Exhibit 10.45
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of March 15, 2001
▇▇▇▇▇▇▇ HOMES, INC.,
as the Borrower,
CERTAIN FINANCIAL INSTITUTIONS,
as the Banks,
FIRST HAWAIIAN BANK,
as the Administrative and Syndication Agent,
BANK OF AMERICA, N.A.,
as the Documentation Agent
BANC OF AMERICA SECURITIES, LLC,
as the Sole Lead Arranger and Sole Book Manager
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT is dated March 15,
2001, and, except as otherwise provided herein, effective as of March 15, 2001,
among ▇▇▇▇▇▇▇ HOMES, INC., a Delaware corporation (the "Borrower"), the banks
from time to time party to this Agreement (collectively referred to as the
"Banks", and individually referred to as a "Bank"), FIRST HAWAIIAN BANK, a
Hawaii corporation, as administrative and syndication agent for the Banks (the
"Administrative Agent"), and BANK OF AMERICA, N.A., a national banking
association, as documentation agent for the Banks (the "Documentation Agent",
the Administrative Agent and the Documentation Agent are collectively referred
to as the "Agents").
RECITALS
WHEREAS, the Borrower, the Banks and the Administrative Agent entered
into that certain Credit Agreement dated as of March 29, 1996 (the "Original
Credit Agreement"), relating to the establishment of a revolving credit facility
in the amount of U.S. ONE HUNDRED TEN MILLION AND NO/100 DOLLARS (U.S.
$110,000,000.00) (the "Credit Facility") made available to the Borrower by the
Banks; and
WHEREAS, in connection therewith, the Borrower, the Banks and the
Administrative Agent executed certain Loan Documents (as defined in the Original
Credit Agreement); and
WHEREAS, the Borrower, the Banks and the Administrative Agent entered
into that certain Amended and Restated Credit Agreement dated March 27, 1997
(the "1997 Credit Agreement"), which amended the terms of the Original Credit
Agreement by, among other things, increasing the amount of the Credit Facility
to $137,600,000.00 and extending the Termination Date (as defined in the
Original Credit Agreement) to July 1, 1999; and
WHEREAS, the Borrower, the Banks and the Agents entered into that
certain Second Amendment to Loan Documents dated April 29, 1998, which further
amended the terms of the 1997 Credit Agreement to permit the Borrower to issue
"Senior Notes" on a PARI PASSU basis with the Credit Facility; and
WHEREAS, the Borrower, the Banks and the Agents entered into that
certain Second Amended and Restated Credit Agreement dated September 30, 1998
(the "1998 Credit Agreement"), which reduced the amount of the Credit Facility
to $90,000,000.00; and
WHEREAS, the 1998 Credit Agreement was amended by that certain First
Amendment to Second Amended and Restated Credit Agreement dated January 21,
1999; and
WHEREAS, the Borrower, the Banks and the Agents entered into that
certain Second Amendment to Second Amended and Restated Credit Agreement dated
July 2, 1999, which increased the amount of the Credit Facility to
$120,000,000.00 and extended the Termination Date to July 1, 2002; and
1
WHEREAS, the 1998 Credit Agreement was further amended by that certain
Third Amendment to Second Amended and Restated Credit Agreement dated July 22,
1999; and
WHEREAS, the Borrower, the Banks and the Agents entered into that
certain Third Amended and Restated Credit Agreement dated September 30, 1999
(the "1999 Credit Agreement"), which increased the amount of the Credit Facility
to $170,000,000.00; and
WHEREAS, the 1999 Credit Agreement was amended by that certain First
Amendment to Third Amended and Restated Credit Agreement dated _________, 2000;
and
WHEREAS, pursuant to that certain Agreement and Plan of Reorganization
(the "Reorganization Plan") made by and among ▇▇▇▇▇▇▇ Homes, Inc., Apollo Real
Estate Investment Fund, L.P. ("Apollo"), Blackacre WPH, LLC ("Blackacre"),
Highridge Pacific Housing Investors, L.P. ("Highridge"), AP WP Partners, L.P.
("APWP"), AP Western GP Corporation ("AP Western"), AP LHI, Inc. ("APLHI"), and
Lamco Housing, Inc. ("Lamco", and together with Apollo, Blackacre, Highridge,
APWP, AP Western, and APLHI, the "WP Partners"), dated as of September 12, 2000,
and as amended as of January 15, 2001, ▇▇▇▇▇▇▇ Holdings, Inc., a Delaware
corporation (the "Holding Company"), was formed, and it in turn will form
▇▇▇▇▇▇▇ Reorganization Sub, Inc., a Delaware corporation (the "Merger Sub"), and
the Merger Sub will be merged into the Borrower, whereupon the Borrower will
become the surviving corporation and a wholly owned subsidiary of the Holding
Company, at which time the Borrower will change its name from "▇▇▇▇▇▇▇ Homes,
Inc." to "▇▇▇▇▇▇▇ Residential, Inc.", and the Holding Company will change its
name from "▇▇▇▇▇▇▇ Holdings, Inc." to "▇▇▇▇▇▇▇ Homes, Inc." (the entire
transaction being referred to as the "Step 1 Merger A Transaction"); and
WHEREAS, the business day immediately following the completion of the
Step 1 Merger A Transaction, certain contributions are to be made to the Holding
Company and shares of the Holding Company are to be issued, all as set forth in
Section 2.5 of the Reorganization Plan (the "Step 2 Merger A Transaction", and
together with the Step 1 Merger A Transaction, the "Merger A Transaction"); and
WHEREAS, pursuant to Section 2.6 of the Reorganization Plan, if the
Borrower and the WP Partners obtain a favorable private letter ruling from the
Internal Revenue Service with regard to the merger of the Borrower into the
Holding Company, then the Borrower and the WP Partners may cause such merger to
occur, after which the Holding Company shall be the surviving corporation and
shall continue its corporate existence under the laws of the State of Delaware
(the "Merger B Transaction", and together with the Merger A Transaction, the
"Merger Transaction"); and
WHEREAS, the Borrower has requested the Banks and the Agents to consent
to the Merger Transaction and to further amend the terms of the Credit Facility
to increase the amount of the Credit Facility to $200,000,000.00 and to amend
other provisions contained in the 1999 Credit Agreement to permit and conform to
the Merger Transaction; and
WHEREAS, the Banks and the Agents are willing to comply with such
request, upon and subject to the terms and conditions hereinafter set forth;
2
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein:
A. The Banks and the Agents hereby consent to the Merger A Transaction,
provided that the Merger A Transaction shall be completed by April 17, 2001; and
B. The Banks and the Agents hereby consent to the Merger B Transaction,
provided that upon the completion of such transaction, the Holding Company shall
(i) execute the Fifth Amended and Restated Revolving Credit Agreement in the
form of Exhibit "I" attached hereto and the Fifth Amended and Restated
Promissory Note in the form of Exhibit "J" attached hereto, and (ii) certify and
covenant that the Holding Company is not, and will not become, a co-borrower,
guarantor or other obligor of, or provide any credit enhancements for, any
obligation of Western Pacific; and
C. The Borrower, the Banks and the Agents hereby agree to amend and
completely restate the 1999 Credit Agreement, as amended, in its entirety,
effective as of the date stated above, as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. In addition to the terms defined elsewhere in
this Agreement, the following terms have the following meanings:
"ADMINISTRATIVE AGENT" means First Hawaiian Bank, in its
capacity as administrative and syndication agent for the Banks hereunder, and
any successor agent.
"ADMINISTRATIVE AGENT'S PAYMENT OFFICE" means the address for
payments set forth on the signature page hereto in relation to the
Administrative Agent or such other address as the Administrative Agent may from
time to time specify in accordance with Section 10.02.
"ADVANCE" means a disbursement of loan proceeds in connection
with a Borrowing, as described in Section 2.03, or upon the conversion of a
Swing-Line Advance, as described in Section 2.04, or upon the negotiation of a
Letter of Credit, as described in Section 2.05, pursuant to the terms and
conditions set forth in Article II of this Agreement, and shall consist of Prime
Rate Advances and LIBO Rate Advances.
"AFFECTED BANK" has the meaning specified in Section 3.06.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing, no Bank shall be deemed an "Affiliate" of the
Borrower or any of its Subsidiaries, nor shall the Borrower or any of its
Subsidiaries be deemed an "Affiliate" of any Bank.
3
"AGENT-RELATED PERSONS" means with respect to any Agent, such
Agent and any successor agent arising under Section 9.09, together with their
respective Affiliates, and the officers, directors, employees, agents, and
attorneys-in-fact of such Persons and Affiliates.
"AGENTS" means collectively the Administrative Agent and the
Documentation Agent.
"AGGREGATE COMMITMENT" means the combined Revolving
Commitments of the Banks, in the amount of U.S. TWO HUNDRED MILLION DOLLARS
(U.S. $200,000,000.00), as such amount may be reduced pursuant to this
Agreement.
"AGREEMENT" means this Fourth Amended and Restated Credit
Agreement, as the same may be amended from time to time in accordance with the
terms hereof.
"APPLICABLE MARGIN" means: (i) for any Prime Rate "A" Advance
-- 0.000%; (ii) for any Prime Rate "B" Advance -- 0.000%; (iii) for any Prime
Rate "C" Advance -- 0.250%; (iv) for any LIBO Rate "A" Advance -- 1.600%; (v)
for any LIBO Rate "B" Advance -- 1.750%; and (vi) for any LIBO Rate "C" Advance
-- 2.000%.
"BANK" has the meaning specified in the introductory clause
hereto.
"BASE GRID" means the parameters for the Leverage Ratio and
the Interest Coverage Ratio as set forth in Section 7.02 herein.
"BORROWING" means a borrowing hereunder consisting of Advances
made to the Borrower on the same day by the Banks pursuant to Section 2.03.
"BORROWING BASE" means, at any date, the GAAP consolidated net
book value, including all inventoriable costs as set forth as "Real Estate
Inventories" in the consolidated financial statement of the Borrower and its
Subsidiaries, at such date, of: (i) Unentitled Land x 0%; plus (ii) Unimproved
Land (which value shall not exceed the lesser of: (A) 35% of the GAAP
consolidated net book value of "Real Estate Inventories" in the consolidated
financial statement of the Borrower and its Subsidiaries x 50%, or (B)
$60,000,000); plus (iii) Land Under Development x 65%; plus (iv) Unsold Homes
Under Construction x 75%; plus (v) Completed Unsold Homes x 75%; plus (vi)
Completed Unsold Homes Over 180 Days x 0%; plus (vii) Contracted Homes x 90%,
excluding, however, the entirety of any assets from Country Club Village,
unconsolidated Subsidiaries of the Borrower, and joint venture projects, such as
Iao Parkside, which are not consolidated in the Real Estate Inventories. All of
such properties described in (i) through (vii) above must be Unencumbered.
"BORROWING BASE CERTIFICATE" means a certificate described in
Section 6.02(d) of this Agreement.
"BUSINESS DAY" means any day other than a Saturday, Sunday,
United States federal holiday or other day on which commercial banks in
Honolulu, Hawaii, and any other jurisdiction in which any Bank maintains its
Lending Office, are authorized or required by law to
4
close and, if the applicable Business Day relates to any LIBO Rate Advance,
means such a day on which dealings are carried on in the London Interbank
Market.
"BUSINESS PLAN" means that certain plan with budget and cash
flow projections presented by the Borrower and its Subsidiaries to the Banks and
prepared as of August, 2000, as identified and delivered to the Banks prior to
the Closing Date.
