EXHIBIT 10.7
REVOLVING CREDIT AGREEMENT
Dated as of June 28, 2001
▇▇▇▇▇▇▇ HOMES, INC.,
as the Company,
CERTAIN FINANCIAL INSTITUTIONS
as the Banks,
FIRST HAWAIIAN BANK,
as the Agent,
BANK OF AMERICA, N.A. and FLEET NATIONAL BANK, N.A.
as the Syndication Agents,
BANC OF AMERICA SECURITIES LLC,
and FLEET SECURITIES, INC.
as the Joint Lead Arrangers and Joint Book Managers
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT ("Agreement") is dated as of June
28, 2001, by and among ▇▇▇▇▇▇▇ HOMES, INC., a Delaware corporation (the
"Company"), the several financial institutions from time to time party to this
Agreement (collectively, the "Banks" and individually, a "Bank"), and FIRST
HAWAIIAN BANK, a Hawaii corporation, individually ("FHB") and as administrative
agent (the "Agent") for the Banks and BANK OF AMERICA, N.A., a national banking
association ("BofA") and FLEET NATIONAL BANK, a national banking association,
("FNB") as syndication agents and is made with reference to the facts set forth
below.
WHEREAS, the Banks have agreed to make available to the Company an
unsecured revolving credit facility upon the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties as agree as follows:
ARTICLE 1: DEFINITIONS AND ACCOUNTING TERMS.
1.1 DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings set forth respectively after each:
"ACCOUNT" means the Company's general account maintained with
FHB, and any future similar account with FHB.
"AFFILIATE" means any Person (1) which directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is
under common control with, the Company or any Controlled Subsidiary, as
the context may require, or (2) which owns beneficially or of record 10%
or more of the Voting Stock of the Company. The term "control" means the
possession, directly or indirectly, of the power to cause the direction of
the management and policies of a Person, whether through the ownership of
voting securities or partnership interests, by contract, family
relationship or otherwise.
"AGENT" means FHB when acting in its capacity as the
administrative agent under any of the Loan Documents, and any successor
agent.
"AGENT-RELATED PERSONS" means the Agent and any successor
agent (pursuant to the terms of SECTION 10.9) together with their
respective Affiliates and the directors, officers, agents, employees and
attorneys-in-fact of such Persons and Affiliates.
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"AGREEMENT" means this Revolving Credit Agreement, either as
originally executed or as it may from time to time be supplemented,
modified or amended.
"ANNIVERSARY DATE" means each anniversary of the Closing Date.
"APPLICABLE FACILITY FEE RATE" means (a) if the then
applicable Leverage Ratio is less than 1.75, .10% per annum, (b) if the
then applicable Leverage Ratio is equal to or greater than 1.75, but less
than 2.00, .125% per annum, (c) if the then applicable Leverage Ratio is
equal to or greater than 2.00 but less than 2.25, .18% per annum, and (d)
if the then applicable Leverage Ratio is greater than 2.25, .25% per
annum. The Applicable Facility Fee Rate shall change with each change in
the applicable Leverage Ratio, effective as of the effective date of the
change in the applicable Leverage Ratio, as specified under the definition
of Leverage Ratio.
"ASSETS" means real property assets.
"ASSIGNEE" shall have the meaning set forth in SECTION 11.6.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning set forth
in SECTION 11.6.
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the reasonable
allocated cost of internal legal services and all reasonable disbursements
of internal legal counsel.
"BANKING DAY" means any Monday, Tuesday, Wednesday, Thursday
or Friday on which banks (including the Banks) are open for business in
Hawaii.
"BANKS" means FHB, BofA, FNB, and California Bank & Trust and
the additional financial institutions (if any) from time to time party to
this Agreement, any of their successors and assigns (including any
Assignee), or any one or more of them.
"BONDING OBLIGATIONS" means the potential monetary liability
with respect to completion bonds, letters of credit or other similar
instruments that are required by insurance companies that issue completion
bonds, cities, counties, the California Department of Real Estate, sellers
of land or other
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governmental agencies in connection with the development of land, the
creation of residential communities and the construction of subdivisions
of Units, the terms of which shall be substantially similar to the
currently existing Bonding Obligations described on Schedule 1.5
attached hereto or otherwise specifically required by a Governmental
Authority.
"BORROWING" means each of the Loans to be made by the Banks to
the Company as provided in Article 3.
"BORROWING BASE" has the meaning set forth in SECTION 3.5(b).
"BORROWING BASE ASSETS" means those Assets which have been
included in the calculation of the Borrowing Base, including those Assets
described in SECTION 3.5(b) hereof.
"BORROWING BASE AVAILABILITY" means the difference, if
positive, between (a) the Borrowing Base and (b) the total principal
balance outstanding under the Loans plus the L/C Obligations.
"BORROWING BASE CERTIFICATE" means a written calculation of
the Borrowing Base substantially in the form of EXHIBIT "B" attached
hereto and made a part hereof, signed by a Responsible Official of the
Company and properly completed to provide all information required to be
included thereon.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law, in
each case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"CAPITALIZED LEASE OBLIGATIONS" means any obligations under a
lease that is required to be capitalized for financial reporting purposes
in accordance with GAAP.
"CASH" means, when used in connection with any Person, all
monetary and non-monetary items owned by that Person that are treated as
cash in accordance with GAAP.
"CASH EQUIVALENTS" means, when used in connection with any
Person, that Person's Investments in:
(a) Government Securities due within one year after
the
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date of the making of the Investment;
(b) readily marketable direct obligations of any State
of the United States of America or any political subdivision of any such
State or any public agency or instrumentality thereof given on the date of
such Investment a credit rating of at least Aa3 by ▇▇▇▇▇'▇ Investors
Service, Inc. or AA - by Standard & Poor's Rating Group (a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.), in each case due within one year from the making of
the Investment;
(c) certificates of deposit issued by, bank deposits in,
Eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by any Bank or any bank
incorporated under the Laws of the United States of America, any State
thereof or the District of Columbia and having on the date of such
Investment combined capital, surplus and undivided profits of at least
$250,000,000, in each case due within one year after the date of the
making of the Investment;
(d) certificates of deposit issued by, bank deposits in,
Eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by any Bank or any
branch or office located in the United States of America of a bank
incorporated under the Laws of any jurisdiction outside the United States
of America having on the date of such Investment combined capital, surplus
and undivided profits of at least $500,000,000, in each case due within
one year after the date of the making of the Investment;
(e) repurchase agreements covering Government Securities
executed by a broker or dealer registered under Section 15(b) of the
Securities Exchange Act of 1934, as amended, having on the date of the
Investment capital of at least $50,000,000, due within 90 days after the
date of the making of the Investment; PROVIDED that the maker of the
Investment receives written confirmation of the transfer to it of record
ownership of the Government Securities on the books of a "primary dealer"
in such Government Securities or on the books of such registered broker or
dealer, as soon as practicable after the making of the Investment;
(f) readily marketable commercial paper or other debt
securities issued by corporations doing business in and incorporated under
the Laws of the United States of America or any State thereof or of any
corporation that is the holding company for a bank described in clause (c)
or (d) above given on the date of such Investment a credit rating of at
least P-1 by Moody's
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Investors Service, Inc. or A-1 by Standard & Poor's Rating Group (a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc.), in each case due within one year after
the date of the making of the Investment;
(g) a readily redeemable "money market mutual fund"
sponsored by a bank described in clause (c) or (d) hereof, or a registered
broker or dealer described in clause (e) hereof, that has and maintains an
investment policy limiting its investments primarily to instruments of the
types described in clauses (a) through (g) hereof and given on the date of
such Investment a credit rating of at least Aa3 by ▇▇▇▇▇'▇ Investors
Service, Inc. and AA - by Standard & Poor's Rating Group (a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.); and
"CHANGE OF CONTROL" means at any time at which any Person
together with its Affiliates, other than ▇▇▇▇▇ ▇▇▇▇▇▇▇, his heirs, and
Apollo Real Estate Investment Fund, owns or controls more than 40% of the
Voting Stock of the Company.
"CLOSING DATE" means the date of this Agreement.
"CO-AGENT" means one or more of the Banks which are designated
in writing by the Agent to serve as Co-Agent hereunder (subject to SECTION
10.13 hereof).
"CODE" means the Internal Revenue Code, and regulations
promulgated thereunder.
"COMMITMENT" means, with respect to the Loans and each of the
Banks, the dollar amount and percentage obligation set forth on SCHEDULE
1.1(a) hereto. As Banks are added to this Agreement, or withdraw from this
Agreement, and assignments are made by the Banks in accordance with
SECTION 11.6 hereof, the amount of each Bank's Commitment shall change in
accordance with that Bank's Pro Rata Share of the Total Aggregate
Commitments. The Assignment and Acceptances executed by the added Banks,
and the records maintained by the Agent, shall be presumptive evidence of
each Bank's Commitment, as each such Bank's Commitment may change from
time to time in accordance with the terms of this Agreement.
"COMPANY" means ▇▇▇▇▇▇▇ Homes, Inc., a Delaware
corporation, and its successors and assigns.
"COMPLETED UNSOLD HOMES" means, as of any date, all Units
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(including Model Homes), for which construction has been "completed" less
than 180 days before such date, but for which there is in existence no
written Contract for Sale. Construction will be considered "completed"
when the temporary certificate of occupancy or the certificate of
occupancy has been issued. Notwithstanding the foregoing, Model Homes will
continue to be considered Completed Unsold Homes until the date which is
180 days after the last production unit in the particular real estate
project (for which such Model Home is used as a model) has been sold.
"COMPLETED UNSOLD HOMES OVER 180 DAYS" means, as of any date,
Completed Unsold Homes which have been completed 180 days or more before
such date. Notwithstanding the foregoing, Model Homes will not be
considered Completed Unsold Homes Over 180 Days until the date which is
180 days after the last production unit in the particular real estate
project (for which such Model Home is used as a model) has been sold.
"CONSOLIDATED INTEREST EXPENSE" means for any period, without
duplication, the aggregate amount of interest which, in accordance with
GAAP, would be included on an income statement for the Company and
consolidated Subsidiaries (excluding the Unrestricted Subsidiaries) on a
consolidated basis, whether expensed directly, or included as a component
of cost of goods sold, or allocated to joint ventures, or otherwise
(including, without limitation, imputed interest included on Capitalized
Lease Obligations, all commissions, discounts, and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing,
the net costs associated with Rate Hedging Obligations, amortization of
other financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount or premium, if any, and all
non-cash interest expense), plus the product of (i) cash dividends paid on
any preferred stock of the Company, times (ii) a fraction, the numerator
of which is one (1) and the denominator of which is one (1) minus the then
current effective aggregate federal, state and local tax rate of the
Company, expressed as a decimal.
"CONSOLIDATED INTEREST INCURRED" means for any period, without
duplication, the aggregate amount of interest which, in conformity with
GAAP, would be opposite the caption "interest expense" or any like caption
on an income statement for the Company and consolidated Subsidiaries
(excluding the Unrestricted Subsidiaries) or allocated to joint ventures,
or otherwise (including without limitation all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, the net costs associated with Rate Hedging
Obligations, and the interest portion of any
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deferred payment obligation) and, without duplication, all capitalized
interest for such period, all interest attributable to discontinued
operations for such period (excluding the Unrestricted Subsidiaries), and
all interest actually paid by the Company or any consolidated Subsidiary
(excluding the Unrestricted Subsidiaries) in each case, to the extent not
set forth on the income statement under the caption "interest expense" or
any like caption, plus the product of (i) cash dividends paid on any
preferred stock of the Company, times (ii) a fraction, the numerator of
which is one (1) and the denominator of which is one (1) minus the then
current effective aggregate federal, state and local tax rate of the
Company, expressed as a decimal.
"CONSOLIDATED LIABILITIES" means, as of any time of
determination, the sum of the following amounts without duplication:
(a) all liabilities and other obligations of the Company
and its consolidated Subsidiaries that, in conformity with GAAP, should be
included in determining total liabilities shown on the liability side of a
consolidated balance sheet of the Company and the consolidated
Subsidiaries, PLUS
(b) all letter of credit reimbursement obligations
of the Company and any consolidated Subsidiary with respect to
Financial Letters of Credit, PLUS
(c) all guaranties and Guaranty Obligations of the
Company or a consolidated Subsidiary, MINUS
(d) Cash and Cash Equivalents in an amount greater than
$10,000,000 owned by the Company and its consolidated Subsidiaries.
"CONSOLIDATED NET INCOME" means, for any period, the net
income of the Company and its Restricted Subsidiaries, determined in
accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means, as of any time of
determination, the sum of the following with respect to the Company and
the consolidated Subsidiaries determined and consolidated in conformity
with generally accepted accounting principles applied on a consistent
basis:
(1) the amount of stated capital (excluding the cost of
treasury shares), additional paid-in capital and retained earnings
(or, in the case of a deficit in additional paid-in capital or
retained earnings, MINUS the amount
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of the deficit), MINUS
(2) the carrying value of intangible assets, such as
deferred costs associated with goodwill, patents, franchises,
organizational expenses and the like (but EXCLUDING unamortized
finance costs, receivables, pre-paid expenses, the capitalized value
of leases and all costs that are specifically identifiable or are
identifiable on a rational and consistent basis with the unexpired
service value of tangible assets), AND MINUS
(3) any amounts which would otherwise be included in the
calculation of Consolidated Tangible Net Worth under subparagraph
(a) immediately above of this definition which pertain to or are
attributable to the Company's or any consolidated Subsidiary's
equity interest in any Unrestricted Subsidiary which is in default
with respect to the payment of any monetary obligations owing under
any land loan, acquisition and development loan, construction loan,
secured or unsecured credit facility, or any other loan or
indebtedness for borrowed money. Such amounts shall be net of
estimated income tax benefits to be realized upon write-off of such
amounts.
"CONTRACT FOR SALE" means a sale and purchase agreement
between the Company or its Subsidiaries and an unrelated third party
purchaser, who has made an ▇▇▇▇▇▇▇ money deposit of not less than $250.00
and who has been pre-qualified by the Company, its Subsidiaries or an
institutional lender; PROVIDED, that such agreement shall not contain any
contingency clause other than a clause conditioning such purchaser's
obligation upon the sale of such purchaser's property.
"CONTRACTED HOMES" means all Units (including Model Homes) on
which a building permit has been issued and construction has begun or has
been completed, and for which the Company or its Subsidiaries has entered
into a written Contract for Sale.
"CONTROLLED SUBSIDIARY" means (i) any corporation of which at
least a majority of the outstanding securities of any class or classes
(however designated) having ordinary voting power to elect directors of
the corporation is owned by the Company and/or by one or more than one
other Controlled Subsidiary, and (ii) any partnership, joint venture or
limited liability company in which the Company and/or any Controlled
Subsidiary owns at least a majority interest and over which the Company
and/or any Controlled Subsidiary exercises a degree of control sufficient
to require the consolidation under GAAP of the results of operations of
such Person with the results of operations of the Company for financial
reporting purposes.
"COUNTRY CLUB VILLAGE" means the Country Club Village
condominium project, Phases I through VI, located in Salt Lake, Oahu,
Hawaii, which is being developed, or which is to be developed, by the
Company.
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"COUNTRY CLUB VILLAGE SUBORDINATE MORTGAGE" means the
Subordinate Mortgage, Security Agreement and Financing Statement dated
February 9, 1993, filed in the Office of the Assistant Registrar of the
Land Court of the State of Hawaii as Document No. 1996140, as amended by
Amended and Restated Subordinate Mortgage, Security Agreement and
Financing Statement dated April 17, 1994, filed in said office as Document
No. 2149634, in favor of HCI (America) Inc., which includes Lots 3878 and
3879 in Country Club Village.
"CONVERTIBLE SUBORDINATED NOTES" means the 6 1/2% Convertible
Subordinated Debentures due 2003 in the principal amount of $57,500,000
issued by the Company.
"DEFAULT RATE" means a fluctuating per annum interest rate at
all times equal to the sum of (a) the otherwise applicable interest rate
PLUS (b) two (2%). Each Default Rate shall be adjusted simultaneously with
any change in the applicable Interest Rate. In addition, with respect to
Letters of Credit, the Default Rate shall mean an increase in the Letter
of Credit Fee by two percentage points.
"DESIGNATED MARKET" means with respect to any LIBOR Borrowing,
the London interbank market for deposits in Dollars or such other
interbank LIBOR market as may be designated in writing from time to time
by the Agent.
"DOLLARS" or "$" means United States dollars.
"EBITDA" means, for any period, without duplication, (a) the
sum of the following amounts attributable to such period and calculated on
a consolidated basis for the Company and its Restricted Subsidiaries: (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) charges
against income for all federal, state and local taxes, (iv) depreciation
expense, (v) amortization expense, (vi) other non-cash charges and
expenses (including non-cash charges resulting from accounting changes),
(vii) cash distributions to the Company or a Restricted Subsidiary of
income earned by an Unrestricted Subsidiary, (viii) amortization of
capitalized interest included in cost of sales, and (ix) any non-cash
losses arising outside of the ordinary course of business which have been
included in the determination of Consolidated Net Income, less (b) any
gains arising outside the ordinary course of business which have been
included in the determination of Consolidated Net Income, determined on a
consolidated basis for the Company and its Restricted Subsidiaries.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000, (ii) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"), or
a political subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States, and (iii) a
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Person that is primarily engaged in the business of commercial banking and
that is (A) a Subsidiary of a Bank, (B) a Subsidiary of a Person of which
a Bank is a Subsidiary, or (C) a Person of which a Bank is a Subsidiary.
"ENTITLED LAND" means all land owned by the Company or its
Subsidiaries as part of their respective real estate development business,
which does have all requisite residential zoning for the construction of
Units and the provision of potable water, sewage and other utilities
available to the boundary of such land.
"ERISA" means the Employee Retirement Income Security Act of
1974, and any regulations issued pursuant thereto, as now or from time to
time hereafter in effect.
"EVENTS OF DEFAULT" has the meaning set forth for that term in
SECTION 9.1.
"EXTENSION REQUEST" means a written request from the Company
to extend the Maturity Date pursuant to SECTION 4.18.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal functions.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Banking Day opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Banking Day, the rate for such
day will be the arithmetic mean as determined by the Agent of the rates
for the last transaction in overnight Federal funds arranged prior to 9:00
a.m. (New York City time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Agent.
"FINANCIAL LETTERS OF CREDIT" means any standby letters of
credit covering the potential default of a financial contractual
obligation, and includes without limitation all letters of credit required
to be classified as such by the Federal Reserve Board or by the Office of
the Comptroller of the Currency.
"FINISHED LOTS" means lots of Entitled Land as to which
offsite construction has been substantially completed, utilities and all
major infrastructure have been completed and stubbed to the site, and
building permits for Units may be promptly pulled and construction
commenced by the Company without the satisfaction of any further
conditions.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its principal
functions.
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"GAAP" means generally accepted accounting principals.
"GAAP VALUE" means, with respect each Asset, the GAAP basis
asset value for such property or asset (but in no event greater than cost
minus accumulated depreciation). In determining GAAP Value, costs for
Land/Lots Under Development and Unimproved Land shall include land costs
and costs associated with obtaining requisite zoning requirements and
governmental approvals, capitalized expenses associated with pulling
permits and the commencement of physical site improvement; and costs for
Finished Lots and Unsold Units shall include the proportional costs of (a)
the land per lot/unit, and (b) the site improvements and soft and hard
costs incurred; and the cost of any land which is subject to a purchase
option shall be excluded until the Company or the Restricted Subsidiary
has acquired title.
"GOVERNMENT SECURITIES" means readily marketable direct
obligations of the United States of America or obligations fully
guaranteed by the United States of America.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government, and any corporation or other entity owned
or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"GUARANTOR" means, collectively, the Persons identified in
SCHEDULE 1.1(b), and each other Person that from time to time executes a
Guaranty in favor of the Banks (or the Agent for the benefit of the Banks)
with respect to the Loans, and their successors and assigns.
"GUARANTY" means a continuing guaranty, substantially in the
form of EXHIBIT "D" attached hereto, either as originally executed or as
it may from time to time be supplemented, modified, amended, restated or
extended, to be executed and delivered by a Guarantor to the Agent for the
benefit of the Banks.
"GUARANTY OBLIGATION" means, as applied to any Person, any
direct or indirect liability of that Person with respect to any
Indebtedness, lease, dividend, letter of credit or other obligation (the
"primary obligations") of another Person (the "primary obligor"),
including any obligation of that Person, whether or not contingent (a) to
purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, or (b) to
advance or provide (i) for the payment or discharge of any such primary
obligation, or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition
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of the primary obligor, or (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold
harmless the holder of any such primary obligation against loss in
respect thereof; in each case (a), (b), (c) or (d), including
arrangements wherein the rights and remedies of the holder of the
primary obligation are limited to repossession or sale of certain
property of such Person. The amount of any Guaranty Obligation shall be
deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if
not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof.
"INDEBTEDNESS" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services; (c) all reimbursement or payment obligations with respect to
Surety Instruments; (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or
businesses; (e) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in
either case with respect to property acquired by the Person (even though
the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property);
(f) all obligations with respect to capital leases; (g) all Rate Hedging
Obligations; (h) all indebtedness referred to in clauses (a) through (g)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including accounts and contracts rights, but excluding
Liens securing profit participations, price participations, marketing
fees, repurchase options or other similar performance based contingent
obligations (collectively, "Liens Securing Performance Obligations") owned
by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness; and (i) all guaranty and surety
obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (g) above; PROVIDED, HOWEVER,
"Indebtedness" shall not include indemnities and guarantees of
performance, such as construction completion guarantees, environmental
indemnities and non-recourse carve-out guarantees that are given in
connection with a project until such time as any of such obligations
become quantified as the result of a judgment, settlement or other
agreement.
"INTEREST DIFFERENTIAL" means with respect to any prepayment
or redesignation of a LIBOR Borrowing on a day other than the last day of
the applicable LIBOR Period, the amount (if any) by which (a) the amount
of interest that would have accrued on such LIBOR Borrowing for the
remainder of the applicable LIBOR Period exceeds (b) the amount of
interest that would accrue on such LIBOR Borrowing for the period from the
date of prepayment or redesignation of such LIBOR Borrowing to the last
day of the applicable LIBOR Period for such LIBOR Borrowing if the LIBOR
Rate applicable to such LIBOR Borrowing (the "Applicable Rate") were
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determined two (2) LIBOR Banking Days prior to the date of prepayment or
redesignation of such LIBOR Borrowing. The period commencing on the date
of such prepayment and ending on the last day of the applicable LIBOR
Period shall be deemed to be the "LIBOR Period" for determination of such
Applicable Rate. The calculation of the Interest Differential by the Agent
shall be conclusive in the absence of manifest error.
"INTEREST PAYMENT DATE" means (a) with respect to each
Reference Rate Borrowing, the first day of any month, and (b) with respect
to each LIBOR Borrowing, the first day of any month.
"INVESTMENT" means (a) any investment by the Company or any
Subsidiary in any joint venture, partnership, corporation, limited
liability company or other entity, whether by acquisition of stock or
debt, or by loan (or other extension of credit), advance, transfer of
property out of the ordinary course of business, capital contribution,
payment pursuant to a guaranty or any other contingent liability of the
Company in respect of liabilities of such entity, or otherwise, and (b)
any investment in, or payment or expenditure with respect to, any Asset
(or other property) or business venture.
"ISSUING BANK" means any Bank or any Affiliate of any Bank
which issues Letters of Credit under this Agreement.
"LAWS" means, collectively, all international, foreign,
federal, state and local laws, statutes, treaties, rules, regulations,
ordinances, codes, administrative or judicial precedents and
determinations of an arbitrator or Governmental Authority.
"LAND/LOTS UNDER DEVELOPMENT" means Entitled Land on which
grading or construction of on-site infrastructure improvements has begun,
and for which all necessary zoning approvals have been obtained and are in
full force and effect, and which does not qualify as a Contracted Home or
an Unsold Home Under Construction.
"L/C APPLICATION" has the meaning set forth in SECTION 3.9.3.
"L/C COMMITMENT" has the meaning set forth in SECTION 3.9.1.
"L/C COMMITMENT TERMINATION DATE" has the meaning set forth in
SECTION 3.9.1.
"L/C OBLIGATIONS" has the meaning set forth in SECTION 3.9.1.
"LENDING OFFICE" means, as to each Bank, the office located at
the address for notices specified for such Bank on the signature pages
hereof.
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"LETTERS OF CREDIT" has the meaning set forth in SECTION
3.9.2(a).
"LEVERAGE RATIO" has the meaning set forth in SECTION 8.2. As
of the date of this Agreement, the applicable Leverage Ratio is 1.89 to
1.0 (the "initial Leverage Ratio") (calculated as of March 31, 2001).
Following the date of this Agreement, the Leverage Ratio shall be
calculated by the Company as of the last day of each calendar quarter
(I.E., March 31, June 30, September 30 and December 31), and the Company
shall deliver such calculation to the Agent within 45 days of the end of
each calendar quarter. The initial Leverage Ratio and any subsequent
Leverage Ratio in effect from time to time under this Agreement shall
continue to be applicable for all purposes of this Agreement until the
applicable Leverage Ratio changes in accordance with the following
provisions. If the Leverage Ratio, calculated as of the last day of any
calendar quarter, is different from the Leverage Ratio then in effect
under this Agreement, the newly applicable Leverage Ratio (which shall be
the Leverage Ratio as of the last day of such calendar quarter) shall be
effective for all purposes of this Agreement (including the calculation of
the applicable LIBOR Rate Spread and the Applicable Facility Fee Rate)
five (5) Banking Days following the date the calculation was delivered by
the Company to the Agent.
"LEVERAGE RATIO CURE PERIOD" has the meaning set forth in
Section 8.2.
"LIBOR BANKING DAY" means any Banking Day on which banks are
open for business (including with respect to dealings between banks in
United States Dollar deposits) in the Designated Market.
"LIBOR BORROWING" means any Loan or portion thereof designated
or redesignated by the Company as a LIBOR Borrowing pursuant to Article 3.
"LIBOR LENDING OFFICE" means the office or branch of each Bank
so designated on the signature pages of this Agreement, or such other
office or branch of each Bank as it may hereafter designate, by written
notice to the Company and the Agent, as its LIBOR Lending Office.
