PROMISSORY NOTE
$10,000,000.00 Los Angeles, California July 2, 1999
FOR VALUE RECEIVED, XXXXXXX-XXXXXX, INC., a Delaware corporation,
XXXXXXX-XXXXXX INTERNATIONAL, INC., a California corporation, XXXXXXX-XXXXXX
PROPERTIES, LTD., a Delaware corporation, and K-W PROPERTIES, INC., a
California corporation (individually and collectively, "Borrower"), jointly
and severally promise to pay to TOKAI BANK OF CALIFORNIA, a California
banking corporation, having an office at 000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("Lender"), or order, at said office or at such
other place as may be designated in writing, from time to time, the principal
sum of $10,000,000.00 in lawful money of the United States of America, or so
much thereof as shall have been advanced and is outstanding, together with
interest calculated daily on the outstanding Principal Balance (as herein
defined), until paid in full in accordance with the terms, conditions and
provisions set forth herein (the "Note"). Interest, as hereinafter provided,
shall be computed on actual days elapsed over the period of a three hundred
sixty (360)-day year.
1. Definitions:
1.1 "Agent" means Tokai Bank of California, a California banking
corporation, and for the purposes of the LIBOR Rate, LIBOR Interest
Period, LIBOR Business Day and LIBOR Rate Option the term Agent
shall also mean and include The Tokai Bank, Limited, Los Angeles
Agency, and each of their successors and assigns.
1.2 "Basis Point" means one-one hundredth (1/100) of one percent (1%) and
therefore one hundred (100) basis points is equal to one percent
(1%).
1.3 "Business Day" means any day that is not a Saturday, Sunday or any
other day when commercial banks in California are authorized or
obligated by law or executive order to be closed.
1.4 "LIBOR Business Day" means any day on which Agent is open for
business in Los Angeles, California and on which commercial banks in
the City of London, England, are open for dealings in dollar deposits
in the London Interbank Market.
1.5 "LIBOR Interest Period" means a one (1), three (3), or six (6) month
period of time, and only in those increments, commencing on the date
specified in Borrower's Request for Advance (as defined in the Loan
Agreement) to Agent to commence a LIBOR Interest Period and ending
on the same numerical day of the last month of
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the Interest Period that corresponds to the numerical day of the
month that the LIBOR Interest Period commences provided that:
1.5a whenever the last day of a LIBOR Interest Period would
otherwise occur on a day other than a LIBOR Business Day, the last
day of such LIBOR Interest Period shall be extended to occur on the
next succeeding LIBOR Business Day; provided, however, that, if such
extension would cause the last day of such LIBOR Interest Period to
occur in the next following calendar month, the last day of such
LIBOR Interest Period shall occur on the next preceding LIBOR
Business Day; and
1.5b whenever the first day of a LIBOR Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such LIBOR Interest Period, such LIBOR Interest Period shall end
on the last LIBOR Business Day of such succeeding calendar month; and
1.5c notwithstanding the foregoing, in no event shall any LIBOR
Interest Period be extended beyond the Maturity Date.
1.6 "LIBOR Notice" has the meaning set forth in Section 3. A LIBOR
Notice setting forth Borrower's election of a LIBOR Rate Option,
shall be in the form set forth in the Request for Advance (as
defined in the Loan Agreement and attached as Exhibit B thereto).
1.7 "LIBOR RATE" means the per annum rate equal to two hundred (200)
Basis Points (2.00%) in excess of the following:
1.7a the rate at which dollar deposits in immediately available
funds are contracted for by Agent in the London Interbank
Market for a term comparable to the LIBOR Interest Period set
forth in the LIBOR Notice to Agent two (2) LIBOR Business Days
prior to commencement of the applicable LIBOR Interest Period
in an amount approximately equal to the amount set forth in
the LIBOR Notice; or
1.7b if Agent does not specifically contract for dollar deposits,
as set forth above, then Lender shall determine the LIBOR
Rate using the indication telerate quotes from the London
Interbank Market received at the London, England office of
Agent at 11:00 a.m., London time, two (2) LIBOR Business Days
prior to the commencement of a LIBOR Interest Period, as
being offered for dollar deposits in an amount approximately
equal to the amount set forth in the LIBOR Notice to Agent
two (2) LIBOR Business Days prior to commencement of the
applicable LIBOR Interest Period, for a term comparable to the
LIBOR Interest Period set forth in the LIBOR Notice.
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This determination of the LIBOR Rate by Agent shall be
binding and conclusive upon Borrower.
1.8 "LIBOR Rate Option" has the meaning set forth in Section 3.
1.9 "Loan Agreement" means that certain Revolving Loan Agreement
entered into by and between Borrower, Agent and Lenders of
even date herewith, as it may be amended from time to time,
and is subject to all of the terms and conditions thereof.
All terms not defined herein shall have the same meaning as
in the Loan Agreement. In the event of a conflict between the
terms of this Note and the Loan Agreement, the terms of this
Note shall prevail.
1.10 "Maturity Date" means the earlier of July 2, 2001 and the
date on which a Change of Control (as defined in the Loan
Agreement) occurs.
1.11 "Prime Rate" means the variable rate of interest per annum
announced, declared and/or published from time to time by
Agent as its "Prime Rate" with the understanding that Agent's
"Prime Rate" is one of its base rates and serves as a basis
upon which effective rates of interest are calculated for
loans making reference thereto and may not be the lowest of
Agent's base rates.
1.12 "Principal Balance" means the outstanding principal balance of
this Note from time to time.
1.13 "Rollover Date" means the last day of the LIBOR Interest
Period.
2. Interest and principal shall be payable as follows:
2.1 Interest shall be payable monthly, in arrears, commencing on
the last day of the month following the initial disbursement,
and shall continue to be due and payable, in arrears, on the
same day of each calendar month thereafter until the Maturity
Date.
2.2 Upon the Maturity Date, the Principal Balance together with
all accrued and unpaid interest and other sums due on this
Note shall be due and payable in full.
2.3 All sums outstanding under the Principal Balance not
designated by Borrower as bearing interest at the LIBOR Rate
shall bear interest at the Prime-Based Rate.
3. Borrower shall have the right and/or option to elect to have the
Principal Balance, or portions thereof, bear interest at the LIBOR Rate
(herein "LIBOR Rate Option"), provided such election is made in the manner
hereinafter set forth. Any election of Borrower of the LIBOR Rate Option must
be made in accordance with the following:
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3.1 Borrower may only elect the LIBOR Rate Option for one (1) month,
three (3) month, or six (6) month periods, and only in regard to
principal increments of not less than $1,000,000.00.
3.2 For each and every election of the LIBOR Rate Option, Borrower
shall deliver to Agent and Lender a written notification or
telex of Borrower's election of such LIBOR Rate Option at least
three (3) LIBOR Business Days prior to the date of commencement
of the LIBOR Interest Period (herein "LIBOR Notice"). Each and
every LIBOR Notice must specify the date the LIBOR Interest
Period is to commence.
3.3 Agent shall, as soon as practicable after 3:00 p.m. Los Angeles
time two (2) LIBOR Business Days prior to the commencement of
the LIBOR Interest Period, determine the LIBOR Rate applicable
to the portion of the Principal Balance set forth in the LIBOR
Notice, and shall deliver oral and facsimile notice to Borrower
and each Lender of such rate on the date of determination.
Interest shall accrue at the LIBOR Rate so determined by Agent
for the LIBOR Interest Period commencing on the date specified
in the LIBOR Notice. The interest rate applicable to the
Principal Balance, with respect to which Xxxxxxxx has elected a
LIBOR Rate, shall revert from the LIBOR Rate applicable thereto
to the Prime Rate on the Rollover Date applicable thereto,
unless Borrower timely exercises the LIBOR Rate Option with
respect thereto within the time periods provided herein. Lender
shall be under no duty or obligation to notify Borrower that the
interest rate on any portion of the Principal Balance is about
to revert from a LIBOR Rate to the Prime Rate.
3.4 Borrower's right to exercise any LIBOR Rate Option shall be
conditioned upon there not being an uncured Event of Default, as
defined in the Loan Agreement, and there not being more than ten
(10) LIBOR Rate Options outstanding at any one time.
3.5 The LIBOR Interest Period in any LIBOR Notice shall not extend
beyond the Maturity Date.
3.6 In the event, and on each occasion, that on the day two (2)
LIBOR Business Days prior to the commencement of a LIBOR
Interest Period, Agent or any Lender shall reasonably determine
(which determination, if reasonably made by Agent or any Lender,
shall be conclusive and binding upon Borrower) that dollar
deposits in an amount approximately equal to that portion of the
Principal Balance set forth in the LIBOR Notice:
3.6a are not generally available at such time in the London
Interbank Market;
3.6b the rate or term at which such dollar deposits are
being offered will not adequately and fairly reflect the
cost to any Lender of making or maintaining a LIBOR Rate
on such portion of the Principal Balance or funding the
same in the London Interbank Market during such LIBOR
Interest Period;
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3.6c reasonable means do not exist for ascertaining a LIBOR
Rate; and/or
3.6d a LIBOR Rate on such portion of the Principal Balance
would be in excess of the maximum interest rate which
Borrower may by Law pay,
then Agent or any Lender shall so notify Borrower and such
portion of the Principal Balance shall continue to bear interest
at the Prime Rate.
3.7 If any change in any Law or in the interpretation thereof by any
Governmental Agency charged with the administration or
interpretation thereof shall make it unlawful for Lender to make
and/or maintain LIBOR Rates with respect to the Principal
Balance or to give effect to its obligations as contemplated
hereby then the LIBOR Rate shall immediately terminate. Lender
shall notify Borrower of such termination, and after such
notification any LIBOR Rate applicable to the Principal Balance
shall be automatically converted to the Prime Rate, and any such
notice given by Lender to Borrower pursuant to this paragraph
shall, if lawful, be effective on the last day of any existing
LIBOR Interest Period.
4. In addition to all other sums due hereunder, Borrower hereby agrees to
indemnify Lender against any loss or reasonable expense, and to pay Lender
upon demand any and all amounts that Lender may reasonably sustain or incur
in liquidating or reemploying deposits from third parties required to effect
or maintain any LIBOR Rate with respect to any portion of the Principal
Balance subject to a LIBOR Rate as a direct consequence of any default by
Borrower in the payment of the Principal Balance bearing interest at a LIBOR
Rate, or any part thereof, or interest accrued thereon at a LIBOR Rate, as
and when due. Lender shall provide to Borrower a statement explaining the
amount of any such loss or expense, which statement, in the absence of
manifest error, shall be conclusive and binding upon Borrower.
5. Borrower shall have the right, at any time, to prepay any portion of the
Principal Balance bearing interest at the Prime Rate, without premium or
penalty any such prepayment shall not result in a reamoritization, deferral,
postponement, suspension or waiver of any and all other payments due under
this Note. Borrower shall have no right to prepay any portion of the
Principal Balance bearing interest at the LIBOR Rate, except on a Rollover
Date.
6. Interest, late charges, costs, or expenses that are not received by
Lender within ten (10) calendar days from the date such interest, late
charges, costs, or expenses become due, shall, at the sole discretion of
Lender, be added to the Principal Balance and shall from the date due bear
interest at the Default Rate.
7. Whenever any payment to be made under this Note shall be due on other
than a Business Day, then the due date for such payment shall be automatically
extended to the next succeeding Business Day, and such extension of time
shall in such cases be included in the computation of the interest portion of
any payment due hereunder.
8. All payments under the Note shall be made by Borrower without any
offset, decrease, reduction or deduction of any kind or nature whatsoever,
including, but not limited to, any decrease,
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reduction or deduction for, or on account of, any offset, withholdings,
future taxes, future reserves, imposts or duties of any kind or nature that
are imposed or levied by or on behalf of any Governmental Agency. If at any
future time, Lender shall be compelled by any Law or any other such
requirement which on its face or by its application requires or establishes
reserves, or payment, deduction or withholding of taxes, imposts or duties to
act such that it causes or results in a decrease, reduction and/or deduction
in payment received by Lender, then Borrower shall pay to Lender such
additional amounts, as Lender shall deem necessary and appropriate, such that
every payment received under this Note, after such decrease, reserve,
reduction, deduction, payment and/or required withholding, shall not be
reduced in any manner whatsoever.
9. Upon the occurrence of an Event of Default under the Loan Agreement or a
default by Borrower hereunder, Xxxxxx may, in its sole and absolute
discretion, declare the entire unpaid principal balance, together with all
accrued and unpaid interest thereon, and all other amounts and/or payments
owing hereunder, immediately due and payable, without notice and/or demand.
10. From and after the occurrence of any Event of Default under the Loan
Agreement or a default by Borrower hereunder, whether by non-payment,
maturity, acceleration, non-performance or otherwise, and until such Event of
Default has been cured, all outstanding amounts under this Note (including,
but not limited to, interest, costs and late charges) shall bear interest at a
per annum rate (the "Default Rate") equal to five percent (5%) in excess of
the rate(s) being charged hereunder.