"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 INTEREST" means any interest incurred by the
Borrower or any Subsidiary of the Borrower that is added to the assets of the
Borrower on the consolidated balance sheet of the Borrower and expensed in
future periods other than the current applicable period.
"CAPTIVE INSURANCE SUBSIDIARY" means a Subsidiary of the
Borrower which is organized and authorized pursuant to Article 19 of Chapter 431
of the Hawaii Revised Statutes.
"CLOSING DATE" means the date on which all conditions
precedent set forth in Section 4.01 are satisfied or waived by all of the Banks.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated thereunder.
"COMMITMENT ASSIGNMENT AND ACCEPTANCE" means a Commitment
Assignment and Acceptance in the form of Exhibit "H" attached hereto, executed
by an Eligible Assignee and delivered to the Administrative Agent pursuant to
Section 10.08.
"COMMITMENT PERCENTAGE" means, as to any Bank, the percentage
equivalent of such Bank's Revolving Commitment divided by the Aggregate
Commitment. Each Bank's initial Commitment Percentage is set forth opposite such
Bank's name in SCHEDULE 1 attached hereto.
"COMPLETED UNSOLD HOMES" means all condominium units and
one-to-four family residences (including Model Homes) owned by the Borrower or
its Subsidiaries as part of their respective real estate development business,
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" for a condominium unit when the temporary
certificate of occupancy for such unit has been issued; construction will be
considered "completed" for a one-to-four family residence when all electrical
and plumbing fixtures have been installed and utility services in connection
therewith have been connected. 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.
5
"COMPLETED UNSOLD HOMES OVER 180 DAYS" means 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 NET EARNINGS" means consolidated gross revenues
of the Borrower and its Subsidiaries less all operating and non-operating
expenses of the Borrower and its Subsidiaries (including current and deferred
taxes on income, provision for taxes on unremitted foreign earnings which are
included in gross revenues, current additions to reserves, and other similar
charges); all determined, in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means the Tangible Net Worth
of the Borrower and its Subsidiaries, determined, on a consolidated basis, in
accordance with GAAP.
"CONTINUATION DATE" means the effective date, at the end of an
Interest Period, on which a LIBO Rate Advance shall be continued as a LIBO Rate
Advance, as provided in Section 2.06(a)(iii).
"CONTRACT FOR SALE" means a sale and purchase agreement
between the Borrower 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 Borrower, its Subsidiaries or an institutional lender;
PROVIDED, that such agreement shall not contain any contingency clause,
conditioning such purchaser's obligation upon the sale of such purchaser's
property.
"CONTRACTED HOMES" means all condominium units and one-to-four
family residences (including Model Homes) owned by the Borrower or its
Subsidiaries as part of their respective real estate development business, on
which a building permit has been issued and construction has begun, and for
which the Borrower or its Subsidiaries has entered into a written Contract for
Sale.
"CONTROLLED GROUP" means the Borrower, its Subsidiaries and
all Persons (whether or not incorporated) under common control or treated as a
single employer with the Borrower and its Subsidiaries pursuant to Section
414(b), (c), (m) or (o) of the Code.
"CONVERSION DATE" means the effective date on which a Prime
Rate Advance shall be converted into one or more LIBO Rate Advances, or on which
one or more LIBO Rate Advances shall be converted into a Prime Rate Advance, as
provided in Section 2.06(a)(i) or 2.06(a)(ii).
"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 Borrower.
"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
6
amended by Amended and Restated Subordinate Mortgage, Security Agreement and
Financing Statement dated April 7, 1994, filed in said Office as Document No.
2149634, in favor of HCI (America) Inc., which encumbers Lots 3878 and 3879
in Country Club Village.
"DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"DEVELOPMENT RATIO" means Real Estate Development Assets
divided by Real Estate Indebtedness.
"DOCUMENTATION AGENT" means Bank of America N.A., in its
capacity as documentation agent for the Banks hereunder, and any successor
agent.
"ELIGIBLE ASSIGNEE" means (a) another Bank and (b) any
commercial bank, savings bank, savings and loan association or similar financial
institution which, (i) has total assets of $5,000,000,000 or more, (ii) is "well
capitalized" within the meaning of such term under the Federal Depository
Institutions Control Act, (iii) is engaged in the business of lending money and
extending credit under credit facilities substantially similar to those extended
under this Agreement and (iv) is operationally and procedurally able to meet the
obligations of a Bank hereunder to the same degree as a commercial bank,
PROVIDED that each Eligible Assignee must be (A) organized under the laws of the
United States of America, any state thereof or the District of Columbia or (B)
if a commercial bank, be organized under the laws set forth in clause (A) or
under the laws of the Cayman Islands or any country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of such a country, and (C) act under the Loan Documents through a
branch, agency or funding office located in the United States of America and (D)
be exempt from withholding of tax on interest and deliver the documents related
thereto pursuant to the Code.
"ELIGIBLE SUCCESSOR" means an individual who (i) has related
business experience as a "Senior Executive" (includes serving as a Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, or Division
President of an operating division) in one or more companies, primary business
of which is residential development, marketing and sales, where (A) the
aggregate of such "Senior Executive" experience is not less than five (5) years,
and (B) during such individual's association with any of the companies as a
"Senior Executive", no company, or any of its subsidiaries or affiliates or any
of its related assets shall have become subject to any bankruptcy or
receivership proceedings, or to any assignment for the benefit of creditors, or
to any other insolvency proceedings; and (ii) has a direct ownership interest in
the Holding Company, through ownership of the common stock of the Holding
Company.
"ENTITLED LAND" means all land owned by the Borrower or its
Subsidiaries as part of their respective real estate development business, which
does have residential zoning 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, as amended from time to time, and the regulations promulgated thereunder.
7
"EQUITY OFFERING" means the raising of capital by the Borrower
or any Subsidiary of the Borrower through a public or private issuance and sale
of stock of such entity not previously offered for sale.
"EVENT OF DEFAULT" means any of the events or circumstances
specified in Section 8.01.
"FEDERAL FUNDS RATE" means, for any period, the rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate". If
on any relevant day the appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean as determined by the Administrative
Agent of the rates for the last transaction in overnight Federal Funds arranged
prior to 9:00 a.m. (New York time) on that day by each of three leading brokers
of Federal Funds transactions in New York selected by the Administrative Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the
Federal Reserve System, or any entity succeeding to any of its principal
functions.
"FORM 1001" has the meaning specified in subsection 3.01(f).
"FORM 4224" has the meaning specified in subsection 3.01(f).
"GAAP" means generally accepted accounting principles set
forth from time to time in statements and pronouncements of the Financial
Accounting Standards Board, or in such other statements by such other entity as
may be in general use by significant segments of the U.S. accounting profession,
which are applicable to the circumstances as of the date of determination.
"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" or "GUARANTORS" means, singularly or collectively,
▇▇▇▇▇▇▇ HOMES OF CALIFORNIA, INC., a California corporation, ▇▇▇▇▇▇▇ HOMES OF
OREGON, INC., an Oregon corporation, ▇▇▇▇▇▇▇ HOMES OF WASHINGTON, INC., a
Washington corporation, MELODY HOMES, INC., a Delaware corporation, ▇▇▇▇▇▇▇
REALTY/MAUI, INC., a Hawaii corporation, ▇▇▇▇▇▇▇ REALTY/OAHU, INC., a Hawaii
corporation, VERTICAL CONSTRUCTION CORPORATION, a Delaware corporation, MELODY
MORTGAGE CO., a Colorado corporation, SHLR OF WASHINGTON, INC., a Washington
8
corporation, SHLR OF UTAH, INC., a Utah corporation, SHLR OF COLORADO, INC.,
a Colorado corporation, SSHI LLC, a Delaware limited liability company, SHLR
OF NEVADA, INC., a Nevada corporation, SRHI LLC, a Delaware limited liability
company, ▇▇▇▇▇▇▇ HOMES OF ARIZONA, LLC, a Delaware limited liability company,
SHLR OF CALIFORNIA, INC., a California corporation, ▇▇▇▇▇▇▇ MORTGAGE, INC., a
Delaware corporation, and SHA CONSTRUCTION LLC, a Delaware limited liability
company.
"GUARANTY" means an agreement or agreements in form and
substance satisfactory to the Banks and the Agents, duly executed by the
Guarantors, jointly and severally guaranteeing the due and punctual payment
of the Note, and the observance and performance of the Borrower's obligations
under the Loan Documents.
"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 funds (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 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. Notwithstanding the foregoing, if the primary obligor is a
Subsidiary of the Borrower, the term "Guaranty Obligation" shall not include
any direct or indirect liability of the Borrower with respect to any primary
obligation of such Subsidiary, which the Borrower itself would not otherwise
be prohibited from assuming or limited in undertaking, pursuant to the terms
of this Agreement.
"HOLDING COMPANY" means ▇▇▇▇▇▇▇ Holdings, Inc., a Delaware
corporation, which shall be renamed as ▇▇▇▇▇▇▇ Homes, Inc. upon the
completion of the Step 1 Merger A Transaction.
"IAO PARKSIDE" means the 480-unit low-rise condominium
project being developed by Iao Partners on 28 acres of land located in
Wailuku, Hawaii.
"IAO PARTNERS" means the joint venture, registered as a
Hawaii general partnership, formed by and between the Borrower (with a 50%
general partnership interest) and ▇. ▇▇▇▇▇▇ Homes, Inc. (with a 50% general
partnership interest).
9
"INDEBTEDNESS" of any Person means, without duplication,
(a) all indebtedness for borrowed money (including Subordinated Debt); (b)
all obligations issued, undertaken or assumed as the deferred purchase price
of property or services (other than accounts payable and accrued expenses as
set forth in the consolidated financial statements of the Borrower and its
Subsidiaries entered into in the ordinary course of business pursuant to
ordinary terms); (c) all non-contingent 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 such Person (even though the rights
and remedies of the seller under such agreement in the event of default are
limited to repossession or sale of such property); (f) all capital lease
obligations; (g) all net obligations with respect to Rate Contracts; (h) any
indebtedness which is guaranteed, directly or indirectly, by such Person; and
(i) all indebtedness referred to in clauses (a) through (h) 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) owned by such Person, even though
such Person has not assumed or become liable for the payment of such
Indebtedness, but does not include any indebtedness referred to in clauses
(a) through (g) above incurred by a Person as a joint venture partner of any
Joint Venture unless such indebtedness is guaranteed, directly or indirectly
(including general partner liability), by such Person as a joint venture
partner, or such indebtedness owed by one member of the Borrower's
consolidated group to another member of such consolidated group.
"INDEMNIFIED PERSON" has the meaning specified in
Section 10.05.
"INDEMNIFIED LIABILITIES" has the meaning specified in
Section 10.05.
"INSOLVENCY PROCEEDINGS" means, in respect of any Person
(a) any case, action or proceeding before any court or other Governmental
Authority relating to bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or (b) any
general assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other similar arrangement in respect of its
creditors generally or any substantial portion of its creditors; in each case
(a) and (b) undertaken under U.S. Federal, State or foreign law, including
the Bankruptcy Code (11 U.S.C. Section 101, ET SEQ.).
"INTER-BANK AGREEMENT" means an agreement executed by and
among the Administrative Agent, as administrative and syndication agent for
the Banks, the Documentation Agent as documentation agent for the Banks, and
the Banks, which shall supplement the provisions of Article IX hereof,
relative to the administration of the credit facility established by this
Agreement.