"LIBOR PERIOD" means, as to each LIBOR Borrowing, the period
commencing on the date specified in the applicable Request for Borrowing
or Request for Redesignation of Borrowing by the Company pursuant to
SECTIONS 3.3 OR 3.4 and ending one month, two months, three months or six
months thereafter, as designated by the Company in the applicable Request
for Borrowing or Request for Redesignation of Borrowing, PROVIDED that:
(2) the first day in any LIBOR Period shall be a
LIBOR Banking Day;
(a) any LIBOR Period that would otherwise end on a day
that is not a LIBOR Banking Day shall be extended to the next
succeeding
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LIBOR Banking Day UNLESS such LIBOR Banking Day falls in another
calendar month, in which case such LIBOR Period shall end on the
next preceding LIBOR Banking Day; and
(b) No LIBOR Period shall extend beyond the
Maturity Date.
"LIBOR RATE" means, for any LIBOR Period for any LIBOR
Borrowing, the rate (rounded upward, if necessary, to the next 1/100 of
1%) determined solely by the Agent for a period of time comparable to the
number of days in the applicable LIBOR Period for deposits in United
States Dollars, as shown on Telerate Page 3750 as of 11:00 a.m. London
time two (2) LIBOR Banking Days prior to the first day of the applicable
LIBOR Period, or if Telerate Page 3750 is unavailable, the rate for such
deposits determined by the Agent at such time based on such other
published service of general application as shall be selected by the Agent
for such purpose. The determination of the LIBOR Rate by the Agent shall
be conclusive in the absence of manifest error. "Telerate Page 3750" means
the display designated as such on Teleratesystem Incorporated (or such
other page as may replace page 3750 on that service for the purpose of
displaying London interbank offered rates of major banks for United States
Dollar deposits).
"LIBOR RATE SPREAD" means the additional component of
interest, expressed as a percentage per annum, to be added to the LIBOR
Rate in determining the applicable rate of interest for LIBOR Borrowings.
Subject to the next sentence, the applicable LIBOR Rate Spread shall be
based on the Company's then effective Leverage Ratio, in accordance with
the following pricing grid:
Leverage Ratio Applicable LIBOR Rate Spread
-------------- ----------------------------
[LESS THAN] 1.75 1.75%
[GREATER THAN OR EQUAL TO] 1.75 through [LESS THAN] 2.00 2.00%
[GREATER THAN OR EQUAL TO] 2.00 through [LESS THAN] 2.25 2.25%
[GREATER THAN OR EQUAL TO] 2.25 2.50%
From the date of this Agreement, through December 31, 2001,
the applicable LIBOR Rate Spread for the Loans shall be 2.00%. Except as
provided in the preceding sentence, the applicable LIBOR Rate Spread shall
change with each change in the applicable Leverage Ratio, effective as of
the effective date of the change in the applicable Leverage Ratio, as
specified under the definition of Leverage Ratio.
"LIEN" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of any
kind or nature whatsoever in respect of any property (including those
created by, arising under or evidenced by any conditional sale or other
title retention agreement, the interest of a lessor under a
-15-
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and
any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease.
"LOAN" or "LOANS" means each of the loans (including the Swing
Line Advances) and Borrowings under this Agreement.
"LOAN DOCUMENTS" means, collectively, this Agreement, each
Note, the Guaranty and any future Guaranties.
"MAJORITY BANKS" means, at any time, Banks then holding at
least 66 2/3% of the then aggregate unpaid principal amount of the Loans,
or, if no such principal amount is then outstanding, Banks then having at
least 66 2/3% of the Total Aggregate Commitment.
"MATERIAL" means, in connection with the Company, its
Subsidiaries, and the Loans and the Loan Documents, such circumstances or
facts which the Banks in the exercise of their discretion could reasonably
be expected to rely upon in determining whether to enter into or to
continue lending under this Agreement or which could reasonably be
expected to have a bearing on any actions undertaken by the Banks. Such
Material circumstances or facts shall include, without limitation, such
circumstances or facts as would materially alter, enlarge, restrict or
otherwise affect the rights and liabilities otherwise existing between the
parties to the Agreement or any other Loan Document.
"MATURITY DATE" means June 28, 2004, subject to possible
extension pursuant to SECTION 4.18 (other than with respect to a Note held
by a Bank which does not extend the maturity date of such Note pursuant to
SECTION 4.18, in which case the applicable Maturity Date for such Note
held by such non-renewing Bank shall be the Non-Renewing Bank Loan
Maturity Date).
"MODEL HOMES" means all Units which are used as models or
sales offices to market a particular real estate development project.
"MORTGAGE AND INSURANCE SUBSIDIARIES" means those Subsidiaries
described on Schedule 1.1(d) hereto and such other Wholly Owned
Subsidiaries that are from time to time created and which engage in the
mortgage and insurance business.
"NET WORKING CAPITAL" means the sum of (A) the lesser of (i)
the Undrawn Commitment or (ii) the Borrowing Base Availability, PLUS (B)
Cash and Cash Equivalents owned by the Company and the Restricted
Subsidiaries PLUS (C) amounts due to the Company and the Restricted
Subsidiaries from title companies
-16-
within the next ten (10) days, LESS (D) all accounts payable owed by
the Company and the Restricted Subsidiaries and LESS (E) customer
deposits held by the Company and the Restricted Subsidiaries.
"NON-RENEWING BANK LOAN MATURITY DATE" means the maturity date
of the Note held by a Bank which does not extend such maturity date in
response to a request for such extension by the Company pursuant to
SECTION 4.18.
"NON-WHOLLY OWNED SUBSIDIARY" means a Subsidiary, less than
100% of the capital stock of which (including voting and non-voting
shares, but exclusive of directors' qualifying shares) is owned by the
Company and its Wholly Owned Subsidiaries.
"NOTE" means each of the promissory notes, substantially in
the form of EXHIBIT "A" attached hereto and made a part hereof, executed
by the Company in favor of the Banks, each to the order of the applicable
Bank as payee to evidence such Bank's share of the Loans, and each in the
original principal amount of the applicable Bank's Commitment such that
the aggregate original principal amount of all Notes is initially
$225,000,000; as originally executed or as the same may from time to time
be supplemented, modified, amended, renewed, extended or refinanced (and
any promissory note that may be issued in substitution or exchange
therefor).
"OBLIGATIONS" means all obligations of every nature of the
Company from time to time owed to the Banks under the Loan Documents.
"OPINION OF COUNSEL" means the favorable written legal opinion
of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, as counsel to the Company and the
Subsidiaries, substantially in the form of EXHIBIT "F" attached hereto,
together with copies of all factual certificates and legal opinions upon
which such counsel has relied.
"OTHER TAXES" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
or any other Loan Documents.
"PARTICIPANT" shall have the meaning set forth in SECTION
11.6.
"PARTICIPATING EQUITY LOAN" means a nonrecourse shared
appreciation loan made by a third party lender to an Unrestricted
Subsidiary, as borrower, which pursuant to its terms provides that, among
other things, the lender thereunder will be paid a portion of the profit,
interest based upon the profit obtained from the sale of certain Units
and/or land or a certain internal rate of return, and in a principal
amount, with a stated rate of interest and with other terms satisfactory
to such Unrestricted Subsidiary and in a form and containing terms
reasonably acceptable to the Agent. The outstanding Participating Equity
Loans as of the Closing Date are described on
-17-
Schedule 1.6.
"PERFORMANCE LETTERS OF CREDIT" means standby letters of
credit used directly or indirectly to cover bid, performance, advance and
retention obligations, including, without limitation, letters of credit
issued in favor of sureties who in connection therewith cover the bid,
performance and retention obligations.
"PERMITTED BUSINESS ACTIVITIES" means the residential real
property acquisition, development, operation, and sales activities of the
types set forth in SCHEDULE 1.1(c) hereto.
"PERMITTED INDEBTEDNESS" means:
(1) the Country Club Village Subordinate Mortgage;
(2) the existing Indebtedness and obligations of the
Company as a joint venture partner in Iao Partners (including
any Indebtedness of Iao Partners for which there is recourse
to the Company);
(3) Convertible Subordinated Notes;
(4) Indebtedness, not to exceed $25,000,000 in the
aggregate, created or arising under a conditional sale or
other title retention agreement, or incurred as purchase money
financing, with respect to property acquired by the Company or
any Restricted Subsidiaries; provided that the rights and
remedies of the seller under such agreement in the event of
default are limited to foreclosure of such property, the
receipt of funds placed in escrow for payment to such seller
in the event of default or any other non-recourse remedy
relating solely to the subject property;
(5) Indebtedness to the extent incurred upon the
endorsement of an instrument in order to negotiate the same,
and for taxes, assessments, governmental charges, or levies to
the extent that payment thereof shall not at the time be
required to be made;
(6) The ▇▇▇▇▇▇ Debt in an amount not to exceed
$6,500,000;
(7) Guaranty Obligations incurred with respect to
Bonding Obligations (less the value of completed work) in
connection with the Company's or any Restricted Subsidiaries'
real estate development businesses in an aggregate amount not
to exceed 60% of Consolidated Tangible Net Worth;
-18-
(8) Indebtedness in respect of the Commitments
hereunder;
(9) The Senior Notes and Guaranty Obligations of
Restricted Subsidiaries in respect thereof;
(10) The Senior Subordinated Notes in an amount not to
exceed $150,000,000 and Guaranty Obligations of Restricted
Subsidiaries in respect thereof;
(11) Guaranty Obligations in an amount not to exceed
$25,000,000 in the aggregate with respect to Unrestricted
Subsidiary Financing;
(12) The obligations arising from letters of credit
(other than Letters of Credit issued pursuant to this
Agreement) which are issued for the benefit of third parties
in an amount not to exceed $25,000,000 in the aggregate;
(13) Guaranty Obligations of the Company for the
benefit of the Restricted Subsidiaries and Guaranty
Obligations of the Restricted Subsidiaries for the benefit
of the Company;
(14) Trade debt incurred in the ordinary course of
Permitted Business Activities;
(15) Rate Hedging Obligations;
(16) Indebtedness not to exceed $10,000,000 for
other unsecured Indebtedness.
"PERMITTED INVESTMENTS" means
(1) (i) Direct Investments by the Company (and not in or
through Unrestricted Subsidiaries, except as permitted in
subparagraph (c) below of this definition) in Permitted Business
Activities within Permitted Markets, (ii) direct Investments by
Restricted Subsidiaries (and not in or through Unrestricted
Subsidiaries, except as permitted in subparagraph (c) below of this
definition) in Permitted Business Activities within Permitted
Markets, and (iii) Investments by the Company and by Restricted
Subsidiaries in Restricted Subsidiaries which conduct Permitted
Business Activities within Permitted Markets.
(2) Investments in Cash Equivalents;
(3) Investments in Unrestricted Subsidiaries, PROVIDED
the
-19-
aggregate book value of all such Investments by the Company and
all Restricted Subsidiaries, plus the loans and advances made to
such Unrestricted Subsidiaries, does not exceed the lesser of (1)
10% of Consolidated Tangible Net Worth or (2) $50,000,000, and,
PROVIDED FURTHER that no more than the lesser of (A) 5% of
Consolidated Tangible Net Worth or (B) $25,000,000 of such
Investments, loans and advances may be made to Unrestricted
Subsidiaries over which the Borrower does not maintain managerial
control;
(4) Loan receivables from the sale of Real Estate
Inventory (including Model Homes, but excluding Unentitled Land) not
to exceed at any one time outstanding the lesser of (1) 10% of
Consolidated Tangible Net Worth or (2) $40,000,000;
(5) Other Investments not to exceed $10,000,000 at
any one time outstanding less the amount of the ▇▇▇▇▇▇ Investment;
(6) Extensions of credit to employees in the ordinary
course of business, not to exceed $5,000,000 at any one time
outstanding.
"PERMITTED MARKETS" means the United States of America and
each political subdivision thereof.
"PERSON" means any entity, whether an individual, trustee,
corporation, general partnership, limited partnership, limited liability
company, joint stock company, trust, unincorporated organization, bank,
business association, firm, joint venture, Governmental Authority or
otherwise.
"PLAN" means any employee benefit plan subject to ERISA and
maintained by the Company and/or any Subsidiary or to which the Company
and/or any Subsidiary is required to contribute on behalf of its
employees.
"PRO RATA SHARE" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place as determined by the Agent) at such time of such Bank's
Commitment divided by the Total Aggregate Commitment.
"QUARTER" means any one of the following three-calendar-month
periods in any calendar year: April 1 through June 30; July 1 through
September 30; October 1 through December 31; and January 1 through March
31.
"RATE HEDGING OBLIGATIONS" means, for any Person, the net
obligations of such Person pursuant to any interest rate hedging agreement
or any foreign exchange contract, currency swap agreement or other similar
agreement to which such Person is a party or a beneficiary.
-20-
"REAL ESTATE INVENTORY" means Entitled Land, Unentitled Land,
Undeveloped Land, Land/Lots Under Development, Unsold Homes Under
Construction, Completed Unsold Homes, Completed Unsold Homes Over 180
Days, and Contracted Homes owned by the Company and its Restricted
Subsidiaries.
"REFERENCE RATE" means the rate of interest publicly announced
from time to time by FHB, as its prime rate. It is a rate set by FHB based
upon various factors including FHB's costs and desired return, general
economic conditions, and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such
announced rate. Any change in the Reference Rate shall take effect on the
day specified in the public announcement of such change.
"REFERENCE RATE BORROWING" means any Loan or portion thereof
which is not designated or redesignated by the Company as a LIBOR
Borrowing pursuant to SECTIONS 3.3 OR 3.4.
"REFERENCE RATE SPREAD" means the additional component of
interest, expressed as a percentage per annum, to be added to the
Reference Rate in determining the applicable rate of interest for
Reference Rate Borrowings. The applicable Reference Rate Spread shall be
based on the Company's then effective Leverage Ratio, in accordance with
the following pricing grid:
Leverage Ratio Applicable Reference Rate Spread
-------------- --------------------------------
[less than] 1.75 0.00%
[greater than] 1.75 through [less than] 2.00 0.00%
[greater than] 2.00 through [less than] 2.25 0.25%
[greater than] 2.25 0.50%
As of the date of this Agreement, the applicable Leverage
Ratio is currently 1.89 to 1.0 and the applicable Reference Rate Spread
for the Loans as of the date of this Agreement is therefore 0%. The
applicable Reference Rate Spread shall change with each change in the
applicable Leverage Ratio, effective as of the effective date of the
change in the applicable Leverage Ratio, as specified under the definition
of the Leverage Ratio.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System as now or from time to time hereafter in effect
and any other regulation issued in substitution therefor.
"▇▇▇▇▇▇ DEBT" means the indebtedness owed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
individually and as Trustee of the T. and ▇. ▇▇▇▇▇▇ Revocable Trust dated
December 15, 1989, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, individually and as Trustee of the
▇▇▇▇▇▇ Living Trust dated April 19, 1988 (collectively, "▇▇▇▇▇▇"),
pursuant to that certain letter agreement dated September 11, 2000, as
amended on January 10, 2001 and the Promissory Note of ▇▇▇▇▇▇▇ Homes,
Inc., formerly known as ▇▇▇▇▇▇▇ Holdings, Inc.,
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dated as of April 3, 2001, in the principal amount of $6,500,000.
"▇▇▇▇▇▇ INVESTMENT" means the loan receivable from ▇▇▇▇▇▇
pursuant to that certain promissory note dated July 22, 1999, in the
original principal amount of $4,810,000, payable to ▇▇▇▇▇▇▇ Homes of
California, Inc., which will be setoff against the Company's obligation to
▇▇▇▇▇▇ pursuant to the ▇▇▇▇▇▇ Debt.
"REQUEST FOR BORROWING" means a written request for a
Borrowing substantially in the form of EXHIBIT "C" attached hereto, signed
by a Responsible Official of the Company and properly completed to provide
all information required to be included thereon.
"REQUEST FOR LETTER OF CREDIT" means a written request for a
Letter of Credit substantially in the form of EXHIBIT "C" attached hereto,
signed by a Responsible Official of the Company and properly completed to
provide all information required to be included thereon.
"REQUEST FOR REDESIGNATION OF BORROWING" means a written
request for redesignation of Borrowing substantially in the form of
EXHIBIT "C" attached hereto, signed by a Responsible Official of the
Company and properly completed to provide all information required to be
included thereon.
"REQUIREMENT OF LAW" means, as to any Person, any Law
applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.
"RESPONSIBLE OFFICIAL" means: (a) when used with reference to
a Person other than an individual, any corporate officer of such Person,
general partner of such Person, corporate officer of a corporate general
partner of such Person, or corporate officer of a corporate general
partner of a partnership that is a general partner of such Person, or any
other responsible official thereof duly acting on behalf thereof, and (b)
when used with reference to a Person who is an individual, such Person.
Any document or certificate hereunder that is signed or executed by a
Responsible Official of another Person shall be conclusively presumed to
have been authorized by all necessary corporate, partnership and/or other
action on the part of such other Person.
"RESTRICTED SUBSIDIARY" means a Wholly Owned Subsidiary who is
also a Guarantor.
"SENIOR DEBT" means, at any time of determination thereof, all
indebtedness with respect to (i) the Loans and L/C Obligations, (ii) any
other senior indebtedness of the Company to any Banks, and (iii) such
other indebtedness for borrowed money senior to or ranking in equal
priority to the Obligations.
"SENIOR NOTES" mean the 9% senior notes in the principal
amount of $100,000,000 maturing April 15, 2008 issued by the Company and
the 9 3/8% senior
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notes maturing 2009, in the principal amount of US$250,000,000 issued by
the Company, and all increases thereto and all extensions thereof.
"SENIOR SUBORDINATED NOTES" mean the 10 1/2% subordinated
notes in the principal amount of $150,000,000 maturing 2011 issued by the
Company and all increases thereto and all extensions thereof.
"SPECIAL CIRCUMSTANCE" means the adoption of any Law or
interpretation, or any change therein or thereof, or any change in the
interpretation, administration or application thereof by any Governmental
Authority, central bank or comparable authority, or change in manner of
compliance by the Banks or their LIBOR Lending Offices with any request or
directive (whether or not having the force of Law) of any Governmental
Authority, central bank or comparable authority, in any case occurring
after the Closing Date, or the occurrence of circumstances affecting the
applicable certificate of deposit market or London interbank eurodollar
market generally which are beyond the reasonable control of the Banks.
"SUBORDINATED DEBT" means such indebtedness of the Company as
is fully subordinated to the Obligations and includes the Senior
Subordinated Notes and the Convertible Subordinated Notes.
"SUBSIDIARY" means (i) any corporation in which the Company
and/or any Subsidiary has an equity Investment, and (ii) any partnership,
joint venture, limited liability company or other entity in which the
Company and/or any Subsidiary has an equity Investment.
"SURETY INSTRUMENTS" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside
bonds, surety bonds and similar instruments.
"SWING LINE ADVANCES" means Borrowings initially funded by FHB
in the manner provided in SECTION 3.1(h).
"SYNDICATION AGENTS" means BofA and FNB who are designated to
serve as Syndication Agents hereunder (subject to SECTION 10.13 hereof).
"TAXES" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank and the Agent, such
taxes (including income taxes or franchise taxes) as are imposed on or
measured by each Bank's net income.
"TOTAL AGGREGATE COMMITMENT" means the total aggregate
combined Commitments of the Banks. The Total Aggregate Commitment
currently equals $225,000,000, and may increase as provided in SECTION
3.10 or decrease as provided in SECTION 4.18.
-23-
"TOTAL BORROWING BASE INDEBTEDNESS" means, subject to the
limitations specified below (a) the aggregate of all Senior Debt, (b) all
amounts outstanding under the Convertible Subordinated Notes, (c) all
amounts due and payable within 12 months under the Senior Subordinated
Notes, (d) all amounts outstanding under the Senior Notes, (e) the
obligations of the Company and the Restricted Subsidiaries arising from
letters of credit (other than Letters of Credit issued pursuant to this
Agreement) which are issued for the benefit of third parties, (f) the
▇▇▇▇▇▇ Debt (net of the ▇▇▇▇▇▇ Investment), (g) indebtedness described in
clause (xvi) of the definition of Permitted Indebtedness, and (h) trade
debt of the Company and the Restricted Subsidiaries which is 90 days or
more past due; PROVIDED, HOWEVER, "Total Borrowing Base Indebtedness"
shall NOT include (i) the principal amount of the Senior Subordinated
Notes which are due and payable more than 12 months from the date of
calculation, and (ii) Performance Letters of Credit.
"UNDEVELOPED LAND" means Unentitled Land, or Entitled Land as
to which no significant physical site improvement has commenced and is
ongoing (or has been completed).
"UNDRAWN COMMITMENT" means the difference, if positive,
between (a) the Total Aggregate Commitment, and (b) the total principal
balance outstanding under the Loans plus the L/C Obligations.
"UNENCUMBERED REAL ESTATE INVENTORY" means Real Estate
Inventory which is not subject to or encumbered by any deed of trust,
mortgage, judgment lien, attachment lien or any other lien (other than
liens which are permitted under SECTION 8.14).
"UNENTITLED LAND" means all land which is not Entitled Land.
"UNIMPROVED LAND" means all Entitled Land on which no
construction of on-site infrastructure improvements has begun.
"UNIT" means a single family residential unit, including a
condominium and townhouse unit and a one-to-four family detached
residence.
"UNRESTRICTED SUBSIDIARY FINANCING" means all indebtedness
owing by Unrestricted Subsidiaries.
"UNRESTRICTED SUBSIDIARY" means a Subsidiary that is NOT a
Restricted Subsidiary.
"UNSOLD HOMES UNDER CONSTRUCTION" means all Units for which
building permits have been issued and construction has commenced, but not
completed, and for which there is no written binding contract of sale with
an unrelated
-24-
third party purchaser. Construction will be considered to have
"commenced" when the slab or foundation for the condominium building or
one-to-four family residence has been completed.
"UNSOLD UNITS" means Unsold Homes Under Construction,
Completed Unsold Homes, and Completed Unsold Homes over 180 days.
"VOTING STOCK" means any class or classes of securities having
voting power to elect the directors of a corporation.
"WHOLLY OWNED SUBSIDIARY" means a Subsidiary, 100% of the
capital stock of which (including voting and non-voting shares, but
exclusive of director's qualifying shares) is owned by the Company and its
Subsidiaries (other than Non-Wholly Owned Subsidiaries).
1.2 USE OF DEFINED TERMS. Any defined term used in the plural shall
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any of the members of the relevant class.
1.3 ACCOUNTING TERMS. All accounting terms not specifically defined
in this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
generally accepted accounting principles applied on a consistent basis.
1.4 OTHER INTERPRETIVE PROVISIONS.
(1) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular
provision of this Agreement; and subsection, subparagraph, Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(2) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) The term "property" includes any kind of property
or asset, real, personal or mixed, tangible or intangible.
(3) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the
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terms of any Loan Document, and (ii) references to any statute or
regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
(4) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and shall each be performed in accordance with their terms.
(5) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Company and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks or the Agent
merely because of the Agent's or Banks' involvement in their preparation;
but rather shall be construed and interpreted in accordance with their
fair meaning.
1.5 EXHIBITS. All exhibits to this Agreement, either as now existing
or as the same may from time to time be supplemented, modified or amended, are
incorporated herein by this reference.
ARTICLE 2: RECITALS.
This Agreement is made with reference to the following facts:
(1) The Company is primarily engaged in Permitted Business
Activities within the Permitted Markets.
(2) The Company has applied to the Banks for the Loans to
finance Permitted Business Activities within the Permitted Markets.
(3) The Banks are willing to make the Loans to the Company on
the terms and conditions set forth in this Agreement and in the other Loan
Documents.
ARTICLE 3: BORROWING PROCEDURES AND LETTER OF CREDIT SUBLIMIT.
3.1 DISBURSEMENT OF LOAN PROCEEDS.
(1) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through
the Banking Day immediately preceding the Maturity Date (or, in the case
of a non-renewing Bank under SECTION 4.18, the Non-Renewing Bank Loan
Maturity Date), each Bank shall, according to its Pro Rata Share, make
Loans to the Company in such amounts as the Company may request that do
not exceed in the aggregate at any one time outstanding, the Commitment of
such Bank. The aggregate amount of each Bank's obligation to make Loans,
together with such Bank's share of L/C Obligation shall not exceed at any
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time the amount set forth opposite such Bank's name in SCHEDULE 1.1(a)
under the heading "Commitment" (such amount, as the same may be reduced
pursuant to the terms of this Agreement, being such Bank's Commitment);
PROVIDED, HOWEVER, that, after giving effect to any Borrowing (including
Swing Line Advances), or any issuance of Letters of Credit, the aggregate
principal amount of all outstanding Loans and L/C Obligations shall not
exceed the amount of the Total Aggregate Commitment. Subject to the
limitations set forth herein, the Company may borrow, repay and reborrow
under each Bank's Commitment without premium or penalty. In no event shall
the Banks be obligated to make Loans to the Company at any time if, after
giving effect to such Loans, the provisions of SECTION 3.6 would be
violated.
(2) Unless the Agent otherwise consents, the aggregate amount
of each LIBOR Borrowing shall be in an integral multiple of $100,000, but
not less than $2,000,000, and the aggregate amount of each Reference Rate
Borrowing shall be in an integral multiple of $10,000, but not less than
$100,000.
(3) The Loans made by the Banks pursuant to this Agreement
shall be evidenced by each Note.
(4) A Request for Borrowing shall be irrevocable upon receipt
by the Agent. The Agent shall not be bound by any preliminary information
that it may give the Company concerning a particular LIBOR Rate before it
delivers the binding LIBOR Rate notice in accordance with SECTION 3.3(b)
below.
(5) Unless the Agent otherwise consents, no more than five (5)
LIBOR Borrowings in the aggregate shall be outstanding at any one time.
(6) The Agent will notify each Bank of its receipt of a
Request for Borrowing and of the amount of such Bank's Pro Rata Share of
that Borrowing promptly on the date of timely receipt of a Request for
Borrowing by the Company.
(7) Each Bank will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of the Company at
the Agent's payment office (described on the signature page hereof) by
9:00 a.m. (Honolulu, Hawaii time) on the date of such Borrowing requested
by the Company in funds immediately available to the Agent. Subject to the
provisions of SECTION 3.7, the proceeds of all such Loans will then be
made available to the Company by the Agent by deposit into the Account.
