrastructure Note and the Building Note were
secured by the following collateral documents (collectively, the "Collateral
Documents"):
1. First Mortgage, Security Agreement and Financing Statement made
by Borrower, as mortgagor, in favor of the Bank, as mortgagee, recorded in the
Bureau of Conveyances of the State of Hawaii as Document No. 95-115642, as
amended by that certain Amendment to First Mortgage, Security Agreement and
Financing Statement recorded in said Bureau as Document No. 96-130600 (the
"Mortgage").
2. Financing Statement made by Borrower, as debtor, in favor of the
Bank, as secured party, recorded in said Bureau as Document No. 95-115643 (the
"Kehalani Financing Statement").
3. An unrecorded Assignment of Sales Contracts, Escrow Deposits and
Escrow Agreement made by Borrower in favor of Bank dated August 31, 1995.
4. An unrecorded Hazardous Materials Indemnity Agreement dated
August 31, 1995, made by Borrower in favor of Bank.
D. Borrower requested, and Bank agreed, to modify and amend the terms of
the Infrastructure Note, the Building Note, the Infrastructure Loan Agreement,
the Building Loan Agreement and the Collateral Documents pursuant to (as
applicable) the following: (1) that certain unrecorded First Loan Modification
Agreement (Infrastructure Facility) dated September 5, 1996 and effective as of
September 9, 1996; (2) that
certain unrecorded First Loan Modification Agreement (Building Facility) dated
September 5, 1996 and effective as of September 9, 1996; (3) that certain
unrecorded Second Loan Modification Agreement (Infrastructure Facility) dated
May 21, 1997 and effective as of April 30, 1997; and (4) that certain unrecorded
Second Loan Modification Agreement (Building Facility) dated May 21, 1997 and
effective April 30, 1997 (collectively, the "Modifications"). Hereinafter, all
references to the Infrastructure Note, the Building Note, the Infrastructure
Loan Agreement, the Building Loan Agreement and the Collateral Documents shall
refer to the Infrastructure Note, the Building Note, the Infrastructure Loan
Agreement, the Building Loan Agreement and the Collateral Documents as
respectively amended by the Modifications.
E. The Modifications, among other things, established several tranches
under the Infrastructure Facility and the Building Facility.
F. The Guarantor, to induce the Bank to agree to the Modifications and
for valuable consideration including a mortgage of certain real property of
the Borrower in which the Bank has no interest, executed that certain
unrecorded Guaranty dated September 5, 1996 in favor of the Bank, as amended
by that certain unrecorded First Amendment to Guaranty dated April 29, 1997
but effective as of April 30, 1997, and as amended by various letter
agreements respectively dated May 30, 1997 and June 17, 1997 (as amended, the
"Original Guaranty") in which the Guarantor guaranteed the Borrower's
obligations with respect to the tranches made for working capital purposes.
G. Borrower has requested and the Bank has agreed to restructure the
Borrower's indebtedness to the Bank under the Infrastructure Facility and the
Building Facility (collectively, the "Original Indebtedness") into six (6)
facilities (the "Facilities") as described herein with no separate tranches.
H. One of the Facilities is a revolving Working Capital Line of Credit
(the "Working Capital LOC") up to the principal amount of SIX MILLION AND NO/100
DOLLARS ($6,000,000.00) evidenced by a promissory note dated the date hereof
(the "Working Capital LOC Note") and subject to the terms and conditions
described in that certain Master Facility Agreement dated the date hereof made
by and between the Borrower and the Bank (the "Master Facility Agreement").
Capitalized terms used herein and not defined shall have the meaning assigned to
them in the Master Facility Agreement.
I. To induce the Bank to agree to: (a) restructure the Original
Indebtedness; (b) offer the Working Capital LOC to the Borrower; and (c)
surrender the Original Guaranty, the Guarantor has agreed with the Bank to
execute this Guaranty.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Guarantor:
1. Subject to paragraph 18 below, unconditionally and absolutely
guarantees
(whether or not the Borrower has initiated or has obtained dissolution or has
initiated bankruptcy proceedings, or has been declared bankrupt or is insolvent,
or is otherwise in default under the Working Capital LOC Note and/or any Loan
Documents), the due and punctual payment in lawful money of the United States of
all principal advanced under the Working Capital LOC ("Working Capital
Advances"), and all interest and charges on such Working Capital Advances and
all costs of collection thereof (the "Working Capital Payment Obligations").