"INTEREST COVERAGE RATIO" means, with respect to the
Borrower and its Subsidiaries, consolidated earnings before impairment loss
recognized pursuant to Financial Accounting Standards Board Statement No.
121, interest expense (including Capitalized Interest expensed during the
applicable period), depreciation, taxes and amortization, divided by total
consolidated interest incurred.
10
"INTEREST PAYMENT DATE" means, with respect to any Prime
Rate Advance, the first day of each calendar month; with respect any LIBO
Rate Advance having an Interest Period of one month, the last day of the
Interest Period applicable to such Advance; and, with respect to any other
LIBO Rate Advance, the first day of each calendar month, AND the last day of
each Interest Period applicable to such Advance.
"INTEREST PERIOD" means, with respect to any LIBO Rate
Advance, the period commencing on the Business Day such LIBO Rate Advance is
disbursed or continued or on the Conversion Date on which a Prime Rate
Advance is converted to a LIBO Rate Advance and ending on the date one (1),
two (2), three (3) or six (6) months thereafter, as selected by the Borrower,
in its Notice of Borrowing or Notice of Conversion/Continuation;
PROVIDED THAT:
(i) if any Interest Period pertaining to a LIBO
Rate Advance would otherwise end on a day which is not a
Business Day, that Interest Period shall be extended to the
next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end
on the immediately preceding Business Day;
(ii) any Interest Period pertaining to a LIBO Rate
Advance that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the
Termination Date.
"ISSUANCE" means the issuance of a Letter of Credit hereunder
at the request of the Borrower and for the account of the Borrower or its
Subsidiaries, pursuant to Section 2.05.
"ISSUING BANK" means any Bank or any Affiliate of any Bank,
other than the Administrative Agent, which issues a Letter of Credit hereunder
at the request of the Borrower and for the account of the Borrower or its
Subsidiaries, in accordance with a requirement by the beneficiary of such Letter
of Credit, and pursuant to Section 2.05.
"JOINT VENTURE" means a general partnership, duly registered
and validly existing under the laws of any state of The United States, which is
formed for the purpose of developing one or more specific real estate projects.
"KULALEI PROPERTY" means 193 improved subdivided lots in the
Ewa by ▇▇▇▇▇▇ development in Ewa, Oahu, Hawaii.
"LAND UNDER DEVELOPMENT" means all land owned by the Borrower
or its Subsidiaries as part of their respective real estate development
business, on which grading or construction of on-site infrastructure
improvements has begun, and for which all necessary zoning and large-lot
subdivision approvals have been obtained and are in full force and effect, but
for which construction of the residential improvements thereon has not begun.
11
"LENDING OFFICE" means, with respect to any Bank, the office
or offices of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "LIBO Lending Office", as the case may be, opposite its name on the
applicable signature page hereto, or such other office or offices of such Bank
as it may from time to time notify the Borrower and the Administrative Agent.
"LETTERS OF CREDIT" means standby letters of credit issued by
the Administrative Agent or the Issuing Bank, at the request of the Borrower and
for the account of the Borrower or its Subsidiaries, pursuant to the terms and
conditions set forth in Article II of this Agreement.
"LEVERAGE RATIO" means total Indebtedness of the Borrower and
its Subsidiaries on a consolidated basis, including all Quantifiable Contingent
Liabilities, but not including all accounts payables and accrued expenses as set
forth in the consolidated financial statements of the Borrower and its
Subsidiaries entered into in the ordinary course of business pursuant to
ordinary terms; divided by Consolidated Tangible Net Worth. The initial Leverage
Ratio will be determined by the Banks at the Closing Date and such determination
shall be effective for the next Quarter following the Closing Date; thereafter,
the Leverage Ratio for each succeeding Quarter will be determined as of the end
of the preceding Quarter (such determination to be made no later than
seventy-five (75) days after the end of such preceding Quarter, based upon the
Leverage Ratio Certificate provided to the Administrative Agent by the Borrower,
pursuant to Section 6.02(e) of this Agreement, and verified by the
Administrative Agent to its satisfaction). The Administrative Agent shall
promptly notify the Borrower, and each Bank of each determination of the
Leverage Ratio. Any determination of the Leverage Ratio shall be conclusively
deemed to be correct unless objected to by the Borrower, or the Majority Banks
within five (5) Business Days after receipt of such notification.
"LEVERAGE RATIO/INTEREST COVERAGE RATIO/BASE GRID CERTIFICATE"
means a certificate more particularly described in Section 6.02(e) of this
Agreement.
"LIBO RATE" means, for each Interest Period in respect of
LIBO Rate Advances comprising part of the same Borrowing, either (i) the rate
of interest per annum (rounded upward to the nearest 1/16th of 1%) equal to
the rate for deposits in U.S. dollars with a maturity approximately equal to
such Interest Period which appears on the Telerate Screen LIBO Page (or such
other display page on the Telerate System as may replace such page) as of
11:00 a.m. (London time) on the day that is two (2) Business Days prior to
the day on which the applicable Interest Period is to begin, or (ii) if no
such rate of interest appears on the Telerate Screen LIBO Page for such
specified Interest Period, the rate of interest per annum equal to the rate
for deposits in U.S. Dollars with a maturity occurring immediately before or
immediately after such specified Interest Period, whichever is higher, as
determined by the Administrative Agent from the Telerate Screen LIBO Page (or
such other display page on the Telerate System as may replace such page) at
approximately 11:00 a.m. (London time) on the day that is two (2) Business
Days prior to the day on which the applicable Interest Period is to begin.
Any LIBO Rate determined on the basis of the rate displayed on the Telerate
Screen LIBO Page in accordance with the foregoing provisions of this
paragraph shall be subject to corrections, if any, made in such rate and
displayed by the Telerate System within one hour of the time when such rate
is first displayed by such service.
12
"LIBO RATE "A" ADVANCE" means any outstanding LIBO Rate
Advance during a time when the Leverage Ratio and the Interest Coverage Ratio
then in effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is less than 1.35 to 1 and the
Interest Coverage Ratio is greater than 2.00 to 1; or
(ii) the Leverage Ratio is less than 1.50 to 1 and the
Interest Coverage Ratio is greater than 2.50 to 1.
"LIBO RATE "B" ADVANCE" means any outstanding LIBO Rate
Advance during a time when the Leverage Ratio and the Interest Coverage Ratio
then in effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is less than or equal to 1.35 to 1
and the Interest Coverage Ratio is greater than or equal to 1.75 to 1, but
less than 2.00 to 1; or
(ii) the Leverage Ratio is less than or equal to 1.50 to 1
and the Interest Coverage Ratio is greater than or equal to 2.00 to 1, but
less than 2.50 to 1; or
(iii) the Leverage Ratio is less than or equal to 1.60 to 1
and the Interest Coverage Ratio is greater than or equal to 2.50 to 1.
"LIBO RATE "C" ADVANCE" means any outstanding LIBO Rate
Advance during a time when the Leverage Ratio and the Interest Coverage Ratio
then in effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is greater than 1.35 to 1, but
less than or equal to 1.50 to 1, and the Interest Coverage Ratio is greater
than or equal to 1.75 to 1, but less than 2.00 to 1; or
(ii) the Leverage Ratio is greater than 1.50 to 1, but
less than or equal to 1.60 to 1, and the Interest Coverage Ratio is greater
than or equal to 2.00 to 1, but less than 2.50 to 1.
"LIBO RATE ADVANCE" means an Advance that bears interest
based on the LIBO Rate.
"LOAN DOCUMENTS" means this Agreement, the Note, the
Guaranty, and all documents delivered to the Administrative Agent in
connection herewith or therewith.
"MAJORITY BANKS" means at any time Banks then holding 66.6%
or more of the Aggregate Commitment.
"MARGIN STOCK" means "margin stock" as such term is defined
in Regulation G, T, U or X of the Federal Reserve Board.
13
"MATERIAL ADVERSE EFFECT" means (a) a material impairment
of the ability of the Borrower or its Subsidiaries on a consolidated basis to
perform under any Loan Document and avoid any Event of Default; or (b) a
material adverse effect upon the legality, validity, binding effect or
enforceability of any Loan Document.
"MERGER TRANSACTION" has the meaning set forth in the
Recitals.
"MERGER A TRANSACTION" has the meaning set forth in the
Recitals.
"MERGER B TRANSACTION" has the meaning set forth in the
Recitals.
"MODEL HOMES" means all condominium units and one-to-four
family residences owned by the Borrower or its Subsidiaries as part of their
respective real estate development business, which are used as models or
sales offices to market a particular real estate development project.
"MULTI-EMPLOYER PLAN" means a "multi-employer plan" (within
the meaning of Section 4001(a)(3) of ERISA) to which any member of the
Controlled Group makes, is making, or is obligated to make, contributions or,
during the preceding three calendar years, has made, or been obligated to
make, contributions.
"NOTE" means the promissory note, as amended and restated,
and dated the date of this Agreement, executed by the Borrower in favor of
the Administrative Agent (as agent for the Banks), evidencing the Borrower's
agreement to repay all amounts outstanding under the Aggregate Commitment,
together with all interest thereon, as provided therein.
"NOTICE OF BORROWING" means a notice given by the Borrower,
to the Administrative Agent pursuant to Section 2.03, in substantially the
form of EXHIBIT A-1.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by
the Borrower, to the Administrative Agent pursuant to Section 2.06, in
substantially the form of EXHIBIT B.
"NOTICE OF SWING-LINE BORROWING" means a notice given by
the Borrower, to the Administrative Agent pursuant to Section 2.04, in
substantially the form of EXHIBIT A-2.
"OBLIGATIONS" means all Advances, Swing-Line Advances and
other Indebtedness, loans, debts, fees, charges, liabilities, obligations,
covenants and duties owing by the Borrower to any Bank, the Administrative
Agent, or any other Person required to be indemnified, that arises under this
Agreement or any Loan Document, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due
now existing or hereafter arising and however acquired.
"OTHER TAXES" has the meaning specified in subsection 3.01(b).
"PBGC" means the Pension Benefit Guaranty Corporation or
any entity succeeding to any of its principal functions under ERISA.
14
"PARTICIPANT" has the meaning specified in
subsection 10.08(a).
"PERMITTED INDEBTEDNESS" means:
(i) the Country Club Village Subordinate Mortgage;
(ii) the existing Indebtedness and obligations of the
Borrower as a joint venture partner in Iao Partners (including any
Indebtedness of Iao Partners for which there is recourse to the
Borrower); PROVIDED, HOWEVER, that the Borrower shall be permitted,
after March 31, 1997, (A) to incur additional Indebtedness as a joint
venture partner of Iao Partners, (B) to make additional net investments
in Iao Partners, and (C) to make additional net advances to Iao
Partners, in amounts which shall not exceed $5,000,000.00, in the
aggregate, for all such indebtedness, investments and advances
described in (A), (B) and (C) above;
(iii) Subordinated Debt of the Borrower (including the
Borrower's existing subordinated convertible debentures);
(iv) Indebtedness, not to exceed $10,000,000 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 Borrower or any of its
Subsidiaries; provided that the rights and remedies of the seller under
such agreement in the event of default are limited to repossession or
sale of such property;
(v) Indebtedness to the extent incurred upon the
indorsement 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;
(vi) in addition to matters permitted in item (ii) above,
Indebtedness and Guaranty Obligations (except for indemnification of
sureties issuing bonds in connection with the Borrower's or any of its
Subsidiaries' real estate development businesses), not to exceed
$10,000,000 in the aggregate, incurred in the ordinary course of the
Borrower's and its Subsidiaries' real estate development businesses,
and after the completion of the Merger A Transaction, such Indebtedness
and Guaranty Obligations shall include the "Net Debt" 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 ("▇▇▇▇▇▇"),
pursuant to that certain letter agreement dated September 11, 2000, as
amended on January 10, 2001 (whereby an obligation of the Borrower owed
to ▇▇▇▇▇▇ shall be setoff against an obligation of ▇▇▇▇▇▇ in the
original principal amount of $4,810,000 owed to ▇▇▇▇▇▇▇ Homes of
California, Inc. (the "Net Debt"));
(vii) Premium Payments;
(viii) Guaranty Obligations (a) incurred in respect of
indemnification of sureties for the issuance of bonds in connection
with the Borrower's or any of its Subsidiaries' real
15
estate development businesses and (b) associated with the acquisition
of Melody Homes, Inc. and Melody Mortgage Co. by the Borrower;
(ix) Senior Debt and any guaranties thereof by any
Guarantor;
(x) the Guaranty; and
(xi) Indebtedness in respect of the Aggregate Commitment
hereunder.