11. Time is of the essence for all payments and other obligations due under
this Note. Borrower acknowledges that if any payment required under this
Note is not received by Lender within ten (10) days after the same becomes
due and payable, Lender will incur extra administrative expenses (i.e., in
addition to expenses incident to receipt of timely payment) and the loss of
the use of funds in connection with the delinquency in payment. Because from
the nature of the case, the actual damages suffered by Lender by reason of
such administrative expenses and loss of use of funds would be impracticable
or extremely difficult to ascertain. Xxxxxxxx agrees that five percent (5%)
of the amount of the delinquent payment, together with the difference between
interest accruing on the entire unpaid principal balance of this Note at the
rate(s) being charged hereunder and at the Default Rate, as provided above,
shall be the amount of damages which Xxxxxx is entitled to receive upon such
breach, in compensation therefor. Therefore, Borrower shall, in such event,
without further demand or notice, pay to Lender, as Xxxxxx's monetary
recovery for such extra administrative expenses and loss of use of funds,
liquidated damages in the amount of five percent (5%) of the amount of the
delinquent payment (in addition to interest at the Default Rate). The
provisions of this paragraph are intended to govern only the determination of
damages in the event of a breach in the performance of Xxxxxxxx to make
timely payments hereunder. Nothing in this Note shall be construed as in any
way giving Borrower the right, express or implied, to fail to make timely
payments hereunder, whether upon payment of such damages or otherwise. The
right of Lender to receive payment of such liquidated and actual damages, and
receipt thereof, are without prejudice to the right of Lender to collect such
delinquent payments and any other amounts provided to be paid hereunder or
under the Loan Agreement or to declare a default hereunder or under the Loan
Agreement.
12. Borrower hereby agrees to pay any and all reasonable costs and/or
expenses paid and/or incurred by Lender by reason of, as a result of, or in
connection with the enforcement of this Note
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and the Loan Agreement including, but not limited to, any and all reasonable
attorneys' fees incurred in connection therewith whether or not suit is filed
including, by way of example, and not by way of limitation, any action or
proceeding under the bankruptcy Laws relating to this Note. Borrower's
agreement to pay any and all such costs and expense includes, but is not
limited to, reasonable costs and expenses incurred in enforcing any judgment
obtained by Xxxxxx and in connection with any and all appeals therefrom. All
such costs and expenses are immediately due and payable to Lender by Borrower
whether or not demand therefor is made by Lender.
13. Borrower hereby waives grace, diligence, presentment, demand, notice of
demand, dishonor, notice of dishonor, protest, notice of protest, any and all
exemption rights against the indebtedness evidenced by this Note and the
right to plead any statute of limitations as a defense to the repayment of all
or any portion of this Note, and interest thereon, to the fullest extent
allowed by Law, and all compensation of cross-demands pursuant to California
Code of Civil Procedure Section 431.70. No delay, omission and/or failure on
the part of Lender in exercising any right and/or remedy hereunder shall
operate as a waiver of such right and/or remedy or of any other right and/or
remedy of Lender.
14. This Note is subject to the express condition that at no time shall
Borrower be obligated, or required, to pay interest on the Principal Balance
at a rate which could subject Lender to either civil or criminal liability as
a result of such rate being in excess of the maximum rate which Lender is
permitted to charge. If, by the terms of this Note, Borrower is, at any time,
required or obligated to pay interest on the Principal Balance at a rate in
excess of such maximum rate, then the rate of interest under this Note shall
be deemed to be immediately reduced to such maximum rate, and interest
payable hereunder shall be computed at such maximum rate, and any portion of
all prior interest payments in excess of such maximum rate shall be applied,
and/or shall retroactively be deemed to have been payments made, in reduction
of the Principal Balance.
15. This Note may be amended, changed, modified, terminated and/or canceled
only by a written agreement signed by the party against whom enforcement is
sought for any such action. This Note shall be governed by, and construed
under, the Laws of the State of California.
16. Borrower hereby represents and warrants to Lender, by its execution
below, that Borrower has the full power, authority and legal right to execute
and deliver this Note and that the indebtedness evidenced hereby constitutes
a valid and binding obligation of Borrower without exception or limitation.
IN WITNESS WHEREOF, Xxxxxxxx has executed this Note on the day and year first
above written.
BORROWER:
XXXXXXX-XXXXXX, INC., a
Delaware corporation
By: /s/ Xxxxxxx Xxxx
-----------------------
Name: Xxxxxxx Xxxx
---------------------
Title: EVP-CFO
--------------------
XXXXXXX-XXXXXX INTERNATIONAL, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxx
-----------------------
Name: Xxxxxxx Xxxx
---------------------
Title: Secy
--------------------
XXXXXXX-XXXXXX PROPERTIES, LTD.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxx
-----------------------
Name: Xxxxxxx Xxxx
---------------------
Title: Secy
--------------------
K-W PROPERTIES, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxx
-----------------------
Name: Xxxxxxx Xxxx
---------------------
Title: Secy
--------------------
REVOLVING LOAN AGREEMENT
THIS REVOLVING LOAN AGREEMENT ("Agreement") is made as of July 2, 1999
by and between XXXXXXX-XXXXXX, INC., A Delaware corporation ("KW"),
XXXXXXX-XXXXXX INTERNATIONAL, INC., a California corporation ("KWI"),
XXXXXXX-XXXXXX PROPERTIES, LTD., a Delaware corporation ("KWPL"), and K-W
PROPERTIES, INC., a California corporation ("KWP"), (individually and
collectively, "Borrower"), the financial institutions that are, or may
hereafter become, parties to this Agreement (individually a "Lender" and
collectively, "Lenders"), and TOKAI BANK OF CALIFORNIA, a California banking
corporation, hereinafter individually referred to as "Tokai" and a Lender,
and in its capacity as agent for Lenders, the "Agent".
X. Xxxxxxxx has applied to Agent and Lenders for a line of credit
in the principal amount of $15,000,000.000.
X. Xxxxxxx have agreed to provide the line of credit to Borrower
upon the terms and conditions hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree
as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATIONS
-------------------------------
For purposes of this Agreement, the following terms shall have
the following meanings:
1.1 DEFINITIONS. The definitions set forth in the recitals
above are incorporated herein by reference. For purposes of this Agreement,
the following words and phrases have the following meanings.
"Advances" means all funds advanced to or for the benefit
of Borrower under this Agreement.
"Affiliate" means any Person directly or indirectly,
related to, in control of, controlled by or under the common control of
Borrower, or of a successor thereof, whether through merger, consolidation,
transfer of assets or otherwise.
"Agreement" means this Revolving Loan Agreement, either
as originally executed or as it may from time to time be supplemented,
modified, or amended.
"Assets" shall have the meaning usually given that term in
accordance with GAAP, but shall exclude sums due to Borrower from Affiliates
(other than subsidiaries).
"Bankruptcy Proceeding" means any proceeding, action, petition or
filing under the United States Bankruptcy Code or any similar state or
federal law now or hereafter in effect relating to bankruptcy reorganization
or insolvency, or the arrangement or adjustment of debts.
"Business Day" or "business day" means a day of the year other than
a Saturday or Sunday on which banks are not required or authorized to close
in California.
"Change of Control" means any transaction or event as a direct or
indirect result of which:
(a) any Person is or becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of
more than 51% of the outstanding shares of voting stock of KW; or
(b) during any period of twelve (12) consecutive months (whether
after the date of this Agreement), individuals who on the first day of such
period constituted the Board of Directors of KW (together with any new
directors subsequently elected whose election by such Board of Directors or
whose nomination for election by the stockholders of KW was approved by a
vote of a majority of the directors of KW then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the board of Directors of KW then in office; or
"Confirmation of Subordination" means that certain Confirmation of
Subordination in form and substance acceptable to Agent, duly executed by
Colony K-W, LLC, Xxxxxx, Xxxxxxx Strategic Partners Fund, L. P. and Strategic
Associates, L. P. in favor of Xxxxxxx.
"Credit" means the line of credit described in Article 3 of the
Agreement, providing for Advances in the aggregate principal sum not
exceeding $15,000,000.00.
"Debt Coverage Ratio" means EBITDA divided by Total Interest and
Principal Payments. For purposes of this ratio, "EBITDA" means net profit
before taxes, plus interest expense, depreciation, amortization, and taxes.
"Total Interest and Principal Payments" means total interest expense and all
regularly scheduled payments of principal required to be made by Borrower
during the applicable period (but not including any balloon payments).
"Environmental Laws" means any and all applicable Laws, each as
amended from time to time, any judicial or administrative orders, decrees,
settlement agreements or judgments thereunder, and any permits, approvals,
licenses, registrations, filings and authorizations, in each case as in
effect as of the relevant date, relating to the environment, health or
safety, or the Release (as defined in CERCLA) of Hazardous Substances into
the indoor or outdoor environment, including, without limitation, ambient
air, soil, surface water, groundwater,
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wetlands, land or subsurface strata or otherwise relating to the presence,
release or management of Hazardous Substances.
"Event of Default" means any of those events specified in Article 5
hereof.
"Financial Statements" means for KW and its subsidiaries on a
consolidated basis, balance sheets, income statements, statements of
stockholder's equity, and statements of cash flows together with appropriate
notes and footnotes.
"GAAP" means generally accepted accounting principles consistently
applied and maintained throughout the period indicated and consistent with
the prior financial practice of KW, except for changes mandated by the
Financial Accounting Standards Board or any similar accounting authority of
comparable standing.
"Governmental Agency" or "Government Agency" means any federal,
state or local governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality or public body, court,
administrative tribunal, or public utility.
"Hazardous Substance" means: (i) those substances included within the
definitions of "hazardous substances", "hazardous materials," "toxic
substances," or "hazardous waste" pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980; 42 U.S.C. Section 9601, ET
SEQ. ("CERCLA"), the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6901, ET SEQ., the Hazardous Materials Transportation Act, 49
U.S.C. Section 1981, ET SEQ., each as amended from time to time and the
regulations promulgated pursuant to said laws; (ii) those substances defined
as "hazardous wastes" in Section 25117 of the California Health and Safety
Code or as "hazardous substances" in Section 25316 of the California Health
and Safety Code and the regulations promulgated thereunder; and (iii) such
other substances, materials, wastes, pollutants or contaminants which are or
become regulated or which are classified as hazardous or toxic under
applicable Laws.
"Intercreditor Agreement" means that certain Intercreditor Agreement
of even date herewith between Lenders and East-West Bank, as the same may be
amended from time to time.
"Laws" means, collectively, all federal, state, and local laws,
rules, statutes, regulations, ordinances, and codes.
"Leverage Ratio" means Borrowed Funds divided by Tangible Net Worth
plus Subordinated Debt. For the purposes of this ratio, "Borrowed Funds"
means the sum of all short-term debt, additional short-term debt, long-term
debt and the current maturities of long-term debt. "Subordinated Debt" means
debt subordinated to Borrowers' debt to Lender in a manner acceptable to
Lender, and shall include current maturities of Subordinated Debt.
"Loan" means the aggregate of Advances under this Agreement.
"Loan Documents" means this Agreement, the Note(s), the
Intercreditor Agreement, the Confirmation of Subordination and such other
documents as Lenders may, in accordance with the terms of this Agreement,
require Borrower to give to Lenders as evidence of the Loan as any or all of
them may be supplemented, modified or amended from time to time.
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"Loan Fee" means, as to each Lender, an amount equal to one quarter
of one percent 0.25% of its respective percentage of the Credit, payable at
closing.
"Majority Lenders" means at any time Lenders holding more than fifty
percent (50%) of the then aggregate unpaid principal amount of the Notes, or
if no such principal amount is then outstanding, Lenders having more than
fifty percent (50%) share of the Credit.
"Material Adverse Effect" means a material adverse effect on the
financial condition of KW and its subsidiaries taken as a whole.
"Maturity Date" means the earlier of July 2, 2001 and the date on
which a Change of Control occurs.
"Note" means a Promissory Note of Borrower payable to the order of a
Lender, evidencing the Loan made by such Lender, substantially in the form of
Exhibit D hereto.
"Organizational Documents" means the Articles of Incorporation and
by-laws of each Borrower and the resolutions of the Board of Directors of
each Borrower approving this Agreement and the transactions contemplated
hereby.
"Other Lenders" means any Lenders, other than Tokai.
"Person" means an individual, corporation, partnership, joint
venture, limited liability company, trust or unincorporated organization or a
Government Agency.
"Tangible Net Worth" means the excess of total assets over total
liabilities (except debt subordinated to Lenders by agreement satisfactory to
Agent), total assets and total liabilities each to be determined in
accordance with the generally accepted accounting principles consistent with
those applied in the preparation of the Financial Statements referred to in
Section 4.8 below, excluding, however, from the determination of total
assets, (a) goodwill, organizational expenses, research and development
expenses, trademarks, trade names, copyrights, patents, patent applications,
licenses and rights in any thereof, and other similar intangibles; (b) all
prepaid expenses, deferred charges or unamortized debt discount and expense;
(c) all reserves carried and not deducted from assets; (d) all notes or
accounts receivable from any Affiliate of KW or any officer of KW or any of
KW's Affiliates; (e) securities which are not readily marketable; (f) cash
held in a sinking or other analogous fund established for the purpose of
redemption, retirement or prepayment of capital stock or indebtedness; (g)
any write-up in the book value of any asset resulting from a revaluation
thereof subsequent to the date of this Agreement; and (h) any items not
included in clauses (a) through (g) above which are treated as intangibles in
conformity with generally accepted accounting principles.
"Tokai's Commitment" means the commitment of Tokai to lend to
Borrower the maximum principal sum of $10,000,000.00 as more particularly
described in Section 3.1 herein.
1.2 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
1.3 USE OF DEFINED TERMS. Any defined terms used in the plural
shall include the singular and such terms shall encompass all members of the
relevant class.
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1.4 SCHEDULES AND EXHIBITS. All schedules and exhibits to this
Agreement, either as originally existing or as the same may from time to time
be supplemented, modified or amended, are incorporated herein by reference.