(8) The following procedures shall apply to Swing Line
Advances:
(1) Each Swing Line Advance shall be made upon the
Company's irrevocable written notice delivered to the Agent in
the form of a Notice of Swing Line Borrowing to be provided by
Agent to Company (which notice must be received by the Agent
prior to
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11:00 a.m., Honolulu, Hawaii time) on or before the
requested Swing Line Advance date, specifying:
(1) the amount of the Swing Line Advance,
which shall be in an aggregate minimum principal amount
of Ten Thousand Dollars ($10,000); and
(2) the requested Swing Line Advance
date, which shall be a Banking Day;
(2) All Swing Line Advances shall be made by the Agent
alone, for its own account, and no other Bank shall be
required or permitted to participate in, or otherwise disburse
any portion of, any Swing Line Advance; provided, however,
that (i) the Agent shall convert, no less than weekly, all
Swing Line Advances into Loans which are not Swing Line
Advances, upon one (1) Banking Day's written notice given by
the Agent to each Bank (with a copy of such notice being given
to the Company), if the outstanding balance of all Swing Line
Advances is $1,000,000 or more, (ii) all Swing Line Advances
which are not converted into Loans which are not Swing Line
Advances as provided herein shall be repaid by the Company
(from its own funds or through a Borrowing) no later than five
(5) days after the date of the Swing Line Advance therefor,
and (iii) all Swing Line Advances shall automatically be
converted into Loans which are not Swing Line Advances upon
the occurrence of a Default or an Event of Default.
(3) If the Agent shall convert a Swing Line Advance into
a Loan which is not a Swing Line Advance, the Agent will
notify each Bank of such conversion, of the amount of such
Bank's Pro Rata Share therein, and the date (which shall be
not less than one (1) Banking Day after the day of such
notification) for such conversion (with a copy of such
notification being given to the Company). Each Bank will
thereupon make the amount of its Pro Rata Share therein
available to the Agent by 9:00 a.m., Honolulu, Hawaii time, on
the date specified in such notice, in funds immediately
available to the Agent. The proceeds received from the Banks
will be used by the Agent to reimburse itself for the former
Swing Line Advance so converted.
(4) The aggregate amount of all Swing Line Advances
outstanding at any one time may not exceed Twenty Million
Dollars ($20,000,000), and the amount available to the Company
for Loans shall be reduced by the aggregate amount of all
Swing Line Advances outstanding at any one time.
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3.2 REFERENCE RATE BORROWINGS. All Loans shall at all times
constitute Reference Rate Borrowings unless properly designated or redesignated
as LIBOR Borrowings pursuant to SECTIONS 3.3. OR 3.4 and all Swing Line Advances
shall constitute Reference Rate Borrowings. Each request by the Company for a
new Reference Rate Borrowing (except for Swing Line Advances) shall be made
pursuant to a Request for Borrowing received by the Agent, at the Agent's
office, not later than 10:00 a.m. Honolulu, Hawaii time, at least one Banking
Day prior to the date the Reference Rate Borrowing is to be funded to the
Company. The Agent will notify each Bank of its receipt of a Request for
Borrowing in accordance with SECTION 3.1(f).
3.3 LIBOR BORROWING.
(1) Each request by the Company for a LIBOR Borrowing shall be
made pursuant to a Request for Borrowing received by the Agent, at the
Agent's office, not later than 10:00 a.m., Honolulu, Hawaii time, at least
four (4) LIBOR Banking Days before the first day of the applicable LIBOR
Period. The Agent will notify each Bank of its receipt of a Request for
Borrowing in accordance with SECTION 3.1(f).
(2) At or about 10:00 a.m., Honolulu, Hawaii time, two (2)
LIBOR Banking Day after the LIBOR Banking Day on which Agent receives
Company's Request for Borrowing, the Agent shall determine the applicable
LIBOR Rate (which determination shall be conclusive in the absence of
manifest error) and shall promptly give notice of the same to the Company
and the Banks by telephone, telecopier or telex.
(3) Upon fulfillment of the applicable conditions set forth in
Article 6, a LIBOR Borrowing shall become effective on the first day of
the applicable LIBOR Period.
(4) The Agent in its sole discretion may require the Company
to request any LIBOR Borrowing of $100,000,000 or more, or any
redesignation of a Reference Rate Borrowing of $100,000,000 or more as a
LIBOR Borrowing, at a time or on a day which is one (1) LIBOR Banking Day
earlier than the deadline stated above (or for redesignations of Reference
Rate Borrowings, stated in SECTION 3.4 below) for making such a request.
0.1 REDESIGNATION OF BORROWINGS.
(5) If any LIBOR Borrowing is not repaid on the last day of
the applicable LIBOR Period, such Borrowing automatically shall be
redesignated as a Reference Rate Borrowing on such date.
(6) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date until
one month preceding the Maturity Date, the Company may request that all or
a portion of outstanding Reference
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Rate Borrowings be redesignated as a LIBOR Borrowing; provided that the
LIBOR Period for such LIBOR Borrowing shall end on or before the
Maturity Date.
(7) Each redesignation of all or a portion of outstanding
Reference Rate Borrowings as a LIBOR Borrowing shall be made pursuant to a
written Request for Redesignation of Borrowing. Not later than 10:00 a.m.,
Honolulu, Hawaii time, at least four (4) LIBOR Banking Days prior to the
first day of the applicable LIBOR Period, the Agent shall have received,
at the Agent's office, a properly completed Request for Redesignation of
Borrowing specifying (1) the requested date of redesignation, (2) the
requested amount of Reference Rate Borrowings to be redesignated as a
LIBOR Borrowing, and (3) the requested LIBOR Period. The Agent may, in its
sole and absolute discretion, permit a Request for Redesignation of
Borrowing to be made by telecopier or by telephone (with confirmation sent
promptly by telecopier) by the Company, in which case the Company shall
confirm same by mailing a written Request for Redesignation of Borrowing
to the Agent within 24 hours following the date of redesignation.
(8) The Agent will notify each Bank of its receipt of a
Request for Redesignation promptly on the date of timely receipt of a
Request for Redesignation from the Company. All redesignations shall be
made ratably according to the respective outstanding principal amount of
the Loans with respect to which the Request for Redesignation was given is
then held by each Bank.
(9) Upon the occurrence of an Event of Default, all LIBOR
Borrowings shall automatically be redesignated as Reference Rate Borrowing
on such date.
(10) Unless the Banks otherwise consent, the amount of
Reference Rate Borrowings to be redesignated as a LIBOR Borrowing shall be
an integral multiple of $100,000, but not less than $2,000,000.
(11) With respect to any redesignation of Reference Rate
Borrowing as a LIBOR Borrowing, at or about 10:00 a.m., Honolulu, Hawaii
time, two (2) LIBOR Banking Day after the LIBOR Banking Day on which Agent
receives Company's Request for Redesignation, the Agent shall determine
the applicable LIBOR Rate (which determination shall be conclusive in the
absence of manifest error) and shall promptly give notice of the same to
the Company and the Banks by telephone, telecopier or telex.
(12) Upon fulfillment of the applicable conditions set forth
in this Agreement, the redesignation of all or a portion of outstanding
Reference Rate Borrowings as a LIBOR Borrowing shall become effective on
the first day of the applicable LIBOR Period.
(13) A Request for Redesignation of Borrowing shall be
irrevocable
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upon receipt by the Agent.
(14) Nothing contained herein shall require the Banks to fund
any LIBOR Borrowing resulting from redesignation of all or a portion of
any of the Reference Rate Borrowings in the London interbank eurodollar
market.
0.2 CALCULATION AND AMOUNT OF BORROWING BASE.
(15) CALCULATION. The Borrowing Base shall be calculated
at the times and in the manner set forth in this SECTION 3.5(a):
(1) The Agent will determine the initial Borrowing Base
at the Closing Date calculated as of May 31, 2001 and
evidenced by a Borrowing Base Certificate. Within fifteen (15)
days after the end of each month other than the end of a
Quarter and twenty-five (25) days after the end of each
Quarter, and at such other times as the Agent may reasonably
require, the Company shall provide the Agent with a Borrowing
Base Certificate showing the Company's calculations of the
components of the Borrowing Base as of the end of such month
and such data supporting such calculations as the Agent may
require. The Borrowing Base for each succeeding month will be
effective as of the first day of the month following
submission by the Company and will be determined by the Agent,
calculated as of the end of the preceding month, evidenced by
the Borrowing Base Certificate provided to the Agent by the
Company, and verified by the Agent to its satisfaction. The
Agent shall promptly notify the Company and each Bank of each
determination by the Agent of the Borrowing Base. Any
determination of the Borrowing Base by the Agent shall be
conclusively deemed to be correct unless objected to by the
Company or the Majority Banks within five (5) Business Days of
the receipt of such determination.
(2) In the event that the Agent timely notifies the
Company of disapproval of a Borrowing Base Certificate (or
should the Company fail to provide a Borrowing Base
Certificate to Agent as and when required under SECTION
3.5(a)(i) above), then the Agent shall notify the Company in
writing of the amount of the Borrowing Base as reasonably
determined by the Agent and the basis of such determination,
and the effective date thereof (which shall be the date of the
giving of such notice respecting the amount of the Borrowing
Base by the Agent), and such amount shall thereupon and
thereafter constitute the Borrowing Base which shall remain in
effect until such time as the Borrowing Base is redetermined
in accordance with this SECTION 3.5(a). The Agent and the
Company shall each cooperate in good faith with the other in
the calculation of the Borrowing Base in circumstances where
the Agent disapproves a Borrowing Base Certificate prepared by
the
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Company.
(3) Each determination of the Borrowing Base in
accordance with this SECTION 3.5(a) shall be binding and
conclusive upon the parties hereto, and provided that the
Agent is not bound to rely on information and figures provided
by the Company if the Agent determines in good faith that it
would be inappropriate to do so.
(16) AMOUNT OF BORROWING BASE. As used herein, the term
"Borrowing Base" shall have the meaning set forth in this SECTION
3.5(b):
(1) Except as set forth in SECTIONS 3.5(b) (ii), (iii),
(iv), (v), (vi) AND (vii) below, the "Borrowing Base" shall
equal the sum of the following amounts specified in
subsections (A) through (E) below (without duplication) with
respect to the following types of Unencumbered Real Estate
Inventory owned 100% (in fee) as part of their respective real
estate development business by the Company or any Restricted
Subsidiary:
(A) Unimproved Land. 50% of the GAAP Value
of the Unimproved Land.
(B) LAND/LOTS UNDER DEVELOPMENT AND FINISHED
LOTS. 65% of the GAAP Value of the Land/Lots Under
Development and Finished Lots.
(C) UNSOLD HOMES UNDER CONSTRUCTION. 80% of
the GAAP Value of the Unsold Homes Under Construction.
(D) COMPLETED UNSOLD HOMES. 80% of the GAAP
Value of the Completed Unsold Homes.
(E) CONTRACTED HOMES. 90% of the GAAP Value
of the Contracted Homes.
(2) Anything in this Agreement to the contrary
notwithstanding, in no event may more than 25% of the GAAP
Value of Real Estate Inventory constituting part of the
Borrowing Base be attributable to Unimproved Land; and any
Unimproved Land in excess of such 25% shall have a 0% advance
rate (i.e., shall add no value to the Borrowing Base).
(3) Anything in this Agreement to the contrary
notwithstanding in no event may more than 60% of the GAAP
Value of Real Estate Inventory constituting part of the
Borrowing Base be
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attributed to Land/Lots Under Development, Finished Lots and
Unimproved Land and any such Land/Lots Under Development,
Finished Lots, and Unimproved Land in excess of such 60%
shall have a 0% advance rate (i.e., shall add no value to the
borrowing Base); PROVIDED, HOWEVER, the 60% shall be reduced
to 55% on the first Anniversary Date of the Closing Date, and
PROVIDED FURTHER that the 55% shall be reduced to 50% on the
second Anniversary Date of the Closing Date.
(4) Only Real Estate Inventory of the types specified in
Subsections 3.5(b)(i)(A) through (E) above which is
Unencumbered Real Estate Inventory that is owned 100% in fee
by the Company or a Restricted Subsidiary may be added to the
Borrowing Base. Any Real Estate Inventory that does not
satisfy such requirements shall have no value for purposes of
the Borrowing Base (i.e., a 0% advance rate). Furthermore,
Real Estate Inventory which is Unentitled Land or Completed
Unsold Homes Over 180 Days shall have no value for purposes of
the Borrowing Base (i.e., a 0% advance rate). Once Units or
any other Real Estate Inventory are sold and conveyed to a
buyer, or otherwise cease to be owned by the Company or a
Restricted Subsidiary, the applicable advance rate shall
decrease to 0%, and the Company shall not be entitled to have
any value for such assets attributed to the Borrowing Base.
(5) Unimproved Land located in
California may only be
added to the Borrowing Base if the Unimproved Land is subject
to an approved tentative map, unless the applicable
jurisdiction does not grant an approved tentative map, but in
any event in order for the Unimproved Land to be added to the
Borrowing Base the Company and its Restricted Subsidiaries
would in all cases have the right to immediately begin rough
grading of lots and other design and improvement work.
(6) Assets which relate to Country Club Village
shall have no value for purposes of the Borrowing Base
(i.e., a 0% advance rate).
(7) The Agent reserves the right to determine, in its
reasonable discretion, the category in which a type of
Unencumbered Real Estate Inventory should be placed.
3.4 LIMITATIONS ON AGGREGATE OUTSTANDING LOANS.
(1) The sum of the aggregate principal amount at any time
outstanding under the Loans PLUS the L/C Obligations shall not at any time
exceed the Total Aggregate Commitment, and
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(2) The sum of the aggregate principal amount at any time
outstanding under the Loans PLUS the L/C Obligations (excluding
Performance Letters of Credit) shall not at any one time exceed the
Borrowing Base LESS Total Borrowing Base Indebtedness (exclusive of the
outstanding amount of the Loans and L/C Obligations).
0.3 PAYMENTS BY THE BANKS TO THE AGENT.
(3) Unless the Agent receives notice from a Bank on or prior
to the Closing Date or, with respect to any Borrowing after the Closing
Date, at least one Banking Day prior to the date of such Borrowing, that
such Bank will not make available as and when required hereunder to the
Agent for the account of the Company the amount of that Bank's Pro Rata
Share of the Borrowing, the Agent may assume that each Bank has made such
amount available to the Agent in immediately available funds on the date
of Borrowing and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Company on such date a
corresponding amount. If and to the extent any Bank shall not have made
its full amount available to the Agent in immediately available funds and
the Agent in such circumstances has made available to the Company such
amount, that Bank shall on the Banking Day following such date of
Borrowing make such amount available to the Agent, together with interest
at the Reference Rate or the interest rate applicable for such Borrowing,
whichever is higher, for each day during such period. A notice of the
Agent submitted to any Bank with respect to amounts owing under this
subsection (a) shall be conclusive, absent manifest error. If such amount
is so made available, such payment when made to the Agent shall constitute
such Bank's Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Agent on the
Banking Day following the date of Borrowing, the Agent will notify the
Company of such failure to fund and, upon demand by the Agent, the Company
shall pay such amount to the Agent for the Agent's account, together with
accrued interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at
the time to the Loans comprising such Borrowing.
(4) The failure of any Bank to make any Loan on any date of
Borrowing shall not relieve any other Bank of any obligation hereunder to
make a Loan on such date of Borrowing, but no Bank shall be responsible
for the failure of any other Bank to make the Loan to be made by such
other Bank on any date of Borrowing.
3.5 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share, such Bank shall
immediately (a) notify the Agent of such fact, and (b) purchase from the other
Banks such participations in the Loans made by them as shall
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be necessary to cause such purchasing Bank to share the excess payment pro
rata with each of them; PROVIDED, HOWEVER, that if all or any portion of such
excess payment is thereafter recovered from the purchasing Bank, such
purchase shall to that extent be rescinded and each other Bank shall repay to
the purchasing Bank the purchase price paid therefor, together with an amount
equal to such paying Bank's ratable share (according to the proportion of (i)
the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid
or payable by the purchasing Bank in respect of the total amount so
recovered. The Company agrees that any Bank so purchasing a participation
from another Bank may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off, but subject to SECTION
11.7) with respect to such participation as fully as if such Bank were the
direct creditor of the Company in the amount of such participation. The Agent
will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in
each case notify the Banks following any such purchases or repayments.
0.4 LETTER OF CREDIT SUBLIMIT.
3.5.1 AVAILABILITY PERIODS AND MAXIMUM L/C OBLIGATIONS.
Subject to the terms and upon the conditions of this Agreement, the Agent
shall, and any Bank may, issue letters of credit for the account of the
Company from time to time up to but not including June 28, 2004 (as
extended by the Banks in writing from time to time in their sole
discretion, the "L/C Commitment Termination Date"). The maximum aggregate
principal amount which remains undrawn under all outstanding Letters of
Credit (the "L/C Obligations") under this Agreement shall not exceed at
any one time outstanding the aggregate principal sum of Fifty Million
Dollars ($50,000,000) (the "L/C Commitment").
3.5.2 LETTERS OF CREDIT.
(1) AMOUNTS AND TERMS OF LETTERS OF CREDIT. During the
period from the date of this Agreement to but excluding the L/C
Commitment Termination Date, and subject to the terms and conditions
of this Agreement, upon Company's request pursuant to SECTION 3.9.3,
the Issuing Bank shall issue one or more Financial Letters of Credit
or Performance Letters of Credit (each, a "Letter of Credit," and
collectively, the "Letters of Credit") for the account of Company;
PROVIDED that the Issuing Bank shall not be obligated to issue any
Letter of Credit if, after giving effect thereto, (i) the L/C
Obligations would exceed the L/C Commitment, or (ii) the total
aggregate outstanding Loans PLUS the L/C Obligations would exceed
the Total Aggregate Commitment, or (iii) the Total Borrowing Base
Indebtedness would exceed the Borrowing Base, or (iv) the Issuing
Bank would exceed its Commitment. All Letters of Credit shall be on
forms reasonably satisfactory to the Issuing Bank. No Letter of
Credit shall have an expiration date (unless the Issuing Bank and
Majority Banks otherwise consent in writing) later than twelve (12)
months after the Maturity Date.
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(2) LETTER OF CREDIT DRAWS ARE LOANS UNDER THIS
AGREEMENT. Company and each Bank agree that any draws under any
Letters of Credit shall constitute Loans under this Agreement for
all purposes. Without limiting the foregoing, (i) all draws under
any Letter of Credit shall bear interest and be repaid as Loans
outstanding under this Agreement, and (ii) if, at the time any draw
is made under any Letter of Credit, an Event of Default has occurred
or the Maturity Date has passed or the Loans have been accelerated
or are otherwise due and payable, such draw under such Letter of
Credit shall be immediately due and payable in full. Promptly upon
being notified by the Agent (after Agent has received notice from
the Issuing Bank) that a draw has occurred under any Letter of
Credit, each Bank shall reimburse the Agent, for the benefit of the
Issuing Bank, for that Bank's Pro Rata Share of such draw.
(3) EXISTING LETTERS OF CREDIT. The Letters of Credit
listed on SCHEDULE 3.9.2 and outstanding as of the Closing Date
shall be considered for all purposes as Letters of Credit issued
pursuant to the Agreement and subject to all of the terms,
conditions, charges and other obligations arising as a result
thereof.
3.5.3 REQUEST FOR LETTER OF CREDIT. The Company, on or after
the date of this Agreement, shall give the Issuing Bank notice of its
request for the issuance of a Letter of Credit by delivering to the
Issuing Bank (with a copy to the Agent) a duly executed and completed L/C
Application on Issuing Bank's then current form (herein, an "L/C
Application"). Such request shall specify: (i) the date on which the
issuance of the Letter of Credit is requested to be made (which day shall
be a Banking Day), and (ii) the amount of the Letter of Credit. Subject to
the conditions herein, the Issuing Bank will issue the Letter of Credit as
soon as reasonably practicable after receiving the above described notice.
3.5.4 LETTER OF CREDIT FEES. For each Performance Letter of
Credit issued by the Issuing Bank (and upon any renewal thereof), the
Company shall pay to the Agent, for the account of each Bank in accordance
with its Pro Rata Share, from the Company's own funds a fee equal to one
and three-quarters of one percent (1 3/4%) per annum TIMES the dollar
amount of the Performance Letter of Credit, which shall be payable
quarterly in advance as of the first day of each calendar quarter; and for
each Financial Letter of Credit issued by the Issuing Bank (and upon any
renewal thereof), the Company shall pay to the Agent, for the account of
each Bank in accordance with its Pro Rata Share, from the Company's own
funds a fee equal to the applicable LIBOR Rate Spread (based on a 360-day
year) TIMES the undrawn dollar amount of the Financial Letter of Credit
which shall be payable quarterly in advance as of the first day of each
calendar quarter (collectively, the "Letter of Credit Fee"); PROVIDED that
the portion of the Letter of Credit Fee payable for the period of time
between the date of issuance of a Letter of Credit and the first day of
the first calendar quarter following the date of issuance shall be payable
on the date of issuance. If a Letter of Credit is
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canceled or otherwise terminates prior to the end of any calendar
quarter, the Company shall not be entitled to any rebate of any portion
of the Letter of Credit Fee paid for such quarter.
3.5.5 CONDITIONS PRECEDENT TO ISSUANCE OF LETTERS OF CREDIT.
The obligation of the Issuing Bank to issue any Letter of Credit requested
by the Company is subject to satisfaction of the following conditions
precedent:
(1) CONDITIONS TO LOANS SHALL BE SATISFIED. Each
of the conditions specified in SECTIONS 6.1 AND 6.2 to Borrowings
shall also be applicable as conditions precedent to the issuance
of any Letter of Credit.
(2) L/C APPLICATION. The Issuing Bank shall have
received from the Company, in form and substance satisfactory to the
Issuing Bank, (i) a duly executed and completed L/C Application
which L/C Application shall set forth, among other things, the
beneficiary, the amount, and the term of the proposed Letter of
Credit, and (ii) a duly executed and completed Request for Letter of
Credit (in the form attached hereto as EXHIBIT "C").
(3) ISSUING BANK APPROVAL. The Issuing Bank shall have
determined that the terms contained in the documents pertaining to
such Letter of Credit are satisfactory to the Issuing Bank in the
exercise of its reasonable discretion.
(4) PAYMENT OF FEES. The Company shall pay the
applicable Letter of Credit Fee. The applicable Letter of Credit Fee
shall be payable prior to the issuance (or renewal) of any Letter of
Credit and shall be paid by the Company to the Agent. In addition,
the Company shall pay all reasonable and customary fees and costs
(other than Letter of Credit fees) described in the documents
pertaining to such Letter of Credit.
(5) TELEPHONE CONFIRMATION. Prior to the issuance of any
Letter of Credit, the Issuing Bank shall confirm by telephone with
the Agent that, following the issuance of such Letter of Credit,
none of the limitations set forth in SECTION 3.9 would be violated.
3.6 POSSIBLE INCREASE IN TOTAL AGGREGATE COMMITMENT.
(1) The Banks on the Closing Date shall be the Banks set forth
on Schedule 1.1(a) on the Closing Date.
(2) At any time prior to June 1, 2002, Agent may in its
discretion (which discretion shall not be arbitrarily or unreasonably
exercised contrary to the requests of the Company so long as the
conditions set forth below are satisfied), without the consent of the
Banks (except as specified in this SECTION 3.10), from time
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to time at the request of the Company, increase the Total Aggregate
Commitment by (i) admitting additional Banks hereunder (each a
"Subsequent Bank"), or (ii) increasing the Commitment of any Bank (each
an "Increasing Bank"), subject to the following conditions:
(1) each Subsequent Bank is an Eligible Assignee;
(2) the Company executes (A) a new Note payable to the
order of a Subsequent Bank, or (B) a replacement Note payable
to the order of an Increasing Bank;
(3) each Subsequent Bank executes and delivers to
Agent a signature page to this Agreement;
(4) after giving effect to the admission of any
Subsequent Bank or the increase in the Commitment of any
Increasing Bank, the Total Aggregate Commitment does not
exceed $400,000,000;
(5) each increase in the Total Aggregate Commitment
shall be in the amount of $10,000,000 or a greater integral
multiple of $1,000,000;
(6) no admission of any Subsequent Bank shall increase
the Commitment of any existing Bank without the written
consent of such Bank;
(7) no Event of Default exists; and
(8) no Bank shall be an Increasing Bank without the
written consent of such Bank.
After Commitment of any Increasing Bank, Agent shall promptly provide to
each Bank and to the Company a new Schedule 1.1(a) to this Agreement (and
each Bank acknowledges that its percentage obligation under such Schedule
will change in accordance with its Pro Rata Share of the increased Total
Aggregate Commitment).
ARTICLE 1: PAYMENTS AND FEES.
3.7 PRINCIPAL AND INTEREST.
(1) Interest shall be payable on the outstanding daily unpaid
principal amount of each Borrowing from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth herein
both before and after default and before and after maturity and judgment,
with interest on overdue interest to bear interest at the rate specified
in SECTION 4.4. Upon any partial prepayment or
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payment in full or redesignation of outstanding Reference Rate
Borrowings, interest accrued through the date of such prepayment or
redesignation shall be payable on the next following Interest Payment
Date and shall be deducted from the Account on such date. Upon any
partial prepayment or payment in full or redesignation of any LIBOR
Borrowings, interest accrued through the date of such prepayment,
payment, or redesignation shall be payable on the next following
Interest Payment Date, and shall be deducted from the Account on such
date. Insufficient funds in the Account shall not excuse the Company's
obligation to pay accrued interest on the Interest Payment Date.
(2) Interest on each Reference Rate Borrowing shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed, at the Reference Rate TIMES the total principal balance
outstanding under each Note. Interest accrued on each Reference Rate
Borrowing shall be payable on each Interest Payment Date, commencing with
the first such date to occur after the Closing Date, and shall be deducted
from the Account on each such Interest Payment Date. Insufficient funds in
the Account shall not excuse the Company's obligation to pay accrued
interest on the Interest Payment Date. The Agent shall use its best
efforts to notify the Company of the amount of interest so payable prior
to each Interest Payment Date, but failure of the Agent to do so shall not
excuse payment of such interest when payable. EXCEPT as otherwise provided
in SECTION 4.4 and in the next sentence, the unpaid principal amount of
any Reference Rate Borrowing shall bear interest at a fluctuating rate per
annum equal to the Reference Rate, plus the applicable Reference Rate
Spread. During a Leverage Ratio Cure Period, the unpaid principal amount
of any Reference Rate Borrowing shall bear interest at a fluctuating rate
per annum equal to the Reference Rate plus 0.75%. Each change in the
interest rate shall take effect simultaneously with the corresponding
change in the Reference Rate. Each change in the Reference Rate shall be
effective as of 12:01 a.m. on the Banking Day on which the change in the
Reference Rate is announced, unless otherwise specified in such
announcement, in which case the change shall be effective as so specified.