"PERMITTED INVESTMENT" means
(a) the creation of or investment in a wholly-owned Subsidiary
of the Borrower which is used exclusively as an exchange vehicle to
facilitate a like-kind exchange under Section 1031 of the Code;
(b) loan receivables from sale of homes (including models) not
to exceed $10,000,000.00;
(c) any one of the following dollar denominated investments,
maturing within one year from the date of acquisition, selected by the
Borrower:
(i) marketable direct obligations issued or
unconditionally guaranteed by the United States government or
issued by any agency thereof and backed by the full faith and
credit of the United States;
(ii) marketable direct obligations issued by any
state of the United States or any political subdivision of any
such state or any public instrumentality thereof and, at the
time of acquisition, having the highest credit rating
obtainable from either Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc. ("S&P") or ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's");
(iii) commercial paper or corporate promissory
notes bearing at the time of acquisition the highest credit
rating either of S&P or Moody's issued by United States,
Australian, Canadian, European or Japanese bank holding
companies or industrial or financial companies (other than an
Affiliate of the Borrower);
(iv) certificates of deposit issued by and
bankers acceptances of and interest bearing deposits with any
Bank, or any commercial bank having capital and surplus of at
least $500,000,000 or the equivalent and which issues (or the
parent of which issues) commercial paper or other short term
securities bearing the highest credit rating obtainable from
either S&P or Moody's; and
16
(v) money market funds organized under the laws
of the United States or any state thereof that invest solely
in any of the foregoing investments permitted under
clauses (i), (ii), (iii) and (iv);
(d) the acquisition of the remaining 11% interest in SSHI LLC,
a Delaware limited liability company ("▇▇▇▇▇▇▇▇"), pursuant to the
terms of that certain Interest Purchase Agreement dated as of July 31,
1997, entered into by and among SSHI LLC, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Construction, Inc., the Borrower and SHLR of Washington, Inc.;
(e) the investment (including advances and guaranties) in
unconsolidated Subsidiaries of the Borrower or joint ventures (in which
the Borrower or its Subsidiaries is a joint venture partner) which are
involved in home building in the principal markets of the Borrower or
its Subsidiaries, provided such investment shall not exceed $25,000,000
in the aggregate subsequent to December 31, 1997, which shall include
the acquisition of a 49% interest in ▇▇▇▇▇▇ Homes Madison, LLC, a
Delaware limited liability company, a 49% interest in ▇▇▇▇▇▇ Carlsbad,
LLC, a Delaware limited liability company, a 24.5% interest in
Venturanza Del Verde, LLC, a Delaware limited liability company, a 50%
interest in Fairway Farms, LLC, a Delaware limited liability company
and a 50% interest in PH-▇▇▇▇▇▇ Orange ▇▇▇▇▇▇, LLC, a Delaware limited
liability company.
(f) the loan receivable from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 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 promissory note dated July 22, 1999, in the
original principal amount of $4,810,000, payable to ▇▇▇▇▇▇▇ Homes of
California, Inc.; which obligation, after the completion of the Merger
A Transaction, will be setoff against the Borrower's obligation to
▇▇▇▇▇▇ pursuant to that certain letter agreement dated September 11,
2000, as amended on January 10, 2001.
(g) upon the completion of the Merger A Transaction, the
acquisition of the interests in SRHI LLC from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
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, pursuant to
that certain letter agreement dated September 11, 2000, as amended on
January 10, 2001.
"PERSON" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture or Governmental Authority.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower, any of its Subsidiaries or any member of the
Controlled Group sponsors or maintains or to which the Borrower, any of its
Subsidiaries or any member of the Controlled Group makes, is making or is
obligated to make contributions.
"PREMIUM PAYMENTS" means (i) payments that are to be made by
the Borrower to Amfac Property Development Corp., if the average sales price for
or number of homes built by the Borrower on parcels of land in the Waikele
master-planned community exceeds the applicable amount set forth in the purchase
agreement between the Borrower and Amfac Property
17
Development Corp. for such parcels; (ii) payments that are to be made by the
Borrower to ▇▇▇▇▇▇ Homes, Ltd., if the Borrower sells certain homes located
on the Kulalei Property at a premium over the price of certain other homes
located elsewhere at the Kulalei Property, pursuant to that certain Amended
and Restated Purchase and Sale Agreement dated November 20, 1995; and (iii)
payments that are to be made by the Borrower to HCI (America) Inc., in the
event the Borrower constructs more than 580 units in Country Club Village.
"PRIME RATE" means, for any day, the lending rate of interest
announced publicly from time to time by First Hawaiian Bank as its "prime
interest rate", which rate shall not necessarily be the best or lowest rate
charged by First Hawaiian Bank from time to time. Any change in the prime
interest rate announced by First Hawaiian Bank shall take effect at the opening
of business on the day specified in the public announcement of such change.
"PRIME RATE "A" ADVANCE" means any outstanding Prime Rate
Advance during a time when the Leverage Ratio and the Interest Coverage Ratio
then in effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is less than 1.35 to 1 and the
Interest Coverage Ratio is greater than 2.00 to 1; or
(ii) the Leverage Ratio is less than 1.50 to 1 and the
Interest Coverage Ratio is greater than 2.50 to 1.
"PRIME RATE "B" ADVANCE" means any outstanding Prime Rate
Advance during a time when the Leverage Ratio and the Interest Coverage Ratio
then in effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is less than or equal to 1.35
to 1 and the Interest Coverage Ratio is greater than or equal to 1.75 to 1,
but less than 2.00 to 1; or
(ii) the Leverage Ratio is less than or equal to 1.50
to 1 and the Interest Coverage Ratio is greater than or equal to 2.00 to 1,
but less than 2.50 to 1; or
(iii) the Leverage Ratio is less than or equal to 1.60
to 1 and the Interest Coverage Ratio is greater than or equal to 2.50 to 1.
"PRIME RATE "C" ADVANCE" means any outstanding Prime Rate
Advance during a time when the Leverage Ratio and the Interest Coverage Ratio
then in effect (computed on a Quarterly basis in advance) are as follows:
(i) the Leverage Ratio is greater than 1.35 to 1, but
less than or equal to 1.50 to 1, and the Interest Coverage Ratio is greater
than or equal to 1.75 to 1, but less than 2.00 to 1; or
(ii) the Leverage Ratio is greater than 1.50 to 1, but
less than or equal to 1.60 to 1, and the Interest Coverage Ratio is greater
than or equal to 2.00 to 1, but less than 2.50 to 1.
"PRIME RATE ADVANCE" means an Advance or a Swing-Line
Advance that bears interest based on the Prime Rate.
18
"QUANTIFIABLE CONTINGENT LIABILITIES" means, with respect to
the Borrower and its Subsidiaries, an estimated loss from a loss contingency
recognized pursuant to Financial Accounting Standards Board Statement No. 5.
"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 CONTRACTS" means swap agreements (as such term is
defined in Section 101 of the Bankruptcy Code (11 U.S.C. Section 101 ET SEQ.)
and any other agreements or arrangements designed to provide protection
against fluctuations in interest or currency exchange rates.
"REAL ESTATE DEVELOPMENT ASSETS" means at any date, the GAAP
consolidated book value of inventories, at such date, as set forth as "Real
Estate Inventories" in the consolidated financial statements of the Borrower and
its Subsidiaries, including Unentitled Land, Unimproved Land, Land Under
Development, Unsold Homes Under Construction, Completed Unsold Homes, Completed
Unsold Homes Over 180 Days, and Contracted Homes.
"REAL ESTATE INDEBTEDNESS" means the total outstanding amount
under: (1) the Aggregate Commitment; (2) the Subordinated Debt of the Borrower
(including the Borrower's existing subordinated convertible debentures); (3) the
Senior Debt; and (4) other indebtedness, as may be permitted by the Banks, in
connection with the development of any Real Estate Development Assets.
"REORGANIZATION PLAN" means that certain Agreement and Plan of
Reorganization made by and among ▇▇▇▇▇▇▇ Homes, Inc., Apollo Real Estate
Investment Fund, L.P., Blackacre WPH, LLC, Highridge Pacific Housing Investors,
L.P., AP WP Partners, L.P., AP Western GP Corporation, AP LHI, Inc., and Lamco
Housing, Inc., dated as of September 12, 2000.
"REPORTABLE EVENT" means, as to any Plan, (a) any of the
events set forth in Section 4043(b) of ERISA or the regulations thereunder,
other than any such event for which the 30-day notice requirement under ERISA
has been waived in regulations issued by the PBGC, (b) a withdrawal from a Plan
described in Section 4063 of ERISA, or (c) a cessation of operations described
in Section 4062(e) of ERISA.
"REQUEST FOR ISSUANCE OF LETTER OF CREDIT" means a notice
given by the Borrower, to the Administrative Agent pursuant to Section 2.05, in
substantially the form of EXHIBIT C.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case 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 OFFICER" of the Borrower or any of its
Subsidiaries means the chief executive officer, the president, or the chief
financial officer of the Borrower or such Subsidiary, or any other officer
having substantially the same authority and responsibility; or, with respect to
19
compliance with financial covenants, the chief financial officer, the
controller, or the treasurer of the Borrower, or any other officer having
substantially the same authority and responsibility.
"REVOLVING COMMITMENT", with respect to each Bank, has the
meaning specified in Section 2.01.
"SENIOR DEBT" means all monetary obligations, evidenced by
bonds, debentures, notes or similar instruments which are or are intended to be
issued pursuant to a registration statement under the Securities Act of 1933 or
an exemption from the registration requirements thereunder, of the Borrower or
its Subsidiaries, including principal and interest thereon, unless such
obligation, by its terms or by the terms of any agreement or instrument pursuant
to which such obligation is issued, is subordinated in right of payment to the
Obligations of the Borrower hereunder. The term "Senior Debt" shall include the
"Senior Notes".
"SENIOR NOTES" means the 9% Senior Notes maturing 2008, in the
principal amount of US$100,000,000 issued by the Borrower pursuant to that
certain Prospectus dated July 7, 1998.
"SOLVENT" means, as to any Person at any time, that (a) the
fair value of the property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for
purposes of Section 101(31) of the Bankruptcy Code (11 U.S.C.Section 101 ET
SEQ.) and, in the alternative, for purposes of the Hawaii Uniform Fraudulent
Transfer Act; (b) the present fair saleable value of the property of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured;
(c) such Person is able to realize upon its property and pay its debts and
other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"STEP 1 MERGER A TRANSACTION" has the meaning set forth in the
Recitals.