2. Subject to paragraph 18 below, waives appraisement and valuation,
diligence, presentment, protest, notice of dishonor, demand for payment,
extensions of time of payment (including multiple extensions for longer than the
original period), notice of acceptance of this Guaranty, nonpayment at maturity
and indulgences and notices of every kind, and consents to and agrees that the
obligations of the Guarantor shall not be released, impaired or otherwise
affected by: (a) any and all forbearances and extensions of the time of payment
of the Working Capital LOC Note (including multiple extensions for longer than
the original period) or for the Borrower's performance of any other obligation
to be performed by the Borrower under the Working Capital LOC Note or the Loan
Documents or any of them; (b) any and all changes in the terms, covenants and
conditions in the Working Capital LOC Note and/or the Loan Documents or any of
them hereafter made or granted; (c) any and all substitutions, exchanges or
releases of all or any part of the security for the Working Capital LOC; (d)
waivers of any of the terms, covenants or conditions set forth in any of the
Loan Documents, including this Guaranty; (e) any election or elections by the
Bank to pursue or enforce any particular right or remedy against the Borrower or
another guarantor; or (f) any other cause, whether similar or dissimilar to the
foregoing, it being the intention hereof that the Guarantor shall remain liable
as principal for the payment of all the Working Capital Payment Obligations
until the full amount of the Working Capital Payment Obligations shall have been
fully paid, the Borrower's right to obtain further advances under the Working
Capital LOC shall have expired or otherwise been terminated, and all of the
terms, covenants, and conditions on the part of the Borrower to be observed and
performed under the Working Capital LOC Note and/or any of the Loan Documents
(and only with respect to the Working Capital Payment Obligations) shall have
been fully performed and observed by the Borrower, notwithstanding any act,
omission or thing which might otherwise operate as a legal or equitable
discharge of the Guarantor.
3. Acknowledges and agrees that all proceeds from the Project and
any other collateral held as security for the Facilities (whether obtained in
the normal course of business or resulting from the exercise by the Bank of its
rights under the Loan Documents) will be applied in the manner specified in the
Master Facility Agreement.
4. Waives any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy to the rights of the Bank against the Borrower or against any
collateral or security provided to the Bank in the Loan Documents until: (a) all
of the Bank's obligations to disburse loan funds under the Master Facility
Agreement have expired; (b) all sums
owing to the Bank pursuant to the Loan Documents have been paid in full; and (c)
the Bank has released, transferred or disposed of all of its rights, title and
interest in any such collateral or security. The Bank acknowledges that the
foregoing waiver does not apply to the rights of indemnification or
reimbursement under any separate agreement between the Borrower and the
Guarantor in which the Bank has no interest.
5. Agrees that this Guaranty may be enforced by the Bank without
first or concurrently proceeding against the Borrower and without first
resorting to or exhausting any other security or collateral and without first
having recourse to the Working Capital LOC Note or to any of the Loan Documents
or to any of the collateral securing the Working Capital LOC Note, through
foreclosure proceedings or otherwise; provided, however, that nothing herein
contained shall prevent the Bank from suing on the Working Capital LOC Note
and/or Loan Documents, with or without making the Guarantor a party to the suit,
or foreclosing on any collateral securing the Working Capital LOC or from
exercising any other rights under any Loan Documents, and if such suit,
foreclosure or other remedy is availed of, only the net proceeds therefrom,
after deduction of all charges and expenses of every kind and nature whatsoever,
shall be applied in reduction of the amount due on the Working Capital LOC Note
and under the Loan Documents and the Bank shall not be required to institute or
prosecute proceedings to recover any deficiency as a condition of payment
hereunder or enforcement hereof. At any sale of the collateral for the
indebtedness or any part thereof whether by foreclosure or otherwise, the Bank
may at Bank's discretion purchase all or any part of such collateral so sold or
offered for sale for Bank's own account and may apply against the amount bid
therefor an equal amount out of the balance due to Bank pursuant to the terms of
the Working Capital LOC Note and/or any Loan Documents.