(3) Interest on each LIBOR Borrowing shall be computed on the
basis of a year of 360 days and the actual number of days elapsed.
Interest accrued on each LIBOR Borrowing shall be payable on each Interest
Payment Date and shall be deducted from the Account on such date.
Insufficient funds in the Account shall not excuse the Company's
obligation to pay accrued interest on the Interest Payment Date. The Agent
shall use its best efforts to notify the Company of the amount of interest
so payable prior to each such date, but failure of the Agent to do so
shall not excuse payment of such interest when payable. Except as
otherwise provided in the next sentence, the unpaid principal amount of
any LIBOR Borrowing shall bear interest at a rate per annum equal to the
LIBOR Rate for that LIBOR Borrowing PLUS the applicable LIBOR Rate Spread.
During a Leverage Ratio Cure Period, the unpaid principal amount of any
LIBOR Borrowing shall bear interest at a rate per annum equal to the LIBOR
Rate for that LIBOR Borrowing plus 2.75%.
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(4) If not sooner paid, the principal indebtedness evidenced
by each Note shall be payable as follows:
(1) subject to the applicable provisions of this
Agreement providing for automatic redesignation of Borrowings
upon compliance with SECTION 3.4, the principal amount of each
LIBOR Borrowing shall be payable on the last day of the LIBOR
Period for such Borrowing;
(2) the amount, if any, by which the principal
indebtedness evidenced by each Note at any time exceeds the
applicable Bank's Commitment shall be payable immediately;
(3) the amount of each payment required pursuant to
SECTION 4.16 shall be payable immediately;
(4) all outstanding Loans (other than as specified
in subparagraph (v) below) shall be payable on the Maturity
Date; and
(5) the principal of any Note held by a Bank which
refuses to extend the Maturity Date pursuant to SECTION 4.18,
if not sooner paid, shall be payable on such Bank's
Non-Renewing Bank Loan Maturity Date.
(5) Each Loan may, at any time and from time to time, be paid
or prepaid in whole or in part, PROVIDED that (i) any partial prepayment
shall be an integral multiple of $100,000, and (ii) any partial prepayment
for any LIBOR Borrowing shall be in an amount not less than $1,000,000,
and, (iii) any payment or prepayment of all or any part of any LIBOR
Borrowing on a day other than the last day of the applicable LIBOR Period
shall be made on a LIBOR Banking Day, as applicable, and shall be preceded
by at least five (5) LIBOR Banking Days, as applicable, written notice to
the Agent of the date and amount of such payment or payments, and (iv) any
prepayment of a LIBOR Borrowing prior to the last day of the applicable
LIBOR Period shall be accompanied by a prepayment fee calculated in
accordance with subsection (f) below, and (v) any prepayment of Reference
Rate Borrowing in whole or in part in an amount greater than $15,000,000
shall be preceded by one (1) Banking Day prior notice to the Agent, and
(vi) any prepayment of Swing Line Advances or Reference Rate Borrowings in
an amount less than $15,000,000 may be made without prior notice to the
Agent. Any such notices or prepayment shall specify the date and amount of
such prepayment and whether such prepayment is a Reference Rate Borrowing
or a LIBOR Borrowing or any combination thereof. In addition, if at any
time the amount of any LIBOR Borrowing is reduced (by payment, prepayment
or conversion of a part thereof) to an amount less than $2,000,000, such
LIBOR Borrowing shall automatically convert into a Reference Rate
Borrowing, and on and after such date the right of the Company to continue
such Borrowing as a LIBOR Borrowing shall terminate.
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(6) Upon payment or prepayment of any LIBOR Borrowing, or
redesignation of a LIBOR Borrowing to a Reference Rate Borrowing, on a day
other than the last day in the applicable LIBOR Period (whether
voluntarily, involuntarily, by reason of acceleration, or otherwise), the
Company shall pay to the Agent a prepayment fee calculated as follows (and
determined as though 100% of the LIBOR Borrowing had been funded in the
Designated Market):
(1) $200 (to be retained solely by Agent); PLUS
(2) the Interest Differential with respect to such LIBOR
Borrowing (which, when received by the Agent, shall be
distributed by the Agent to the Banks according to their
respective Pro Rata Shares); PLUS
(3) all out-of-pocket expenses incurred by the Banks and
reasonably attributable to such payment or prepayment (which,
when received by the Agent, shall be distributed by the Agent
to the Banks in amounts corresponding to their out-of- pocket
expenses);
PROVIDED that no prepayment fee shall be payable (and no credit or rebate shall
be required) under the foregoing provisions of this Section 4.1(f) if the sum of
the foregoing clauses (i), (ii) and (iii) is not positive. The Agent's
determination of the amount of any prepayment fee payable under this SECTION
4.1(f) shall be conclusive in the absence of manifest error.
Nothing contained in this SECTION 4.1 shall relieve the Company from
its obligation to make interest payments to the Banks on each Interest Payment
Date (in accordance with the terms and conditions contained herein) in the event
the funds held in the Account are insufficient to make such interest payments on
any such Interest Payment Date.
3.8 UNUSED FEE. For the period commencing on the date of this
Agreement and ending on the Maturity Date, the Company shall pay to the Agent
for the account of each Bank in accordance with its Pro Rata Share an unused
fee, computed on the basis of a year of 360 days and the actual number of days
elapsed, at the rate of .20% per annum TIMES the average daily Undrawn
Commitment. The unused fee accrued as of the last day of March, June, September
and December of each year shall be payable in arrears on the day on which the
Agent notifies the Company of the amount due, EXCEPT that upon payment of each
Note in full, the unused fee accrued to the date of payment shall be payable on
the date of payment. Notwithstanding the foregoing, the unused line fee shall be
calculated at the rate of .40% in the event the average daily Undrawn Commitment
for the immediately preceding two calendar quarters, calculated on a quarterly
basis, is greater than 75% of the Total Aggregate Commitment and the unused fee
shall continue to be computed at the rate of .40% until the average daily
Undrawn Commitment is equal to or less than 75% of the Total Aggregate
Commitment for the immediately preceding calendar quarter.
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3.9 FACILITY FEE. For the period commencing on the date of this
Agreement and ending on the Maturity Date, the Company shall pay to the Agent
for the account of each Bank a facility fee, computed on the basis of a year of
360 days and the actual number of days, payable at a rate equal to the
Applicable Facility Fee Rate, TIMES the amount of the Commitment of each such
Bank. The facility fee owing to each Bank under this SECTION 4.3 shall be
payable quarterly in advance on the first day of each January, April, July, and
October of each year (and shall be calculated based on the Leverage Ratio
applicable as of each such date).
3.10 LATE PAYMENTS. Should any installment of principal or interest
or any fee or cost or other amount payable under any Loan Document to the Banks
not be paid within 5 days of when due, it shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the sum of the
Reference Rate PLUS 2.00% per annum, to the fullest extent permitted by
applicable Law. Accrued and unpaid interest on past due amounts (INCLUDING,
without limitation, interest on past due interest) shall be compounded monthly,
on the last day of each calendar month, to the fullest extent permitted by
applicable Law.
3.11 TAXES. All payments payable to the Banks hereunder or with
respect to the Loan Documents shall be made to the Banks without deductions for
any Taxes or Other Taxes except to the extent the Company is required by any Law
or Governmental Authority to withhold and except in accordance with SECTION
10.10 to the extent, if any, that such amounts are required to be withheld by
the Agent under the laws of the United States of America or any other applicable
taxing authority.
3.12 ILLEGALITY.
(1) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration of any Requirement of Law, in any case
after the Closing Date has made it unlawful, or that any central bank or
other Governmental Authority has asserted that it is unlawful, for any
Bank or its applicable Lending Office to make LIBOR Borrowings, then, on
notice thereof by the Bank to the Company through the Agent, any
obligation of that Bank to make LIBOR Borrowings shall be suspended until
the Bank notifies the Agent and the Company that the circumstances giving
rise to such determination no longer exist.
(2) If a Bank determines that it is unlawful to maintain any
LIBOR Borrowing, the Company shall, upon its receipt of notice of such
fact and demand from such Bank (with a copy to the Agent), prepay in full
such LIBOR Borrowings of that Bank then outstanding, together with
interest accrued thereon and amounts required under SECTION 4.1(f), either
on the last day of the LIBOR Period thereof, if the Bank may lawfully
continue to maintain such LIBOR Borrowings to such day, or immediately, if
the Bank may not lawfully continue to maintain such LIBOR Borrowing. If
the Company is required to so prepay any LIBOR Borrowing, then
concurrently with such prepayment, the Company may, at its option, borrow
from the
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affected Bank, in the amount of such repayment, a Reference Rate
Borrowing.
(3) If the obligation of any Bank to make or maintain LIBOR
Borrowings has been so terminated or suspended, the Company may elect, by
giving notice to the Bank through the Agent that all Loans which would
otherwise be made by the Bank as LIBOR Borrowings shall be instead
Reference Rate Borrowings.
(4) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office with respect
to its Reference Rate Borrowings if such designation will avoid the need
for giving such notice or making such demand and will not, in the judgment
of the Bank, be illegal or otherwise disadvantageous to the Bank.
3.13 INCREASED COSTS AND REDUCTION OF RETURN.
(1) If any Bank determines that, due to either (i) the
introduction of or any change (other than any change by way of imposition
of or increase in reserve requirements included in the calculation of the
LIBOR Rate or in respect of the assessment rate payable by any Bank to the
FDIC for insuring U.S. deposits) in or in the interpretation of any law or
regulation or (ii) the compliance by that Bank with any guideline imposed
or request made by any central bank or other Governmental Authority after
the date hereof (whether or not having the force of law), there shall be
any increase in the cost to such Bank of agreeing to make or making,
funding or maintaining any LIBOR Borrowings, then, so long as such Bank is
imposing such costs generally on borrowers similarly situated with the
Company, the Company shall be liable for, and shall from time to time,
upon demand (with a copy of such demand to be sent to the Agent), pay to
the Agent for the account of such Bank, additional amounts as are
sufficient to compensate such Bank for such increased costs.
(2) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by the Bank (or its Lending
Office) or any corporation controlling the Bank with any Capital Adequacy
Regulation described in clauses (i) through (iii) above, affects or would
affect the amount of capital required or expected to be maintained by the
Bank or any corporation controlling the Bank and (taking into
consideration such Bank's or such corporation's policies with respect to
capital adequacy and such Bank's desired return on capital) determines
that the amount of such capital is increased as a consequence of its
Commitment, Loans, credits or obligations under this Agreement, then, upon
demand of such Bank to the Company through the Agent, so long as such Bank
is imposing such costs generally on borrowers similarly situated with the
Company, the Company shall pay to the Bank, from time to time as specified
by the Bank, additional amounts sufficient to compensate the Bank for such
increase.
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3.14 FUNDING LOSSES. The Company hereby indemnifies each Bank
against, and agrees to hold each Bank harmless from and reimburse each Bank on
demand for, all costs, expenses, claims, penalties, liabilities, losses, legal
fees and damages (INCLUDING, without limitation, any interest paid by any Bank
for deposits in dollars in the London eurodollar market, or other eurodollar
market, and any loss sustained by any Bank in connection with the reemployment
of funds) incurred or sustained by each Bank, as reasonably determined by each
Bank, as a result of any failure of the Company to borrow on the date or in the
amount specified in any Request for Borrowing or Request for Redesignation of
Borrowings. The determination of such amount by each Bank shall be conclusive in
the absence of manifest error.
3.15 INABILITY TO DETERMINE RATES. If any Bank determines that for
any reason adequate and reasonable means do not exist for determining the LIBOR
Rate for any requested LIBOR Period with respect to a proposed LIBOR Borrowing,
or that the LIBOR Rate applicable pursuant to SECTION 4.1(c) for any requested
LIBOR Period with respect to a proposed LIBOR Borrowing does not adequately and
fairly reflect the cost to such Bank of funding such Borrowing, the Agent will,
following notification by such Bank, promptly so notify the Company and each
other Bank. Thereafter, the obligation of the Banks to make or maintain LIBOR
Borrowings, as the case may be, hereunder shall be suspended until the Agent
upon the instruction of such Bank revokes such notice in writing. Upon receipt
of such notice, the Company may revoke any Request for Borrowing or Request for
Redesignation of Borrowing then submitted by it. If the Company does not revoke
such Request, the Banks shall make, convert or continue the Loans, as proposed
by the Company, in the amount specified in the applicable notice submitted by
the Company, but such Loans shall be made, converted or continued as Reference
Rate Borrowings instead of LIBOR Borrowings. As of the date of this Agreement,
no Bank has made the determination or is aware of the conditions referenced in
the first sentence of this SECTION 4.9.
3.16 RESERVES ON LIBOR BORROWINGS. The Company shall pay to each
Bank, as long as such Bank shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount of each LIBOR
Borrowing equal to the actual costs of such reserves allocated to such Loan by
the Bank (as determined by the Bank in good faith, which determination shall be
conclusive), payable on each date on which interest is payable on such Loan,
provided the Company shall have received at least 15 days' prior written notice
(with a copy to the Agent) of such additional interest from the Bank. If a Bank
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be payable 15 days from receipt of such notice.
3.17 CERTIFICATES OF BANKS. Any Bank claiming reimbursement or
compensation under this Article 4 shall deliver to the Company (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Bank hereunder, and the calculation thereof, and such certificate shall
be conclusive and binding on the Company in
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the absence of manifest error.
3.18 SUBSTITUTION OF BANKS. Upon the receipt by the Company from any
Bank (an "AFFECTED BANK") of a claim for compensation under SECTION 4.7 or
SECTION 4.15, or notice of a Bank's inability to fund LIBOR Borrowings under
SECTION 4.6 or determine LIBOR rates under SECTION 4.9, the Company may: (i)
request the Affected Bank to use its best efforts to obtain a replacement bank
or financial institution satisfactory to the Company to acquire and assume all
or a ratable part of all of such Affected Bank's Loans and Commitment (a
"REPLACEMENT BANK"); or (ii) request one or more of the other Banks to acquire
and assume all or part of such Affected Bank's Loans and Commitment (which such
other Banks may decline to do in their sole discretion); or (iii) designate a
Replacement Bank. Any such designation of a Replacement Bank under clause (i) or
(iii) shall be subject to the prior written consent of the Agent (which consent
shall not be unreasonably withheld).
3.19 SURVIVAL. The agreements and obligations of the Company in this
Article 4 shall survive for one year following the payment in full of all
Obligations.
3.20 MANNER AND TREATMENT OF PAYMENTS. The amount of each payment
hereunder (including but not limited to the Unused Fee and the Facility Fee) or
on each Note shall be made to the Agent for the account of each applicable Bank
in immediately available funds on the day of payment (which must be a Banking
Day). Any payment received after 9:00 a.m. (Honolulu, Hawaii time), on any
Banking Day, and any payment on, or, of Swing Line Advances which is received by
the Agent later than 1:00 p.m., Honolulu, Hawaii time shall be deemed to have
been received on the immediately succeeding Banking Day and any applicable
interest or fee shall continue to accrue. The amount of all payments received by
the Agent for the account of each Bank shall be promptly paid by the Agent to
the applicable Bank(s) in immediately available funds (and any such payment not
remitted on the same Banking Day that it is deemed received by the Agent shall
thereafter be payable by the Agent to the applicable Bank(s) together with
interest at the overnight Federal Funds Rate, as such rate is reasonably
determined by the Agent). Whenever any payment to be made hereunder or on each
Note is due on a day that is not a Banking Day, payment shall be made on the
next succeeding Banking Day; provided that the extension shall be included in
the computation of interest owing on the next following Interest Payment Date.
Any payment of the principal of any LIBOR Borrowing shall be made on a LIBOR
Banking Day as applicable.
3.21 ADDITIONAL COSTS. If the occurrence of any Special Circumstance
or other regulatory development, or the imposition of any Tax or Other Tax, or
change in applicable Law (other than a change in applicable income tax rates of
any Bank or the manner of computing taxes on income of any Bank), shall result
in an increase in the cost to any Bank of making, funding, maintaining or
continuing the funding of any Borrowing, then Company shall pay to such Bank on
demand such additional amounts as such Bank determines to be necessary to
compensate the Bank for such increased cost.
3.22 MANDATORY PREPAYMENT. In the event that the aggregate principal
amount of the outstanding Loans PLUS the L/C Obligations at any time exceeds the
limitations
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specified in SECTION 3.6 (whether because of the outstanding amount of the
Loans or L/C Obligations, or because of the other outstanding Total Borrowing
Base Indebtedness), the Company shall immediately make a prepayment of the
Loans in such amount as is necessary to cause the amount of outstanding Loans
PLUS L/C Obligations to comply with the limitations of SECTION 3.6. In the
event that the L/C Obligations at any time exceed the Borrowing Base, the
Company shall immediately upon demand by the Agent deposit with the Agent,
for the benefit of the Banks, an amount in cash equal to the amount by which
the outstanding L/C Obligations exceed the Borrowing Base. Such cash shall be
deposited in an interest bearing account with the Agent as to which the
Company shall have no right of withdrawal except as provided below. At such
time as the Borrowing Base once again equals or exceeds the outstanding L/C
Obligations, and provided no other Event of Default is outstanding and the
Company is otherwise in compliance with this Agreement, the amount so
deposited by the Company in such restricted account with the Agent, together
with any interest accrued thereon, shall be remitted to the Company.
3.23 ADMINISTRATIVE FEE PAYABLE TO AGENT. The Banks acknowledge that
pursuant to a fee letter agreement dated as of June 22, 2001, between the Agent
and the Company (the "Fee Letter Agreement"), the Company has agreed to pay FHB,
an "administrative fee," as consideration for FHB's performance of its duties as
Agent under this Agreement and for other valuable services, as more fully set
forth in the Fee Letter Agreement. The Company covenants and agrees to pay such
administrative fee to FHB at the times and in the manner set forth in the Fee
Letter Agreement. The administrative fee payable to FHB under the Fee Letter
Agreement shall belong solely to FHB, and FHB shall not be required to share any
such administrative fee, specified in the Fee Letter Agreement with any of the
other Banks.
3.24 MATURITY DATE EXTENSION OPTION.
(1) The Maturity Date may be extended to the first anniversary
of the then applicable Maturity Date, at the sole discretion of each of
the Banks, upon receipt from the Company of an Extension Request delivered
to the Agent not earlier than ninety (90) days and not later than thirty
(30) days prior to the date which is two (2) years prior to the then
existing Maturity Date. No such extension shall be effective as to a
particular Bank without the approval of such extension by such Bank and
the payment to such Bank of an extension fee as required by such Bank.
Approval or disapproval of each such extension shall be in the sole and
absolute discretion of each Bank. Each Bank shall notify the Agent and the
Company, in writing and within 30 days of receipt of an Extension Request,
whether it will extend the Maturity Date. If Banks holding at least 80% of
the Total Aggregate Commitment approve such extension within such 30-day
period, the Maturity Date shall be extended to the first anniversary of
the then effective Maturity Date.
(2) If any Bank elects not to extend the Maturity Date, or
does not give notice of its election to extend the Maturity Date on or
before the date which is thirty (30) days following the receipt of an
Extension Request, the Company may, at
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its option to be exercised in its sole discretion, by delivery of written
notice to all of the Banks at any time prior to the previously applicable
Maturity Date, either:
(1) Repay all Loans from the non-renewing Bank(s),
reduce the Total Aggregate Commitment by an amount equal to
the Pro Rata Share of the Commitment of the non-renewing
Bank(s) effective on the date of repayment of the non-renewing
Bank(s) (which date must be on or before the Non-Renewing Bank
Loan Maturity Date), amend the Commitments of the renewing
Banks to reflect a ratable allocation of the Total Aggregate
Commitment as thus reduced, effective as of the date of
repayment of the non-renewing Bank(s), and extend the Maturity
Date by one year as to the renewing Banks; or
(2) Reduce the Total Aggregate Commitment by an amount
equal to the Pro Rata Share of the Loans of the non-renewing
Bank(s) effective on a date specified by the Company (which
date must be on or before the Non-Renewing Bank Loan Maturity
Date), amend the Commitments of the renewing Banks to reflect
a ratable allocation of the Total Aggregate Commitment as thus
reduced, effective as of the date specified by the Company as
provided above, extend the Maturity Date by one year as to the
renewing Banks and retain the Non-Renewing Bank Loan Maturity
Date as the date of maturity of principal of the Pro Rata
Share of Loan proceeds disbursed by the non-renewing Bank(s);
or
(3) Identify an Eligible Assignee to purchase, without
recourse, at par, all or the remaining portion of the
non-renewing Bank's Commitment on or before the Non-Renewing
Bank Loan Maturity Date for such Bank. Such Eligible Assignee
must agree to a Maturity Date which is coterminous with the
Maturity Date for all of the renewing Banks and must be
approved by the Agent, which approval shall not be
unreasonably withheld or delayed.
3.25 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The Company
may, upon not less than three (3) Banking Days' prior notice to the Agent,
terminate the Commitments, or permanently reduce the Commitments by an aggregate
minimum amount of $5,000,000 or any multiple of $1,000,000 in excess thereof;
UNLESS, after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, the then-outstanding principal amount of the Loans PLUS
all outstanding L/C Obligations would exceed the amount of the combined
Commitments then in effect. Once reduced in accordance with this Section, the
Commitments may not be increased. Any reduction of the Commitments shall be
applied to each Bank according to its Pro Rata Share. All accrued facility fees
to, but not including the effective date of any reduction or termination of
Commitments, shall be paid on the effective date of such reduction or
termination.
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3.26 DEFAULT RATE. If any Event of Default occurs and is continuing
and the Majority Lenders in their discretion so elect, then, while any such
Event of Default is continuing, all of the Obligations shall bear interest at
the Default Rate applicable thereto.
ARTICLE 4: SECURITY.
4.1 UNSECURED CREDIT. The Obligations shall be unsecured.
ARTICLE 5: CONDITIONS.
5.1 CONDITIONS TO DISBURSEMENT OF FIRST BORROWINGS. The
obligation of the Banks to make the first disbursement of Loans is subject to
the conditions precedent specified in SECTION 11.21.
5.2 CONDITIONS FOR SUBSEQUENT BORROWINGS OR FOR A REDESIGNATION OF
BORROWINGS. The obligation of the Banks to make any Borrowing (including the
first and any subsequent Borrowing) or redesignation of Borrowing is subject to
the following conditions precedent:
(1) the representations and warranties contained in ARTICLE 7,
as of the latest reporting required under this Agreement, shall be correct
in all Material respects on and as of the date of the Borrowing, or
redesignation thereof, as though made on and as of that date, and no Event
of Default or event that would become an Event of Default upon the giving
of notice and/or the passage of time shall have occurred and be
continuing; and
(2) the Company shall, at its sole expense, deliver or cause
to be delivered to the Agent, in form and substance satisfactory to the
Agent, a Request for Borrowing or a Request for Redesignation of
Borrowing, as applicable.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Bank that:
6.1 INCORPORATION, QUALIFICATION, POWERS AND CAPITAL STOCK. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of Delaware, is duly qualified to do
business as, and is in good standing as, a foreign corporation in each
jurisdiction in which the conduct of its business or the ownership or leasing of
its properties makes such qualification necessary other than jurisdictions in
which the failure to be so qualified or in good standing would not have a
Material adverse effect on the Company and its Subsidiaries taken as a whole,
and has all requisite power and authority to conduct its business and to own and
lease its properties. All outstanding shares of capital stock of the Company are
duly authorized, validly issued, fully paid, nonassessable, and issued in
compliance with all applicable state and federal securities and other Laws.
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6.2 EXECUTION, DELIVERY AND PERFORMANCE OF LOAN DOCUMENTS.
(1) The Company has all requisite power and authority to
execute and deliver, and to perform all of its obligations under, the Loan
Documents.
(2) Each Guarantor has all requisite power and authority to
execute and deliver, and to perform all of its obligations under the
Guaranty.
(3) The execution and delivery by the Company of, and the
performance by the Company of each of its obligations under, each Loan
Document to which it is a party, and the execution and delivery by each
Guarantor of, and the performance by each Guarantor of each of its
obligations under the Guaranty, have been duly authorized by all necessary
action and do not and will not:
(1) require any consent or approval not heretofore
obtained of any stockholder, security holder or creditor of
the Company, any Subsidiary or any Guarantor;
(2) violate any provision of the certificate of
incorporation or bylaws (or similar organizational or
governing documents) of the Company or any Guarantor or any
provision of the articles or certificate of incorporation,
bylaws or partnership agreement (or similar organizational or
governing documents) of any Subsidiary;
(3) result in or require the creation or imposition of
any lien, claim or encumbrance (except to the extent that any
lien is created under this Agreement) upon or with respect to
any property now owned or leased or hereafter acquired by the
Company, any Subsidiary or any Guarantor;
(4) violate any provision of any Law, order, writ,
judgment, injunction, decree, determination or award presently
in effect having applicability to the Company, any Subsidiary
or any Guarantor; or
(5) result in a breach of or constitute a default under,
or cause or permit the acceleration of any obligation owed
under, any indenture or loan or credit agreement or any other
Material agreement, lease or instrument to which the Company,
any Subsidiary or any Guarantor is a party or by which the
Company, any Subsidiary or any Guarantor or any property of
the Company, any Subsidiary or any Guarantor is bound or
affected.
(4) The Company, each Controlled Subsidiary and each Guarantor
is not in default under any Law, order, writ, judgment, injunction,
decree,
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determination, award, indenture, agreement, lease or instrument
described in SECTIONS 7.2(c)(iv) OR 7.2(c)(v) above, in any respect that
is Materially adverse to the interests of any Bank, or that could
Materially impair the ability of the Company, its Controlled Subsidiaries
and each Guarantor taken as a whole to perform its obligations under the
Loan Documents, as applicable, or that has a Material adverse effect on
the business or financial condition of the Company and the Subsidiaries
taken a whole.