1.5 REFERENCES. Any reference to this Agreement or any other document
shall include such document both as originally executed and as it may from
time to time be supplemented and modified. References herein to Articles,
Sections and Exhibits shall be construed as references to this Agreement
unless a different document is named.
1.6 OTHER TERMS. The term "document" is used in its broadest sense and
encompasses agreements, certificates, opinions, consents, instruments and
other written material of every kind. The terms "including" and "include"
means "including (include), without limitation."
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF BORROWER
Each Borrower hereby represents and warrants to Agent and Lenders as of
the date of this Agreement, the date of each Advance, and each and every date
during the existence of the Loan, or any portion thereof, as the context
admits or requires, that:
2.1 BORROWER'S CAPACITY. Borrower is a corporation duly incorporated
and existing under the laws of the state where organized. Borrower is duly
qualified to do business in any state in which the nature of its business
requires it to be so qualified, except where the failure to so qualify could
reasonably be expected to have a Material Adverse Effect.
2.2 VALIDITY OF LOAN DOCUMENTS. To the best of Borrower's knowledge, the
Loan Documents are legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at Law),
provided, however, that Borrower knows no reason why the implementation of
such Laws would affect the ultimate realization of the security afforded
thereby. The execution and delivery by Xxxxxxxx of and the performance by
Borrower of all its obligations under the Loan Documents have been duly
authorized by all necessary corporate action and do not and will not:
(a) Require any consent or approval not heretofore obtained of any
other Person holding any interest or entitled to receive any interest issued
or to be issued by Borrower or otherwise.
(b) Violate any provision of the Organizational Documents or other
agreements to which Borrower is bound.
(c) Result in or require the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest, claim, charge,
right of others or other encumbrance of any nature (other than under the Loan
Documents) upon or with respect to any property now owned or leased or
hereafter acquired by Xxxxxxxx.
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(d) To the best of Xxxxxxxx's knowledge, violate any provision of
any Laws, or of any order, writ, judgment, injunction, decree, determination,
or award to which Borrower is a party.
(e) Result in a breach of or constitute a default under, cause or
permit the acceleration of any obligation owed under, or require any consent
under any indenture or loan or credit agreement or any other agreement,
lease, or instrument to which Borrower is a party or by which Borrower or any
property of Borrower is bound or affected.
2.3 BORROWER NOT IN DEFAULT OR VIOLATION. To the best of Xxxxxxxx's
knowledge, Borrower is not in default under or in violation of any Laws, or any
order, writ, judgment, injunction, decree, determination or award to which
Borrower is a party which default or violation could reasonably be expected
to have a Material Adverse Effect. Borrower is not in default under any
obligation, agreement, instrument, loan, or indenture, whether to Lender or
otherwise, or any lease which default could reasonably be expected to have a
Material Adverse Effect. No event has occurred and is continuing, or would
result from the making of any Advance, which constitutes an Event of
Default, or would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
2.4 NO GOVERNMENTAL APPROVALS REQUIRED. Borrower does not require any
authorization, consent, approval, order, license, exemption from, or filing,
registration, or qualification with, any Governmental Agency in connection
with the execution and delivery by Xxxxxxxx, and the performance by Xxxxxxxx,
of all or any of its obligations under, the Loan Documents, except that
filing and/or recording with Governmental Agencies may be required to comply
with public disclosure requirements.
2.5 TAX LIABILITY. Xxxxxxxx has filed all tax returns (federal, state,
and local) required to be filed and has paid all taxes shown thereon to be
due and all property taxes due, including interest and penalties, if any;
except where Borrower is contesting taxes Borrower reasonably believes are
improperly stated or assessed which contests are in accordance with applicable
Laws and the procedures of the appropriate Governmental Agency.
2.6 FINANCIAL STATEMENTS. All Financial Statements, tax returns and
other financial information of Borrower which have heretofore been submitted
to Lender fairly present the financial position of Borrower at the
respective dates of their preparation. Since the dates of such Financial
Statements, tax returns and other financial information, there has been no
material adverse change in the financial condition of Borrower.
2.7 PENDING LITIGATION. To the best of Borrower's knowledge, there are
no actions, suits, or proceedings pending, or to the knowledge of Borrower
threatened, against or affecting Borrower, including, without limitation, any
Bankruptcy Proceeding, or involving the validity or enforceability of any of
the Loan Documents or the priority of the lien thereof, at Law or in equity,
or before or by any Governmental Agency, which could reasonably be expected to
have a Material Adverse Effect or which, if adversely determined, would not
substantially impair the ability of Borrower to perform each and every one of
its obligations under and by virtue of the Loan Documents.
2.8 YEAR 2000 MATTERS. With respect to the data processing and
software programs used by Borrower in the conduct of the business of Borrower
(the "Software"), to the best of Xxxxxxxx's knowledge, except as disclosed in
KW's Prospectus dated May 12, 1999:
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(a) The Software will record, store, process and present calendar
dates on and after January 1, 2000, and all information pertaining to those
dates in the same manner and with the same functionality as the Software
does with respect to calendar dates falling on or before December 31, 1999.
(b) The Software has all appropriate capabilities and
compatibility for operation of year-2000 compliant data.
(c) Date-related user interface functions, data-fields and
data-related program instructions and functions of the Software include the
indication of the century.
(d) Xxxxxxxx has created a plan to comply with the foregoing
subsections (a), (b) and (c).
(e) Borrower has undertaken appropriate testing to verify that
its software programs are in compliance with the foregoing subsections (a),
(b) and (c) of this Section 2.8.
2.9 SOLVENCY. Borrower is able to pay its debts as they mature and the
realizable value of its Assets is sufficient to satisfy any and all
obligations hereunder.
2.10 PERMITS. Borrower possesses all licenses, permits, franchises,
patents, copyrights, trademarks, and trade names, or rights thereto, that are
necessary to conduct its business substantially as now conducted and as
presently proposed to be conducted except where the failure to possess the
same could reasonably be expected to have a Material Adverse Effect, and
Borrower is not in material violation of any valid rights of others with
respect to any of the foregoing where any such violation could reasonably be
expected to have a Material Adverse Effect.
2.11 ERISA.
(a) Each Plan (other than a multiemployer plan) is in compliance
in all respects with the applicable provision of ERISA, the Code and other
applicable Laws except to the extent that any non-compliance would not result
in a material liability of Borrower. Each Plan that is not a multiemployer
Plan has received a favorable determination letter from the IRS and to the
best knowledge of Borrower, nothing has occurred which would cause the loss
of such qualification. Borrower has fulfilled its obligations, if any, under
the minimum funding standards of ERISA and the Code with respect to each
Plan, except to the extent that any failure to fulfill such obligation would
not result in a material liability of Borrower, and has not incurred any
material, unsatisfied liability with respect to any Plan under Title IV of
ERISA.
(b) There are no claims, lawsuits or actions (including by any
Governmental Authority), and there has been no prohibited transaction or
violation of the fiduciary responsibility rules, with respect to any Plan
which has resulted or could reasonably be expected to result in a Material
Adverse Effect.
(c) With respect to any Plan subject to Title IV of ERISA:
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(i) No reportable event has occurred under Section
4043(c) of ERISA for which the PBGC requires thirty (30)-day notice which
would result in a material liability of Borrower.
(ii) No action by Borrower or any ERISA Affiliate to
terminate or withdraw from any Plan has been taken and no notice of intent to
terminate a Plan has been filed under Section 4041 of ERISA, which
termination or withdrawal would result in a material liability of Borrower.
(iii) No termination proceeding has been commenced with
respect to a Plan under Section 4042 of ERISA, and to Borrower's knowledge no
event has occurred or condition exists which would constitute grounds for the
commencement of such a proceeding; PROVIDED that with respect to any
multiemployer plan, this representation is made to Xxxxxxxx's knowledge.
(d) The following terms have the meanings indicated for
purposes of this Agreement:
(i) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(ii) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
(iii) "ERISA Affiliate" means any trade or business
(whether or not incorporated) under common control with Borrower within the
meaning of Section 414(b) or (c) of the Code.
(iv) "IRS" means the Internal Revenue Service.
(v) "PBGC" means the Pension Benefit Guaranty
Corporation.
(vi) "Plan" means a pension, profit-sharing, or stock
bonus plan intended to qualify under Section 401(a) of the Code, maintained
or contributed to by Borrower or any ERISA Affiliate, including any
multiemployer plan within the meaning of Section 4001(a)(3) of ERISA.
2.12 CREDIT BENEFITS. Each Borrower acknowledges and agrees that
(i) it is in its best interest to receive the financial accommodations
provided by Lenders to itself and to each other Borrower under this
Agreement and (ii) because of the relationship of each Borrower to the other,
each Borrower it will derive direct and indirect benefits from the Credit and
the Advances made to self and to each other Borrower hereunder.
ARTICLE 3
THE LINE OF CREDIT
3.1 THE CREDIT. Upon the request of Xxxxxxxx, made in accordance with
Section 3.7, and otherwise in compliance with this Agreement, provided that
no Event of Default has occurred, each Lender severally agrees to lend to
Borrower its pro rata share of Advances. The total amount outstanding under
this Agreement for each Lender shall not exceed at any one time
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the commitment amount set forth opposite such Xxxxxx's name on Exhibit A
hereto. In no event shall Lenders be obligated to make Advances to Borrower
under this Article 3 whenever the aggregate amount of the Advances made and
requested to be made pursuant to this Article 3 exceeds or would exceed, at
any one time, the sum of $15,000,000.00: PROVIDED, HOWEVER, until Other
Lenders become a party to this Agreement, the aggregate amount of Advances
made to Borrower hereunder, shall not, at any one time, exceed the amount of
Tokai's Commitment; and PROVIDED, FURTHER, that in no event shall the
aggregate amount of Advances made for the purposes of investments outside of
the United States of America exceed at any one time fifty percent (50%) of
the available Credit. Provided no Event of Default occurs and shall be
continuing, Advances fully and timely repaid by Xxxxxxxx during the term of
the Notes may be reborrowed within such term, subject to all conditions of
Advances under this Agreement. Concurrently with Xxxxxxxx's execution of this
Agreement, and as a condition to Xxxxxxx' making any Advances, Borrower shall
make, execute and deliver to each Lender its Note.
3.2 TERM. The Credit shall automatically terminate on the Maturity
Date. Notwithstanding the foregoing, upon the occurrence of an Event of
Default, Lenders may terminate the Credit pursuant to Section 6.1. On the
date of termination, all obligations owed by Borrower to Lenders under the
Notes, shall become immediately due and payable without notice or demand and
shall be repaid to Lenders in cash or by a wire transfer of immediately
available funds.
3.3 NOTE. The Credit shall be evidenced by the Notes. Payments of
principal and interest shall be as provided for in the Notes. Each Advance
and each payment under the Credit shall be evidenced and recorded by each
Lender upon the records it maintains concerning its portion of the Credit
(including, without limitation, on any schedule attached to its Note), which
recordation shall be prima facie evidence of such Advance or payment;
provided, however, that the failure by any Lender to make any such
recordation shall not limit or otherwise affect the obligation of Borrower
hereunder or under the Notes. Each Lender is hereby authorized by Borrower to
endorse its Note and to attach to and make a part of its Note a continuation
of any schedule attached to its Note as and when required.
3.4 PURPOSE. The Credit is for the purpose of providing funds for
acquisitions and investments and for general corporate purposes.
3.5 TERMS OF REPAYMENT. The principal balance of each Note shall earn
interest at the Prime Rate or, at Borrower's option, the LIBOR Rate plus 200
basis points (2.00%), fixed for periods of one (1), three (3) or six (6)
months, but fixed only for principal increments of not less than
$1,000,000.00. Interest shall be due and payable monthly and principal shall
be repayable on the Maturity Date. The foregoing terms are more fully set
forth in the Notes, the terms of which shall prevail over the terms of this
Section 3.5 if inconsistent therewith.
All payments received by any Lender from or for the account of
Borrower may be applied by Xxxxxx, in its sole absolute discretion, in the
following manner, or in any other manner, or in any other order Lender
chooses:
(a) to pay any and all interest due, owing and/or accrued;
(b) to pay any and all costs, advances, expenses or fees due under
this Agreement;
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(c) to pay the principal balance on the Note.
3.6 CONDITIONS TO CLOSING. Lenders shall not be obligated to make any
Advance hereunder until Xxxxxxxx, at its sole expense, deposits or causes to
be deposited with Lenders, the following in form and substance satisfactory
to Agent, in Agent's sole opinion and judgment:
(a) The Loan Fee;
(b) The Note;
(c) The Intercreditor Agreement;
(d) The Confirmation of Subordination;
(e) True and correct copies of: Xxxxxxxx's Organizational
Documents, and Financial Statements, all of which documents must be first
reviewed and approved by Xxxxxx, its counsel, or both;
(f) A favorable opinion of independent counsel to Borrower
acceptable to Agent and its counsel opining to, among other things, Borrower
being a validly organized and existing business entity in good standing with
full power and authority to carry on its business as now being conducted,
Xxxxxxxx's execution and authority to execute the Loan Documents, the validity
and binding effect of the Loan Documents, and further opining as to any
additional matters required by Agent's counsel.