6. Without limiting the generality of the foregoing, agrees that the
obligation of the Guarantor to make payment in lawful money of the United States
in accordance with the terms of this Guaranty shall not be impaired, modified,
changed, released, or limited in any manner whatsoever by any impairment,
modification, change, release, or limitation of the liability of the Borrower or
Borrower's estate in bankruptcy resulting from the operation of any present or
future provision of the national Bankruptcy Code or other similar statute, or
from the decision of any court.
7. The Bank may, at any time, apply or set off against the
Guarantor's indebtedness under this Guaranty any deposits or other monies owed
by the Bank to the Guarantor.
8. If claim is ever made upon the Bank for repayment or recovery of
any amount or amounts received by Bank in payment or on account of the Working
Capital LOC Note or other guaranteed obligations and Bank repays all or part of
such amount by reason of: (a) any judgment, decree or order of any court or
administrative body having jurisdiction over Bank; or (b) any settlement or
compromise of any such claim effected by Bank with any such claimant (including
the Borrower), then and in such event the Guarantor agrees that any such
judgment, decree, order, settlement or
compromise shall be binding upon the Guarantor, notwithstanding the cancellation
of the Working Capital LOC Note, and the Guarantor shall be and remain liable
hereunder to the same extent as if the amount so repaid or recovered had never
originally been received by the Bank.
9. Agrees that the rights and remedies of the Bank under this
Guaranty and under the Working Capital LOC Note and 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 Bank shall determine. All security of any
kind or nature received or receivable by the Bank for the repayment of the
indebtedness evidenced by the Working Capital LOC Note and Loan Documents may be
applied in any manner or order determined by the Bank.
10. Agrees that the terms of this Guaranty may not be modified or
amended except by a written agreement executed by the Guarantor and the Bank.
11. Agrees that the obligations of the Guarantor under this Guaranty
shall be continuing obligations and that a separate cause of action shall be
deemed to arise in respect of each default under the Working Capital LOC Note or
any or all of the Loan Documents and that the Guarantor will from time to time
deliver, upon request of the Bank, satisfactory acknowledgments of the
Guarantor's continued liability hereunder.
12. Agrees that any notice or demand to be given or served under this
Guaranty shall be issued in writing and shall be deemed to have been
sufficiently given or served for all purposes when presented personally, or when
facsimile confirmation is received or forty-eight (48) hours after deposit in
United States certified mail, postage prepaid, addressed to the Guarantor at the
address set forth opposite such Guarantor's signature below.
13. Assumes full responsibility for keeping fully informed of the
financial condition of the Borrower and all other circumstances affecting the
Borrower's ability to perform Borrower's obligations to the Bank under the
Working Capital LOC Note and each and all of the Loan Documents, and agrees that
the Bank will have no duty to report to the Guarantor any information which the
Bank receives about the Borrower's financial condition or any circumstances
bearing on Borrower's ability to perform as aforesaid.
14. Agrees to provide to the Bank, current financial statements of
the Guarantor prior to the closing of the Facilities and from time and time
during the entire term of the Working Capital LOC as requested by the Bank and
acknowledges that during the entire term of the Working Capital LOC, the Bank
has the continuing right to obtain credit reports on the Guarantor without
further authorization from the Guarantor.
15. Agrees that, if this Guaranty is placed in the hands of attorneys
for enforcement, the Guarantor will reimburse the Bank for all expenses
incurred, including reasonable attorneys' fees.
16. Agrees that this Guaranty shall inure to the benefit of and may
be enforced by the Bank and any subsequent holder of the Working Capital LOC
Note, and shall be binding upon and enforceable against the Guarantor and its
successors and assigns.
17. Agrees that this Guaranty shall be construed and interpreted in
accordance with the laws of the State of Hawaii.