"STEP 2 MERGER A TRANSACTION" has the meaning set forth in the
Recitals.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof; but
does not include a Joint Venture.
"SUBORDINATED DEBT" means Indebtedness of the Borrower or its
Subsidiaries (including subordinated debentures and subordinated convertible
debentures) to another lender or creditor who has expressly agreed by virtue of
documents or instruments acceptable to the Majority Banks, that the Indebtedness
of such entity to such lender or creditor is subordinated to the Obligations of
the Borrower hereunder, and that such lender or creditor will not demand or
20
assert payment of any portion of such lender's or creditor's Indebtedness until
the Obligations of the Borrower hereunder have been paid in full.
"SUPER MAJORITY BANKS" means at any time Banks then holding
80% or more of the Aggregate Commitment.
"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 ADVANCE" means a disbursement of loan proceeds in
connection with a Swing-Line Borrowing, pursuant to the terms and conditions set
forth in Article II of this Agreement, and shall consist of Prime Rate Advances
only.
"SWING-LINE BORROWING" means a borrowing hereunder consisting
of Swing-Line Advances made to the Borrower on the same day by the
Administrative Agent pursuant to Section 2.04.
"TANGIBLE NET WORTH" of a Person means such Person's total
assets (exclusive of goodwill, patents, trademarks, trade names, organization
expense, treasury shares, unamortized debt discount and premium, and other like
intangibles), less all liabilities (including accrued and deferred income taxes
and subordinated liabilities).
"TAXES" has the meaning specified in subsection 3.01(a).
"TERMINATION DATE" means July 1, 2002, unless extended by the
Banks pursuant to subsection 2.09.
"UNENCUMBERED" when used to describe real property owned by
the Borrower or any of its Subsidiaries, means property which is not subject to
any lien, whether the same is recorded, unrecorded, springing, resulting from a
court judgment or arbitration award, or otherwise; PROVIDED, (i) that the filing
of an application for mechanic's or materialman's lien on such real property
under Chapter 507, Hawaii Revised Statutes, or such similar statutes under the
laws of any other state, shall not prevent such property from being
Unencumbered, as long as the Borrower or its Subsidiaries are diligently
defending or causing another party in interest to defend such application; (ii)
that the attachment of any such lien to any such property shall not prevent such
property from being Unencumbered, as long as the Borrower or its Subsidiaries
have filed a bond, sufficient to discharge such lien, with the clerk of the
applicable court, as provided in Section 507-43, Hawaii Revised Statutes, or
such similar statutes under the laws of any other state; and (iii) that the
recording of any lien by the obligee of any Premium Payment against property for
which a Premium Payment is required and has not been paid, shall not prevent
such property from being Unencumbered, as long as the Borrower or its
Subsidiaries have filed a bond, in form and substance satisfactory to the
Majority Banks, in an amount equal to no less than 125% of the claimed amount of
the lien.
"UNENTITLED LAND" means all land owned by the Borrower or its
Subsidiaries as part of their respective real estate development business, that
does not have residential zoning, or
21
that does have residential zoning but does not have the provision of potable
water, sewage, or other utilities available to the boundary of such land.
"UNFUNDED PENSION LIABILITIES" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used by
that Plan's actuaries for funding that Plan pursuant to Section 412 of the Code
for the applicable plan year.
"UNIMPROVED LAND" means all Entitled Land owned by the
Borrower or its Subsidiaries as part of their respective real estate development
business, on which no construction of on-site infrastructure improvements has
begun.
"UNSOLD HOMES UNDER CONSTRUCTION" means all condominium units
and one-to-four family residences (including Model Homes) owned by the Borrower
or its Subsidiaries as part of their respective real estate development
business, for which building permits have been issued and construction has
commenced (and not been abandoned), but not completed, and for which there is no
written contract of sale with an unrelated 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.
"WESTERN PACIFIC" means, individually and collectively,
Western Pacific Housing Development Limited Partnership, a California limited
partnership, Western Pacific Housing Development II Limited Partnership, a
California limited partnership, and WPH-▇▇▇▇▇▇, LLC, a Delaware limited
liability company, and their respective subsidiaries and affiliated entities.
"WESTERN PACIFIC ADVANCE" means an inter-company loan advance
by the Borrower or its Subsidiaries to Western Pacific pursuant to Section
7.07(e) hereof.
"WESTERN PACIFIC CREDIT AGREEMENT" means that certain Third
Amended and Restated Revolving Credit Agreement dated November 21, 2000 among
Western Pacific, and the "Banks" which are a party to such Agreement.
"WP PARTNERS" shall have the meaning set forth in the
recitals.
1.02 OTHER INTERPRETIVE PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto. The meaning of defined terms shall be equally applicable to the singular
and plural forms of the defined terms. Terms (including uncapitalized terms) not
otherwise defined herein and that are defined in the Uniform Commercial Code of
Hawaii shall have the meanings therein described.
(b) THE AGREEMENT. The words "hereof", "herein",
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, section, schedule and exhibit references are to this
Agreement unless otherwise specified.
22
(c) CERTAIN COMMON TERMS.
(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."
(d) PERFORMANCE; TIME. Whenever any performance
obligation hereunder (other than a payment obligation) shall be stated to be due
or required to be satisfied on a day other than a Business Day, such performance
shall be made or satisfied on the next succeeding Business Day. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until" each mean
"to but excluding", and the word "through" means "to and including." If any
provision of this Agreement refers to any action taken or to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
interpreted to encompass any and all means, direct or indirect, of taking, or
not taking. such action.
(e) CONTRACTS. Unless otherwise expressly provided
herein, references to agreements 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 terms of any Loan Document.
(f) LAWS. 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.
(g) CAPTIONS. The captions and headings of this
Agreement are for convenience of reference only and shall not affect the
interpretation of this Agreement.
(h) INDEPENDENCE OF PROVISIONS. The parties acknowledge
that this Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters, and
that such limitations, tests and measurements are cumulative and must each be
performed, except as expressly stated to the contrary in this Agreement.
(i) INTERPRETATION. This Agreement is the result of
negotiations among and has been reviewed by counsel to the Administrative Agent,
the Borrower, its Subsidiaries and other parties, and is the product of all
parties hereto. Accordingly, this Agreement and the other Loan Documents shall
not be construed against the Banks or the Administrative Agent merely because of
the Administrative Agent's or Banks' involvement in the preparation of such
documents and agreements.
23
1.03 ACCOUNTING PRINCIPLES.
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" refer to such
fiscal year of the Borrower.
ARTICLE II
THE CREDITS
2.01 AMOUNTS AND TERMS OF COMMITMENTS. Each Bank severally agrees,
on the terms and conditions hereinafter set forth, to make Advances to the
Borrower from time to time on any Business Day during the period from the
Closing Date to the Termination Date (as the same may be extended pursuant to
Section 2.09 hereof); and the Administrative Agent agrees, on the terms and
conditions hereinafter set forth, to make Swing-Line Advances to the Borrower
from time to time on any Business Day during the period from the Closing Date to
the Termination Date (as the same may be extended pursuant to Section 2.09
hereof); and the Administrative Agent and the Issuing Bank agree, on the terms
and conditions hereinafter set forth, to issue Letters of Credit for the account
of the Borrower from time to time on any Business Day during the period from the
Closing Date to the Termination Date (as the same may be extended pursuant to
Section 2.09 hereof). The aggregate amount of each Bank's obligation to make
Advances, together with such Bank's share of funding for any Letter of Credit
upon negotiation by the beneficiary thereof, shall not exceed at any time the
amount set forth opposite such Bank's name in SCHEDULE 1 under the heading
"Commitment", and the aggregate amount of the Administrative Agent's obligation
to make Advances and Swing-Line Advances, together with the Administrative
Agent's share of funding for any Letter of Credit upon negotiation by the
beneficiary thereof, shall not exceed at any time the amount set forth opposite
the Administrative Agent's name in SCHEDULE 1 under the heading "Commitment"
(such amount, as the same may be reduced pursuant to the terms of this
Agreement, being such Bank's "Revolving Commitment"); PROVIDED, HOWEVER, that,
after giving effect to any Borrowing, any Swing-Line Borrowing or any Issuance,
the aggregate principal amount of all outstanding Advances, all outstanding
Swing-Line Advances, and all outstanding Letters of Credit shall not exceed the
amount of the Aggregate Commitment. Within the limits of the Aggregate
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow, prepay, and reborrow.
2.02 DETERMINATION OF BORROWING BASE; RESTRICTION ON ADVANCES,
SWING-LINE ADVANCES AND LETTERS OF CREDIT. The Administrative Agent will
determine the initial Borrowing Base at the Closing Date, calculated as of
December 31, 2000, and evidenced by a Borrowing Base Certificate delivered by
the Borrower, to the Administrative Agent no later than January 31, 2001. Such
determination shall be effective for the first month following the Closing Date.
Thereafter, the Borrowing Base for each succeeding month will be determined by
the Administrative Agent, calculated as of the end of the preceding month,
evidenced by the Borrowing Base Certificate provided to the Administrative Agent
by the Borrower, pursuant to Section 6.02(c) of this Agreement, and verified by
the Administrative Agent to its satisfaction. The Administrative Agent shall
promptly notify the Borrower and each Bank of each
24
determination by the Administrative Agent of the Borrowing Base. Any
determination of the Borrowing Base by the Administrative Agent shall be
conclusively deemed to be correct unless objected to by the Borrower or the
Majority Banks within five (5) Business Days of the receipt of such
determination. The aggregate amount of all Advances and Swing-Line Advances
outstanding hereunder, and all Letters of Credit issued and outstanding
hereunder, shall not exceed the Borrowing Base, as determined by the
Administrative Agent for any succeeding month, less (i) the outstanding
principal amount of Senior Debt, and (ii) 50% of the outstanding principal
amount of new Subordinated Debt (i.e., Subordinated Debt incurred after the
effective date of this Agreement), and shall in no event exceed the amount of
the Aggregate Commitment. In the event the Borrowing Base, for any month, as
determined by the Administrative Agent hereunder, less (i) the principal
amount of Senior Debt, and (ii) 50% of the principal amount of new
Subordinated Debt, is less than the aggregate amount of all outstanding
Advances and Swing-Line Advances and all issued and outstanding Letters of
Credit at the date of such determination, the Borrower shall, within fifteen
(15) Business Days of the receipt of notification by the Administrative
Agent, repay Advances or Swing-Line Advances and/or repay or cash
collateralize issued and outstanding Letters of Credit, in such amounts as
may be necessary to reduce the aggregate amount of all outstanding Advances
and Swing-Line Advances and all issued and outstanding Letters of Credit, to
the amount of the newly-determined Borrowing Base, less (i) the principal
amount of Senior Debt, and (ii) 50% of the principal amount of new
Subordinated Debt.