3.7 CONDITIONS TO EACH ADVANCE.
(a) Before each Advance, including the first, Agent shall have
received from Borrower: (A) a Request for Advance, in substantially the form
of Exhibit B hereto, (x) with respect to an Advance bearing interest at the
Prime Rate, not later than 10:00 a.m. (Los Angeles time) of the Business Day
of such Advance, and (y) with respect to an Advance bearing interest at the
LIBOR Rate, at least three (3) LIBOR Business Days prior to the date of the
requested Advance; and (B) a Compliance Certificate, substantially in the
form of Exhibit C hereto, with appropriate insertions.
(b) Upon receipt of the Request for Advance, Agent shall promptly
notify each Lender of the contents thereof and of such Lender's ratable share
of the Advance specified therein and such Request for Advance shall not
thereafter be revocable by Borrower.
(c) Not later than [2:00 p.m.] (Los Angeles time) on the date of
the Advance, each Lender shall make available its ratable share of the
Advance, in immediately available funds, to Agent at its address set forth
herein or at such other address as Agent may hereafter designate by notice to
Borrower and Lenders, and unless Agent determines that any applicable
condition specified in this Agreement has not been satisfied or that any
Event of Default has occurred, Agent will make the funds so received from
Lenders available to Borrower.
3.8 NON-UTILIZATION FEE. Xxxxxxxx agrees to pay a fee on any
difference between each Xxxxxx's pro rata share of the Credit and the
principal balance outstanding under such Xxxxxx's Note, determined by the
weighted average credit outstanding during the specified
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period. The fee shall be payable quarterly in arrears, commencing on
September 30, 1999, and the last day of each calendar quarter thereafter. The
fee will be calculated at the per annum percentage determined as follows:
Weighted
Average Utilization Non-Utilization Fee
------------------- -------------------
Under 33.3% 0.25% of unused amount
33.3% to 66.6% 0.20% of unused amount
Over 66.6% 0.15% of unused amount
3.9 ADDITIONAL PROVISIONS REGARDING THE LOAN.
(a) Borrower hereby authorizes each Lender, if and to the extent
any payment of principal or interest or sum otherwise due hereunder,
following the occurrence of any Event of Default, is not promptly made
pursuant to the Note, and to the extent of any obligation of Borrower to such
Lender under this Agreement or any other agreement, to charge against any
deposit account which Borrower may maintain with such Lender an amount equal
to part or all of the principal costs and expenses then due and payable, and
accrued interest from time to time due and payable to such Lender under its
Note or otherwise. Each Lender is under no obligation to charge such past due
payments against such account of Borrower, but may elect to do so in such
Xxxxxx's sole and absolute opinion and judgment.
(b) If, with respect to the Credit there is, due to either (i) the
introduction of or any change (including, without limitation, any change by
way of imposition or increase of reserve requirements) in any Law or in the
interpretation thereof, or (ii) the compliance by each Lender with any
guidelines or request from any central bank or other governmental authority
(whether or not having the force of Law but which are generally complied
with), any increase in the cost of Lender of agreeing to make or making,
funding or maintaining such Credit, then Borrower shall from time to time,
upon demand by any Lender, pay to such Lender additional amounts sufficient
to indemnify Lender against such increased costs, provided that Lender shall
determine such additional amounts under the same formula and method that it
uses for other borrower's that obtain similar credit facilities to this
Credit, from Lender. A certificate as to the amount of such increased costs
submitted to Borrower by any Lender shall be prima facie evidence of the
increased costs, and shall be immediately due and payable upon demand.
(c) In the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and
binding on all the parties hereto) at any time that by reason of Regulation D
of the Board of Governors of the Federal Reserve System ("Regulation D"),
such Lender is required to maintain reserves in respect of Eurocurrency
Liabilities (as defined in Regulation D) during any period that interest on
any portion of its Note is payable at the LIBOR Rate (each such period, for
any Lender, a "Reserve Period"), then such Lender shall promptly give notice
(by telephone confirmed in writing) to Borrower and to Agent of such
determination (which notice the Agent shall promptly transmit to each of the
other Lenders), and Borrower shall directly pay to such Lender additional
interest on the unpaid portion of its Note bearing interest at the LIBOR Rate
during such Reserve Period at a rate per annum which shall, during each LIBOR
Interest Period, be the amount by which (i) the LIBOR Rate for
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such LIBOR Interest Period divided (and rounded upward to the next whole
multiple of 1/16 of 1%) by a percentage equal to 100% minus the then stated
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities (as defined in Regulation D) exceeds (ii) the LIBOR Rate for such
LIBOR Interest Period. Additional interest payable pursuant to the
immediately preceding sentence shall be paid by Xxxxxxxx at the time that it
is otherwise required to pay interest in respect of such LIBOR Interest
Period of, if later demanded by the Lender, promptly on demand. Each Lender
agrees that if it gives notice to Borrower of the existence of a Reserve
Period, it shall promptly notify Borrower of any termination thereof, at
which time Borrower shall cease to be obligated to pay additional interest to
such Lender pursuant to the first sentence of this Section 3.9(c) until such
time, if any, as a subsequent Reserve Period shall occur.
ARTICLE 4
BORROWER'S COVENANTS
In addition to anything else herein stated, Xxxxxxxx agrees:
4.1 INSURANCE. To obtain and at all times maintain hazard and liability
insurance and such other insurance with such companies and in such amounts as
is usual for the business it is in.
4.2 LENDER MAY EXAMINE BOOKS AND RECORDS. Borrower shall keep and
maintain at all times at Xxxxxxxx's address as stated in Section 8.11, or at
such other place as Borrower shall notify Agent from time to time, complete
and accurate books or accounts and records adequate to reflect correctly the
results of the operation of the Borrower's business and copies of all
written contracts, leases, rental agreements, concessions, licenses, and
other documents and instruments which affect Xxxxxxxx's business, or any
portion thereof or interest therein. Such books, records, contracts, leases,
documents, and other instruments shall be subject to examination and
inspection by any Lender, or any Lender's agents or designated auditors, upon
reasonable written notice, during regular business hours at any reasonable
time and from time to time.
4.3 NO AUTOMATIC SET-OFF. The existence of any deposit account
maintained with any Lender and/or the fact of any sum or sums being on
deposit in said account shall in no way constitute a set-off against or be
deemed to compensate the obligation of the Loan or any payment or performance
due under this Agreement or any of the other Loan Documents, unless and until
such Lender, by affirmative action, shall so apply said account or any
portion thereof and then only to the extent thereof so designated by such
Lender.
4.4 PRESERVATION OF CORPORATE EXISTENCE. Borrower shall preserve and
maintain its corporate existence, right, franchises and privileges in the
jurisdiction of formation, and qualify and remain qualified as a foreign
entity in any jurisdiction in which such qualification is or may be
necessary, in view of Borrower's business and operations or the ownership of
its properties, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
4.5 COMPLIANCE WITH LAWS AND CONTRACTS. Borrower shall comply with the
requirements of all applicable Laws and orders of any Governmental Agency,
provided that if Borrower has not so complied by the date prescribed in any
such Law or order Borrower shall
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comply therewith by the date set forth in any order of the Governmental
Agency charged with the enforcement of such Law or order if such date is
later, and comply with all contracts, agreements, indentures or instruments
by which it is bound, except where the failure to comply with such Laws,
orders, contracts, agreements, indentures or instruments could not reasonably
be expected to have a Material Adverse Effect.
4.6 MAINTENANCE OF PROPERTIES. Borrower shall use its best efforts
efforts to maintain and preserve, or cause to be maintained and preserved,
all of its properties, necessary or useful in the proper conduct of its
business, including such as may be under lease, in good working order and
condition, ordinary wear and tear excepted, except where the failure to
maintain or preserve the same could not reasonably be expected to have a
Material Adverse Effect. In the event Borrower hereafter intends to move its
principal place of business to a location other than as set forth under
Section 8.11 of this Agreement, Borrower shall give at least thirty (30)
days' prior written notice to Agent of its intention to move, the date that
such move is anticipated, and its new address.
4.7 LIMITATION ON ACQUISITIONS; MERGERS. KW shall not acquire, merge or
consolidate with or into any business organization unless KW is the surviving
entity following such action.
4.8 REPORTING REQUIREMENTS. So long as Borrower shall have any
obligation to Lenders under this Agreement, Borrower shall deliver to Agent
the following financial statements and reports:
(a) As soon as practicable and in any event within five (5)
Business Days after Borrower or its President or Chief Financial Officer
knows or should reasonably have known of the commencement of any legal action
against it or its President or Chief Financial Officer except actions seeking
money judgment that are fully insured or bonded or could not reasonably be
expected to have a Material Adverse Effect, a report of the commencement of
such action containing a statement signed for and on behalf of Borrower by
the President or Chief Financial Officer setting forth details of such legal
action and any action Borrower proposes to take with respect thereto;
(b) Within five (5) Business Days of the occurrence of any Event
of Default or event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default, a report regarding such Event of
Default or event setting forth details and describing any action which
Xxxxxxxx proposes to take with respect thereto, signed for and on behalf of
Borrower by an authorized officer of Borrower;
(c) Any change in name of Borrower or use of any trade names or
trade styles not presently used;
(d) As soon as possible, but in any event, within one hundred
twenty (120) days following the end of each calendar year during which the
Credit has not been fully repaid and performed, and discharged, audited
Financial Statements representing the financial condition of KW and its
subsidiaries on a consolidated basis as of the end of such calendar year. All
such Financial Statements shall be prepared, audited, and presented in
accordance with GAAP, or in such other form and content as Agent may permit,
in its sole opinion and judgment. All such Financial Statements shall contain
a certification signed by any individual providing a Financial Statement or
by one or more authorized representatives of any corporation, partnership,
limited
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liability company or other entity providing a Financial Statement, certifying
to the completeness and accuracy of all information, without exception;
(e) As soon as available and in any event within thirty (30) days
of filing each year, a copy of KW's federal and state income tax returns
complete with supporting schedules and exhibits;
(f) As soon as available, but in any event, within thirty (30)
days of the end of each calendar year, projections by KW of the Financial
Statements for KW and its subsidiaries for the succeeding calendar year on a
quarterly basis, and on an annual basis for the following two (2) calendar
years. These Financial Statements may be Borrower prepared;
(g) Copies of KW's Form 10-K Annual Report, form 10-Q Quarterly
Report and Form 8-K Current Report within fifteen (15) days after the date of
filing with the Securities and Exchange Commission;
(h) Within the periods provided in (d) and (g) above, a Compliance
Certificate of KW signed by an authorized financial officer of KW setting
forth (i) the information and computations (in sufficient detail) to
establish that KW is in compliance with all financial covenants provided for
in Section 4.11 at the end of the period covered by the Financial Statements
then being furnished and (ii) whether there existed as of the date of such
Financial Statements and whether there exists as of the date of the Compliance
Certificate, any Event of Default under this Agreement or any event which
with notice or lapse of time or both would constitute an Event of Default
and, if any of the foregoing exists, specifying the nature thereof and the
action KW is taking or proposes to take with respect thereto;
(i) Promptly upon receipt thereof, one (1) copy of any other
report submitted to Borrower or any of Borrower's officers by independent
accountants in connection with any annual, interim or special audit made by
them of the books of Borrower;
(j) Within five (5) Business Days of becoming aware of any
developments or other information likely to materially and adversely affect
Borrower's properties, business, prospects, profits or condition (financial
or otherwise) or Borrower's ability to perform this Agreement or the other
Loan Documents, telephonic or facsimile notice specifying the nature of such
development or information and such anticipated effect, which shall be
promptly confirmed in writing;
(k) Xxxxxxxx agrees to furnish notice immediately to Lender if
Xxxxxxxx has reason to believe or discovers any failure to comply with
subsections (a), (b) and/or (c) of Section 2.8;
(l) Xxxxxxxx agrees to furnish notice immediately to Lender in the
event Borrower has reason to believe or discovers that the interface of
Borrower's data processing and/or software systems with any third party
program or system may or does result in material adverse consequence to
Borrower;
(m) Such other information respecting the business, properties or
the condition or operations, financial or otherwise, of Borrower as Lender
may reasonably request from time to time.
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4.9 TRANSFER OF ASSETS. There shall not be, whether voluntarily,
involuntarily, or by operation of Law, a transfer, conveyance, lease, sale or
other disposition of any of the Assets of Borrower or any part thereof,
except as otherwise explicitly permitted hereunder or under any of the other
Loan Documents and other than (i) in the ordinary course of Xxxxxxxx's
business, and (ii) the conveyance, sale or disposition of xxxxx.xxx (a.k.a.
xxxxxxxxx.xxx), without the prior written consent of Agent, which consent
shall not be unreasonably withheld.
4.10 YEAR 2000 COMPLIANCE. From and after December 31, 1999: (i) the
Software used by Xxxxxxxx in the conduct and operation of the business of
Borrower will comply with the representations and warranties set forth in
Section 2.8, and (ii) the representations and warranties set forth in Section
2.8 shall continue in full force and effect, and Borrower will comply with
and otherwise act in accordance with such representations and warranties.
Borrower further covenants and agrees to indemnify and hold Xxxxxx harmless
from any and all claims, suits, actions, debts, damages, costs, losses,
obligations, changes and expenses of any nature whatsoever suffered or
incurred by Agent and Lenders arising from the failure of Borrower to comply
with or act in accordance with the terms of this Section 4.10.
4.11 FINANCIAL COVENANTS. KW shall maintain on a consolidated basis,
the following financial covenants, to be measured at the end of each calendar
quarter (other than (d) below), commencing on September 30, 1999. All
financial ratios shall be calculated at the end of each calendar quarter,
using the results of that quarter and each of the three (3) immediately
preceding quarters.