18. Notwithstanding anything to the contrary contained in this
Guaranty or in any of the Loan Documents, the Guarantor's liability and
obligation under this Guaranty shall be limited to a maximum of $6,000,000.00 in
principal advanced under the Working Capital LOC on or prior to the Maturity
Date plus expenses and attorneys' fees as provided in Paragraph 15 hereof. If
the principal balance of the Working Capital LOC is not paid on the Maturity
Date (or any acceleration thereof) the Bank shall have until (and including)
June 30, 1998, to commence the exercise of its rights hereunder by notifying the
Guarantor of the Bank's intention to exercise its rights under this Guaranty;
otherwise, the Guaranty shall expire unless the Guarantor agrees, in writing, to
an extension. The Guarantor agrees that the foregoing deadline applies only to
the notification of the Guarantor of the Bank's intention to exercise its rights
under this Guaranty and does not, for example, mean that the Bank must have
obtained funds from, or a judgment against, the Guarantor by such deadline.
Further, regardless of whether the principal due under the Working Capital LOC
is paid on or before the Maturity Date and regardless of whether the Bank
commences the exercise of its rights by June 30, 1998, the rights of the Bank
under Paragraph 8 hereof shall remain in full force and effect.
IN WITNESS WHEREOF, the Guarantor has executed this instrument as of
the day and year first above written. This instrument shall be effective and
deemed delivered when the Original Guaranty is surrendered to the Guarantor.
ADDRESS: X. XXXXXX AND COMPANY,
000 Xxxx Xxxxxx LIMITED, a Hawaii corporation
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile No.: (000) 000-0000
By /s/ XXXX X. XXXXXX
Name: XXXX X. XXXXXX
Title: Executive Vice President
By /s/ XXXXXXXX X. XXXXXX
Name: XXXXXXXX X. XXXXXX
Title: Vice President and Secretary
STATE OF HAWAII )
) SS.
CITY AND COUNTY OF HONOLULU )
On this the 24th day of July, 1997, before me,
XXXX X. XXX XXXX, the undersigned Notary Public,
personally appeared
Name of Notary Public
Xxx X. Xxxxxx and
---------------------------------------
Xxxxxxxx X. Xxxxxx ,
-------------------------------------
Name of Signer Name of Signer
/X/ personally known to me -OR- / / proved to me on the basis of satisfactory
evidence to be the
person(s) who executed the within instrument as Executive Vice President
-------------------------------
and
Corporate Title
Vice President and Secretary of X. XXXXXX AND COMPANY, LIMITED, on
------------------------------------
Corporate Title
behalf of the corporation therein named, and acknowledged to me that the
corporation executed it.
Witness my hand and official seal.
------------------------------------ /s/ Xxxx X. Xxx Xxxx
Notary Public, State of Hawaii
My commission expires:
06-28-00
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Description of Attached Document
Title or Type of Document: Guaranty
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Document Date: Number of Pages: 8
-
Signer(s) Other Than Named Above: None
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CORPORATE RESOLUTIONS RE: GUARANTY
TO: Bank of Hawaii, CIPLD #000
X. X. Xxx 0000
Xxxxxxxx, Xxxxxx 00000
I certify to BANK OF HAWAII (the "Bank") that the
following is a true copy of resolutions duly adopted by the Board
of Directors of X. XXXXXX AND COMPANY, LIMITED (the "Corporation"),
a Hawaii corporation, at a meeting duly held on May 6, 1997, at
which a quorum was present and voting, that the resolutions have
been duly entered in the book of minutes of the Corporation, and
that the resolutions are in conformity with the Charter of
Incorporation and By-laws of the Corporation and the laws of the
jurisdiction of its incorporation, and are now in full force and
effect:
"WHEREAS, by a Guaranty dated September 5, 1996 in favor
of the Bank of Hawaii (the "Bank"), as amended, the Corporation
guaranteed the payment of up to $4,000,000 under certain working
capital tranches made available to X. XXXXXX HOMES, INC., a
Delaware corporation (the "Borrower") by the Bank under two credit
facilities (the "Original Credit Facilities");
"WHEREAS, the Borrower has requested and the Bank has
agreed to restructure the Original Credit Facilities, and in
connection therewith, the Borrower will have a working capital line
of credit in a principal amount of up to $6,000,000 (the "Working