(5) No authorization, consent, approval, order, license,
permit or exemption from, or filing, registration or qualification with,
any Governmental Authority not heretofore obtained is or will be required
under applicable Law to authorize or permit the execution, delivery and
performance by the Company or any Guarantor of, all of its obligations
under, the Loan Documents.
(6) Each of the Loan Documents to which the Company is a
party, when executed and delivered, will constitute the legal, valid and
binding obligations of the Company, and the Guaranty, when executed and
delivered, will constitute the legal, valid and binding obligations of
each Guarantor, each enforceable against such Person in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to
or affecting creditors' rights generally or equitable principles relating
to the granting of specific performance or other equitable remedies as a
matter of judicial discretion.
6.3 COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS. The Company is in
compliance with all Laws and other requirements applicable to its business and
has obtained all authorizations, consents, approvals, orders, licenses, permits
and exemptions from, and has accomplished all filings, registrations or
qualifications with, any Governmental Authority that is necessary for the
transaction of its business in each case, other than as would not have a
Material adverse effect on the Company and its Subsidiaries taken as a whole.
1.5 SUBSIDIARIES.
(1) EXHIBIT "E" hereto correctly sets forth the names and
jurisdictions of incorporation or formation of all present Subsidiaries
(including all Restricted Subsidiaries and Unrestricted Subsidiaries).
EXHIBIT "E" correctly sets forth which Subsidiaries are Restricted
Subsidiaries, and which are Unrestricted Subsidiaries. Except as described
in EXHIBIT "E", the Company does not own any capital stock or ownership
interest in any Person. All outstanding shares of capital stock or
ownership interests, as the case may be, of each Subsidiary that are owned
by the Company or any Subsidiary are (i) owned of record and beneficially
by the Company and/or by one or more Subsidiaries, free and clear of all
liens, claims, encumbrances and rights of others, and are (ii) duly
authorized, validly issued, fully paid, nonassessable, and issued in
compliance with all applicable state and federal securities and other
Laws. The Company may update EXHIBIT "E" from time to time by sending
written notice to the Agent.
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(2) Each Controlled Subsidiary is a corporation, partnership
or limited liability company duly incorporated or formed, validly existing
and in good standing under the laws of its respective jurisdiction of
incorporation or formation, is duly qualified to do business as, and is in
good standing as, a foreign corporation, partnership or limited liability
company in each jurisdiction in which the conduct of its business or the
ownership or leasing of its properties makes such qualification necessary
other than jurisdictions in which the failure to be so qualified or in
good standing would not have a Material adverse effect on the Company and
its Subsidiaries taken as a whole, and has all requisite power and
authority to conduct its business and to own and lease its properties.
(3) Each Controlled Subsidiary is in compliance in all
Material respects with all Laws and other requirements applicable to its
business and has obtained all authorizations, consents, approvals, orders,
licenses, permits and exemptions from, and has accomplished all filings,
registrations or qualifications with, any Governmental Authority that is
necessary for the transaction of its business.
6.4 FINANCIAL STATEMENTS OF THE COMPANY AND ITS CONSOLIDATED
SUBSIDIARIES. The Company has furnished to the Banks a copy of the financial
statements of (a) ▇▇▇▇▇▇▇ Homes, Inc. (prior to its merger into the Company,
known as ▇▇▇▇▇▇▇ Residential, Inc.) and its consolidated subsidiaries, and (b)
Western Pacific Housing and its consolidated subsidiaries, in each case, for the
year ended March 31, 2001. Such financial statements and the notes thereto
fairly present in all Material respects the consolidated financial position of
the Company and its consolidated Subsidiaries as at the dates specified therein
and the consolidated results of operations and cash flows for the periods then
ended, all in conformity with generally accepted accounting principles applied
on a consistent basis.
6.5 NO MATERIAL ADVERSE CHANGE. There has been no Material adverse
change in the condition, financial or otherwise, of the Company and the
Subsidiaries, taken as a whole, from the financial condition of the Company and
the Subsidiaries, taken as a whole, since March 31, 2001, and the Company and
the Subsidiaries, taken as a whole, do not have any Material liability or, to
the best knowledge of the Company, Material contingent liability, not reflected
or disclosed in the financial statements or notes thereto described in SECTION
7.5 (or, to the extent that financial statements have been delivered pursuant to
SECTION 8.12, in the most recently delivered financial statements), or otherwise
disclosed to the Agent in writing.
6.6 TAX LIABILITY. The Company and each Subsidiary have filed all
Material tax returns (federal, state and local) required to be filed by them and
have paid all taxes shown thereon to be due and all property taxes due,
including interest and penalties, if any. To the best knowledge of the Company,
there does not exist any substantial likelihood that any Governmental Authority
will successfully assert a tax deficiency against the Company or any Subsidiary
that is Material to the Company and the Subsidiaries, taken as a whole, that has
not been adequately reserved against in the financial statements described in
SECTION 7.5 (or, to the extent that financial statements have been delivered
pursuant to
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SECTION 8.12, in the most recently delivered financial statements). The
Company and each Controlled Subsidiary has established and is maintaining
adequate reserves for tax liabilities, if any, sufficient to comply with
generally accepted accounting principles.
6.7 LITIGATION. There are no actions, suits or proceedings pending
or, to the best knowledge of the Company, threatened against or affecting the
Company or any Controlled Subsidiary, or any property of the Company or any
Controlled Subsidiary, before any Governmental Authority which, if determined
adversely to the Company or the Subsidiary, could reasonably be expected to have
a Material adverse effect on the interests of any Bank, or could Materially
impair the ability of the Company to perform its obligations under the Loan
Documents, or could have a Material adverse effect on the business or financial
condition of the Company and the Subsidiaries, taken as a whole.
1.6 ERISA COMPLIANCE.
(1) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS and to the
best knowledge of the Company, nothing has occurred which would cause the
loss of such qualification. The Company and each ERISA Affiliate has made
all required contributions to any Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(2) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably
be expected to result in (i) a Material adverse change in, or a Material
adverse effect upon, the operations, business, properties, condition
(financial or otherwise) of the Company, or (ii) a Material impairment of
the ability of the Company to perform its obligations under the Loan
Documents or to avoid any Event of Default. 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 (i) a Material adverse change in, or a Material adverse effect
upon, the operations, business, properties, condition (financial or
otherwise) of the Company, or (ii) a Material impairment of the ability of
the Company to perform its obligations under the Loan Documents or to
avoid any Event of Default.
(3) (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii)
neither the Company nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to
any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA); (iv) neither the Company nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any
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liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) neither the Company nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
6.8 REGULATIONS U AND X; INVESTMENT COMPANY ACT. Neither the Company
nor any Controlled Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the meanings of Regulation U of the FRB.
No part of the Loans will be used to purchase or carry any margin stock, or to
extend credit to others for that purpose, or for any purpose that violates the
provisions of Regulations U or X of the FRB. Neither the Company nor any
Controlled Subsidiary is or is required to be registered under the Investment
Company Act of 1940.
6.9 NO DEFAULT. No event has occurred and is continuing that is an
Event of Default or that could become an Event of Default upon the giving of
notice and/or the passage of time.
6.10 BORROWING BASE. The Total Borrowing Base Indebtedness does
not exceed the Borrowing Base.
6.11 BORROWING BASE CERTIFICATE. Borrowing Base Certificate
submitted to Bank pursuant to SECTION 3.5(a) hereof, and the calculations
pertaining thereto, shall be true and correct in all respects to the best of
Company's knowledge and belief.
ARTICLE 7: COVENANTS OF THE COMPANY.
As long as any Note remains unpaid or any other Obligation (other
than indemnification or other contingent obligations surviving the termination
of this Agreement) remains outstanding or any Commitment remains in effect,
unless the Majority Banks otherwise consent in writing:
7.1 CONSOLIDATED TANGIBLE NET WORTH. The Company shall not permit,
measured as of the end of each Quarter, Consolidated Tangible Net Worth to be
less than the sum of (a) $300,000,000, PLUS (b) 50% of the cumulative
consolidated net income (without deduction for losses sustained during any
fiscal quarter) of the Company and its consolidated Subsidiaries for each fiscal
quarter subsequent to the fiscal quarter ended March 31, 2001, PLUS (c) 90% of
the net proceeds from (i) any equity offerings of the Company from and after
March 31, 2001, and (ii) any conversion of the Subordinated Debt to equity from
and after March 31, 2001.
7.2 LEVERAGE COVENANTS. The Company shall not permit, measured as of
the end of each Quarter, the ratio (the "Leverage Ratio") of Consolidated
Liabilities to
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Consolidated Tangible Net Worth to exceed 2.50 to 1, PROVIDED, HOWEVER, that
the Company will not be in default under this SECTION 8.2 if the Leverage
Ratio is more than 2.50 to 1.0 (but IN NO EVENT more than 2.75 to 1.0) for
not more than one Quarter ("Leverage Ratio Cure Period"), so long as all the
following conditions are satisfied:
(1) The Company shall have delivered to the Agent written
notice of its failure to satisfy the 2.50 to 1.0 Leverage Ratio
requirement (a "LEVERAGE COVERAGE NOTICE"), specifying the Leverage Ratio
as of the end of the Quarter ("Leverage Failure Date"), within 45 days
after the end of the Quarter or sooner if known to the Company.
(2) The Consolidated Net Income (less any non-cash inventory
writedowns) was positive as of the Leverage Coverage Failure Date and for
the immediately preceding Quarter.
(3) The Leverage Coverage Failure Date covered by any Leverage
Coverage Notice shall have been immediately preceded by at least two
Quarters in which the Company was in compliance with the 2.50 to 1.0
Leverage Coverage Ratio.
(4) No other Event of Default has occurred and is
continuing.
(5) The Minimum Interest Coverage as of the Leverage Failure
Date is no less than 2.5 to 1.0.
7.3 MINIMUM INTEREST COVERAGE. The Company shall not permit,
measured as of the end of each Quarter, the ratio ("Minimum Interest Coverage")
of (a) EBITDA to (b) Consolidated Interest Incurred, for any period consisting
of the preceding four (4) fiscal quarters, to be less than 2.25 to 1.0.
7.4 MINIMUM LIQUIDITY. The Company shall not permit, measured
as of the end of each Quarter, the Net Working Capital to be less than zero
(0).
7.5 PAYMENT OF TAXES AND OTHER POTENTIAL LIENS. The Company shall
pay and discharge promptly, and cause each Controlled Subsidiary to pay and
discharge promptly, all taxes, assessments and governmental charges or levies
imposed upon it, upon its property or any part thereof, upon its income or
profits or any part thereof, or upon any right or interest of any Bank under or
in respect of any Loan Document, EXCEPT that neither the Company nor any
Controlled Subsidiary shall be required to pay or cause to be paid (a) any
income or gross receipts tax generally applicable to banks and imposed on any
Bank, or (b) any tax, assessment, charge or levy that is not yet past due, or
being actively contested in good faith by appropriate proceedings, as long as
the Company or Subsidiary, as the case may be, has established and maintains
adequate reserves for the payment of the same and, by reason of nonpayment, no
property of the Company or any Subsidiary is in danger of being lost or
forfeited.
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7.6 PRESERVATION OF EXISTENCE. Unless the Company, in the exercise
of its reasonable business judgment, determines otherwise, the Company shall
preserve and maintain, and cause each Subsidiary to preserve and maintain, its
corporate or partnership existence, as the case may be, and all licenses,
rights, franchises and privileges in the jurisdiction of its incorporation or
formation and all authorizations, consents, approvals, orders, licenses, permits
or exemptions from, or registrations or qualifications with, any Governmental
Authority that are necessary for the transaction of its business, and qualify
and remain qualified, and cause each Subsidiary to qualify and remain qualified,
to do business as a foreign corporation, partnership or limited liability
company in each jurisdiction in which such qualification is necessary in view of
its business or the ownership or leasing of its properties; provided, however,
the Company shall advise the Agent in writing in the event any Restricted
Subsidiary is dissolved or merged and shall maintain at all times the corporate
existence of the Company.
7.7 MAINTENANCE OF PROPERTIES. The Company shall maintain, preserve
and protect, and cause each Controlled Subsidiary to maintain, preserve and
protect, all of its properties in good order and condition, subject to wear and
tear in the ordinary course of business and, in the case of unimproved
properties, damage caused by the natural elements, and not allow any Controlled
Subsidiary to suffer or permit, any waste of its properties.
7.8 MAINTENANCE OF INSURANCE. The Company shall maintain, and shall
cause each of its Controlled Subsidiaries to maintain, with financially sound
and reputable independent insurers, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons; including workers' compensation insurance, public liability and
property and casualty insurance which amount shall not be reduced by the Company
in the absence of 30 days' prior notice to the Agent. Upon request of the Agent
or any Bank, the Company shall furnish the Agent, with sufficient copies for
each Bank, at reasonable intervals (but not more than once per calendar year) a
certificate of the chief financial officer of the Company (and, if requested by
the Agent, any insurance broker of the Company) setting forth the nature and
extent of all insurance maintained by the Company and its Controlled
Subsidiaries in accordance with this Section (and which, in the case of a
certificate of a broker, were placed through such broker).
7.9 MERGERS. The Company shall not merge or consolidate, or permit
any Controlled Subsidiary to merge or consolidate, with or into any Person,
EXCEPT THAT any Restricted Subsidiary may merge into the Company (provided that
the surviving entity is the Company) or into any other Restricted Subsidiary and
any Unrestricted Subsidiary may merge into any other Unrestricted Subsidiary and
any Restricted Subsidiary may merge with any Person (provided that the
Restricted Subsidiary is the surviving entity) so long as such merger would
constitute a Permitted Investment.
7.10 BOOKS AND RECORDS. The Company shall maintain, and cause each
Controlled Subsidiary to maintain, full and complete books of account and other
records
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reflecting the results of its operations in conformity with generally
accepted accounting principles applied on a consistent basis and all
applicable requirements of any Governmental Authority having jurisdiction
over the Company or any Controlled Subsidiary or any business or properties
of the Company or any Controlled Subsidiary.
7.11 INSPECTION RIGHTS. At any time during regular business hours
and at any other reasonable time, and as often as requested, the Company shall
permit, and cause each Controlled Subsidiary to permit, each Bank or any
employee, agent or representative thereof to inspect and make copies and
abstracts from the records and books of account of, and to visit and inspect the
properties of, the Company and any Controlled Subsidiary, and to discuss any
affairs, finances and accounts of the Company and any Controlled Subsidiary with
any of their respective officers or directors.
7.12 REPORTING REQUIREMENTS. The Company shall cause to be
delivered to the Agent, in form and detail satisfactory to the Agent (for
prompt distribution by the Agent to the Banks):
(1) as soon as practicable and in any event within 5 days
after the occurrence of an Event of Default becomes known to the Company,
a written statement setting forth the nature of the Event of Default and
the action that the Company proposes to take with respect thereto;
(2) as soon as available and in any event within 45 days after
the end of each of the first three calendar quarters of each calendar
year, a Form 10-Q of the Company and its consolidated Subsidiaries as of
the end of the quarter most recently ended, and unaudited consolidated
balance sheets, statements of income, retained earnings and cash flows of
the Company and unaudited consolidating balance sheets and statements of
income of its consolidated Subsidiaries in the form previously delivered
to and approved by Agent, for such period, all in reasonable detail and
duly certified (subject to year-end audit adjustments) by the chief
financial officer or the treasurer of the Company; (additionally, a
schedule shall accompany the unaudited consolidating and consolidated
balance sheets which shall reconcile the amounts used to calculate the
covenants pursuant to SECTIONS 8.1, 8.2, 8.3 and 8.4 above to such
unaudited consolidated and consolidating balance sheets);
(3) as soon as available and in any event within 90 days after
the end of each calendar year, a Form 10-K and a consolidating and
consolidated balance sheet of the Company and its consolidated
Subsidiaries as of the end of the year most recently ended and
consolidated statements of income, retained earnings and cash flows of the
Company and its consolidated Subsidiaries for such year, setting forth in
each case in comparative form the corresponding figures for the preceding
fiscal year, audited by and with the opinion of Ernst & Young any
successor thereto or any other independent certified public accountants of
recognized standing selected by the Company and acceptable to the Agent,
which opinion shall be unqualified except as to such matters as are
acceptable to the Majority Banks ("ACCEPTABLE AUDIT OPINION");
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(4) at the time of the delivery of the financial statements
described in (b) and (c) above, a certificate of the chief financial
officer or the chief accounting officer of the Company stating that to the
knowledge of such officer no event exists that is, or with the giving of
notice and/or the passage of time would be, an Event of Default, or if
such an event exists, stating the nature thereof and the action that the
Company proposes to take with respect thereto;
(5) as soon as available and in any event within 90 days after
the end of each calendar year, (i) a business plan, for the succeeding
thirty-six months (which for 2001 will be in the form previously delivered
to Agent); and (ii) cash flow projections and an operating budget for the
next twelve months. The business plan should include for each of the
Company's real estate development projects for each quarter (a) the number
of projected closings of Units and Finished Lots, and (b) projected
revenue (including the aggregate of all amounts projected to be generated
from any source);
(6) promptly upon the Company learning thereof, notice in
writing of any action, suit or proceeding before any Governmental
Authority which, if determined adversely to the Company or any Controlled
Subsidiary, might reasonably be expected to have a Material adverse effect
on the business, assets, operation or condition, financial or otherwise,
of the Company and its Subsidiaries, taken as a whole, or could impair the
ability of the Company to perform its obligations under the Loan
Documents;
(7) such other information about the business, assets,
operation or condition, financial or otherwise, of the Company or any
Controlled Subsidiary, as Agent may reasonably request from time to time;
(8) as soon as available and in any event within 45 days after
the end of each calendar quarter, (a) a residential development summary
substantially in the form previously submitted to Agent, (b) financial
statements by division, (c) a breakdown of all land holdings by type, (d)
details of all land purchases and projected purchases, and (e) sales
reports by division;
(9) within forty-five (45) days after the end of each calendar
quarter, a certificate of the Company's chief financial officer or chief
accounting officer, together with such backup information as each Bank may
reasonably require, demonstrating in detail acceptable to Agent that the
Company was in compliance during the applicable period with the covenants
set forth in SECTIONS 8.1, 8.2, 8.3, 8.4, 8.22 and 8.29; and
(10) within 15 days after the end of each month, a Borrowing
Base Certificate, as specified in SECTION 3.5(a) and within 45 days after
the end of each calendar quarter a compliance certificate substantially in
the form of EXHIBIT "H"
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("Compliance Certificate").
7.13 LIENS GENERALLY. The Company shall not create, incur, assume or
allow to exist, or permit any Restricted Subsidiary to create, incur, assume or
allow to exist, any Lien of any nature upon or with respect to any property of
the Company or any Restricted Subsidiary, including equity interests in
Unrestricted Subsidiaries, whether now owned or hereafter acquired, except the
following permissible liens:
(1) existing Liens identified on SCHEDULE 8.13 hereof
securing indebtedness outstanding on the date hereof;
(2) Liens for taxes, assessments or governmental charges or
levies to the extent that neither the Company nor any Subsidiary is
required to pay the amount secured thereby under SECTION 8.5;
(3) Liens imposed by law, such as carrier's, warehouseman's,
mechanic's, materialman's and other similar liens, arising in the ordinary
course of business in respect of obligations that are not overdue or are
being actively contested in good faith by appropriate proceedings, as long
as the Company or Subsidiary, as the case may be, has established and
maintains adequate reserves for the payment of the same and, by reason of
nonpayment, no property of the Company or any Subsidiary is in danger of
being lost or forfeited;
(4) purchase money liens upon or in any property acquired or
held by the Company or any Restricted Subsidiary in the ordinary course of
business, including, without limitation real property, to secure the
purchase price of such property, so long as such liens do not exceed 80%
of the value of the property encumbered thereby;
(5) leases of Model Homes; and
(6) Liens Securing Performance Obligations.
7.14 LIENS ON BORROWING BASE ASSETS. The Company shall not, and
shall not permit any Restricted Subsidiary to, create, incur, assume or allow to
exist any Lien of any nature upon or with respect to any Borrowing Base Asset,
except the following permissible Liens:
(1) Liens for taxes, assessments or governmental charges or
levies to the extent that neither the Company nor any Restricted
Subsidiary is required to pay the amount secured thereby under SECTION
8.5;
(2) Liens imposed by law, such as carrier's, warehouseman's,
mechanic's, materialman's and other similar Liens, arising in the ordinary
course of business in respect of obligations that are not overdue or are
being actively contested
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in good faith by appropriate proceedings, as long as the Company or
Restricted Subsidiary, as the case may be, has established and
maintains adequate reserves for the payment of the same and, by reason
of nonpayment, no property of the Company or any Restricted Subsidiary
is in danger of being lost or forfeited; and
(3) Liens Securing Performance Obligations.
7.15 PREPAYMENT OF INDEBTEDNESS. If an Event of Default has occurred
and is continuing or an acceleration of the indebtedness evidenced by each Note
has occurred, the Company shall not prepay the principal amount, in whole or in
part, of any Indebtedness other than (a) Indebtedness owed to each Bank
hereunder or under some other agreement between the Company and such Bank and
(b) Indebtedness which ranks pari passu with indebtedness evidenced by each Note
which is or becomes due and owing whether by reason of acceleration or
otherwise.
1.7 COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS.
(1) The Company shall comply, and cause each Controlled
Subsidiary to comply, in all Material respects with the requirements of
all applicable Laws and orders of any Governmental Authority.
(2) The Company shall comply, and cause each Controlled
Subsidiary (to the extent they are so engaged) to comply, in all Material
respects with all applicable Laws and other requirements relating to the
development, management, operation and sale of each of its projects and
shall obtain, and cause each Subsidiary (to the extent they are so
engaged) to obtain, all necessary authorizations, consents, approvals,
licenses and permits of any Governmental Authority with respect thereto.
7.16 CHANGE IN NATURE OF BUSINESS. The Company shall not make, or
permit any Controlled Subsidiary to make, any change in the nature of its or
their respective businesses as carried on at the date hereof, which has not been
consented to by the Majority Banks in writing.
7.17 COMPLIANCE WITH ERISA. The Company shall, and shall cause each
of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code. In addition, the Company shall not,
and shall not suffer or permit any of its ERISA Affiliates to: (a) engage in a
prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan which has resulted or could reasonably expected to result in
liability of the Company in an aggregate amount in excess of $500,000; or (b)
engage in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.
7.18 DIVIDENDS AND SUBORDINATED DEBT. The Company shall not declare
or
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pay any dividend on, or purchase, redeem, retire or otherwise acquire for
value any of its capital stock now or hereafter outstanding, return any capital
to its stockholders or make any distribution of assets to its stockholders,
whether in cash, property or obligations, or pay or repurchase all or any part
of any Subordinated Debt, transfer any property in payment of or as security for
the payment of all or any part of any Subordinated Debt, or establish any
sinking fund, reserve or like set aside of funds or other property for the
redemption, retirement or repayment of all or any part of any Subordinated Debt,
EXCEPT:
(1) unless (i) an Event of Default has occurred under Section
9.1(a) and is continuing or (ii) any other Event of Default has occurred
and is continuing in respect of which the Agent has given a Payment
Blockage Notice under, in accordance with, and as defined in the indenture
governing the Senior Subordinated Notes, that is in effect in accordance
with such indenture, the Company may make interest and scheduled principal
payments in respect of any Subordinated Debt as and when required by the
terms thereof, but in any event not more than 90 days in advance of the
due date thereof; and
(2) so long as no Event of Default has occurred and is
continuing, the Company may declare and pay dividends in any calendar
quarter and purchase, redeem, retire, or otherwise acquire for value any
of its capital stock now or hereafter outstanding, return any capital to
its stockholders or make any distribution of assets to its stockholders,
whether in cash, property, or obligations ("Stock Payments") in any
calendar quarter so long as (i) at the time each such dividend is declared
or the Stock Payment is made the Consolidated Tangible Net Worth
requirement of SECTION 8.1 remains satisfied and any such dividend or
Stock Payment would not cause SECTION 8.1 to be violated, and (ii) all
such dividends paid and Stock Payments made in such calendar quarter do
not in the aggregate exceed 50% of the Consolidated Net Income (without
deduction for net losses) of the Company for the preceding calendar
quarter; provided, however the aggregate amount of Stock Payments during
each fiscal year of the Company may not exceed $10,000,000.
7.19 DISPOSITION OF PROPERTIES. The Company shall not, and shall not
permit the Controlled Subsidiaries to, sell, assign, exchange, transfer, lease
or otherwise dispose of any of their respective properties (whether real or
personal), other than properties sold, assigned, exchanged, transferred, leased
or otherwise disposed of for fair value and in the ordinary course of business
(other than sales or transfers to homeowners associations, government agencies,
or to other Persons in connection with the acquisition or entitlement of land,
in each case, in which the Company or the Restricted Subsidiary receives little
or no consideration); PROVIDED the Company shall not, and shall not permit any
Restricted Subsidiary to, sell, assign, exchange, transfer, lease or otherwise
dispose of any of its properties to a Unrestricted Subsidiary, and PROVIDED
FURTHER, that the Company and any Restricted Subsidiary may sell, assign,
exchange, transfer, lease, or otherwise dispose of any of its property to the
Company or any other Restricted Subsidiary.
7.20 MANAGEMENT. The Company shall at all times maintain ▇▇▇▇▇
▇▇▇▇▇▇▇
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as president and chief executive officer of the Company, who shall at all
times be responsible for the day-today management and operations of the
Company, PROVIDED, HOWEVER, in the event ▇▇▇▇▇ ▇▇▇▇▇▇▇ ceases to serve as
president and chief executive officer, the Company shall nevertheless have
120 days from the date on which ▇▇▇▇▇ ▇▇▇▇▇▇▇ ceases to serve as president
and chief executive officer to select a replacement president and chief
executive officer reasonably acceptable to FNB, FHB, BofA and the Majority
Banks.
7.21 TOTAL BORROWING BASE INDEBTEDNESS NOT TO EXCEED BORROWING
BASE. The Company shall not permit the Total Borrowing Base Indebtedness to
at any time exceed the Borrowing Base.
7.22 SUBSIDIARY GUARANTIES. The Company shall cause each existing
Subsidiary identified on SCHEDULE 1.1(c) hereto, as a Restricted Subsidiary to
execute a Guaranty of the Obligations, in substantially the form attached hereto
as EXHIBIT "D", with such changes and modifications thereto as Agent shall in
its discretion require. The Company shall cause (a) each of the Subsidiaries
identified on Schedule 1.1(c) as a Restricted Subsidiary to execute such
Guaranty prior to or concurrently with the Closing Date, and (b) any new Wholly
Owned Subsidiaries which are to be Restricted Subsidiaries to execute such a
Guaranty prior to being designated a Restricted Subsidiary.