(a) TANGIBLE NET WORTH. Maintain on a consolidated basis Tangible
Net Worth equal to at least the amounts indicated for each period specified
below:
Period Amounts
------ -------
Ending December 31, 1999 $27,000,000.00
Ending December 31, 2000 $38,000,000.00
(b) LEVERAGE RATIO. Maintain on a consolidated basis a Leverage
Ratio not exceeding the amounts indicated for each period specified below:
Period Ratio
------ -----
Ending December 31, 1999 3.00:1.0
Ending June 30, 2000 2.50:1.0
Ending June 30, 2001 2.00:1.0
(c) DEBT COVERAGE RATIO. Maintain on a consolidated basis a Debt
Coverage Ratio of at least the amounts indicated for each period specified
below:
Period Ratio
------ -----
Ending December 31, 1999 1.50:1.0
Ending December 31, 2000 2.00:1.0
(d) POSITIVE NET INCOME. Earn positive net income in each calendar
year.
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4.12 LIQUIDITY. KW shall maintain unencumbered liquid assets equal to
at least $2,712,500. "Liquid Assets" means the following assets of KW: (a)
cash and certificates of deposit; (b) U.S. Treasury Bills and other
obligations of the United States government; and (c) readily marketable
securities (including commercial paper, but excluding restricted stock and
stock subject to the provisions of Rule 144 of the Securities and Exchange
Commission).
4.13 OTHER DEBT. Borrower shall not have outstanding or incur any
direct or contingent liabilities (other than to Lenders), or become liable
for the liabilities of others, without the Lenders' written consent. This
does not prohibit:
(a) Acquiring goods, supplies, or merchandise on normal trade
credit;
(b) Endorsing negotiable instruments received in the usual
course of business;
(c) Obtaining surety bonds in the usual course of business;
(d) Liabilities and lines of credit in existence on the date of
this Agreement disclosed in writing to Lenders; provided, that, without the
prior consent of Agent, at no time shall the aggregate amount of unsecured
debt of KW and its subsidiaries exceed $40,000,000.00, including the lines of
credit provided under this Agreement and by East-West Bank;
(e) Guaranties by KWP of the debt of its subsidiaries for the
acquisition, holding or development of real estate;
(f) Additional real estate secured or other non-recourse debt;
(g) Additional recourse debt approved by Xxxxxxx having (i) a
maturity date at least twenty-four (24) months beyond the Maturity Date and
(ii) covenants no more stringent than the covenants provided in Article IV of
this Agreement;
(h) Debts in favor of Affiliates and/or officers, directors or
shareholders provided such debts are subordinated, in form and substance
acceptable to Lenders, to all obligations of Borrower to Lenders under this
Agreement.
4.14 DIVIDENDS. KW shall not declare or pay any dividends on any of
its shares except dividends payable in capital stock of KW, and shall not
purchase, redeem or otherwise acquire for value any of its shares, or create
any sinking fund in relation thereto.
4.15 OTHER LIENS. Borrower shall not create, assume, or allow any
security interest or lien (including judicial liens) on property Borrower now
or later owns, except:
(a) Deeds of trust and security agreements in favor of Agent on
behalf of Xxxxxxx:
(b) Liens for taxes not yet due;
(c) Liens outstanding on the date of this Agreement disclosed in
writing to Agent, including, without limitation, the pledge and security
interest in favor of Colony K-W, LLC on the capital stock of KWPL;
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(d) Liens securing debt permitted in Section 4.13 (e) and (f).
ARTICLE 5
EVENTS OF DEFAULT
5.1 CONDITIONS UNDER WHICH LENDER MAY DECLARE AN EVENT OF DEFAULT BY
BORROWER: Each of the following shall constitute an Event of Default under
this Agreement, the Note and the other Loan Documents:
(a) failure in the payment of any principal or interest, or both,
within five (5) days of the date when due under the terms of any Note, this
Agreement or any other Loan Documents; and
(b) other than monetary defaults covered under Section 5.1(a),
default in the due observance or performance of any term, covenant or
condition contained in this Agreement, any Note or any other Loan Document
which default cannot be cured by the payment of money and such default shall
continue for a period of thirty (30) calendar days after Lender shall have
given a written notice to Borrower specifying such default; PROVIDED,
HOWEVER, that if such non-monetary default is curable but is of a nature that
such cure cannot be completed within such thirty (30) day period, Borrower
shall be allowed to cure such default if Borrower shall promptly commence
such cure after receipt of such notice and diligently prosecutes the same to
completion (PROVIDED FURTHER, HOWEVER, that in no event shall such extension
operate to extend beyond the earlier to occur of sixty (60) days or the
Maturity Date); PROVIDED, HOWEVER, Lenders shall not be obligated to make any
Advances to Borrower during any cure period;
(c) if any representation or warranty made or agreed to be made
herein or in any other Loan Document shall prove to be untrue or misleading
in any material respect;
(d) if Borrower or any subsidiary consents to the filing of, or
commences or consents to the commencement of, any Bankruptcy Proceeding with
respect to Borrower;
(e) if any Bankruptcy Proceeding shall have been filed against
Borrower or any subsidiary and the same is not withdrawn, dismissed, canceled
or terminated within ninety (90) days of such filing; PROVIDED, HOWEVER,
Lenders shall not be obligated to make any Advances to Borrower during such
period;
(f) if Borrower or any subsidiary is adjudicated bankrupt or
insolvent or a petition for reorganization of Borrower or any subsidiary is
granted;
(g) if a receiver, liquidator or trustee shall be appointed for
Borrower or any subsidiary or for substantially all of their respective
property;
(h) if Borrower or any subsidiary shall make an assignment for the
benefit of its creditors or shall admit in writing the inability to pay its
debts generally as they become due;
(i) except as otherwise permitted herein, if Borrower shall
institute or cause to be instituted any proceeding for the termination or
dissolution of Borrower;
(j) any suit shall be filed against Borrower, which, if adversely
determined could reasonably be expected to materially impair the ability of
Borrower to perform any or all of its obligations under this Agreement or any
of the other Loan Documents, unless Xxxxxxxx's counsel furnishes to Agent its
opinion, to the satisfaction of Agent and Agent's counsel, that, in its
judgment the suit is not reasonably expected to have a Material Adverse
Effect.
(k) a final judgment for the payment of money shall be rendered by
a court of competent jurisdiction against Borrower or any of its
subsidiaries, and Borrower or such subsidiary, as the case may be, shall not
discharge or bond the same or provide for its discharge or bonding in
accordance with its terms, or procure a stay of execution thereof, within
forty-five (45) days from the date of entry thereof and within said period of
forty-five (45) days, or such longer period during which execution of such
judgment shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal, and such judgment together with all
other such judgments shall exceed in the aggregate $250,000.00;
(l) Borrower shall liquidate, dissolve, or fail to maintain its
status as a going concern;
(m) Borrower commits a breach or default in the payment or
performance of any other obligation of Borrower to Lender which is not
remedied within any period provided therein or waived by Lender;
(n) (i) any debt of Borrower, which individually or in the
aggregate exceeds $250,000.00 ("Material Debt"), shall be declared to be due
and payable or required to be prepaid, redeemed, purchased or defeased, or an
offer to prepay, redeem, purchase or defease Material Debt shall be required
to be made, in each case prior to the stated maturity thereof, or the
maturity of any or all of Material Debt is otherwise accelerated, or (ii)
Borrower or any of its subsidiaries shall fail to pay all or any portion of
its Material Debt in full upon the final stated maturity of such respective
Material Debt (including any extension thereof);
(o) (i) KW shall fail to pay any principal of, premium or interest
on or any other amount payable to East West Bank under KW's line of credit
therewith when the same becomes due and payable (whether at scheduled
maturity, or by required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such credit line; or
(ii) any other event shall occur or condition shall exist under any agreement
or instrument relating to such credit line and shall continue after the
applicable grace period, if any, specified in such agreement or instrument,
if the effect of such event or condition is to permit the acceleration of the
maturity of amounts owed under such credit line (whether or not such
acceleration occurs);
(p) Any Confirmation of Subordination, security agreement or other
document required by this Agreement is revoked, violated or no longer in
effect;
(q) Any levy (including, but not limited to any levy following the
granting of an attachment lien) is made on any of Borrower's property under
any process or any lien creditor commences suit to enforce a judgment lien
against any of Xxxxxxxx's property and such levy or action shall not be
bonded against by sureties deemed by Agent to be sufficient in its opinion
and judgment and shall continue unstayed for thirty (30) calendar days or
more; provided, however,
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Lenders shall not be obligated to make any Advances to Borrower during the
period of time the levy is unstayed;
5.2 CESSATION OF ADVANCES. Upon the occurrence of an Event of
Default by Borrower under this Agreement, Agent may, at its option, and upon
the request of Majority Lenders shall, without notice or demand, except as
otherwise provided in Section 5.1, cease making any Advances under this
Agreement or under any other agreement between Borrower and Lender.
ARTICLE 6
REMEDIES
6.1 RIGHTS OF LENDER. Upon the occurrence of an Event of Default
by Borrower under this Agreement, Agent may, at its option, and upon the
request of Majority Lenders shall, without notice or demand, in the case of
any Event of Default under Section 5.1(d) through (h), inclusive, and
otherwise upon five (5) Business Days written notice from Agent to Borrower,
do any one or more of the following, all of which are authorized by Borrower:
(a) Declare all obligations, whether evidenced by this
Agreement, the Notes, or otherwise, immediately due and payable;
(b) Terminate this Agreement and the Credit as to any future
obligation or liability of any Lender, but without affecting the obligations
owing by Borrower to any Lender.
6.2 RIGHTS AND REMEDIES NON-EXCLUSIVE. In addition to the specific
rights and remedies hereinabove mentioned, Agent shall have the right to
avail itself of any other rights or remedies to which Lenders may be entitled
any other Loan Documents, at Law or in equity, including, but not limited to,
the right to realize upon any or all of the security and for the Credit to
do so in any order. Furthermore, the rights and remedies set forth above are
not exclusive, and Agent, for itself and on behalf of Lenders may avail
itself of any individual right or remedy set forth in this Agreement, or
available at Law or in equity, without utilizing any other right or remedy.
ARTICLE 7
THE AGENT
7.1 APPOINTMENT AND AUTHORIZATION. Each Lender irrevocably appoints
and authorizes Agent to take such action on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are delegated to
Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
7.2 AGENT AND AFFILIATES. Agent shall have the same rights and powers
under this Agreement as any other Lender and may exercise or refrain from
exercising the same as though it were not the Agent, and Agent and its
affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any subsidiary or Affiliate of the
Borrower as if were not Agent hereunder.
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7.3 ACTION BY AGENT. The obligations of Agent xxxxxxxxx and under
the other Loan Documents are only those expressly set forth herein and
therein. Without limiting the generality of the foregoing, Agent shall not
be required to take any action with respect to any Event of Default, except
as expressly provided in Article 5 hereof.
7.4 CONSULTATION WITH EXPERTS. Agent may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accounts or experts.
7.5 LIABILITY OF AGENT. Neither Agent nor any of its directors,
officers, agents, or employees shall be liable for any action taken or not
taken by it in connection herewith or in connection with any other Loan
Documents (i) with the consent or at the request of the Majority Lenders or
(ii) in the absence of its own gross negligence or willful misconduct.
Neither Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into or verify (a)
any statement, warranty or representation made in connection with this
Agreement or any Advance hereunder or in connection with any other Loan
Documents; (b) the performance or observance of any of the covenants or
agreements of Borrower; (c) the satisfaction of any condition specified in
Article 3; or (d) the validity, effectiveness or genuineness of any of the
Loan Documents or any other instrument or writing furnished in connection
herewith or therewith. Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing) believed by it to be
genuine or to be signed by the proper party or parties. As to any matters
not expressly provided for by this Agreement, Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder or under
any other Loan Document in accordance with instructions signed by the
Majority Lenders and such instructions of the Majority Lenders and any action
taken or failure to act pursuant thereto shall be binding on all of Lenders.
7.6 INDEMNIFICATION. Each Lender shall, ratably in proportion to
the amount of its commitment, indemnify the Agent (to the extent not
reimbursed by Borrower) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from the Agent's gross negligence or willful misconduct) that Agent may
suffer or incur in connection with this Agreement or any other Loan Document
or any action taken or omitted by Agent hereunder or thereunder.
7.7 FAILURE TO ACT. Except for action expressly required of Agent
hereunder or under any other Loan Document Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall be
indemnified to its satisfaction by Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
7.8 CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and each other Loan
Document to which it is a party. Each Lender also acknowledges that it will,
independently and without reliance upon Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue
20
to make its own credit decisions in taking or not taking any action under
this Agreement or under any other Loan Document.
7.9 ADDITIONAL LENDERS. From time to time additional financial
institutions may, with the written consent of Agent and Xxxxxxxx, become a
Lender under this Agreement upon the execution and delivery to Agent of a
Lender Participation Agreement, substantially in the form of Exhibit E. Upon
receipt of such executed agreement, Agent shall revise Exhibit A to this
Agreement and distribute same to all parties hereto and Borrower shall
execute and deliver a Note to the new Lender evidencing its pro rata share of
the Credit.
7.10 SETOFF. Regardless of the adequacy of any collateral for the
Credit, during the continuance of any Event of Default, any deposits (general
or specific, time or demand, provisional or final, regardless of currency,
maturity or the branch of where such deposits are held) or other sums credit
by or due from any Lender to Borrower and any securities or other property of
Borrower in the possession of such Lender may be applied to or set off against
the payment of any obligations owing to such Lender hereunder, and any and
all other liabilities, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of Borrower to such Lender.