Capital LOC");
"WHEREAS, the Bank's agreement to restructure the
Original Credit Facilities and to establish the Working Capital LOC
for the Borrower is conditioned on the Corporation's agreement to
execute and deliver to the Bank a new guaranty of the payments to
be made by the Borrower under the Working Capital LOC; and
"WHEREAS, the Corporation has determined that the
commercial benefits to be derived by the Corporation from the
restructure of the Original Credit Facilities and the Bank's
establishment of the Working Capital LOC in favor of the Borrower
and the security to be provided to the Corporation by the Borrower,
justify or will justify the Corporation's execution and delivery of
a new guaranty;
"NOW, THEREFORE, BE IT RESOLVED, THAT:
1. Any two (2) of the President, any Vice President,
the Secretary, the Treasurer, any Assistant Secretary or Assistant
Treasurer of the Corporation are hereby authorized to execute and
deliver on behalf of the Corporation, in the name of the
Corporation and as its corporate act and deed, from time to time
and on such terms and conditions as such officers may agree upon
with the Bank, a guaranty of payment
of the Borrower's indebtedness to the Bank under the Working
Capital LOC (the "Guaranty"), in such form as the officers of the
Corporation executing and delivering the Guaranty on behalf of the
Corporation may approve, such approval to be conclusively evidenced
by the execution and delivery of such Guaranty; PROVIDED, HOWEVER,
that any guaranty executed pursuant to these Resolutions shall not
extend to or cover, at any time, that portion of the Borrower's
indebtedness to the Bank which is in excess of $6,000,000.
2. Such officers are further authorized and empowered
for and in the name of the Corporation, from time to time and on
such terms and conditions as such officers may determine, to
perform all such other acts and execute and deliver all such other
instruments and documents which said officers may deem necessary to
carry out the purposes of these Resolutions, and, in connection
with any of the foregoing, to accept, receive, withdraw or waive
notices, demands, protests, vouchers, papers, and property, and to
make, execute and deliver notes, obligations, instruments,
assignments, waivers, releases, indemnities or other agreements of
any kind.
3. The Secretary or an Assistant Secretary of the
Corporation is authorized and directed to certify to the Bank the
adoption of these Resolutions, and the names and titles and
specimen signatures of present officers of the Corporation, and
from time to time as changes in such personnel are made, to certify
such changes to the Bank, and the name(s) and title(s) and specimen
signature(s) of the new personnel.
4. These Resolutions and any certifications executed
pursuant to these Resolutions shall remain in full force and
effect, and that the Bank is authorized and requested to rely and
act upon the matters contained in these Resolutions and such
certifications, until the Bank shall receive, at the offices to
which the certified copy of these Resolutions is delivered, either
a certified copy of a further resolution of the Board of Directors
specifically and expressly amending or revoking these Resolutions,
or a further certification as above provided for, as the case may
be.
5. Any and all actions heretofore taken by any
officer(s) or agent(s) of the Corporation in connection with or
relating to any and all transactions between the Corporation and
the Bank be and they are hereby ratified and confirmed as the
proper and binding actions of the Corporation."
I FURTHER CERTIFY that the following are the names and
specimen signatures of present officers of the Corporation, holding
the offices set forth below:
Office Name Signature
President X.X. Xxxxxxxxx /s/ X. X. XXXXXXXXX
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Execitive V.P. Xxx X. Xxxxxx /s/ XXXX X. XXXXXX
-------------------- -------------------- ----------------------
Execitve V.P. J. Xxxx Xxxxx /s/ J. XXXX XXXXX
-------------------- -------------------- ----------------------
Vice Pres/Secretary Xxxxxxxx X. Ohiro /s/ XXXXXXXX X. XXXXXX
-------------------- -------------------- ----------------------
DATED: , 1997.
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/s/ XXXXXXXX X. XXXXXX
---------------------------------
Xxxxxxxx X. Xxxxxx
Secretary of
(corporate seal) X. XXXXXX AND COMPANY, LIMITED