1.8 INVESTMENTS.
(1) MAXIMUM INVESTMENTS BY COMPANY AND RESTRICTED
SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, make any Investments other than Permitted
Investments.
(2) INVESTMENTS IN UNRESTRICTED SUBSIDIARIES. Neither the
Company nor any Restricted Subsidiary shall in the aggregate as to all
such Investments by the Company and Restricted Subsidiaries make any
Investments in Unrestricted Subsidiaries which exceed the limits specified
in subparagraph (c) of the definition of Permitted Investments.
(3) INVESTMENTS IN COMMERCIAL PROPERTY. The Company and its
Restricted Subsidiaries shall not make Investments in any mixed use,
commercial or income producing Assets, including apartments, offices,
hotels, retail or mixed use or commercial properties, unless such mix use,
commercial and income producing Assets are attached or contiguous to and
developed in connection with residential development projects, provided
such mix use, commercial and income producing Assets are disposed of
within twelve (12) months of completion.
(4) INVESTMENTS IN UNENTITLED LAND. Neither the Company
nor any Subsidiary shall make any Investments in any Unentitled Land.
7.23 INDEBTEDNESS. The Company shall not, and shall not suffer or
permit any Restricted Subsidiary to, create, incur, assume, permit to exist or
otherwise become or
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remain directly or indirectly liable with respect to, any Indebtedness
(including Guaranty Obligations), other than Permitted Indebtedness or any
refinancings thereof having similar terms and amounts.
7.24 NO OTHER NEGATIVE PLEDGE. The Company shall not, and shall not
permit any Restricted Subsidiary to covenant or otherwise agree with any Person
(other than the Banks and Agent pursuant to this Agreement and the holders of
the Senior Notes), whether in connection with obtaining or modifying credit
accommodations from such Person, or incurring other Indebtedness, or otherwise,
to keep its Unencumbered Real Estate Inventory free of any or all Liens.
7.25 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall
not suffer or permit any Restricted Subsidiary to, enter into any transaction
(other than employee loans in the ordinary course of business) with any
Affiliate of the Company (including Unrestricted Subsidiaries), except upon fair
and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would be obtained in a comparable arm's-length transaction with
a Person not an Affiliate of the Company or such Restricted Subsidiary.
7.26 ACCOUNTING CHANGES. The Company shall not, and shall not suffer
or permit any Subsidiary to, make any significant change in accounting treatment
or reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any Subsidiary.
1.9 MAXIMUM FINISHED LOTS, LAND/LOTS UNDER DEVELOPMENT,
UNIMPROVED LAND AND UNSOLD UNITS.
(1) The Company shall not allow, measured as of the end of
each Quarter, the aggregate GAAP Value of all Finished Lots, Land/Lots
Under Development, Undeveloped Land, and Unimproved Land owned by the
Company and its Restricted Subsidiaries to at any time exceed any of the
following:
(1) 120% of the sum of (a) Consolidated Tangible
Net Worth plus (b) up to $150,000,000 of Subordinated Debt
on the Closing Date and June 30, 2001;
(2) 110% of the sum of (a) Consolidated Tangible Net
Worth plus (b) up to $150,000,000 of Subordinated Debt on
September 30, 2001, December 31, 2001 and March 31, 2002;
(3) 105% of sum of (a) Consolidated Tangible Net Worth
plus (b) up to $150,000,000 of Subordinated Debt on June 30,
2002, September 30, 2002, December 31, 2002 and March 31,
2003; and
(4) 100% of the sum of (a) Consolidated Tangible Net
Worth plus (b) up to $150,000,000 of Subordinated Debt on June
30,
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2003 and at the end of each Quarter thereafter.
(2) The Company shall not allow, measured as of the end of
each Quarter, the aggregate number of Unsold Units owned by the Company
and its Restricted Subsidiaries (excluding Model Homes) to exceed 25% of
the number of Units that were sold in the previous 12 months by the
Company and its Restricted Subsidiaries.
7.27 NO HIGH-RISE CONSTRUCTION. The Company shall not, and shall not
permit its Restricted Subsidiaries to, engage in any development of a
residential building having more than six (6) stories, other than Country Club
Village.
7.28 PERMITTED DEBT BY UNRESTRICTED SUBSIDIARIES. The Company shall
not permit the Unrestricted Subsidiaries to incur Unrestricted Subsidiary
Financing and Participating Equity Loans in excess of $100,000,000 at any one
time outstanding.
ARTICLE 8: EVENTS OF DEFAULT AND REMEDIES UPON DEFAULT.
8.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an Event of Default hereunder:
(1) failure to pay within 5 days after the date when due the
principal of each Note or any portion thereof or any interest thereon; or
(2) failure to pay any fee or any other amount payable by the
Company or any Controlled Subsidiary under the Loan Documents within 15
days after the date when due; or
(3) failure to perform or observe any other term, covenant or
agreement contained in any Loan Document on the Company's or any
Controlled Subsidiary's part to be performed or observed, and such failure
shall continue uncured for a period of thirty (30) days following notice
from the Agent to the Company (PROVIDED, HOWEVER, that the cure period
specified in this subparagraph (c) shall not be applicable to any of the
other Events of Default set forth in the other subparagraphs of this
SECTION 9.1, or with respect to the failure to perform any covenants set
forth in Sections 8.8 OR 8.9, or with respect to any other provisions of
any of the other Loan Documents as to which a cure period is specifically
stated); or
(4) any representation or warranty in any Loan Document or in
any certificate, agreement, instrument or other document made or delivered
pursuant to or in connection with any Loan Document proves to have been
incorrect when made in any material respect that is adverse to the
interests of any Bank under the Loan Documents; or
(5) the occurrence of any default under any other agreement
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between the Company (or any Controlled Subsidiary) and any Bank, including
without limitation, the failure to pay when due (or within any stated
grace period) the principal or any principal installment of, or any
interest, on any present or future indebtedness for borrowed money owed by
the Company (or any Controlled Subsidiary) to any Bank; or
(6) the Company, any Controlled Subsidiary (other than an
inactive Subsidiary having assets of $10,000 or less) or any Guarantor is
dissolved or liquidated or all or substantially all of the assets of the
Company are sold or otherwise transferred or encumbered without the prior
written consent of each Bank; or
(7) the Company, any Controlled Subsidiary or any Guarantor is
the subject of an order for relief by any bankruptcy court, or is unable
or admits in writing its inability to pay its debts as they mature or
makes an assignment for the benefit of creditors; or applies for or
consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for
all or any part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed
without the application or consent of the Company, Controlled Subsidiary,
or Guarantor and the appointment continues undischarged or unstayed for 60
days; or the Company, any Controlled Subsidiary or any Guarantor
institutes or consents to any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, custodianship,
conservatorship, liquidation, rehabilitation or similar proceeding
relating to it or to all or any part of its property under the laws of any
jurisdiction; or any similar proceeding is instituted without the consent
of the Company, Controlled Subsidiary, or Guarantor, and continues
undismissed or unstayed for 45 days; or any judgment, writ, warrant of
attachment or execution or similar process is issued or levied against all
or any part of the property of the Company, any Controlled Subsidiary, or
any Guarantor and is not released, vacated or fully bonded within 45 days
after its issue or levy; or
(8) the Majority Banks have reasonably determined that a
Material adverse change has occurred since the date hereof in the
operations, business or financial condition of the Company and its
Subsidiaries taken as a whole, and 15 calendar days have elapsed since the
date that notice of such determination is given to the Company; or
(9) the Company or any Restricted Subsidiary shall (A) fail to
pay any Indebtedness in an aggregate amount of $2,500,000 ($5,000,000 if
the Indebtedness is non-recourse to the Company or the Restricted
Subsidiary) or more owing to any other Person or Persons or any interest
or premium thereon, when due (whether by scheduled maturity, 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 Indebtedness, or (B) fail to
perform any term, covenant or condition on its part to be performed under
any agreement or instrument relating to any such Indebtedness, when
required to be
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performed, and such failure shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect
of such failure to perform is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or
(10) any Guarantor shall reject or disaffirm its Guaranty, or
otherwise notify the Agent that it does not intend the Guaranty or its
liability thereunder to apply to any one or more future Borrowings or
other Obligations; or
(11) any Borrowing Base Certificate or any Compliance
Certificate proves to have been incorrect in any Material respect when
delivered to the Agent; or
(12) any final judgment or judgments in an aggregate amount of
$5,000,000 or more shall have been entered or awarded against the Company
and/or the Subsidiaries; or
(13) a Change of Control occurs; or
(14) Any Unrestricted Subsidiary in which the Company or a
Restricted Subsidiary has an Investment in the Unrestricted Subsidiary in
the amount of $5,000,000 or more shall (A) fail to pay any Indebtedness in
an aggregate amount of $5,000,000 or more owing to any other Person or
Persons or any interest or premium thereon, when due (whether by scheduled
maturity, 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 Indebtedness, or
(B) fail to perform any term, covenant or condition on its part to be
performed under any agreement or instrument relating to any such
Indebtedness, when required to be performed, and such failure shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such failure to perform is to
accelerate, or to permit the acceleration of, the maturity of such
Indebtedness.
8.2 REMEDIES. If any Event of Default occurs, the Agent shall,
at the request of, or may, with the consent of, the Majority Banks,
(1) declare the obligation of each Bank to make Loans to
be terminated, whereupon such obligation shall be terminated;
(2) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon and immediately all other
amounts payable under the Loan Documents to be immediately due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Company; and
(3) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or
applicable law;
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PROVIDED, HOWEVER, that upon the occurrence of any event specified in
subsection (g) of SECTION 9.1, the obligation of each Bank to make Loans
shall automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent or
any Bank. Upon the occurrence of any Event of Default and on the Maturity
Date the Company shall immediately pay to the Agent, for the benefit of
the Banks, an amount (the "L/C OBLIGATIONS AMOUNT") equal to the aggregate
outstanding L/C Obligations; and upon receipt of the payment of the L/C
Obligations Amount, the Agent shall deposit such funds in an
interest-bearing cash account (the "CASH ACCOUNT") in the name of the
Company maintained with the Agent as to which the Company shall have NO
right of withdrawal except as provided below. The Company hereby
irrevocably authorizes and directs the Agent to apply amounts on deposit
in the Cash Account against draws on the outstanding Letters of Credit as
such draws are made. Upon expiration of all Letters of Credit and payment
in full of all draws thereunder and all outstanding Loans and other
Obligations, the amounts then on deposit in the Cash Account and any
interest accrued thereon shall then be returned to the Company (to the
extent any funds remain in the Cash Account after application of such
funds as provided above.)
8.3 RIGHTS NOT EXCLUSIVE. The rights and remedies of the Agent and
Banks provided for in this Agreement and the other Loan Documents are cumulative
and are not exclusive of any other rights, powers, privileges or remedies
provided by law or in equity, or under any other instrument, document or
agreement now existing or hereafter arising.
ARTICLE 2: THE AGENT.
8.4 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints, designates and authorizes the Agent to take such action in its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
8.5 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
8.6 LIABILITY OF AGENT. None of the Agent-Related Persons
shall:
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(1) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or
(2) be responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by the Company or any
Subsidiary or Affiliate of the Company, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Agent under or in connection with, this Agreement or any
other Loan Document, or for the value of or title to any collateral, or
the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document, or for any failure of the
Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder.
No Agent-Related Person shall be under any obligation to any Bank to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
8.7 RELIANCE BY AGENT.
(1) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Company), independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or concurrence of
each Bank as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of each
Bank and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Banks.
(2) For purposes of determining compliance with the conditions
specified in Article 6, each Bank that has executed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Agent to such Bank
for consent, approval, acceptance or satisfaction, or required thereunder
to be consented to or approved by or acceptable or satisfactory to the
Bank.
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8.8 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Banks, unless the Agent shall
have received written notice from a Bank or the Company referring to this
Agreement, describing such default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Banks of its receipt
of any such notice. The Agent shall take such action with respect to such
default or Event of Default as may be requested by the Majority Banks in
accordance with Article 9; PROVIDED, HOWEVER, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
default or Event of Default as it shall deem advisable or in the best interest
of the Banks.
8.9 CREDIT DECISION. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, the value of and title to any collateral, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Company hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Agent, the Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Company which may come
into the possession of any of the Agent-Related Persons.
8.10 INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligations of the Company to do so), pro rata, from and against
any and all liabilities covered by any indemnification hereunder; PROVIDED,
HOWEVER, that no Bank shall be liable for the payment to the Agent-Related
Persons of any portion of such liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including attorney fees and costs) incurred by
the Agent in
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connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
8.11 AGENT IN INDIVIDUAL CAPACITY. FHB and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though FHB were not the Agent hereunder and
without notice to or consent of the Banks. Each Bank acknowledges that, pursuant
to such activities, FHB or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that FHB and its Affiliates shall be under no obligation to provide
such information to it. With respect to its Loans, FHB shall have the same
rights and powers under this Agreement as any other bank and may exercise the
same as though it were not the Agent, and the terms "Bank" and "Banks" include
FHB in its individual capacity.
8.12 SUCCESSOR AGENT. The Agent may resign as Agent upon 30 days'
notice to the Banks. If the Agent resigns under this Agreement, the Majority
Banks shall appoint from among the Banks a successor agent for the Banks upon
the written consent of the Company and the Banks (which consents shall not be
unreasonably withheld). If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint a
successor agent from among the Banks upon the written consent of the Company and
the Banks (which consents shall not be unreasonably withheld). Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Banks shall perform all of the duties of the
Agent hereunder until such time, if any, as the Majority Banks appoint a
successor agent as provided for above.
8.13 WITHHOLDING TAX.
(1) If any Bank is a "foreign corporation, partnership or
trust" within the meaning of the Code and such Bank claims exemption from,
or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the
Code, such Bank agrees with and in favor of the Agent, to deliver to the
Agent:
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(1) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, properly completed IRS Forms 1001 and W-8 before the
payment of any interest in the first calendar year and before
the payment of any interest in each third succeeding calendar
year during which interest may be paid under this Agreement;
(2) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because
it is effectively connected with a United States trade or
business of such Bank, two properly completed and executed
copies of IRS Form 4224 before the payment of any interest is
due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest may
be paid under this Agreement, and IRS Form W-9; and
(3) such other form or forms as may be required under
the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding
tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption
or reduction.
(2) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form
1001 and such Bank sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Company to such Bank in
accordance with SECTION 11.6, such Bank agrees to notify the Agent of the
percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Bank. To the extent of such percentage
amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.
(3) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations of the Company to such Bank in accordance with SECTION 11.6,
such Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the
Code.
(4) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent, then the
Agent may withhold from any interest
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payment to such Bank not providing such forms or other documentation an
amount equivalent to the applicable withholding tax.
(5) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly
executed, or because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the
resignation or replacement of the Agent.
8.14 PERFORMANCE BY THE AGENT. In the event that the Company shall
default in or fail to perform any of its obligations under the Loan Documents,
which default is not cured within any applicable cure period, the Agent shall
have the right, but not the duty, without limitation upon any of the Agent's or
the Banks' rights pursuant thereto, to perform the same, and the Company agrees
to pay to the Agent within five (5) Banking Days after demand, all reasonable
costs and expenses incurred by the Agent in connection therewith, including
without limitation reasonable Attorney Costs, together with interest thereon
from the date which is 5 Banking Days after demand until paid at a rate per
annum equal to the Reference Rate plus 2 1/2%.
8.15 ACTIONS. The Agent shall have the right to commence, appear in,
and defend any action or proceeding purporting to affect the rights or duties of
the Banks hereunder or the payment of any funds, and in connection therewith the
Agent may pay necessary expenses, employ counsel, and pay Attorney Costs. The
Company agrees to pay to the Agent, within 5 Banking Days after demand, all
reasonable costs and expenses incurred by the Agent in connection therewith,
including without limitation reasonable Attorney Costs, together with interest
thereon from the date which is 5 Banking Days after demand until paid at a rate
per annum equal to the Reference Rate PLUS 2%.
8.16 SYNDICATION AGENTS AND CO-AGENT. Notwithstanding anything
contained herein which may be construed to the contrary, neither the
Syndication Agents nor the Co-Agent shall exercise any of the rights or have
any of the responsibilities of the Agent hereunder, or any other rights or
responsibilities other than their respective rights and responsibilities as
Banks hereunder.
ARTICLE 9: MISCELLANEOUS.
9.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure
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by the Company therefrom, shall be effective unless the same shall be in
writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and the Company and acknowledged by the Agent,
and then any such waiver of consent shall be effective only in the specific
instance and for the specific purpose for which given; PROVIDED, HOWEVER,
that no such waiver, amendment, or consent shall, unless in writing and
signed by all the Banks and the Company and acknowledged by the Agent, do any
of the following:
(1) increase or extend the Commitment of any Bank, unless
such Bank has consented thereto in writing;
(2) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other
Loan Document;
(3) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or
under any other Loan Document;
(4) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the
Banks or any of them to take any action hereunder;
(5) amend the definition of Majority Banks;
(6) amend this Section or any provision herein providing
for consent or other action by all Banks;
(7) discharge any Guarantor, or release any Material portion
of any collateral except where the consent of the Majority Banks only is
specifically provided for; or
(8) amend, or perform any act pursuant to, any provision
herein expressly requiring the consent of each Bank.
and, PROVIDED FURTHER, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document. Each Bank shall bear its Pro Rata Share of
all costs and expenses incurred in any amendment, waiver or consent pursuant to
this Agreement.
9.2 COSTS, EXPENSES AND TAXES. The Company shall pay on demand the
reasonable costs and expenses of the Agent and the Banks in connection with the
negotiation, preparation, execution, delivery, administration, amendment, waiver
and enforcement of the Loan Documents and any matter related thereto and any
litigation or dispute with respect thereto (including any bankruptcy or similar
proceedings), including without limitation
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attorney's fees and disbursements; PROVIDED, HOWEVER (i) the Company shall
not be liable for any expenses of any Bank other than FHB (for itself and as
Agent), BofA, FNB, and
California Bank & Trust in connection with the
negotiation and preparation of the Loan Documents and (ii) the Company shall
not be liable for any expenses of any Bank other than FHB (for itself and as
Agent) and BofA in connection with the negotiation, preparation, execution,
delivery, administration, amendment or waiver of the Loan Documents
subsequent to the Closing Date, PROVIDED FURTHER, however that the
immediately preceding proviso shall not be deemed to limit the right of each
Bank to payment from the Company of all reasonable costs and expenses
incurred by each Bank as aforesaid in connection with any and all enforcement
actions or litigation, actions or matters relating to the Agreement and the
other Loan Documents. The Company shall not be responsible for costs and
expenses with respect to assignments or participations other than for the
processing fee owing pursuant to SECTION 11.6(a) relating to the Loans and
Loan Documents). Any amount payable to the Agent and the Banks under this
SECTION 11.2 shall, from the date of demand for payment, and any other amount
payable to the Agent under the Loan Documents which is not paid when due or
within any applicable grace period shall, thereafter, bear interest at the
rate in effect under each Note with respect to Reference Rate Borrowings.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
9.4 PAYMENTS SET ASIDE. To the extent that the Company makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar proceeding relating to or affecting
creditors' rights generally or otherwise, then (a) to the extent of such
recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such set-off had not occurred, and (b) each Bank severally
agrees to pay to the Agent upon demand its Pro Rata Share of any amount so
recovered from or repaid by the Agent.
9.5 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent and each Bank, and no Bank may assign or transfer
any of its rights or obligations under this Agreement except in accordance with
SECTION 11.6.
9.6 ASSIGNMENTS, PARTICIPATIONS, ETC.
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(1) Any Bank may, with the written consent of (i) the Company
at all times other than during the existence of an Event of Default (which
consent shall not be unreasonably withheld) and (ii) the Agent (which
consent shall not be unreasonably withheld), at any time assign and
delegate to one or more Eligible Assignees (provided that no written
consent of the Company or the Agent shall be required in connection with
any assignment and delegation by a Bank to an Eligible Assignee that is an
affiliate of such Bank) which have not been a party to any Material
litigation with the Agent or the Company (each an "ASSIGNEE") all, or any
ratable part of all, of the Loans, the Commitments and the other rights
and obligations of such Bank hereunder, in an initial minimum amount of
$5,000,000 and in increments of $5,000,000 in excess thereof; PROVIDED,
HOWEVER, the Company and the Agent may continue to deal solely and
directly with such Bank in connection with the interest so assigned to an
Assignee until (1) written notice of such assignment, together with
payment instructions, addresses and related information with respect to
the Assignee, shall have been given to the Company and the Agent by such
Bank and the Assignee; (2) such Bank and its Assignee shall have delivered
to the Company and the Agent an Assignment and Acceptance in the form of
EXHIBIT "G" ("Assignment and Acceptance") together with any Note or Notes
subject to such assignment and (3) the assignor Bank or Assignee has paid
to the Agent a processing fee in the amount of $5,000. All costs and
expenses incurred by an assigning Bank in such assignment shall be borne
by such Bank.
(2) From and after the date that the Agent notifies the
assignor Bank that it has received (and provided its consent with respect
to and received the consent of the Company with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing
fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Bank under the Loan Documents, and (ii) the assignor Bank
shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations
under the Loan Documents.
(3) Within five Banking Days after its receipt of notice by
the Agent that it has received an executed Assignment and Acceptance and
payment of the processing fee (and provided that it consents to such
assignment in accordance with SECTION 11.6(a)), the Company shall execute
and deliver to the Agent, new Notes evidencing such Assignee's assigned
Loans and Commitment and, if the assignor Bank has retained a portion of
its Loans and its Commitment, replacement Notes in the principal amount of
the Loans retained by the assignor Bank (such Notes to be in exchange for,
but not in payment of, the Notes held by such Bank). Immediately upon each
Assignee's making its processing fee payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent,
but only to the extent, necessary to reflect the addition of the Assignee
and the resulting
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adjustment of the Commitments arising therefrom. The Commitment allocated
to each Assignee shall reduce such Commitment of the assigning Bank PRO
TANTO.
(4) Any Bank may, with the written consent of the Agent (which
consent shall not be unreasonably withheld), at any time sell to one or
more commercial banks or other Persons not Affiliates of the Company (a
"Participant") participating interests in any Loans, the Commitment of
that Bank and the other interests of that Bank (the "originating Bank")
hereunder and under the other Loan Documents; PROVIDED, HOWEVER, that (A)
the originating Bank's obligations under this Agreement shall remain
unchanged, (B) the originating Bank shall remain solely responsible for
the performance of such obligations, (C) the Company and the Agent shall
continue to deal solely and directly with the originating Bank in
connection with the originating Bank's rights and obligations under this
Agreement and the other Loan Documents, and (D) no Bank shall transfer or
grant any participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment,
consent or waiver would require unanimous consent of the Banks as
described in the FIRST PROVISO to SECTION 11.1. In the case of any such
participation, the Participant shall be entitled to the benefit of
SECTIONS 4.5, 4.7 and 11.12 as though it were also a Bank hereunder, and,
if amounts outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Bank under this
Agreement.
(5) Each Bank agrees to take normal and reasonable precautions
and exercise due care to maintain the confidentiality of all information
identified as "confidential" or "secret" by the Company and provided to it
by the Company or any Subsidiary, or by the Agent on such Company's or
Subsidiary's behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other
than in connection with or in enforcement of this Agreement and the other
Loan Documents; except to the extent such information (i) was or becomes
generally available to the public other than as a result of disclosure by
the Bank, or (ii) was or becomes available on a non-confidential basis
from a source other than the Company, provided that such source is not
bound by a confidentiality agreement with the Company known to the Bank;
PROVIDED, HOWEVER, that any Bank may disclose such information (A) at the
request or pursuant to any requirement of any Governmental Authority to
which the Bank is subject or in connection with an examination of such
Bank by any such authority; (B) pursuant to subpoena or other court
process; (C) when required to do so in accordance with the provisions of
any applicable Requirement of Law; (D) to the extent reasonably required
in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan
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Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or
potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of the Banks
hereunder, and (H) as to any Bank, as expressly permitted under the
terms of any other document or agreement regarding confidentiality to
which the Company is party or is deemed party with such Bank.
(6) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and the Note
held by it in favor of any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 CFR Section
203.14, and such Federal Reserve Bank may enforce such pledge or
security interest in any manner permitted under applicable Law.
9.7 SET-OFF. In addition to any rights and remedies of the Banks
provided by Law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Company, any such notice being waived by the Company to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final excluding the
Company's customer trust accounts) at any time held by, and other indebtedness
at any time owing by, such Bank to or for the credit or the account of the
Company against any and all Obligations owing to the Banks, now or hereafter
existing, irrespective of whether or not the Agent or such Bank shall have made
demand under this Agreement or any Loan Document and although such Obligations
may be contingent or unmatured. Each Bank agrees promptly to notify the Company
and the Agent after any such set-off and application made by such Bank;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect the
validity of such set-off and application.
9.8 AUTOMATIC DEBITS. With respect to any principal or interest
payment, facility fee or usage fee due and payable to the Agent or the Banks
under the Loan Documents, the Company hereby irrevocably authorizes the Agent to
debit any deposit account of the Company with FHB and hereby agrees to
irrevocably direct in writing the holder of any deposit account to debit any
deposit account of the Company (excluding the Company's customer trust
accounts), in amounts specified by the Agent from time to time such that the
aggregate amount debited from all such deposit accounts does not exceed such
payment, fee, other cost or expense. The Agent shall use its best efforts to
give the Company advance notice of each debit, but failure of the Agent to give
such notice shall not invalidate its authorization hereunder. If there are
insufficient funds in such deposit accounts to cover the amount of the payment,
fee, other cost or expense then due, such debits will be reversed (in whole or
in part, in the Agent's sole discretion) and such amount not debited shall be
deemed to be unpaid. No such debit under this Section shall be deemed a set-off.
9.9 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all
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payments to be made to it hereunder and of such other administrative
information as the Agent shall reasonably request.