7.11 DISTRIBUTION OF PROCEEDS In the event that, following the
occurrence or during the continuance of any Event of Default, any monies are
received in connection with the enforcement of the Loan Documents, except as
otherwise provided in Section 7.10, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be), the
reimbursement of, the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by Agent in connection with the collection of such monies by
Agent, for the exercise, protection or enforcement by Agent of all or any of
the rights, remedies, powers and privileges of Agent under this Agreement or
any of the other Loan Documents or in support of any provision of adequate
indemnity to Agent against any taxes or liens which by Law shall have or may
have, priority over the rights of Agent to such monies;
(b) Second, to all obligations of Borrower to Tokai under
the Loan Documents; and
(c) Third, to all obligations of Borrower to Other Lenders
under the Loan Documents.
7.12 PAYMENTS.
(a) A payment by Borrower to Agent hereunder or under any of
the other Loan Documents for the account of any other Lender shall constitute
a payment to such other Lender. Agent agrees to distribute to such Xxxxxx
not later than one Business Day after Agent's receipt of good funds,
determined in accordance with Agent's customary practices, such Lenders pro
rata share of payments received by Agent for the account of such Xxxxxx
except as otherwise expressly
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provided herein or in any of the other Loan Documents. In the event that
Agent fails to distribute such amounts within one Business Day as provided
above, Agent shall pay interest on such amount at a rate per annum equal to
the Federal Funds Effective Rate (calculated for the purposes of this section
only based on overnight federal funds transactions) from time to time in
effect.
(b) If, in the opinion of Agent the distribution of any
amounts received by it in such capacity hereunder, under the notes or under
any of the other Loan Documents might involve it in liability, it may refrain
from making such distribution until it is right to make such distribution
shall have been adjudicated by a court of competent jurisdiction. If a court
of competent jurisdiction shall adjudge that any amount received and
distributed by Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over
the same in such manner and to such Persons as shall be determined by such
court.
(c) Notwithstanding anything to the contrary contained in
this Agreement or any of the other Loan Documents, any Lender that fails (i)
to make available to Agent its pro rata share of any Credit or (ii) to
comply with any of its obligations under this Agreement, shall be deemed
delinquent (a "Delinquent Bank") and shall be deemed a Delinquent Bank until
such time as such delinquency is satisfied. A Delinquent Bank shall be
deemed to have assigned any and all payments due to it from Borrower, whether
on account of outstanding Credit, interest, fees or otherwise, to the
remaining non-delinquent Lenders for application to, and reduction of, their
respective pro-rata shares of all outstanding Credit in accordance with the
terms of this Agreement. The Delinquent Bank hereby authorizes Agent to
distribute such payments to the non-delinquent Lenders in proportion to their
respective pro-rata shares of all outstanding Credit in accordance with the
terms of this Agreement. A Delinquent Bank shall be deemed to have satisfied
in full a delinquency when and if, as a result of application of the assigned
payments to all outstanding Credit of the non-delinquent Lenders or as a
result of other payments by the Delinquent Bank to the non-delinquent
Lenders, Lenders respective pro rata shares of all outstanding Credit have
returned to those in effect immediately prior to such delinquency and without
giving effect to the non-payment causing such delinquencies.
ARTICLE 8
GENERAL CONDITIONS AND MISCELLANEOUS
8.1 NON-LIABILITY OF LENDER. Borrower acknowledges and agrees that
by accepting or approving anything required to be observed, performed,
fulfilled, or given to Lenders pursuant to this Agreement or the other Loan
Documents, including any certificate, Financial Statement, appraisal or
insurance policy, Lenders shall not be deemed to have warranted or
represented the sufficiency, legality, effectiveness or legal effect of the
same, or of any term, provision, or condition thereof, and such acceptance or
approval thereof shall not be or constitute any warranty or representation to
anyone with respect thereto by Xxxxxxx.
8.2 NO THIRD PARTIES BENEFITTED. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights, and duties
of Borrower and Lenders in
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connection with the Loan. It shall be deemed a supplement to the Note and the
other Loan Documents, and shall not be construed as a modification of the
Note or the other Loan Documents, except as provided herein. It is made for
the sole protection of Xxxxxxxx and Xxxxxxx, and Xxxxxxx' successors and
assigns and Xxxxxxxx's permitted successor and assigns. No other Person shall
have any rights of any nature hereunder or by reason hereof or the right to
rely hereon. In the event of a conflict between this Agreement and the Note,
the provisions of the Note shall control.
8.3 INDEMNITY BY XXXXXXXX. Xxxxxxxx hereby indemnifies and agrees to
hold harmless each Lender and its directors, officers, agents and employees
(individually and collectively the "Indemnitee(s)") from and against:
(a) Any and all claims, demands, actions or causes of
action that are asserted against any Indemnitee by any Person if the claim,
demand, action or cause of action, directly or indirectly, relates to a
claim, demand, action or cause of action that the Person has or asserts
against Borrower; and
(b) Any and all liabilities, losses, cost or expenses
(including court costs and attorneys' fees) that any Indemnitee suffers or
incurs as a result of the assertion of any claim, demand, action or cause of
action specified in this Section 8.3.
(c) Notwithstanding the foregoing provisions of this
Section 8.3, Borrower is not obligated to defend, indemnify or hold any
Indemnitee harmless from any claims, actions, demands, causes of action,
liabilities, damages, losses, costs or expenses of any kind arising from any
Indemnitee's gross negligence or willful misconduct.
8.4 INTENTIONALLY OMITTED.
8.5 TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement and of each and every provision hereof. The waiver by Lender of any
breach or breaches hereof shall not be deemed, nor shall the same constitute,
a waiver of any subsequent breach or breaches.
8.6 SUCCESSORS AND ASSIGNS; DISSEMINATION OF INFORMATION.
(a) This Agreement shall be binding upon and shall inure
to the benefit of Borrower, Agent and Xxxxxxx and their respective successors
and assigns. Notwithstanding anything to the contrary contained or implied
herein, Borrower shall not be permitted to assign its rights and obligations
hereunder without the prior written consent of Xxxxxxx. Any purported
assignment in violation of the foregoing shall be null and void.
(b) Each Lender may, but only with the prior written
consent of the other Lender(s) and Borrower (which consent shall not be
unreasonably withheld), at any time sell, assign or transfer all or any
portion of its Credit, Loan or Note or of its right, title and interest
therein or thereto or in or to this Agreement to any other Person; PROVIDED
that: (i) each such
-23-
assignment (a) shall be of a constant, and not a varying, percentage of such
Lender's Loans and (b) if such assignment shall be a Novation (defined below),
it shall be of all of such Lender's rights and obligations under this
Agreement (including such Lender's commitment); and (ii) no consent from
Borrower shall be required in the case of (a) any assignment to another
Lender or to a financial institution or entity under common ownership with
and directly controlled by such Lender, or (b) pledges or assignments for
security purposes by any Lender to any Federal Reserve Bank, provided, in no
event, shall any assignment increase the costs or obligations of Borrower. If
such assignment is to one or more financial institutions which assume the
obligations of such Lender hereunder (a "Novation"): (x) the assigning Lender
shall deliver to Agent an Assignment and Assumption Agreement, duly executed
by it and by the assignee bank, in form and substance satisfactory to Agent;
(y) the assigning Lender shall thereupon be released from, and the assuming
institution shall assume and become obligated in respect of, the assigning
Xxxxxx's commitment and its other obligations hereunder to the extent of such
Novation and (z) the assuming institution shall be a party hereto (and shall
constitute a Lender hereunder). Following any Novation, Agent will prepare,
and Xxxxxxxx will execute and deliver, a new Note for the assignee Lender
reflecting the Novation. Each Lender may furnish any information supplied to
such Lender pursuant to this Agreement to any proposed assignee previously
consented to by Borrower (if such consent is required); provided that such
actual or potential assignees shall agree to treat all information exchanged
as confidential.
(c) Borrower hereby further agrees that any Lender may
disclose such information as it deems necessary or advisable regarding the
Loan or Borrower, in connection with any disclosure required of such Lender
with respect to its organization, capitalization or operations, or as may be
required by any applicable securities or other disclosure Laws or any laws,
rules, statutes, codes or regulations of Japan or the United States (and the
laws, rules, statutes, codes or regulations regulating or governing any other
sovereign matter having a similar import, scope or purpose) or as may
otherwise be necessary in connection with any such transaction or the
preparation of audited or unaudited financial statements of such Lender.
8.7 EXECUTION IN COUNTERPARTS. This Agreement and any other Loan
Document, except the Notes may be executed in any number of counterparts, and
any party hereto or thereto may execute any counterpart, each of which, when
executed and delivered, will be deemed to be an original, and all of which
counterparts of this Agreement or any other Loan Document, as the case may
be, taken together will be deemed to be but one and the same instrument. The
execution of this Agreement or any other Loan Document by any party hereto or
thereto will not become effective until counterparts hereon or thereof, as
the case may be, have been executed by all the parties hereto or thereto.
8.8 INTEGRATION; AMENDMENTS; CONSENTS. This Agreement, together
with the documents referred to herein, constitute the entire agreement of the
parties touching upon the subject matter hereof, supersedes any prior
negotiations or agreements on such matter. No amendment, modification or
supplement of any provision of this Agreement or any of the other Loan
Documents shall be effective unless in writing, signed by Xxxxxxx and
Borrower; and no waiver of any of Borrower's obligations under this Agreement
or any of the other Loan
-24-
Documents or consent to any departure by Borrower therefrom shall be
effective unless in writing, signed by Xxxxxxx, and then only in the specific
instance and for the specific purpose given.
8.9 COSTS, EXPENSES AND TAXES. Borrower shall pay to Lenders, on
demand:
(a) The reasonable attorneys' fees and out-of-pocket
expenses incurred by Agent in connection with the negotiation, preparation,
execution, delivery and administration of the Agreement and any other Loan
Document and any matter related thereto;
(b) The reasonable costs and expenses of each Lender in
connection with the enforcement of this Agreement and any other Loan Document
and any matter related thereto, including the reasonable fees and
out-of-pocket expenses of any legal counsel, independent public accountants,
and other outside experts retained by each Lender, and including reasonable
attorneys' fees and expenses incurred by such Lender in connection with the
analysis, monitoring, supervision and/or assertion of such Xxxxxx's rights
and claims in any Bankruptcy Proceeding affecting Borrower, including, but
not limited to, pursuing or opposing any motion for relief from the automatic
stay, use of cash collateral, post-petition financing or confirmation of a
plan; and
All sums paid or expended by Xxxxxxx under the terms of
this Agreement shall be payable by Borrower within five (5) Business Days of
receipt from Agent or any Lender of written demand for payment. All such
sums, together with all amounts to be paid by Borrower pursuant to this
Agreement, shall bear interest from the date of expenditure at the default
rate provided in the Note.
8.10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Borrower contained herein or in any other
Loan Document shall survive the making of the Credit and the execution and
delivery of the Notes, and are material and have been or will be relied upon
by Xxxxxxx, notwithstanding any investigation made by any Lender or on behalf
of any Lender. For the purpose of this Agreement, all statements contained in
any certificate, agreement, Financial Statement, or other writing delivered by
or on behalf of Borrower pursuant hereto or to any other Loan Document or in
connection with the transactions contemplated hereby or thereby shall be
deemed to be representations and warranties of Borrower contained herein or
in the other Loan Documents, as the case may be.
8.11 NOTICES. All notices, requests, demands, directions, and
other communications provided for hereunder and under any other Loan
Document, must be in writing and must be mailed or delivered to the
appropriate party at its respective address set forth below or, as to any
party, at may other address as may be designated by it in a written notice
sent to the other parties in accordance with this Section.
If any notice is given by mail, it will be effective three
(3) calendar days after being deposited in the mails with first-class or air
mail postage prepaid; if given by a reputable overnight courier for next day
delivery, one (1) business day after being delivered to such courier;
-25-
if given by facsimile or other form of electronic written communication, when
confirmation of delivery has been received by sender; or if given by personal
delivery, when delivered.
Such notices will be given to the following:
To Agent TOKAI BANK OF CALIFORNIA
on behalf 000 Xxxxx Xxxxx Xxxxxx
xx Xxxxxxx: Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Loan Servicing Group
To Borrower: XXXXXXX-XXXXXX, INC.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Chief Financial Officer
8.12 FURTHER ASSURANCES. Borrower shall, at its sole expense and
without expense to Lenders, do, execute and deliver such further acts and
documents as any Lender from time to time may reasonably require for the
purpose of assuring and confirming unto Lenders the rights hereby created or
intended, now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of any Loan Documents.
8.13 GOVERNING LAW. The Loan shall be deemed to have been made in
California, and this Agreement and the other Loan Documents shall be governed
by and construed and enforced in accordance with the internal laws of the
State of California without application of conflict of laws principals. It is
agreed that exclusive venue for any legal action between the parties arising
out of or relating to this Agreement shall be in the Superior Court for Los
Angeles County, California, or in cases where federal diversity jurisdiction
is available and obtained in the United States District Court for the Central
District of California situated in Los Angeles, California.
8.14 SEVERABILITY OF PROVISIONS. If any provision of this
Agreement or of any of the other Loan Documents is held to be inoperative,
unenforceable or invalid, such provision shall be inoperative, unenforceable
or invalid without affecting the remaining provisions; this Agreement and the
other Loan Documents shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this
Agreement or the other Loan Documents; and to this end the provisions of this
Agreement and the other Loan Documents are declared to be severable,
remaining in full force and effect.