2.03 PROCEDURE FOR BORROWING.
(a) Each Borrowing shall be made upon the Borrower's
irrevocable written notice delivered to the Administrative Agent in accordance
with Section 10.02 in the form of a Notice of Borrowing (which notice must be
received by the Administrative Agent prior to 10:00 a.m. Honolulu, Hawaii time)
(i) four Business Days prior to the requested Borrowing date, in the case of
LIBO Rate Advances; and (ii) one Business Day prior to the requested Borrowing
date, in the case of Prime Rate Advances, specifying:
(A) whether the Borrowing is to be comprised of
LIBO Rate Advances and/or Prime Rate Advances;
(B) the amount of the Borrowing; PROVIDED that
LIBO Rate Advances shall be in an aggregate minimum principal amount of
Two Million Dollars ($2,000,000) or any integral multiple of One
Hundred Thousand Dollars ($100,000) in excess thereof; and that Prime
Rate Advances shall be in an aggregate minimum principal amount of One
Hundred Thousand Dollars ($100,000) or any integral multiple of One
Hundred Thousand Dollars ($100,000) in excess thereof;
(C) the requested Borrowing date, which shall be
a Business Day;
(D) if the requested Borrowing consists of one
or more LIBO Rate Advances, the duration of the Interest Period
applicable thereto; PROVIDED HOWEVER, that if the Notice of Borrowing
shall fail to specify the duration of the Interest Period for any such
LIBO Rate Advances, such Interest Period shall be three (3) months; and
25
(E) if permitted pursuant to Section 7.07(e)
hereof, whether the requested Borrowing is for the purpose of a Western
Pacific Advance.
(b) Upon receipt of the Notice of Borrowing, the
Administrative Agent will promptly notify each Bank thereof and of the amount of
such Bank's Commitment Percentage of the Borrowing.
(c) Each Bank will make the amount of its Commitment
Percentage of the Borrowing available to the Administrative Agent for the
account of the Borrower at the Administrative Agent's Payment Office by 11:00
a.m. Honolulu, Hawaii time on the Borrowing date requested by the Borrower in
funds immediately available to the Administrative Agent. The proceeds of all
such Advances will then be made available to the Borrower by the Administrative
Agent at such office by crediting the account of the Borrower on the books of
First Hawaiian Bank or such other accounts as the Borrower, may specify, with
the aggregate of the amounts made available to the Administrative Agent by the
Banks and like funds as received by the Administrative Agent.
(d) The proceeds from Advances shall be used for (i)
general corporate purposes of the Borrower and its Subsidiaries, including
working capital, set aside letters for bonding purposes, development and land
acquisition, and (ii) Western Pacific Advances pursuant to Section 7.07(e)
hereof, and not in contravention of any provision of this Agreement or any
Requirement of Law.
(e) Unless the Majority Banks shall otherwise agree,
during the existence of a Default or Event of Default, all LIBO Rate Advances
shall automatically be converted into Prime Rate Advances. The Borrower shall
reimburse each Bank and hold each Bank harmless from any loss or expense which
such Bank may sustain or incur as a consequence of any such conversion of a LIBO
Rate Advance to a Prime Rate Advance on a day that is not the last day of the
Interest Period for such LIBO Rate Advance, as provided in Section 3.04 below.
(f) After giving effect to any Borrowing, there shall not
be more than five (5) LIBO Rate Advances in effect.
(g) Notwithstanding any other provision herein, the
Borrower shall not be permitted to request or obtain LIBO Rate "A" Advances or
Prime Rate "A" Advances (but shall be permitted to request or obtain LIBO Rate
"B" Advances, LIBO Rate "C" Advances, Prime Rate "B" Advances or Prime Rate "C"
Advances) during the period that the Borrower has the right to make Western
Pacific Advances pursuant to Section 7.07(e), and if during such period, the
Borrower's Leverage Ratio and Interest Coverage Ratio are such that they would
have qualified for a LIBO Rate "A" Advance or a Prime Rate "A" Advance, the
Borrower shall only be eligible for a LIBO Rate "B" Advance or a Prime Rate "B"
Advance, respectively. This prohibition shall be terminated upon the earlier of:
(i) the termination of the Borrower's right to make Western Pacific Advances
under Section 7.07(e), or (ii) December 31, 2001.
26
2.04 PROCEDURE FOR SWING-LINE BORROWING.
(a) Each Swing-Line Borrowing shall be made upon the
Borrower's irrevocable written notice delivered to the Administrative Agent in
accordance with Section 10.02 in the form of a Notice of Swing-Line Borrowing
(which notice must be received by the Administrative Agent prior to 11:00 a.m.
Honolulu, Hawaii time) on or before the requested Swing-Line Borrowing date,
specifying:
(A) the amount of the Swing-Line Borrowing,
which shall be in an aggregate minimum principal amount of Ten Thousand
Dollars ($10,000);
(B) the requested Swing-Line Borrowing date,
which shall be a Business Day; and
(C) if permitted pursuant to Section 7.07(e)
hereof, whether the requested Borrowing is for the purpose of a Western
Pacific Advance.
(b) All Swing-Line Advances shall be made by the
Administrative 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 Administrative Agent
shall convert, no less than weekly, all Swing-Line Advances into an Advance,
upon one (1) Business Day's written notice given by the Administrative Agent to
each Bank (with a copy of such notice being given to the Borrower), if the
outstanding balance of all Swing-Line Advances is $1,000,000 or more, (ii) all
Swing-Line Advances which are not converted as provided in subsection 2.04(b)(i)
shall be repaid by the Borrower (from its own funds or through a Borrowing) no
later than seven (7) days after the date of the Swing-Line Borrowing therefor,
and (iii) all Swing-Line Advances shall automatically be converted into Advances
upon the occurrence of a Default or an Event of Default.
(c) [RESERVED]
(d) If the Administrative Agent shall convert a
Swing-Line Advance into an Advance, the Administrative Agent will notify each
Bank of such conversion, of the amount of such Bank's Commitment Percentage
therein, and the date (which shall be not less than one (1) Business Day after
the date of such notification) for such conversion (with a copy of such
notification being given to the Borrower). Each Bank will thereupon make the
amount of its Commitment Percentage therein available to the Administrative
Agent at the Administrative Agent's Payment Office by 11:00 a.m. Honolulu,
Hawaii time, on the date specified in such notice, in funds immediately
available to the Administrative Agent. The proceeds received from the Banks will
be used by the Administrative Agent to reimburse itself for the former
Swing-Line Advance so converted.
(e) The proceeds from Swing-Line Advances shall be used
for (i) general corporate purposes of the Borrower and its Subsidiaries,
including working capital, development and land acquisition, and (ii) Western
Pacific Advances pursuant to Section 7.07(e) hereof, and may also be used to
repay Prime Rate Advances upon approval of the Administrative Agent, and not in
contravention of any provision of this Agreement or any Requirement of Law.
27
(f) The aggregate amount of all Swing-Line Advances
outstanding at any one time may not exceed Ten Million Dollars ($10,000,000),
and the amount available to the Borrower for Advances shall be reduced by the
aggregate amount of all Swing-Line Advances outstanding at any one time.
(g) All Swing-Line Advances shall be Prime Rate Advances.
All Swing-Line Advances that have been converted into Advances as described in
subsection 2.04(d) above, shall be Prime Rate Advances, unless and until the
Borrower has converted the same into LIBO Rate Advances, in accordance with
Section 2.06(a)(i) hereof.
(h) Notwithstanding any other provision herein, the
Borrower shall not be permitted to request or obtain Prime Rate "A" Advances
(but may continue to request and obtain Prime Rate "B" Advances and Prime Rate
"C" Advances) during the period that the Borrower has the right to make Western
Pacific Advances pursuant to Section 7.07(e), and if during such period, the
Borrower's Leverage Ratio and Interest Coverage Ratio are such that they would
have qualified for a Prime Rate "A" Advance, the Borrower shall only be eligible
for a Prime Rate "B" Advance. This prohibition shall be terminated upon the
earlier of: (i) the termination of the Borrower's right to make Western Pacific
Advances under Section 7.07(e), or (ii) December 31, 2001.
2.05 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT.
(a) Each Issuance shall be made upon the Borrower's
irrevocable written request delivered to the Administrative Agent in accordance
with Section 10.02 in the form of a Request for Issuance of Letter of Credit
(which request must be received by the Administrative Agent prior to 11:00 a.m.
Honolulu, Hawaii time), together with an Application and Agreement for Standby
Letter of Credit in the form attached hereto as EXHIBIT D (as the same may be
revised by the Administrative Agent from time to time), or in a form that is
acceptable to the Issuing Bank, no less than five (5) Business Days prior to the
requested Issuance date, if the Issuance is by the Administrative Agent, or no
less than ten (10) Business Days prior to the requested Issuance date, if the
Issuance is by the Issuing Bank.
(b) Upon receipt of the Request for Issuance of Letter of
Credit, the Administrative Agent will promptly notify each Bank thereof. The
Issuing Bank will immediately notify the Administrative Agent upon the Issuance
of a Letter of Credit.
(c) Upon any negotiation of an outstanding Letter of
Credit by the beneficiary thereof, the Issuing Bank shall notify the
Administrative Agent and the Administrative Agent will promptly notify each Bank
of such negotiation, and of the amount of such Bank's Commitment Percentage
thereof. Each Bank will make the amount of its Commitment Percentage of the
negotiated Letter of Credit available to the Administrative Agent at the
Administrative Agent's Payment Office by 11:00 a.m. Honolulu, Hawaii time on the
date requested by the Administrative Agent in funds immediately available to the
Administrative Agent. The proceeds received from the Banks will be used by the
Administrative Agent to pay the beneficiary of the Letter of Credit upon such
negotiation, or to reimburse the Administrative Agent or the Issuing Bank, as
applicable, for such amounts if payment to such beneficiary has already been
made.
28
(d) Unless all of the Banks shall otherwise agree, (i) no
Letter of Credit shall have an expiry date later than the Termination Date; (ii)
no Letter of Credit shall contain an automatic renewal clause or feature; and
(iii) no Letter of Credit shall be issued for credit enhancement, provided,
however, that Letters of Credit may be issued to the Borrower to comply with
capital requirements for the Captive Insurance Subsidiary.
The aggregate amount of all Letters of Credit issued and outstanding at
any one time may not exceed Twenty-Five Million Dollars ($25,000,000), and the
amount available to the Borrower for Advances and Swing-Line Advances shall be
reduced by the aggregate amount of all Letters of Credit issued and outstanding
at any one time. In addition to the Letter of Credit Fee payable by the Borrower
pursuant to Section 2.11(d) of this Agreement, the Borrower shall, at the time
of the Issuance of each Letter of Credit, pay to the Administrative Agent or the
Issuing Bank, as applicable, its standard letter of credit issuance fee. Upon
the negotiation of any Letter of Credit by the beneficiary thereof, the amount
drawn thereunder shall become and be deemed an Advance under and subject to the
terms and provisions of this Agreement relating to Advances. Upon the occurrence
of an Event of Default hereunder, the Borrower shall deposit with the
Administrative Agent cash in an amount sufficient to fully collateralize all
outstanding Letters of Credit as of such date, and if the Borrower shall fail to
do so, the full amount of such outstanding Letters of Credit shall become and be
deemed an Advance under and subject to the terms and provisions of this
Agreement relating to Advances. The Letters of Credit shall be issued to support
performance requirements and obligations of the Borrower or its Subsidiaries in
connection with their real estate development businesses (including any required
deposits for like-kind exchanges under Section 1031 of the Code), and to support
capital and performance requirements and obligations of the Captive Insurance
Subsidiary, and not in contravention of any provision of this Agreement or any
Requirement of Law.