9.10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of the Company contained herein or in any certificate or other
writing delivered by or on behalf of the Company pursuant to any Loan Document
will survive the making and repayment of the Loan and the execution and delivery
of each Note, and have been or will be relied upon by each Bank, notwithstanding
any investigation made by such Bank or on its behalf.
9.11 NOTICES. Except as otherwise provided herein or in each
Note:
(1) all notices, requests, demands, directions and other
communications provided for hereunder and under each Note must be in
writing and must be mailed, telecopied, delivered or sent by telex or
cable to the appropriate party at the address set forth on the signature
pages of this Agreement or, as to any party, at any other address as may
be designated by it in a written notice sent to the other party in
accordance with this SECTION 11.11, and
(2) if any notice, request, demand, direction or other
communication is given by mail, it must be sent by registered mail or by
Federal Express or its equivalent, postage prepaid, and will be effective
on receipt; if given by telecopier, when receipt is confirmed by the
recipient; if given by cable, when delivered to the telegraph company with
charges prepaid; if given by telex, when sent; or if given by personal
delivery, when delivered.
9.12 INDEMNITY BY THE COMPANY. The Company agrees to indemnify, save
and hold harmless each Bank, the Agent and their directors, officers, agents,
attorneys and employees (collectively the "indemnitees") 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 or is in connection with the Loan
Documents, and (b) any and all liabilities, losses, costs or expenses (including
Attorney Costs) that any indemnitee suffers or incurs as a result of the
assertion of any such claim, demand, action or cause of action.
9.13 INTEGRATION AND SEVERABILITY. This Agreement and the other Loan
Documents comprise the complete and integrated agreement of the parties on the
subject matter hereof and supersede all prior agreements, written or oral, on
the subject matter hereof. Any provision in any Loan Document that is held to be
inoperative, unenforceable or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable or invalid without affecting the
remaining provisions or the operation, enforceability or validity of that
provision in any other jurisdiction, and to this end the provisions of the Loan
Documents are declared to be severable.
9.14 COUNTERPARTS. This Agreement may be executed in any number of
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separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
9.15 NO THIRD PARTIES BENEFITTED. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Agent and the Agent-Related Persons, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
9.16 SECTION HEADINGS. Section headings in this Agreement are
included for convenience of reference only and are not part of this Agreement
for any other purpose.
9.17 FURTHER ACTS BY THE COMPANY. The Company agrees, at its own
expense, to do such acts and execute and deliver such documents as any Bank from
time to time reasonably requires for the purpose of carrying out the intention
or facilitating the performance of the terms hereof.
9.18 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.
9.19 GOVERNING LAW. The Loan Documents shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
California without regard to the conflict of law provisions thereof.
9.20 REFERENCE AND ARBITRATION.
(1) In any judicial action between or among the parties,
including any action or cause of action arising out of or relating to this
Agreement or the Loan Documents or based on or arising from an alleged
tort, all decisions of fact and law shall at the request of any party be
referred to a referee in accordance with
California Code of Civil
Procedure Sections 638 ET SEQ. The parties shall designate to the court a
referee or referees selected under the auspices of the American
Arbitration Association ("AAA") in the same manner as arbitrators are
selected in AAA-sponsored proceedings. The presiding referee of the panel,
or the referee if there is a single referee, shall be an active attorney
or retired judge. Judgment upon the award rendered by such referee or
referees shall be entered in the court in which such proceeding was
commenced in accordance with
California Code of Civil Procedure Sections
644 and 645.
(2) Any controversy or claim between or among the parties,
including those arising out of or relating to this Agreement or the Loan
Documents and any claim based on or arising from an alleged tort, shall at
the request of any party be determined by arbitration. The arbitration
shall be conducted in accordance with the United States Arbitration Act
(Title 9, U.S. Code), notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the AAA. The
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arbitrator(s) shall give effect to statutes of limitation in
determining any claim. Any controversy concerning whether an issue is
arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit
of a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such
action for judicial relief.
(3) No provision of this SECTION 11.20 shall limit the right
of any party to this Agreement to exercise self-help remedies such as
setoff, foreclosure against or sale of any real or personal property
collateral or security, or to obtain provisional or ancillary remedies
from a court of competent jurisdiction before, after, or during the
pendency of any arbitration or other proceeding. The exercise of a remedy
does not waive the right of either party to resort to arbitration or
reference.
9.21 EFFECTIVENESS OF THIS AGREEMENT. Notwithstanding anything
contained herein to the contrary, the effectiveness of this Agreement and the
Banks' and the Agent's obligations hereunder are expressly conditioned upon
satisfaction of all of the following conditions precedent (any one or more of
which the Majority Banks may waive in their sole discretion):
(1) The Agent shall have received the following original
executed documents (in form and substance satisfactory to the Agent and
legal counsel for the Agent in sufficient number for the Agent and each
Bank):
(1) this Agreement;
(2) each Note;
(3) the Guaranty;
(4) the Opinion of Counsel;
(5) a certified copy of resolutions of the board of
directors of the Company authorizing the execution of the Loan
Documents, together with an incumbency certificate executed by
the corporate secretary of the Company;
(6) a certified copy of resolutions of the board of
directors of each Guarantor authorizing the execution of the
Guaranty, together with an incumbency certificate executed by
the corporate secretary of each Guarantor;
(7) a Borrowing Base Certificate calculated as of May
31, 2001 and a Compliance Certificate calculated as of March
31, 2001,
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showing the Company to be in compliance with the Agreement.
(8) the consummation of the merger of ▇▇▇▇▇▇▇
Residential, Inc. into the Company on a tax free exchange
basis following receipt of a favorable IRS private letter
ruling;
(9) receipt by the Company of at least $250,000,000
in gross proceeds from the issuance of the Senior Notes;
(10) receipt by the Company of at least $150,000,000
in gross proceeds from the issuance of the Senior
Subordinated Notes;
(11) no injunction or threaten material legal action
against the Company or its Subsidiaries has occurred;
(12) no material adverse change in the condition,
financial or otherwise, of the Company or its Subsidiaries
has occurred;
(13) evidence that all amounts owing by the Company to
FNB and FHB under the existing credit agreements between the
parties have been paid in full and all liens on the assets of
the Company have been released; and
(14) such other agreements, instruments and documents as
any Bank shall reasonably request.
(2) The Agent shall have received evidence satisfactory to the
Agent and legal counsel to the Agent that the Company and each Guarantor
has been duly incorporated, validly exist and are in good standing under
the laws of the State of their incorporation are duly qualified to do
business as, and are in good standing as, a foreign corporation in each
jurisdiction in which the conduct of their business or the ownership or
leasing of their properties makes such qualification necessary, and have
all requisite power and authority to conduct their business and to own and
lease their properties.
In no event may the Company claim or contend that this Agreement has
not become effective following the first disbursement of Loan proceeds
hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
▇▇▇▇▇▇▇ HOMES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
---------------------------------
By:
-----------------------------------
Title:
---------------------------------
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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FIRST HAWAIIAN BANK,
as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇
-----------------------------------
Title: Senior Vice President
---------------------------------
ADDRESS FOR PAYMENTS:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Division
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Division
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FIRST HAWAIIAN BANK,
as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇
-----------------------------------
Title: Senior Vice President
---------------------------------
ADDRESS FOR NOTICES:
First Hawaiian Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Division
DOMESTIC AND OFFSHORE LENDING OFFICE:
First Hawaiian Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Division
ADDRESS FOR PAYMENTS:
First Hawaiian Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Attention: Commercial Real Estate Division
-83-
BANK OF AMERICA, N.A.,
as a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Principal
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ADDRESS FOR NOTICES:
Bank of America, N.A.
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
LIBOR LENDING OFFICE:
Bank of America, National Association
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-84-
FLEET NATIONAL BANK,
as a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President
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ADDRESS FOR NOTICES:
Fleet National Bank
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fleet National Bank
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Attention: Real Estate Division
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
LIBOR RATE OFFICE:
Fleet National Bank
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-85-
CALIFORNIA BANK & TRUST,
as a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President
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ADDRESS FOR NOTICES:
California Bank & Trust
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
California Bank & Trust
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Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
LIBOR LENDING OFFICE:
California Bank & Trust Real Estate Division
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Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
-86-
EXHIBIT "A"
NOTE
$_________________ _____________, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇ Homes, Inc., a Delaware corporation (the
"Company"), promises to pay to the order of ______________________________
_________________ ("Bank") the principal amount of _________________________
__________________________ AND NO/100 DOLLARS ($___________), or such lesser
aggregate amount of Loans as may be made pursuant to Bank's Commitment under the
Revolving Credit Agreement hereinafter described, payable as hereinafter set
forth. Company promises to pay interest on the principal amount hereof remaining
unpaid from time to time from the date hereof until the date of payment in full,
payable as hereinafter set forth.
Reference is made to the
Revolving Credit Agreement dated as of June
28, 2001 (the "Agreement") among the Company, First Hawaiian Bank, as Agent, and
the financial institutions from time to time a party thereto (the "Banks").
Terms defined in the Agreement and not otherwise defined herein are used herein
with the meanings defined for those terms in the Agreement. This is one of the
Notes referred to in the Agreement, and any holder hereof is entitled to all of
the rights, remedies, benefits and privileges provided for in the Agreement as
originally executed or as it may from time to time be supplemented, modified or
amended. The Agreement, among other things, contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events upon the
terms and conditions therein specified.
The principal indebtedness evidenced by this Note shall be payable
as provided in the Agreement and in any event on the Maturity Date subject to
possible extension as provided in SECTION 4.18 of the Agreement).
Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan hereunder from the date thereof until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the rate set
forth in SECTION 4.4 of the Agreement, to the fullest extent permitted by
applicable Law.
The amount of each payment hereunder shall be made to Bank at
Agent's office located in Honolulu, Hawaii, for the account of Bank, in lawful
money of the United States of America and in immediately available funds not
later than 9:00 a.m., Honolulu, Hawaii time, on the day of payment (which must
be a Banking Day). All payments received after 9:00 a.m., Honolulu, Hawaii time,
on any Banking Day, shall be deemed received on the next
EXHIBIT "A" -- Page 1
succeeding Banking Day. Bank shall use its best efforts to keep a record of
Loans made by it and payments of principal with respect to this Note, and
such record shall be presumptive evidence of the principal amount owing under
this Note.
Company hereby promises to pay all costs and expenses of any holder
hereof incurred in collecting the undersigned's obligations hereunder or in
enforcing or attempting to enforce any of any holder's rights hereunder,
including Attorney Costs, whether or not an action is filed in connection
therewith.
Company hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
Assignment of this Note is subject to the consent of certain parties
pursuant to SECTION 11.6 of the Agreement.
This Note shall be delivered to and accepted by Bank in the State of
California, and shall be governed by, and construed and enforced in accordance
with, the internal Laws thereof without regard to the choice of law provisions
thereof.
"Company"
▇▇▇▇▇▇▇ HOMES, INC., a Delaware corporation
By:
-----------------------------------
Title:
---------------------------------
By:
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Title:
---------------------------------
EXHIBIT "A" -- Page 2
EXHIBIT "B"
BORROWING BASE CERTIFICATE
The undersigned, being the duly elected chief financial officer or
Treasurer of ▇▇▇▇▇▇▇ Homes, Inc., a Delaware corporation, hereby certifies that
the following is a true and correct calculation of the Borrowing Base as of
_____________, 2001:
[AGENT TO PROVIDE FORM OF CALCULATION AND
SCHEDULES IT WOULD DESIRE]
▇▇▇▇▇▇▇ HOMES, INC., a Delaware corporation
▇▇▇▇▇▇▇ HOMES, INC., a Delaware corporation
By:
-----------------------------------
Title:
---------------------------------
By:
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Title:
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EXHIBIT "B" -- Page 1
EXHIBIT "C"
REQUEST FOR BORROWING/REDESIGNATION/LETTER OF CREDIT
1. This REQUEST is executed and delivered by the Company to the
Agent for the Banks pursuant to the
Revolving Credit Agreement (the "Agreement")
dated as of June __, 2001, entered into by the Company, the Banks and the Agent.
Any terms used herein and not defined herein shall have the meanings defined in
the Agreement.
/ / 2. The Company hereby requests that the Banks make a Loan for the
account of the Company pursuant to the Agreement, as follows:
(a) Amount of Loan: $________________.
(b) Date of Loan: _______________, 20__.
(c) Type of Loan (check one box only):
/ / Reference Rate Borrowing.
/ / LIBOR Borrowing with a ______ [-month] LIBOR
Period ending _______________, 20__.
/ / 3. The Company hereby requests that the Banks redesignate
outstanding Borrowings heretofore made or redesignated for the account of the
Company pursuant to the Agreement, as follows:
(a) Total Amount of Loans to be Redesignated:
$________________.
(b) Date of Redesignation: _______________, 20__.
(c) Type of Loan as so Redesignated:
/ / (i) Reference Rate to LIBOR Borrowing with a
___-month LIBOR Period ending
_________________, 20__.
/ / (ii) LIBOR Borrowing to Reference Rate.
/ / 4. The Company hereby requests that the Issuing Bank issue a Letter
of Credit in accordance with the L/C Application accompanying this request.
EXHIBIT "C" -- Page 1
5. In connection with the Loan, redesignation or Letter of Credit
requested herein, the Company hereby represents, warrants and certifies to the
Banks that, as of the date of the Loan, redesignation or Letter of Credit
requested herein: Each representation and warranty made by the Company in
Article 7 of the Agreement will be true and correct, both immediately before and
after such Loan or redesignation is made or Letter of Credit is issued, as
though such representation and warranty was made on and as of the date of such
Loan, redesignation or issuance, provided, however, the representations and
warranties made by the Company in SECTION 7.12 of the Agreement are true and
correct as of the last reporting under the Agreement; no Material adverse change
will have occurred in the business, operations or financial condition of the
Company and its Subsidiaries taken as a whole since the Closing Date; and no
Event of Default or event that upon notice or passage of time would constitute
an Event of Default will have occurred and be continuing. (If any of the
foregoing statements is not true and correct, attach a statement specifying in
detail the circumstances thereof and the actions the Company is taking or
proposes to take with respect thereto.)
6. This Request is executed on ____________, 20__, by a Responsible
Official of the Company on behalf of the Company. The undersigned, in such
capacity, hereby certifies each and every matter contained herein to be true and
correct.
Dated: _________________
▇▇▇▇▇▇▇ HOMES, INC., a Delaware corporation
By:
-----------------------------------
Title:
---------------------------------
By:
-----------------------------------
Title:
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EXHIBIT "C" -- Page 2
EXHIBIT "D"
CONTINUING GUARANTY
TO: FIRST HAWAIIAN BANK, AS AGENT, AND TO THE BANKS THAT ARE, OR MAY
BECOME, PARTIES TO THE AGREEMENT
▇▇▇▇▇▇▇ Homes, Inc., a Delaware corporation (herein the "Company"),
has entered into a
Revolving Credit Agreement dated as of even date herewith
(the "Agreement") with First Hawaiian Bank, as Agent (the "Agent"), and First
Hawaiian Bank, Bank of America, N.A., Fleet National Bank, N.A., and California
Bank & Trust (together with any other financial institution from time to time a
party to the Agreement, the "Banks"). Capitalized terms used herein and not
otherwise defined shall have the same meanings as the terms used and defined in
the Agreement. Subject to the terms and provisions set forth in the Agreement,
the Banks have agreed to make Loans to the Company. As a condition to the
obligation of the Banks to make such Loans,
__________________________________________________,
____________________________________________________________________,
____________________________________________________________________,
____________________________________________________________________, and
____________________________________________________________________
(collectively, "Guarantor") are required to execute and deliver to the Agent
this Guaranty. To induce the Banks to make the Loans to the Company as provided
in the Agreement, Guarantor hereby agrees as follows:
1. GUARANTY OF OBLIGATIONS. For valuable consideration,
Guarantor unconditionally guarantees and promises to pay to the Agent, for
the benefit of the Banks, or order, on demand, after the occurrence of an
Event of Default, in lawful money of the United States of America:
(a) all outstanding Loans and other Obligations of the
Company evidenced by each Note; and
(b) all other Obligations of the Company, including without
limitation all amendments, modifications, supplements, renewals, or
extensions of the foregoing, whether such amendments, modifications,
supplements, renewals, or extensions are evidenced by new or additional
instruments, documents, or agreements or change the rate of interest on
any indebtedness or the maturity thereof, or otherwise. All indebtedness
and obligations covered by this Guaranty are hereinafter collectively
referred to as the "indebtedness." The term "indebtedness" shall also
include, without limitation on the foregoing, all interest that accrues on
all or any part of the
EXHIBIT "D" -- Page 1
indebtedness after the filing of any petition or pleading against the
Company or any other Person for a proceeding under any chapter or
provision of any present or future federal bankruptcy legislation or
amendments thereto.
2. NATURE OF GUARANTY. This Guaranty is continuing in nature
and relates to any indebtedness, including indebtedness arising after the
date hereof and any renewals or extensions of any indebtedness. The guaranty
contained herein is a guaranty of payment and not of collection.
3. RIGHTS INDEPENDENT. The obligations of Guarantor hereunder are
independent of the Obligations of the Company or any other Person or any other
guarantor or any security for the indebtedness or Obligations, and the Agent
may, upon the occurrence of an Event of Default, proceed in the enforcement
hereof independently of any other right or remedy that the Agent may at any time
hold with respect to the Obligations, the indebtedness or any security or other
guaranty therefor. The Agent may file a separate action or actions against
Guarantor hereunder, whether action is brought and prosecuted with respect to
any security or against the Company or any other Guarantor or any other Person,
or whether the Company or any other Guarantor or any other Person is joined in
any such action or actions. Guarantor waives the benefit of any statute of
limitations affecting its liability hereunder or the enforcement of the
Obligations. The liability of Guarantor hereunder shall be reinstated and
revived, and the rights of the Agent and each Bank shall continue, with respect
to any amount at any time paid on account of the Obligations which shall
thereafter be required to be restored or returned by Agent or any Bank upon the
bankruptcy, insolvency, or reorganization of the Company or any other Person, or
otherwise, all as though such amount had not been paid. Guarantor further agrees
that to the extent the Company or Guarantor makes any payment to Agent or any
Bank in connection with the Obligations or the indebtedness and all or any part
of such payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid by the trustee, receiver or any
other entity, whether under any bankruptcy act or otherwise (any such payment is
hereinafter referred to as a "Preferential Payment"), then this Guaranty shall
continue to be effective or shall be reinstated, as the case may be, and, to the
extent of such payment or repayment by Agent or such Bank, the obligations or
the indebtedness or part thereof intended to be satisfied by such Preferential
Payment shall be revived and continued in full force and effect as if said
Preferential Payment had not been made.
4. AUTHORITY TO MODIFY THE OBLIGATIONS. Guarantor authorizes the
Agent and each Bank, without notice to or demand on Guarantor and without
affecting its liability hereunder or the enforceability hereof, from time to
time to: (a) supplement, modify, amend, extend, renew, accelerate, or otherwise
change the time for payment or the terms of the Obligations or any part thereof,
including increase or decrease the rates of interest thereon; (b) supplement,
modify, amend, or waive, or enter into or give any agreement, approval, or
consent with respect to, the indebtedness or any part thereof or any of the Loan
Documents or any security or additional guaranties, or any condition, covenant,
default, remedy, right, representation, or term thereof or thereunder; (c)
accept new or additional instruments, documents, or agreements in exchange for
or relative to any of the Loan Documents or the
EXHIBIT "D" -- Page 2
Obligations or any part thereof; (d) accept partial payments on the
Obligations; (e) receive and hold additional security or guaranties for the
Obligations or any part thereof or this Guaranty; (f) release, reconvey,
terminate, waive, abandon, subordinate, exchange, substitute, transfer, and
enforce the Obligations or any security or any other guaranties, and apply
any security and direct the order or manner of sale thereof as Agent or such
Bank in its discretion may determine; (g) release the Company or any other
Person or any other guarantor from any personal liability with respect to the
Obligations or any part thereof; (h) settle, release on terms satisfactory to
Agent or such Bank or by operation of law or otherwise, compound, compromise,
collect, or otherwise liquidate or enforce any of the Obligations and any
security or other guaranty in any manner, consent to the transfer of any
security, and bid and purchase at any sale; and (i) consent to the merger or
any other change, restructure, or termination of the corporate existence of
the Company or any other Person and correspondingly restructure the
Obligations, and any such merger, change, restructure, or termination shall
not affect the liability of Guarantor hereunder or the enforceability hereof
with respect to all indebtedness.
5. WAIVER OF DEFENSES. Guarantor waives any right to require Agent
or any Bank, prior to or as a condition to the enforcement of this Guaranty, to:
(a) proceed against the Company or any other Person or any other guarantor; (b)
proceed against or exhaust any security for the Obligations or to marshal assets
in connection with foreclosing collateral security; (c) give notice of the
terms, time, and place of any public or private sale of any security for the
Obligations; or (d) pursue any other remedy in Agent's or such Bank's power
whatsoever. Guarantor waives any defense arising by reason of (i) any disability
or other defense of the Company or any other Person with respect to the
Obligations, (ii) the unenforceability or invalidity of the Obligations or any
security or any other guaranty for the Obligations or the lack of perfection or
failure of priority of any security for the Obligations, (iii) the cessation
from any cause whatsoever of the liability of the Company or any other Person or
any other guarantor (other than by reason of the full payment and discharge of
all indebtedness), or (iv) any act or omission of Agent or any Bank or any other
Person which directly or indirectly results in or aids the discharge or release
of the Company or any other Person or the Obligations or any security or other
guaranty therefor by operation of law or otherwise. Guarantor waives all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and all other notices of any kind or
nature whatsoever with respect to the Obligations, and notices of acceptance of
this Guaranty and of the existence, creation, or incurring of new or additional
Obligations.
6. DEFERRAL OF SUBROGATION. Until all Obligations have been paid and
performed in full, (a) Guarantor shall not exercise any rights of subrogation,
contribution or reimbursement against the Company or any other guarantor of the
Obligations (individually each an "other Loan Party"), and (b) Guarantor shall
not exercise any right to enforce any right, power or remedy which Agent or each
Bank now has or may in the future have against any other Loan Party and any
benefit of, and any right to participate in, any security for this Guaranty or
for the obligations of any other Loan Party now or in the future held by Agent
or each Bank. If Guarantor nevertheless receives payment of any amount on
account of any such subrogation, contribution or reimbursement rights or
otherwise in respect of any payment by Guarantor of the Obligations prior to
payment and performance in full of all Obligations, such
EXHIBIT "D" -- Page 3
amount shall be held in trust for the benefit of the Agent and immediately
paid to the Agent for application to the Obligations in such order and manner
as the Agent may determine.
7. DEEDS OF TRUST ON REAL PROPERTY. Guarantor understands and
acknowledges that if the indebtedness is ever secured by real property and Agent
or a Bank forecloses judicially or nonjudicially against any real property
security for the indebtedness, that foreclosure could impair or destroy any
ability that Guarantor may have to seek reimbursement, contribution or
indemnification from the Company or others based on any right Guarantor may have
of subrogation, reimbursement, contribution or indemnification for any amounts
paid by Guarantor under this Guaranty. Guarantor further understands and
acknowledges that in the absence of this provision, such potential impairment or
destruction of Guarantor's rights, if any, may entitle Guarantor to assert a
defense to this Guaranty based on Section 580d of the California Code of Civil
Procedure as interpreted in UNION BANK ▇. ▇▇▇▇▇▇▇, 265 Cal.App.2d 40 (1968). By
executing this Guaranty, Guarantor freely, irrevocably and unconditionally: (i)
waives and relinquishes that defense and agrees that Guarantor will be fully
liable under this Guaranty even though Agent or a Bank may foreclose judicially
or nonjudicially against the real property security for the indebtedness; (ii)
agrees that Guarantor will not assert that defense in any action or proceeding
which Agent or a Bank may commence to enforce this Guaranty; (iii) acknowledges
and agrees that the rights and defenses waived by Guarantor in this Guaranty
include any right or defense that Guarantor may have or be entitled to assert
based upon or arising out of any one or more of Sections 580a, 580b, 580d or 726
of the California Code of Civil Procedure or Section 2848 of the California
Civil Code; and (iv) acknowledges and agrees that Agent and each Bank are
relying on this waiver in entering into the Agreement, and that this waiver is a
material part of the consideration which Agent and each Bank are receiving for
entering into the Agreement. Guarantor further acknowledges and agrees that the
waivers set forth in this Guaranty are operative regardless of whether Guarantor
may have made any payments to Agent or any Bank. Guarantor further waives all
rights and defenses arising out of an election of remedies by Agent or a Bank,
even though that election of remedies, such as a nonjudicial foreclosure with
respect to security for a guaranteed obligation, has destroyed Guarantor's right
of subrogation and reimbursement against the Company by the operation of Section
580d of the California Code of Civil Procedure or otherwise. Guarantor
specifically waives any right to a fair value hearing, and any and all other
rights it may have under Section 580a of the California Code of Civil Procedure.
Without limiting the foregoing, should any of the indebtedness guaranteed hereby
ever be secured by real property, Guarantor further agrees as follows: Guarantor
waives all rights and defenses that the Guarantor may have because the Company's
debt is secured by real property. This means, among other things: (1) Agent and
the Banks may collect from the Guarantor without first foreclosing on any real
or personal property collateral pledged by the Company, and (2) if Agent and the
Banks foreclose on any real property collateral pledged by the Company: (A) the
amount of the debt may be reduced only by the price for which that collateral is
sold at the foreclosure sale, even if the collateral is worth more than the sale
price, and (B) Agent and each Bank may collect from the Guarantor even if Agent
or the Banks, by foreclosing on the real property collateral, have destroyed any
right the Guarantor may have to collect from the Company. This is an
unconditional and irrevocable waiver of any rights and defenses that Guarantor
may have
EXHIBIT "D" -- Page 4
because the Company's debt is secured by real property. These rights and
defenses include, but are not limited to, any rights or defenses based upon
Sections 580(a), 580(b), 580(d), or 726 of the Code of Civil Procedure.
8. CONDITIONS. Guarantor represents and warrants to the Agent, for
the benefit of the Banks that: (a) this Guaranty is executed at the request of
the Company; (b) that Guarantor has established adequate means of obtaining from
the Company on a continuing basis financial and other information pertaining to
the business of the Company; and (c) that Guarantor is now and will be
completely familiar with the business, operation, condition, and assets of the
Company. Guarantor hereby waives and relinquishes any duty on the part of the
Agent or any Bank to disclose to Guarantor any matter, fact, or thing relating
to the business, operation, condition, or assets of the Company now known or
hereafter known by the Agent or any Bank during the life of this Guaranty. With
respect to any Obligations, neither the Agent nor any Bank need inquire into the
powers of the Company or the officers or employees acting or purporting to act
on its behalf, and all Obligations made or created in good faith reliance upon
the professed exercise of such powers shall be guaranteed hereby.