8.15 JOINT AND SEVERAL OBLIGATIONS. If this Agreement is executed
by more than one Person as Xxxxxxxx, the obligations of each of such Person
hereunder shall be joint and several obligations.
-26-
8.16 CONSTRUCTION. Whenever the context of this Agreement
requires, the singular shall include the plural and the masculine gender
shall include the feminine and/or neuter. Any representation or warranty made
herein or in the other Loan Documents based on the "knowledge" of Borrower or
any other Person making such representation or warranty shall be deemed and
construed to mean such facts and circumstances that the Person knows or
should have known after due inquiry regarding the making of such
representation or warranty.
8.17 HEADINGS. Article and Section headings in this Agreement
are included for convenience of reference only and are not part of this
Agreement for any other purpose.
8.18 JURY TRIAL WAIVER. IN ANY ACTION BROUGHT BY XXXXXXX,
BORROWER OR ANY THIRD PARTY ARISING UNDER THIS AGREEMENT, THE NOTE, OR ANY
DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION THEREWITH, INCLUDING, WITHOUT
LIMITATION, ANY ACTION BASED UPON FRAUD, NEGLIGENCE, BREACH OF CONTRACT,
WASTE, INTENTIONAL TORT OR NEGLIGENT TORT, BORROWER HEREBY WAIVES ANY RIGHT
TO TRIAL BY JURY AND AGREES THAT SUCH ACTION SHALL BE TRIED BY THE COURT
ONLY. XXXXXXXX FURTHER AGREES TO EXECUTE AND TO FILE WITH ANY COURT IN WHICH
ANY SUCH ACTION IS COMMENCED. ANY DOCUMENTS OR INSTRUMENTS NECESSARY TO
EVIDENCE OR TO EFFECTUATE THIS WAIVER OF TRIAL BY JURY.
Borrower has initialed this Section 8.18 to further indicate its
awareness and acceptance of each and every provision hereof.
[Illegible] [Illegible] [Illegible] [Illegible]
------------------- ------------------- ------------------- -------------------
Borrower's Initials Borrower's Initials Borrower's Initials Borrower's Initials
IN WITNESS WHEREOF, Xxxxxxxx, Agent and Xxxxxxx have hereunto
caused this Agreement to be executed on the date first above written.
"Lender" and "Agent"
TOKAI BANK OF CALIFORNIA, a California
banking corporation
By: /s/ X.X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
------------------------------
Title: Senior Vice President
------------------------------
[Signatures continued on next page]
-27-
"Borrower"
XXXXXXX-XXXXXX, INC., a
Delaware corporation
By: /s/ Xxxxxxx Xxxx
----------------------
Name: Xxxxxxx Xxxx
--------------------
Title: EVP-CFO
-------------------
XXXXXXX-XXXXXX INTERNATIONAL, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxx
----------------------
Name: Xxxxxxx Xxxx
--------------------
Title: Secy
-------------------
XXXXXXX-XXXXXX PROPERTIES, LTD.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxx
----------------------
Name: Xxxxxxx Xxxx
--------------------
Title: Secy
-------------------
K-W PROPERTIES, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxx
----------------------
Name: Xxxxxxx Xxxx
--------------------
Title: Secy
-------------------
- 28 -
EXHIBIT A
Name of Lender Commitment Amount Percentage Interest
-------------- ----------------- -------------------
Tokai Bank of California $10,000,000 66.66667
[Additional Lender(s)] [$ 5,000,000] [33.33333]
----------------- -------------------
$15,000,000 100.00000%
- 29 -
EXHIBIT B
FORM OF REQUEST FOR ADVANCE
- 30 -
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
- 31 -
EXHIBIT D
FORM OF PROMISSORY NOTE
- 32 -
FORM OF COMPLIANCE CERTIFICATE
Dated: ______________, 1999
TO: Tokai Bank of California
as Agent for the Lenders
under the Revolving Loan
Agreement referred to below
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Loan Servicing Group
Ladies and Gentlemen:
The undersigned hereby certifies to you pursuant to the Revolving Loan
Agreement dated as of July 2, 1999, ("Agreement") between Xxxxxxx-Xxxxxx,
Inc., a Delaware corporation ("KW"), Xxxxxxx-Xxxxxx International, Inc., a
California corporation ("KWI"), Xxxxxxx-Xxxxxx Properties, Ltd., a Delaware
corporation ("KWPL"), and K-W Properties, Inc., a California corporation
("KWP"), (individually and collectively, "Borrower"), certain Xxxxxxx and
Tokai Bank of California, as agent for Lenders ("Agent"), as follows:
As of _________________, no Event of Default or event which with the
lapse of time or the giving of notice, or both, would become an Event of
Default (an "Unmatured Event of Default")has occurred [except: (Specify nature
and extent of such Event of Default and/or Unmatured Event of Default)
______________________________________________].
If applicable, the corrective action taken or proposed to be taken to
prevent or cure such Event of Default or Unmatured Event of Default is as
follows: ____________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
As of __________________________, KW maintains on a consolidated basis
the following financial covenants pursuant to Section 4.11 of the Agreement:
a) Tangible Net Worth of $_____________________
b) A Leverage Ratio of ________:1.0
c) A Debt Coverage Ratio of ________:1.0
d) As of December 31, ____, positive net income of $____________.
1
As of _____________________, KW maintains:
a) unencumbered liquid assets of $_______________
The Financial Statements and/or reports submitted as of this date are
true, complete, correct and consistent with GAAP.
Any and all capitalized terms set forth in this certificate without
definition shall have the respective meanings ascribed thereto in the
Agreement.
XXXXXXX-XXXXXX, INC., a Delaware
corporation
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
2
This determination of the LIBOR Rate by Agent shall be
binding and conclusive upon Borrower.
1.8 "LIBOR Rate Option" has the meaning set forth in Section 3.
1.9 "Loan Agreement" means that certain Revolving Loan Agreement
entered into by and between Borrower, Agent and Lenders of
even date herewith, as it may be amended from time to time,
and is subject to all of the terms and conditions thereof. All
terms not defined herein shall have the same meaning as in the
Loan Agreement. In the event of a conflict between the terms
of this Note and the Loan Agreement, the terms of this Note
shall prevail.
1.10 "Maturity Date" means the earlier of July 2, 2001 and the date
on which a Change of Control (as defined in the Loan
Agreement) occurs.
1.11 "Prime Rate" means the variable rate of interest per annum
announced, declared and/or published from time to time by
Agent as its "Prime Rate" with the understanding that Agent's
"Prime Rate" is one of its base rates and serves as a basis
upon which effective rates of interest are calculated for
loans making reference thereto and may not be the lowest of
Agent's base rates.
1.12 "Principal Balance" means the outstanding principal balance of
this Note from time to time.
1.13 "Rollover Date" means the last day of the LIBOR Interest
Period.
2. Interest and principal shall be payable as follows:
2.1 Interest shall be payable monthly, in arrears, commencing on the
last day of the month following the initial disbursement, and
shall continue to be due and payable, in arrears, on the same day
of each calendar month thereafter until the Maturity Date.
2.2 Upon the Maturity Date, the Principal Balance together with all
accrued and unpaid interest and other sums due on this Note shall
be due and payable in full.
2.3 All sums outstanding under the Principal Balance not designated by
Borrower as bearing interest at the LIBOR Rate shall bear interest
at the Prime-Based Rate.
3. Borrower shall have the right and/or option to elect to have the
Principal Balance, or portions thereof, bear interest at the LIBOR Rate
(herein "LIBOR Rate Option"), provided such election is made in the manner
hereinafter set forth. Any election of Borrower of the LIBOR Rate Option must
be made in accordance with the following:
3
3.1 Borrower may only elect the LIBOR Rate Option for one (1) month, three
(3) month, or six (6) month periods, and only in regard to principal
increments of not less than $1,000,000.00.
3.2 For each and every election of the LIBOR Rate Option, Borrower shall
deliver to Agent and Lender a written notification or telex of Borrower's
election of such LIBOR Rate Option at least three (3) LIBOR Business Days
prior to the date of commencement of the LIBOR Interest Period (herein
"LIBOR Notice"). Each and every LIBOR Notice must specify the date the
LIBOR Interest Period is to commence.
3.3 Agent shall, as soon as practicable after 3:00 p.m. Los Angeles time two
(2) LIBOR Business Days prior to the commencement of the LIBOR Interest
Period, determine the LIBOR Rate applicable to the portion of the
Principal Balance set forth in the LIBOR Notice, and shall deliver oral
and facsimile notice to Borrower and each Lender of such rate on the date
of determination. Interest shall accrue at the LIBOR Rate so determined
by Agent for the LIBOR Interest Period commencing on the date specified
in the LIBOR Notice. The interest rate applicable to the Principal
Balance, with respect to which Xxxxxxxx has elected a LIBOR Rate, shall
revert from the LIBOR Rate applicable thereto to the Prime Rate on the
Rollover Date applicable thereto, unless Borrower timely exercises the
LIBOR Rate Option with respect thereto within the time periods provided
herein. Lender shall be under no duty or obligation to notify Borrower
that the interest rate on any portion of the Principal Balance is about
to revert from a LIBOR Rate to the Prime Rate.
3.4 Borrower's right to exercise any LIBOR Rate Option shall be conditioned
upon there not being an uncured Event of Default, as defined in the Loan
Agreement, and there not being more than ten (10) LIBOR Rate Options
outstanding at any one time.
3.5 The LIBOR Interest Period in any LIBOR Notice shall not extend beyond
the Maturity Date.
3.6 In the event, and on each occasion, that on the day two (2) LIBOR
Business Days prior to the commencement of a LIBOR Interest Period, Agent
or any Lender shall reasonably determine (which determination, if
reasonably made by Agent or any Lender, shall be conclusive and binding
upon Borrower) that dollar deposits in an amount approximately equal to
that portion of the Principal Balance set forth in the LIBOR Notice:
3.6a are not generally available at such time in the London Interbank
Market;
3.6b the rate or term at which such dollar deposits are being offered
will not adequately and fairly reflect the cost to any Lender of
making or maintaining a LIBOR Rate on such portion of the Principal
Balance or funding the same in the London Interbank Market during
such LIBOR Interest Period;
4
3.6c reasonable means do not exist for ascertaining a LIBOR Rate; and/or
3.6d a LIBOR Rate on such portion of the Principal Balance would be in
excess of the maximum interest rate which Borrower may by Law pay,
then Agent or any Lender shall so notify Borrower and such portion of the
Principal Balance shall continue to bear interest at the Prime Rate.
3.7 If any change in any Law or in the interpretation thereof by any
Governmental Agency charged with the administration or interpretation
thereof shall make it unlawful for Lender to make and/or maintain LIBOR
Rates with respect to the Principal Balance or to give effect to its
obligations as contemplated hereby then the LIBOR Rate shall immediately
terminate. Lender shall notify Borrower of such termination, and after
such notification any LIBOR Rate applicable to the Principal Balance shall
be automatically converted to the Prime Rate, and any such notice given
by Lender to Borrower pursuant to this paragraph shall, if lawful, be
effective on the last day of any existing LIBOR Interest Period.
4. In addition to all other sums due hereunder, Borrower hereby agrees to
indemnify Lender against any loss or reasonable expense, and to pay Lender
upon demand any and all amounts that Lender may reasonably sustain or incur
in liquidating or reemploying deposits from third parties required to effect
or maintain any LIBOR Rate with respect to any portion of the Principal
Balance subject to a LIBOR Rate as a direct consequence of any default by
Borrower in the payment of the Principal Balance bearing interest at a LIBOR
Rate, or any part thereof, or interest accrued thereon at a LIBOR Rate, as
and when due. Lender shall provide to Borrower a statement explaining the
amount of any such loss or expense, which statement, in the absence of
manifest error, shall be conclusive and binding upon Borrower.
5. Borrower shall have the right, at any time, to prepay any portion of the
Principal Balance bearing interest at the Prime Rate, without premium or
penalty any such prepayment shall not result in a reamortization, deferral,
postponement, suspension or waiver of any and all other payments due under
this Note. Borrower shall have no right to prepay any portion of the
Principal Balance bearing interest at the LIBOR Rate, except on a Rollover
Date.
6. Interest, late charges, costs, or expenses that are not received by
Lender within ten (10) calendar days from the date such interest, late
charges, costs, or expenses become due, shall, at the sole discretion of
Lender, be added to the Principal Balance and shall from the date due bear
interest at the Default Rate.
7. Whenever any payment to be made under this Note shall be due on other
than a Business Day, then the due date for such payment shall be
automatically extended to the next succeeding Business Day, and such
extension of time shall in such cases be included in the computation of the
interest portion of any payment due hereunder.
8. All payments under the Note shall be made by Borrower without any offset,
decrease, reduction or deduction of any kind or nature whatsoever, including,
but not limited to, any decrease,
5
reduction or deduction for, or on account of, any offset, withholdings,
future taxes, future reserves, imposts or duties of any kind or nature that
are imposed or levied by or on behalf of any Governmental Agency. If at any
future time, Lender shall be compelled by any Law or any other such
requirement which on its face or by its application requires or establishes
reserves, or payment, deduction or withholding of taxes, imposts or duties to
act such that it causes or results in a decrease, reduction and/or deduction
in payment received by Lender, then Borrower shall pay to Lender such
additional amounts, as Lender shall deem necessary and appropriate, such that
every payment received under this Note, after such decrease, reserve,
reduction, deduction, payment and/or required withholding, shall not be
reduced in any manner whatsoever.