2.06 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Borrower may upon irrevocable written notice to
the Administrative Agent in accordance with subsection 2.06(b):
(i) elect to convert on any Business Day, any Prime
Rate Advance (other than a Swing-Line Advance), or any part thereof in
an amount not less than $2,000,000, or that is an integral multiple of
$100,000 in excess thereof, into LIBO Rate Advances; or
(ii) elect to convert on the last day of any
Interest Period applicable thereto any LIBO Rate Advances (or any part
hereof in an amount not less than $100,000, or that is an integral
multiple of $100,000 in excess thereof) into a Prime Rate Advance; or
(iii) elect to continue on the last day of any
Interest Period applicable thereto any LIBO Rate Advances (or any part
thereof in an amount not less than $2,000,000, or that is an integral
multiple of $100,000 in excess thereof);
29
PROVIDED, that if the aggregate amount of any LIBO Rate Advance in respect of
any Borrowing shall have been reduced, by payment, prepayment, or conversion of
part thereof to be less than $2,000,000, such LIBO Rate Advance shall
automatically convert into a Prime Rate Advance, and on and after such date the
right of the Borrower to continue such Advance as, and convert such Advance
into, a LIBO Rate Advance, shall terminate.
(b) The Borrower shall deliver a Notice of
Conversion/Continuation in accordance with Section 10.02 to be received by the
Administrative Agent no later than 10:00 a.m., Honolulu, Hawaii time at least
(i) four Business Days prior to the Conversion Date or Continuation Date, if the
Advances are to be converted into or continued as LIBO Rate Advances; and (ii)
one Business Day in advance of the Conversion Date, if the Advances are to be
converted into Prime Rate Advances, specifying:
(i) the proposed Conversion Date or Continuation
Date;
(ii) the aggregate amount of Advances to be
converted or continued;
(iii) the nature of the proposed conversion or
continuation; and
(iv) if applicable, the duration of the requested
Interest Period.
(c) If upon the expiration of any Interest Period
applicable to LIBO Rate Advances, the Borrower failed to select timely a new
Interest Period to be applicable to such LIBO Rate Advances, or if any Default
or Event of Default shall then exist, the Borrower shall be deemed to have
elected to convert such LIBO Rate Advances into Prime Rate Advances effective as
of the expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation,
the Administrative Agent will promptly notify each Bank thereof, or, if no
timely notice is provided by the Borrower, the Administrative Agent will
promptly notify each Bank of the details of any automatic conversion. All
conversions and continuations shall be made pro rata among the Banks according
to the respective outstanding principal amounts of the Advances held by each
Bank with respect to which the notice was given.
(e) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any
Advances, there shall not be more than five (5) LIBO Rate Advances in effect.
(f) The Borrower shall reimburse each Bank and hold each
Bank harmless from any loss or expense which such Bank may sustain or incur as a
consequence of any conversion of a LIBO Rate Advance to a Prime Rate Advance on
a day that is not the last day of the Interest Period for such LIBO Rate
Advance, as provided in Section 3.04 below.
2.07 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENT. The Borrower
may, (i) at the end of any Quarter and upon not less than five Business Days'
prior notice to the Administrative Agent (which shall promptly notify each Bank
thereof), terminate the Aggregate Commitment, or (ii) only on a one time basis,
at the end of any Quarter and upon not less than
30
five Business Days' prior notice to the Administrative Agent (which shall
promptly notify each Bank thereof), permanently reduce the Aggregate
Commitment by an aggregate minimum amount of $10,000,000 or any integral
multiple of $10,000,000 in excess thereof, up to an aggregate maximum amount
of $30,000,000; PROVIDED that no such termination or reduction shall be
permitted if, after giving effect thereto and to any prepayments of the
Advances or Swing-Line Advances made on the effective date thereof, the then
outstanding principal amount of all Advances, Swing-Line Advances and Letters
of Credit issued and outstanding would exceed the amount of the Aggregate
Commitment then in effect and, PROVIDED, FURTHER, that once reduced in
accordance with this Section, the Aggregate Commitment may not be increased
without the written approval of the Administrative Agent and each Bank. Any
reduction of the Aggregate Commitment shall be applied to each Bank's
Revolving Commitment in accordance with such Bank's Commitment Percentage.
All accrued interest, and all accrued fees described in Section 2.11 hereof,
to, but not including, the effective date of any reduction or termination of
the Aggregate Commitment, shall be paid on the effective date of such
reduction or termination. The Borrower shall reimburse each Bank and hold
each Bank harmless from any loss or expense which such Bank may sustain or
incur as a consequence of any reduction or termination of the Aggregate
Commitment which is effective, with respect to a LIBO Rate Advance, on a day
that is not the last day of the Interest Period for such LIBO Rate Advance,
as provided in Section 3.04 below.
2.08 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. Subject to Section 3.04, the
Borrower may, at any time or from time to time, (i) prepay LIBO Rate Advances in
whole or in part, upon at least three Business Days' prior notice, by the
Borrower, to the Administrative Agent, in amounts of $1,000,000 or any integral
multiple of $100,000 in excess thereof (PROVIDED that after any such prepayment,
the balance of any such LIBO Rate Advance shall be $2,000,000 or any integral
multiple of $100,000 in excess thereof), (ii) prepay Prime Rate Advances (other
than Swing-Line Advances) in whole or in part, upon at least one Business Day's
prior notice, by the Borrower to the Administrative Agent, in the amount of or
greater than $15,000,000, and (iii) prepay Swing-Line Advances or Prime Rate
Advances, in an amount less than $15,000,000, in whole or in part without prior
notice to the Administrative Agent. Any such notice of prepayment shall specify
the date and amount of such prepayment and whether such prepayment is of Prime
Rate Advances, or LIBO Rate Advances, or any combination thereof. Such notice
for prepayment of LIBO Rate Advances shall not thereafter be revocable by the
Borrower, and the Administrative Agent will promptly notify each Bank thereof
and of such Bank's Commitment Percentage of such prepayment. If such notice for
prepayment of LIBO Rate Advances is given by the Borrower, the Borrower shall
make such prepayment, and the payment amounts specified in such notice shall be
due and payable on the date specified therein, together with accrued interest to
each such date on the amount prepaid and any amounts required pursuant to
Section 3.04. The Borrower shall reimburse each Bank and hold each Bank harmless
from any loss or expense which such Bank may sustain or incur as a consequence
of any prepayment of a LIBO Rate Advance, on a day that is not the last day of
the Interest Period for such LIBO Rate Advance, as provided in Section 3.04
below.
(b) MANDATORY PREPAYMENTS. If the Borrower or any of its
Subsidiaries sells (other than a sale to the Borrower or any other Subsidiary)
any portion of any property or assets
31
of the Borrower or any of its Subsidiaries for $10,000,000.00 or more, or if
the Borrower or any of its Subsidiaries sells, in a single transaction, all
or substantially all of the property or assets of the Borrower or any of its
Subsidiaries, the Borrower shall use 100% of the proceeds of such sale, net
of commissions and closing costs (the "Sale Proceeds") to prepay any
Advances, subject to Section 3.04. If the Sale Proceeds are used to prepay
LIBO Rate Advances in whole or in part, then the Borrower shall provide at
least three Business Days' prior notice to the Administrative Agent, of such
prepayment and such prepayments shall be in amounts of $1,000,000 or any
integral multiple of $100,000 in excess thereof (PROVIDED that after any such
prepayment, the balance of any such LIBO Rate Advance shall be $2,000,000 or
any integral multiple of $100,000 in excess thereof; unless the total
Advances outstanding after giving effect to any other prepayments required by
this section, is less than $2,000,000, in which case, the LIBO Rate Advances
outstanding shall be reduced by the balance of the such prepayment). Such
notice for prepayment of LIBO Rate Advances shall not thereafter be revocable
by the Borrower, and the Administrative Agent will promptly notify each Bank
thereof and of such Bank's Commitment Percentage of such prepayment. If such
notice for prepayment of LIBO Rate Advances is given by the Borrower, the
Borrower shall make such prepayment, and the payment amounts specified in
such notice shall be due and payable on the date specified therein, together
with accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.04. The Borrower shall reimburse each Bank and
hold each Bank harmless from any loss or expense which such Bank may sustain
or incur as a consequence of any prepayment of a LIBO Rate Advance, on a day
that is not the last day of the Interest Period for such LIBO Rate Advance,
as provided in Section 3.04 below. If the Sale Proceeds are used to prepay
Prime Rate Advances (other than Swing-Line Advances) in whole or in part,
then the Borrower shall provide at least one Business Day's prior notice to
the Administrative Agent, and such prepayments may be made in any amounts.
Prepayments of Swing-Line Advances in whole or in part may be made without
prior notice to the Administrative Agent.
2.09 REPAYMENT; EXTENSION OF TERMINATION DATE.
(a) The Borrower shall, on the Termination Date, repay to
the Banks in full the aggregate principal amount of all outstanding Advances,
and all accrued interest thereon, and shall repay to the Administrative Agent in
full the aggregate principal amount of all outstanding Swing-Line Advances, and
all accrued interest thereon, shall pay to the Banks all fees, charges and other
sums outstanding hereunder on the Termination Date.
(b) Notwithstanding the foregoing, upon the request of
the Borrower made not earlier than April 1, 2000, and not earlier than April 1st
of each subsequent year, and not later than June 30, 2000, and not later than
June 30th of each subsequent year, and the concurrence of all of the Banks, in
their sole and absolute discretion, the Termination Date may be extended for an
additional period of one year; provided, however, and except for any request to
extend the Termination Date made in 1999, that the Borrower shall have, in the
immediately preceding year, exercised its option, and all of the Banks shall
have concurred, to extend the Termination Date; provided, further, if any Bank
does not concur in the extension of the Termination Date (the "Dissenting
Bank"), the Borrower may:
(i) request that the Dissenting Bank continue its
Commitment Percentage until the original Termination Date; or
32
(ii) request one or more of the other Banks (the
"Non-Dissenting Banks") to acquire and assume all or part of such Dissenting
Bank's Advances and Revolving Commitment, which request may be granted or denied
in such Non-Dissenting Bank's sole discretion; or
(iii) designate a replacement bank or financial
institution to acquire and assume all or part of such Dissenting Bank's Advances
and Revolving Commitment (a "REPLACEMENT BANK"); or
(iv) notwithstanding the provisions of Section 2.07,
permanently reduce the Aggregate Commitment by the aggregate amount of such
Dissenting Bank's Advances and Revolving Commitment, by prepaying the amount of
such Dissenting Bank's Advances and all accrued interest and fees and
reimbursing such Dissenting Bank and holding such Dissenting Bank harmless from
any loss or expense which such Dissenting Bank may sustain or incur as a
consequence of such reduction of the Aggregate Commitment which is effective,
with respect to a LIBO Rate Advance, on a day that is not the last day of the
Interest Period for such LIBO Rate Advance, as provided in Section 3.04 below.
Any acquisition of a Dissenting Bank's Advances and Revolving Commitment,
designation of a Replacement Bank or reduction of the Aggregate Commitment shall
be subject to the prior written consent of the Administrative Agent (which
consent shall not be unreasonably withheld), and shall be effective upon such
consent. In the event of the replacement of a Dissenting Bank, such Dissenting
Bank agrees to assign without recourse its rights and obligations hereunder to
the Replacement Bank upon payment by the Replacement Bank to the Dissenting Bank
of the principal amount of such Dissenting Banks's outstanding Advances and any
accrued and unpaid interest thereon, and any other amounts owed to such
Dissenting Bank and to execute and deliver to the Administrative Agent an
assignment and acceptance in form and substance reasonably satisfactory to the
Administrative Agent and such Dissenting Bank evidencing such assignment and the
acceptance by the Replacement Bank of such Dissenting Bank's obligations
hereunder. The designation of a Replacement Bank shall not affect the Borrower's
obligations to such Dissenting Bank hereunder.