9. AMENDMENTS; WAIVERS. Neither this Guaranty nor any provision
hereof may be amended, modified, waived, discharged, or terminated except by an
instrument in writing duly signed by or on behalf of the Banks. Guarantor
warrants and agrees that each of the waivers set forth in this Guaranty are made
with Guarantor's full knowledge of their significance and consequences, and that
under the circumstances, the waivers are reasonable and not contrary to public
policy or law. If any of such waivers are determined to be contrary to any
applicable law or public policy, such waivers shall be effective only to the
maximum extent permitted by law.
10. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power, remedy or privilege of the Agent
hereunder or the Banks under the Loan Documents preclude any other or further
exercise thereof or the exercise of any other right, power, remedy or privilege.
11. COSTS AND EXPENSES IN ENFORCEMENT. Guarantor agrees to pay to
the Agent all reasonable advances, charges, costs, and expenses, including
reasonable Attorney Costs, incurred or paid by the Agent in exercising any
right, power, or remedy conferred by this Guaranty, or in the enforcement of
this Guaranty, whether or not an action is filed in connection therewith.
12. NOTICES. All notices, requests, demands, directions, and other
communications provided for hereunder must be in writing and must be personally
delivered or mailed to Guarantor at the address set forth on the signature page
of this Guaranty or at any other address as may be designated by Guarantor in a
written notice sent to the Banks in accordance with the Agreement. Any notice,
request, demand, direction, or other communication given by mail will be deemed
effective on the third calendar day after
EXHIBIT "D" -- Page 5
deposited in the United States mails with first class postage prepaid; or if
given by personal delivery, when delivered.
13. BINDING AGREEMENT. This Guaranty and the terms, covenants, and
conditions hereof shall be binding upon and inure to the benefit of Guarantor,
each Bank, and their respective successors and assigns, except that Guarantor
shall not be permitted to transfer, convey, or assign this Guaranty or any
interest herein without the prior written consent of each Bank. Each Bank may
assign its interest hereunder in whole or in part in connection with an
assignment of its Loans, Commitments and other rights and obligations under the
Agreement pursuant to SECTION 11.6(a) thereof.
14. SEVERABILITY. In case any right or remedy of the Banks
shall be held to be invalid, illegal, or unenforceable, such invalidity,
illegality, or unenforceability shall not affect any other right or remedy
granted hereby.
15. MISCELLANEOUS. All words used herein in the plural shall be
deemed to have been used in the singular, and all words used herein in the
singular shall be deemed to have been used in the plural, where the context and
construction so require. Section headings in this Guaranty are included for
convenience of reference only and are not a part of this Guaranty for any other
purpose. This Guaranty is executed in connection with, and is subject to, the
terms and provisions of the Agreement.
16. GOVERNING LAW. This Guaranty shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
California without regard to the conflict of law provisions thereof.
17. JOINT AND SEVERAL LIABILITY. The liability and obligations of
each corporation, partnership, limited liability company or other entity
executing this Guaranty as a "Guarantor" hereunder shall be joint and several;
and, without limiting the foregoing, each such corporation, partnership or other
entity executing this Guaranty shall individually be liable and responsible for
repayment of the full amount of all Obligations and indebtedness owing to each
and all of the Banks.
EXHIBIT "D" -- Page 6
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed as of June __, 2001.
"GUARANTOR":
, a
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corporation
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Title:
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Title:
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EXHIBIT "D" -- Page 7
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corporation
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By:
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Title:
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corporation
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EXHIBIT "D" -- Page 8
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corporation
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EXHIBIT "D" -- Page 9
EXHIBIT "E"
SUBSIDIARIES
I. Wholly Owned Subsidiaries who are Restricted Subsidiaries:
II. Wholly Owned Subsidiaries who are Unrestricted Subsidiaries:
III. Other Unrestricted Subsidiaries (including all Non-Wholly Owned
Subsidiaries):
EXHIBIT "E"
EXHIBIT "F"
FORM OF LEGAL OPINION
June __, 2001
First Hawaiian Bank
as Agent and to
the Banks that are, or may become,
parties to the to the Agreement
Re: ▇▇▇▇▇▇▇ HOMES, INC.
Ladies and Gentlemen:
We have acted as special counsel to ▇▇▇▇▇▇▇ Homes, Inc., a Delaware
corporation (the "Company"), in connection with the execution and delivery of a
Revolving Credit Agreement, dated as of even date herewith (the "Agreement") by
and among the Company and Bank of America, National Association, a national
banking association, and other Banks that are, or may become, parties to the
Agreement. Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
In our capacity as counsel for the Company, we have made such legal
and factual inquiries and examinations as we deemed advisable for purposes of
rendering this opinion, and, in the course thereof, we have examined originals,
or copies of originals certified to our satisfaction, of such agreements,
documents, certificates and other statements of government officials, officers
of the Company and others as we deemed relevant and necessary as a basis for
this opinion. We have relied upon such certificates and documents with respect
to the accuracy of factual matters contained therein, which factual matters were
not independently established or verified by us. In all such examinations, we
have assumed the genuineness of all signatures by each party and the
authenticity of all documents submitted to us as originals and the conformity to
authentic original documents of all documents submitted to us as conformed or
photostatic copies. For the purpose of the opinions hereinafter expressed, we
have assumed the due execution and delivery, pursuant to due authorization, of
each document referred to herein by each party thereto other than the Company
and the Subsidiaries and that each document constitutes the valid and binding
obligation of each party thereto other than the Company and the Subsidiaries,
enforceable against such party in accordance with its terms.
On the basis of our inquiries and examinations, and subject to the
qualifications, exceptions, assumptions and limitations contained herein, we are
of the opinion that:
EXHIBIT "F" -- Page 1
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and is qualified to do
business in the jurisdictions listed on Schedule I hereto, which Schedule lists
the jurisdictions in respect of which the Company has informed us are the
jurisdictions in which the nature of the property owned or leased by the Company
or the nature of the business transacted by the Company makes such qualification
necessary, except where the failure to be so qualified would not have a Material
adverse effect on the business or financial condition of the Company and the
Subsidiaries taken as a whole.
2. The execution, delivery and performance by the Company of the
Agreement and the Note pursuant thereto are within the Company's corporate
powers, have been duly authorized by all necessary corporate action and do not
contravene (a) the Company's certificate of incorporation or bylaws, (b) any law
or (c) any agreement or instrument identified to us by the Company as being
Material to the business or financial condition of the Company and the
Subsidiaries taken as a whole.
3. The Agreement is, and the Notes when delivered thereunder will
be, valid and binding obligations of the Company enforceable against the Company
in accordance with their respective terms.
4. No action of, or filing with, or approval or other action by, any
governmental or public body or authority which has not been taken, made or
obtained is required to authorize, or is otherwise required in connection with,
the execution, delivery and performance of the Agreement and the Notes.
5. Each of ____________________________________________,
____________________________________, __________________________________,
____________________________________, ______________________________, and
_____________________________________ (collectively, the "Material
Subsidiaries") is validly organized, existing and in good standing under the
laws of the jurisdiction of its incorporation. Each of the Material Subsidiaries
is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the ownership of property or the nature
of the business transacted by such Material Subsidiary makes such qualification
necessary, except where the failure to be so qualified would not have a Material
adverse effect on the business or financial condition of the Company and the
Subsidiaries taken as a whole.
6. Each of the existing Guarantors has the requisite corporate power
and authority to execute, deliver and perform their obligations under the terms
of the Guaranty, and such Guaranty, when executed and delivered, will constitute
the valid and binding obligation of each of such entities enforceable against it
in accordance with its terms.
EXHIBIT "F" -- Page 2
7. To the best of our knowledge, the Company owns all of the issued
and outstanding capital stock of each of the Guarantors and each of the Material
Subsidiaries.
Very truly yours,
--------------------------
EXHIBIT "F" -- Page 3
EXHIBIT "G"
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "ASSIGNMENT AND
ACCEPTANCE") dated as of June __, 2001 is made between
__________________________ (the "ASSIGNOR") and __________________________ (the
"ASSIGNEE").
RECITALS
WHEREAS, the Assignor is party to that certain
Revolving Credit
Agreement dated as of June __, 2001 (as amended, amended and restated, modified,
(B) all related rights, benefits, obligations, liabilities and indemnities of
the Assignor under and in connection with the Credit Agreement and the Loan
Documents.
[IF APPROPRIATE, ADD PARAGRAPH SPECIFYING PAYMENT TO ASSIGNOR BY
ASSIGNEE OF OUTSTANDING PRINCIPAL OF, ACCRUED INTEREST ON, AND FEES WITH RESPECT
TO, COMMITTED LOANS AND L/C OBLIGATIONS ASSIGNED.]
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Bank under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank. It is the intent
of the parties hereto that the Commitment of the Assignor shall, as of the
Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Sections __ and __ of the Credit Agreement to the extent such rights relate to
the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignee's Commitment will be
$___________.
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignor's Commitment will be
$___________.
2. PAYMENTS.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Committed Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section [ ](__) of the Credit
Agreement.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment [and] Loans shall be for the account of the Assignor.
Any interest, fees and other payments accrued on and after the Effective Date
with respect to the Assigned Amount shall be for the account of the Assignee.
Each of the Assignor and the Assignee agrees that it will hold in trust for the
other party any interest, fees and other amounts which it may receive to which
the other party is entitled pursuant to the preceding sentence and pay to the
other party any such amounts which it may receive promptly upon receipt.
EXHIBIT "G" -- Page 2
4. INDEPENDENT CREDIT DECISION.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section [ ](___) of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance shall be __________, _____ (the "EFFECTIVE
DATE"); PROVIDED that the following conditions precedent have been satisfied on
or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Company and the Agent required for an
effective assignment of the Assigned Amount by the Assignor to the Assignee
under Section [ ](__) of the Credit Agreement shall have been duly obtained and
shall be in full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section [
](__) of the Credit Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof
and in Section [ ](__) of the Credit Agreement shall have been paid to the
Agent; and
(vi) the Assignor shall have assigned and the Assignee shall have
assumed a percentage equal to the Assignee's Percentage Share of the rights and
obligations of the Assignor under the Credit Agreement (if such agreement
exists).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company [, the Issuing Bank] and
the Agent for acknowledgment by the Agent, a Notice of Assignment
[substantially] in the form attached hereto as SCHEDULE 1.
[6. AGENT. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
EXHIBIT "G" -- Page 3
(a) The Assignee hereby appoints and authorizes the Assignor to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the Banks pursuant to the terms of
the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement.]
7. WITHHOLDING TAX.
The Assignee (a) represents and warrants to the Bank, the Agent and the
Company that under applicable law and treaties no tax will be required to be
withheld by the Bank with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent and
the Company prior to the time that the Agent or Company is required to make any
payment of principal, interest or fees hereunder, duplicate executed originals
of either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Assignee claims entitlement to the benefits of a
tax treaty that provides for a complete exemption from U.S. federal income
withholding tax on all payments hereunder) and agrees to provide new Forms 4224
or 1001 upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments
thereto, duly executed and completed by the Assignee, and (c) agrees to comply
with all applicable U.S. laws and regulations with regard to such withholding
tax exemption.
8. REPRESENTATIONS AND WARRANTIES.
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim; (ii) it is
duly organized and existing and it has the full power and authority to take, and
has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in
EXHIBIT "G" -- Page 4
connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Company, or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. FURTHER ASSURANCES.
The Assignor and the Assignee each hereby agree to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Company or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
EXHIBIT "G" -- Page 5
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA. The Assignor
and the Assignee each irrevocably submits to the non-exclusive jurisdiction of
any State or Federal court sitting in California over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such [California] State or Federal court. Each party
to this Assignment and Acceptance hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. [Reference]
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER
ORAL OR WRITTEN).
[OTHER PROVISIONS TO BE ADDED AS MAY BE NEGOTIATED BETWEEN THE
ASSIGNOR AND THE ASSIGNEE, PROVIDED THAT SUCH PROVISIONS ARE NOT INCONSISTENT
WITH THE CREDIT AGREEMENT.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By: ______________________________________
Title:_____________________________________
EXHIBIT "G" -- Page 6
[ASSIGNEE]
By: ______________________________________
Title:_____________________________________
EXHIBIT "G" -- Page 7
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_________________, 2001
First Hawaiian Bank
▇▇▇▇▇▇▇ Homes, Inc.
________________________
________________________
________________________
Ladies and Gentlemen:
We refer to the Revolving Credit Agreement dated as of _____________
1999 (as amended, amended and restated, modified, supplemented or renewed from
time to time the "CREDIT AGREEMENT") among ▇▇▇▇▇▇▇ Homes, Inc., a Delaware
corporation (the "COMPANY"), the Banks referred to therein and First Hawaiian
Bank as agent for the Banks (the "AGENT"). Terms defined in the Credit Agreement
are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "ASSIGNOR") to _______________ (the
"ASSIGNEE") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor and all
outstanding Loans made by the Assignor) pursuant to the Assignment and
Acceptance Agreement attached hereto (the "ASSIGNMENT AND ACCEPTANCE"). Before
giving effect to such assignment, the Assignor's Commitment is $ ___________ and
the aggregate amount of its outstanding Loans is $_____________. After giving
effect to such assignment, the Assignor's Commitment shall be $______________
and the Assignee's Commitment shall be
$_______________.
2. The Assignee agrees that, upon receiving the consent of the Agent
and, if applicable, the Company to such assignment, the Assignee will be bound
by the terms of the Credit Agreement as fully and to the same extent as if the
Assignee were the Bank originally holding such interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
SCHEDULE 1 TO
EXHIBIT "G" -- Page 1
(A) Notice Address:
Assignee name: __________________________
Address: _____________________________
_____________________________
_____________________________
Attention: ____________________________
Telephone: (___) _______________________
Telecopier: (___) ______________________
Telex (Answerback): ____________________
(B) Payment Instructions:
Account No.: ___________________________
At: ___________________________
___________________________
___________________________
Reference: ___________________________
Attention: __________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
SCHEDULE 1 TO
EXHIBIT "G" -- Page 2
[NAME OF ASSIGNEE]
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
▇▇▇▇▇▇▇ HOMES, INC., a Delaware corporation
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
SCHEDULE 1 TO
EXHIBIT "G" -- Page 3
FIRST HAWAIIAN BANK,
as Agent
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
SCHEDULE 1 TO
EXHIBIT "G" -- Page 4
EXHIBIT "H"
COMPLIANCE CERTIFICATE
EXHIBIT "H" -- Page 1
SCHEDULE 1.1(a)
BANK GROUP COMMITMENT SCHEDULE
BANK COMMITMENT SHARE
--------------------------------------------------------------------
Bank of America, N.A. $75,000,000 33.3333%
--------------------------------------------------------------------
First Hawaiian Bank $50,000,000 22.2222%
--------------------------------------------------------------------
Fleet National Bank $75,000,000 33.3333%
--------------------------------------------------------------------
California Bank & Trust $25,000,000 11.1111%
--------------------------------------------------------------------
$___________ ____________
--------------------------------------------------------------------
$___________ ____________
--------------------------------------------------------------------
$___________ ____________
--------------------------------------------------------------------
AMOUNT $225,000,000 100.00%
--------------------------------------------------------------------
SCHEDULE 1.1(a)
SCHEDULE 1.1(b)
GUARANTORS
SCHEDULE 1.1(b)
SCHEDULE 1.1(c)
PERMITTED BUSINESS ACTIVITIES
THE BUILDING AND DEVELOPMENT FOR SALE TO CONSUMERS OF SINGLE FAMILY
CONDOMINIUM UNITS AND ONE TO FOUR FAMILY DETACHED RESIDENCES,
TOGETHER WITH MORTGAGE LENDING, TITLE INSURANCE, HOMEOWNERS
INSURANCE, SALE OF SECURITY SYSTEMS AND OTHER BUSINESSES INCIDENTAL
AND COMPLIMENTARY TO THE HOMEBUILDING BUSINESS..
SCHEDULE 1.1(c)
SCHEDULE 1.1(d)
MORTGAGE AND INSURANCE SUBSIDIARIES
SCHEDULE 1.1(d)
SCHEDULE 1.5
DESCRIPTION OF BONDING OBLIGATIONS
SCHEDULE 1.5
SCHEDULE 1.6
OUTSTANDING PARTICIPATING EQUITY LOANS
SCHEDULE 1.6
SCHEDULE 3.9.2
EXISTING LETTERS OF CREDIT
SCHEDULE 3.9.2
SCHEDULE 8.13
EXISTING LIENS
SCHEDULE 8.13
supplemented or renewed, the "CREDIT AGREEMENT") among ▇▇▇▇▇▇▇ Homes, Inc., a
Delaware corporation (the "COMPANY"), the several financial institutions from
time to time party thereto (including the Assignor, the "BANKS"), and First
Hawaiian Bank, as agent for the Banks (the "AGENT"). Any terms defined in the
Credit Agreement and not defined in this Assignment and Acceptance are used
herein as defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making Loans (the "COMMITTED LOANS") to the Company in an aggregate
amount not to exceed $__________ (the "COMMITMENT");
WHEREAS, [the Assignor has made Committed Loans in the aggregate
principal amount of $__________ to the Company] [no Committed Loans are
outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the Credit Agreement in
respect of its Commitment, [together with a corresponding portion of each of its
outstanding Loans, in an amount equal to $__________ (the "ASSIGNED AMOUNT") on
the terms and subject to the conditions set forth herein and the Assignee wishes
to accept assignment of such rights and to assume such obligations from the
Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) __% (the "ASSIGNEE'S PERCENTAGE
SHARE") of (A) the Commitment [and the Loans] of the Assignor and
EXHIBIT "G" -- Page 1
(B) all related rights, benefits, obligations, liabilities and indemnities of
the Assignor under and in connection with the Credit Agreement and the Loan
Documents.
[IF APPROPRIATE, ADD PARAGRAPH SPECIFYING PAYMENT TO ASSIGNOR BY
ASSIGNEE OF OUTSTANDING PRINCIPAL OF, ACCRUED INTEREST ON, AND FEES WITH RESPECT
TO, COMMITTED LOANS AND L/C OBLIGATIONS ASSIGNED.]
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Bank under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank. It is the intent
of the parties hereto that the Commitment of the Assignor shall, as of the
Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Sections __ and __ of the Credit Agreement to the extent such rights relate to
the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignee's Commitment will be
$___________.
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignor's Commitment will be
$___________.
2. PAYMENTS.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Committed Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section [ ](__) of the Credit
Agreement.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment [and] Loans shall be for the account of the Assignor.
Any interest, fees and other payments accrued on and after the Effective Date
with respect to the Assigned Amount shall be for the account of the Assignee.
Each of the Assignor and the Assignee agrees that it will hold in trust for the
other party any interest, fees and other amounts which it may receive to which
the other party is entitled pursuant to the preceding sentence and pay to the
other party any such amounts which it may receive promptly upon receipt.
EXHIBIT "G" -- Page 2
4. INDEPENDENT CREDIT DECISION.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section [ ](___) of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance shall be __________, _____ (the "EFFECTIVE
DATE"); PROVIDED that the following conditions precedent have been satisfied on
or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Company and the Agent required for an
effective assignment of the Assigned Amount by the Assignor to the Assignee
under Section [ ](__) of the Credit Agreement shall have been duly obtained and
shall be in full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section [
](__) of the Credit Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof
and in Section [ ](__) of the Credit Agreement shall have been paid to the
Agent; and
(vi) the Assignor shall have assigned and the Assignee shall have
assumed a percentage equal to the Assignee's Percentage Share of the rights and
obligations of the Assignor under the Credit Agreement (if such agreement
exists).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company [, the Issuing Bank] and
the Agent for acknowledgment by the Agent, a Notice of Assignment
[substantially] in the form attached hereto as SCHEDULE 1.
[6. AGENT. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
EXHIBIT "G" -- Page 3
(a) The Assignee hereby appoints and authorizes the Assignor to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the Banks pursuant to the terms of
the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement.]
7. WITHHOLDING TAX.
The Assignee (a) represents and warrants to the Bank, the Agent and the
Company that under applicable law and treaties no tax will be required to be
withheld by the Bank with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent and
the Company prior to the time that the Agent or Company is required to make any
payment of principal, interest or fees hereunder, duplicate executed originals
of either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Assignee claims entitlement to the benefits of a
tax treaty that provides for a complete exemption from U.S. federal income
withholding tax on all payments hereunder) and agrees to provide new Forms 4224
or 1001 upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments
thereto, duly executed and completed by the Assignee, and (c) agrees to comply
with all applicable U.S. laws and regulations with regard to such withholding
tax exemption.
8. REPRESENTATIONS AND WARRANTIES.
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim; (ii) it is
duly organized and existing and it has the full power and authority to take, and
has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in
EXHIBIT "G" -- Page 4
connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Company, or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. FURTHER ASSURANCES.
The Assignor and the Assignee each hereby agree to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Company or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
EXHIBIT "G" -- Page 5
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA. The Assignor
and the Assignee each irrevocably submits to the non-exclusive jurisdiction of
any State or Federal court sitting in California over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such [California] State or Federal court. Each party
to this Assignment and Acceptance hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. [Reference]
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER
ORAL OR WRITTEN).
[OTHER PROVISIONS TO BE ADDED AS MAY BE NEGOTIATED BETWEEN THE
ASSIGNOR AND THE ASSIGNEE, PROVIDED THAT SUCH PROVISIONS ARE NOT INCONSISTENT
WITH THE CREDIT AGREEMENT.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By: ______________________________________
Title:_____________________________________
EXHIBIT "G" -- Page 6
[ASSIGNEE]
By: ______________________________________
Title:_____________________________________
EXHIBIT "G" -- Page 7
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_________________, 2001
First Hawaiian Bank
▇▇▇▇▇▇▇ Homes, Inc.
________________________
________________________
________________________
Ladies and Gentlemen:
We refer to the Revolving Credit Agreement dated as of _____________
1999 (as amended, amended and restated, modified, supplemented or renewed from
time to time the "CREDIT AGREEMENT") among ▇▇▇▇▇▇▇ Homes, Inc., a Delaware
corporation (the "COMPANY"), the Banks referred to therein and First Hawaiian
Bank as agent for the Banks (the "AGENT"). Terms defined in the Credit Agreement
are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "ASSIGNOR") to _______________ (the
"ASSIGNEE") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor and all
outstanding Loans made by the Assignor) pursuant to the Assignment and
Acceptance Agreement attached hereto (the "ASSIGNMENT AND ACCEPTANCE"). Before
giving effect to such assignment, the Assignor's Commitment is $ ___________ and
the aggregate amount of its outstanding Loans is $_____________. After giving
effect to such assignment, the Assignor's Commitment shall be $______________
and the Assignee's Commitment shall be
$_______________.
2. The Assignee agrees that, upon receiving the consent of the Agent
and, if applicable, the Company to such assignment, the Assignee will be bound
by the terms of the Credit Agreement as fully and to the same extent as if the
Assignee were the Bank originally holding such interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
SCHEDULE 1 TO
EXHIBIT "G" -- Page 1
(A) Notice Address:
Assignee name: __________________________
Address: _____________________________
_____________________________
_____________________________
Attention: ____________________________
Telephone: (___) _______________________
Telecopier: (___) ______________________
Telex (Answerback): ____________________
(B) Payment Instructions:
Account No.: ___________________________
At: ___________________________
___________________________
___________________________
Reference: ___________________________
Attention: __________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
SCHEDULE 1 TO
EXHIBIT "G" -- Page 2
[NAME OF ASSIGNEE]
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
▇▇▇▇▇▇▇ HOMES, INC., a Delaware corporation
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
SCHEDULE 1 TO
EXHIBIT "G" -- Page 3
FIRST HAWAIIAN BANK,
as Agent
By:
--------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Title:
-----------------------------------
SCHEDULE 1 TO
EXHIBIT "G" -- Page 4
EXHIBIT "H"
COMPLIANCE CERTIFICATE
EXHIBIT "H" -- Page 1
SCHEDULE 1.1(a)
BANK GROUP COMMITMENT SCHEDULE
BANK COMMITMENT SHARE
--------------------------------------------------------------------
Bank of America, N.A. $75,000,000 33.3333%
--------------------------------------------------------------------
First Hawaiian Bank $50,000,000 22.2222%
--------------------------------------------------------------------
Fleet National Bank $75,000,000 33.3333%
--------------------------------------------------------------------
California Bank & Trust $25,000,000 11.1111%
--------------------------------------------------------------------
$___________ ____________
--------------------------------------------------------------------
$___________ ____________
--------------------------------------------------------------------
$___________ ____________
--------------------------------------------------------------------
AMOUNT $225,000,000 100.00%
--------------------------------------------------------------------
SCHEDULE 1.1(a)
SCHEDULE 1.1(b)
GUARANTORS
SCHEDULE 1.1(b)
SCHEDULE 1.1(c)
PERMITTED BUSINESS ACTIVITIES
THE BUILDING AND DEVELOPMENT FOR SALE TO CONSUMERS OF SINGLE FAMILY
CONDOMINIUM UNITS AND ONE TO FOUR FAMILY DETACHED RESIDENCES,
TOGETHER WITH MORTGAGE LENDING, TITLE INSURANCE, HOMEOWNERS
INSURANCE, SALE OF SECURITY SYSTEMS AND OTHER BUSINESSES INCIDENTAL
AND COMPLIMENTARY TO THE HOMEBUILDING BUSINESS..
SCHEDULE 1.1(c)
SCHEDULE 1.1(d)
MORTGAGE AND INSURANCE SUBSIDIARIES
SCHEDULE 1.1(d)
SCHEDULE 1.5
DESCRIPTION OF BONDING OBLIGATIONS
SCHEDULE 1.5
SCHEDULE 1.6
OUTSTANDING PARTICIPATING EQUITY LOANS
SCHEDULE 1.6
SCHEDULE 3.9.2
EXISTING LETTERS OF CREDIT
SCHEDULE 3.9.2
SCHEDULE 8.13
EXISTING LIENS
SCHEDULE 8.13