9. Upon the occurrence of an Event of Default under the Loan Agreement or a
default by Borrower hereunder, Xxxxxx may, in its sole and absolute
discretion, declare the entire unpaid principal balance, together with all
accrued and unpaid interest thereon, and all other amounts and/or payments
owing hereunder, immediately due and payable, without notice and/or demand.
10. From and after the occurrence of any Event of Default under the Loan
Agreement or a default by Borrower hereunder, whether by non-payment,
maturity, acceleration, non-performance or otherwise, and until such Event of
Default has been cured, all outstanding amounts under this Note (including,
but not limited to, interest, costs and late charges) shall bear interest at
a per annum rate (the "Default Rate") equal to five percent (5%) in excess of
the rate(s) being charged hereunder.
11. Time is of the essence for all payments and other obligations due under
this Note. Borrower acknowledges that if any payment required under this
Note is not received by Lender within ten (10) days after the same becomes due
and payable, Lender will incur extra administrative expenses (i.e., in
addition to expenses incident to receipt of timely payment) and the loss of
the use of funds in connection with the delinquency in payment. Because,
from the nature of the case, the actual damages suffered by Lender by reason
of such administrative expenses and loss of use of funds would be
impracticable or extremely difficult to ascertain, Xxxxxxxx agrees that five
percent (5%) of the amount of the delinquent payment, together with the
difference between interest accruing on the entire unpaid principal balance
of this Note at the rate(s) being charged hereunder and at the Default Rate,
as provided above, shall be the amount of damages which Lender is entitled
to receive upon such breach, in compensation therefor. Therefore, Borrower
shall, in such event, without further demand or notice, pay to Lender, as
Xxxxxx's monetary recovery for such extra administrative expenses and loss of
use of funds, liquidated damages in the amount of five percent (5%) of the
amount of the delinquent payment (in addition to interest at the Default
Rate). The provisions of this paragraph are intended to govern only the
determination of damages in the event of a breach in the performance of
Xxxxxxxx to make timely payments hereunder. Nothing in this Note shall be
construed as in any way giving Borrower the right, express or implied, to
fail to make timely payments hereunder, whether upon payment of such damages
or otherwise. The right of Lender to receive payment of such liquidated and
actual damages, and receipt thereof, are without prejudice to the right of
Lender to collect such delinquent payments and any other amounts provided to
be paid hereunder or under the Loan Agreement or to declare a default
hereunder or under the Loan Agreement.
12. Borrower hereby agrees to pay any and all reasonable costs and/or
expenses paid and/or incurred by Lender by reason of, as a result of, or in
connection with the enforcement of this Note
6
and the Loan Agreement including, but not limited to, any and all reasonable
attorneys' fees incurred in connection therewith whether or not suit is filed
including, by way of example, and not by way of limitation, any action or
proceeding under the bankruptcy Laws relating to this Note. Borrower's
agreement to pay any and all such costs and expenses includes, but is not
limited to, reasonable costs and expenses incurred in enforcing any judgment
obtained by Xxxxxx and in connection with any and all appeals therefrom. All
such costs and expenses are immediately due and payable to Lender by Borrower
whether or not demand therefor is made by Lender.
13. Borrower hereby waives grace, diligence, presentment, demand, notice of
demand, dishonor, notice of dishonor, protest, notice of protest, any and all
exemption rights against the indebtedness evidenced by this Note and the
right to plead any statute of limitations as a defense to the repayment of all
or any portion of this Note, and interest thereon, to the fullest extent
allowed by Law, and all compensation of cross-demands pursuant to California
Code of Civil Procedure Section 431.70. No delay, omission and/or failure on
the part of Lender in exercising any right and/or remedy hereunder shall
operate as a waiver of such right and/or remedy or of any other right and/or
remedy of Lender.
14. This Note is subject to the express condition that at no time shall
Borrower be obligated, or required, to pay interest on the Principal Balance
at a rate which could subject Lender to either civil or criminal liability as
a result of such rate being in excess of the maximum rate which Lender is
permitted to charge. If, by the terms of this Note, Borrower is, at any
time, required or obligated to pay interest on the Principal Balance at
a rate in excess of such maximum rate, then the rate of interest under this
Note shall be deemed to be immediately reduced to such maximum rate, and
interest payable hereunder shall be computed at such maximum rate, and any
portion of all prior interest payments in excess of such maximum rate shall
be applied, and/or shall retroactively be deemed to have been payments made,
in reduction of the Principal Balance.
15. This Note may be amended, changed, modified, terminated and/or canceled
only by a written agreement signed by the party against whom enforcement is
sought for any such action. This Note shall be governed by, and construed
under, the Laws of the State of California.
16. Borrower hereby represents and warrants to Lender, by its execution
below, that Borrower has the full power, authority and legal right to execute
and deliver this Note and that the indebtedness evidenced hereby constitutes
a valid and binding obligation of Borrower without exception or limitation.
IN WITNESS WHEREOF, Xxxxxxxx has executed this Note on the day and year first
above written.
BORROWER:
XXXXXXX-XXXXXX, INC., a
Delaware corporation
By: /s/ Xxxxxxx Xxxx
--------------------
Name: Xxxxxxx Xxxx
------------------
Title: EVP-CFO
-----------------
XXXXXXX-XXXXXX INTERNATIONAL, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxx
--------------------
Name: Xxxxxxx Xxxx
------------------
Title: Secy
-----------------
XXXXXXX-XXXXXX PROPERTIES, LTD.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxx
--------------------
Name: Xxxxxxx Xxxx
------------------
Title: Secy
-----------------
K-W PROPERTIES, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxx
--------------------
Name: Xxxxxxx Xxxx
------------------
Title: Secy
-----------------
EXHIBIT E
FORM OF LENDER PARTICIPATION AGREEMENT
LENDER PARTICIPATION AGREEMENT
This Lender Participation Agreement ("Agreement") is made as of this ___
day of ____________, 19__, by and among TOKAI BANK OF CALIFORNIA, a
California corporation, (hereinafter individually referred to as "Existing
Lender," and in its capacity as agent under the Revolving Loan Agreement (as
defined below), the "Agent") and _______________________________ (hereinafter
referred to as "New Leader").
WITNESSETH:
WHEREAS, Xxxxxxx-Xxxxxx, Inc., a Delaware corporation, Xxxxxxx-Xxxxxx
International, Inc., a California corporation, Xxxxxxx-Xxxxxx Properties,
Ltd., a Delaware corporation, and K-W Properties, Inc., a California
corporation (individually and collectively "Borrower"), Agent and Lenders,
including Existing Lender, are parties to a certain Revolving Loan Agreement
dated as of July 2, 1999 ("Loan Agreement").
WHEREAS, pursuant to the Loan Agreement, Agent and Lenders have provided
a line of credit to Borrower in the principal sum of $15,000,000 ("Credit")
and the commitment of Existing Lender under the Credit is $10,000,000.
WHEREAS, New Lender has advised Agent, Existing Lender and Borrower of
its desire to become a Lender under the Loan Agreement and to assume the
unallocated portion of the Credit in the amount of [$5,000,000] on the terms
herein provided.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants hereinafter set forth and intending to be legally bound hereby
agree as follows:
AGREEMENT
1. DEFINITIONS. Except as otherwise provided herein, capitalized terms
defined in the Loan Agreement are used herein with the meanings set forth
therein. As used in this Agreement, the following capitalized terms shall
have the meanings set forth below:
"New Lender's Commitment Percentage" means the percentage of the
aggregate Credit of New Lender under the Loan Agreement and the corresponding
dollar amount with respect to the aggregate Credit under the Loan Agreement
as set forth below:
Percentage: %
--------------
Dollar Amount: $
--------------
-1-
"Pro Rata" means a Pro Rata sharing among Lenders, based on the
ratio that a party's interest in the Credit bears to the outstanding
principal amount of the Loan made by such party at the time in question.
"Effective Date" means
---------------------------------------------.
2. REPRESENTATIONS AND WARRANTIES OF AGENT. Agent represents and
warrants to New Lender as follows:
a. As of the date hereof, Existing Lender has a ratable share of the
Credit equal to $10,000,000 or 66.66667%.
b. As of the date hereof, there is [no] [$______] outstanding
principal balance of Loans made by Existing Lender under the Loan Agreement.
c. As of the date hereof, there are no Other Lenders, except
Existing Lender, that are a party to the Loan Agreement.
d. Agent has obtained the approval of Borrower to having New Lender
become a Lender under the Loan Agreement as provided for herein.
Neither Agent nor Existing Lender makes any representation or warranty or
assumes any responsibility with respect to the financial condition of
Borrower or the performance of Borrower of the Loan, and neither Agent nor
Existing Lender assumes any responsibility with respect to any statements,
warranties or representations made under or in connection with the Loan
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement or any other documents under the
Loan Agreement, other than as expressly set forth above.
3. REPRESENTATIONS AND WARRANTIES OF NEW LENDER. New Lender hereby
represents and warrants to Agent and Existing Lender as follows:
a. New Lender has full power and authority, and has taken all action
necessary to execute and deliver this Agreement, and any and all other
documents required or permitted to be executed or delivered by it in
connection with this Agreement and to fulfill so obligations under, and to
consummate the transactions contemplated by, this Agreement, and no
governmental authorizations or other authorizations are required in
connection therewith;
b. This Agreement constitutes the legal, valid and binding obligation
of New Lender;
c. New Lender has independently and without reliance upon Agent or
Existing Lender and based on such information as New Lender has deemed
appropriate, made its
-2-
own credit analysis and decision to enter into this Agreement and became a
Lender under the Loan Agreement. New Lender will, independently and without
reliance upon Agent or any Lender, and based upon such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Agreement;
and
d. If New Lender is organized under the laws of a jurisdiction
outside the United States of America, attached hereto are forms certifying
New Lender's exemption from United States withholding taxes with respect to
all payments to be made to New Lender under the Loan Agreement.
4. LENDER STATUS. On the Effective Date, New Lender assumes all rights
and obligations of a Lender under the Loan Agreement and severally agrees to
lend to Borrower its ratable share of Advances; provided, that, at no time
shall the aggregate amount of Advances made by New Lender to Borrower exceed
New Xxxxxx's Commitment Percentage. New Lender agrees to the provisions of
Article 7 of the Loan Agreement and authorizes Agent to take such action on
its behalf and to exercise such powers as are provided in the Loan Agreement.
5. PAYMENT. On the Effective Date, Agent shall advise New Lender of the
amount of its Pro Rata share of the outstanding principal Advances. New
Lender shall immediately make available to Agent its ratable share of the
outstanding Advances in immediately available funds. Agent shall use the
funds so received from New Lender to reduce the amount of outstanding
Advances made by Existing Lender so that, after giving effect to such
payment, Lenders will share Pro Rata in the outstanding Advances.
6. NOTES. Agent shall make appropriate arrangements with Borrower
concurrently with the execution and delivery hereof so that a new Note is
issued to New Lender in the principal amount of the Credit as herein provided.
7. FURTHER ASSURANCES. Concurrently with the execution of this
Agreement, Agent shall register New Lender as a Lender under the Loan
Agreement and revise Exhibit "A" to the Loan Agreement to reflect New
Lender's Commitment Percentage.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL
OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA. NEW LENDER HEREBY
AGREES TO THE PROVISIONS OF SECTION 8.13 OF THE LOAN AGREEMENT.
9. NOTICES. All communications among the parties or notices in
connection herewith must be in writing and must be mailed, telegraphed,
telecopied, delivered or sent by telex or cable, addressed to the appropriate
party at its address set forth on the signature pages hereof. All
communications and notices shall, if sent by telegraph, telex or telecopy, be
deemed to have
-3-
been given when received by the Person to whom addressed; if sent by
overnight courier service, be deemed to have been given one day after the
date when set; and if sent by mail, be given to have been given three days
after the date when sent by registered or certificate mail, postage prepaid.
10. ATTORNEYS' FEES. In the event of any action at law or any suit in
equity with respect to this Agreement, or any documents executed pursuant
hereto, whether in federal court, state court, administrative proceedings,
arbitration proceeding (if agreed upon by the parties hereto) or insolvency
proceedings, the prevailing party, in addition to all other sums to which it
may be entitled by law, shall be entitled to a reasonable sum for attorneys'
fees and costs incurred.
11. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
12. INTERPRETATION. The headings of the various sections hereof are
for convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers, as of the date
first above written.
"Agent" and "Existing Lender"
TOKAI BANK OF CALIFORNIA,
a California corporation
BY:____________________________________
NAME:__________________________________
TITLE:_________________________________
"New Lender"
_______________________________________
BY:____________________________________
NAME:__________________________________
TITLE:_________________________________
-4-
CONSENT OF BORROWER
Each Borrower confirms its approval of New Lender pursuant to the Lender
Participation Agreement.
XXXXXXX-XXXXXX. INC., a Delaware corporation
BY:__________________________________________
NAME:________________________________________
TITLE:_______________________________________
XXXXXXX-XXXXXX INTERNATIONAL, INC.,
a California corporation
BY:__________________________________________
NAME:________________________________________
TITLE:_______________________________________
XXXXXXX-XXXXXX PROPERTIES, LTD.,
a Delaware corporation
BY:__________________________________________
NAME:________________________________________
TITLE:_______________________________________
K-W PROPERTIES, INC., a California corporation
BY:__________________________________________
NAME:________________________________________
TITLE________________________________________
-5-