(c) As a condition to such extension as provided
hereinabove, the Banks may require the Borrower to pay an extension fee, in an
amount to be determined by the Banks and agreed to by the Borrower.
2.10 INTEREST.
(a) Subject to subsection (c) of this Section and to
Sections 2.03(g) and 2.04(h) hereof, each LIBO Rate "A" Advance, each LIBO Rate
"B" Advance, each LIBO Rate "C" Advance, each Prime Rate "A" Advance, each Prime
Rate "B" Advance and each Prime Rate "C" Advance shall bear interest on the
outstanding principal amount thereof, from the date when made until it becomes
due, at a rate per annum equal to the LIBO Rate or the Prime Rate, as the case
may be, PLUS, the Applicable Margin.
33
(b) Interest on each Advance and on each Swing-Line
Advance shall be paid in arrears on each Interest Payment Date. Interest shall
also be paid on any portion of Advances or Swing-Line Advances prepaid pursuant
to Sections 2.07 and 2.08; provided, however, that interest on Prime Rate
Advances shall be paid in arrears on the Interest Payment Date immediately
following the date of such prepayment. Interest shall be paid on demand during
the existence of any Event of Default.
(c) During the existence of any Event of Default, the
Borrower agrees to pay interest on any unpaid principal or other amount payable
hereunder or under any of the other Loan Documents, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable on
demand, at a fluctuating rate per annum equal to the Prime Rate PLUS four
percent (4%).
(d) Anything herein to the contrary notwithstanding, the
obligations of the Borrower hereunder shall be subject to the limitation that
payments of interest shall not be required, for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by the respective Bank would be contrary to the
provisions of any law applicable to such Bank limiting the highest rate of
interest which may be lawfully contracted for, charged or received by such Bank,
and in such event the Borrower shall pay such Bank interest at the highest rate
permitted by law applicable to such Bank.
2.11 FEES.
(a) MODIFICATION FEES.
(i) The Borrower shall pay to the Administrative
Agent on the Closing Date, for the account of each Bank which has committed to
fund the "Increase Amount" (as shown on Schedule "1"), non-refundable fees in an
amount equal to three-sixteenths of one percent (0.1875%) of the amount of such
Bank's "Increase Amount" (as shown on Schedule "1"), for an aggregate fee of
$56,250.00.
(ii) The Borrower shall pay to the Administrative
Agent on the Closing Date, for the account of each Bank which has funded the
"Existing Revolving Commitment" (as shown on Schedule "1"), non-refundable fees
in an amount equal to one-tenth of one percent (0.10%) of the amount of such
Bank's "Existing Revolving Commitment" (as shown on Schedule "1"), for an
aggregate fee of $170,000.00.
(b) COMMITMENT FEE. The Borrower shall pay to the
Administrative Agent for the account of each Bank a non-refundable commitment
fee in the following percentage per annum on the amount of such Bank's Revolving
Commitment, computed on a Quarterly basis in advance, based upon the Leverage
Ratio and the Interest Coverage Ratio then in effect (for example, the
commitment fee due on April 1 shall be computed based upon the Leverage Ratio
then in effect, which in such case would be as of the previous December 31),
commencing on the Closing Date, and continuing on the first Business Day of each
Quarter until the Termination Date:
34
(i) if on the first day of such Quarter:
(A) the Leverage Ratio is less than 1.35 to
1 and the Interest Coverage Ratio is greater than 2.00 to 1;
or
(B) the Leverage Ratio is less than 1.50 to
1 and the Interest Coverage Ratio is greater than 2.50 to 1;
then the percentage for the commitment fee shall be equal to 0.125%;
(ii) if on the first day of such Quarter:
(A) the Leverage Ratio is less than or equal
to 1.35 to 1 and the Interest Coverage Ratio is greater than
or equal to 1.75 to 1, but less than 2.00 to 1; or
(B) the Leverage Ratio is less than or equal
to 1.50 to 1 and the Interest Coverage Ratio is greater than
or equal to 2.00 to 1, but less than 2.50 to 1; or
(C) the Leverage Ratio is less than or equal
to 1.60 to 1 and the Interest Coverage Ratio is greater than
or equal to 2.50 to 1;
then the percentage for the commitment fee shall be equal to 0.18%; and
(iii) if on the first day of such Quarter:
(A) the Leverage Ratio is greater than 1.35
to 1, but less than or equal to 1.50 to 1, and the Interest
Coverage Ratio is greater than or equal to 1.75 to 1, but less
than 2.00 to 1; or
(B) the Leverage Ratio is greater than 1.50
to 1, but less than or equal to 1.60 to 1, and the Interest
Coverage Ratio is greater than or equal to 2.00 to 1, but less
than 2.50 to 1;
then the percentage for the commitment fee shall be equal to 0.25%;
PROVIDED, HOWEVER, that (1) if the Borrower fails to provide the Leverage
Ratio/Interest Coverage Ratio/Base Grid Certificate as required in Section
6.02(e), and the Administrative Agent is unable to determine the Leverage Ratio
for such Quarter, then the percentage for the commitment fee for such Quarter
shall be 0.25%, or (2) if an Event of Default has occurred, then the percentage
for the commitment fee for the Quarter immediately following such Event of
Default, and for each subsequent Quarter as long as such Event of Default is
continuing, shall be 0.25%; and
35
PROVIDED, FURTHER, HOWEVER, that if the Borrower has the right to make Western
Pacific Advances pursuant to Section 7.07(e) hereof, then even if the Leverage
Ratio and the Interest Coverage Ratio would otherwise qualify for the percentage
as set forth in subsection (i) above, the Borrower shall pay the commitment fee
in the percentage as set forth in subsection (ii) above. This restriction shall
terminate upon the earlier of: (i) the termination of the Borrower's right to
make Western Pacific Advances under Section 7.07(e), or (ii) December 31, 2001.
(c) UNUSED FACILITY FEES. The Borrower shall pay to the
Administrative Agent for the account of each Bank an unused facility fee equal
to one-fifth of one percent (0.20%) per annum of the amount equal to the
difference between (i) such Bank's Revolving Commitment (less such Bank's
Commitment Percentage of any issued and outstanding Letters of Credit) and (ii)
such Bank's Commitment Percentage of the outstanding principal balance of all
Advances made hereunder, computed on a daily balance basis in arrears,
commencing as of the Closing Date, and becoming due and payable on the last
Business Day of each Quarter, with the final payment to be made on the
Termination Date; PROVIDED HOWEVER that in the case of the Administrative Agent,
the unused facility fee shall be equal to one-fifth of one percent (0.20%) of
the amount equal to the difference between (i) the Administrative Agent's
Revolving Commitment (less the Administrative Agent's Commitment Percentage of
any issued and outstanding Letters of Credit) and (ii)(A) the Administrative
Agent's Commitment Percentage of the outstanding principal balance of all
Advances made hereunder and (B) 100% of the outstanding principal balance of all
Swing-Line Advances made hereunder, computed on a daily balance basis in
arrears, commencing as of the Closing Date and becoming due and payable on the
last Business Day of each Quarter, with the final payment to be made on the
Termination Date.
(d) LETTER OF CREDIT FEES. The Borrower shall pay to the
Administrative Agent or the Issuing Bank, as applicable, upon the Issuance
hereunder of each new Letter of Credit, or upon the extension hereunder of each
existing Letter of Credit, a letter of credit fee in an amount equal to one and
one-fourth percent (1.25%) of the amount of such Letter of Credit. For Letters
of Credit issued by the Administrative Agent, the Administrative Agent will
retain 20% of such letter of credit fee (i.e., .25% of the amount of such Letter
of Credit) for its own account, and will remit the balance of such fee to each
Bank (including the Administrative Agent) pro rata in accordance with such
Bank's Revolving Commitment. For Letters of Credit issued by the Issuing Bank,
the Issuing Bank may retain 20% of such letter of credit fee (i.e., .25% of the
amount of such Letter of Credit) for its own account, and will remit the balance
to the Administrative Agent, who will then remit the same to each Bank
(including the Issuing Bank and the Administrative Agent) pro rata in accordance
with such Bank's Revolving Commitment.
(e) AGENCY FEE; STRUCTURING FEE. The Borrower shall pay
to the Administrative Agent for the Administrative Agent's own account an agency
fee in the amount and at the times set forth in those letter agreements between
the Borrower and the Administrative Agent dated September 30, 1998 and July 2,
1999.
36
2.12 COMPUTATION OF FEES AND INTEREST.
(a) The fees described in Section 2.11 above shall be
calculated on the basis year of 365 days, and actual days elapsed; provided,
however, all fees for Letters of Credit shall be calculated based upon a year of
360 days.
(b) All computations of interest payable in respect of
Prime Rate Advances shall be made on the basis of a year of 365 days, and actual
days elapsed. All computations of interest payable in respect of LIBO Rate
Advances shall be made on the basis of a 360-day year and actual days elapsed.
Interest and fees shall accrue during each period during which interest or such
fees are computed from the first day thereof to the last day thereof.
(c) The Administrative Agent will, with reasonable
promptness, notify the Borrower and the Banks of each determination of the
Borrowing Base, of the Leverage Ratio and the Interest Coverage Ratio; PROVIDED
that any failure to do so shall not relieve the Borrower of any liability
hereunder or provide the basis for any claim against the Administrative Agent.
Any change in the interest rate on an Advance or a Swing-Line Advance resulting
from a change in the Prime Rate shall become effective as of the opening of
business on the day on which such change in the Prime Rate becomes effective.
Any change in the interest rate on an Advance or a Swing-Line Advance resulting
from a change in the Leverage Ratio and the Interest Coverage Ratio (and the
resultant Applicable Margin) shall become effective as of the opening of
business on the first day of the month following the determination of the
Leverage Ratio and the Interest Coverage Ratio. The Administrative Agent will
with reasonable promptness notify the Borrower and the Banks of the effective
date and the amount of each such change; PROVIDED that any failure to do so
shall not relieve the Borrower of any liability hereunder or provide the basis
for any claim against the Administrative Agent.
2.13 PAYMENTS BY THE BORROWER.
(a) All payments (including prepayments) to be made by
the Borrower on account of principal, interest, fees and other amounts required
hereunder shall be made without set-off, recoupment or counterclaim; shall,
except with respect to payments relating to Swing-Line Advances, and as
otherwise expressly provided herein, be made to the Administrative Agent for the
ratable account of the Banks at the Administrative Agent's Payment Office; and
shall be made in U.S. Dollars and in immediately available funds, no later than
9:00 a.m. Honolulu, Hawaii time on the date specified herein for payments on, or
of, Advances, and no later than 1:00 p.m. Honolulu, Hawaii time on the date
specified herein for payments on, or of, Swing-Line Advances. The Administrative
Agent will promptly distribute to each Bank its Commitment Percentage (or other
applicable share as expressly provided herein) of such principal, interest, fees
or other amounts, in like funds as received; provided however that the
Administrative Agent shall retain all payments made by the Borrower on, or of,
Swing-Line Advances for the Administrative Agent's own account. Any payment
which is received by the Administrative Agent later than 9:00 a.m. Honolulu,
Hawaii time and any payment on, or of, Swing-Line Advances which is received by
the Administrative Agent later than 1:00 p.m. Honolulu, Hawaii time, shall be
deemed to have been received on the immediately succeeding Business Day and any
applicable interest or fee shall continue to accrue.
37
(b) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be; subject to
the provisions set forth in the definition of "Interest Period" herein.
(c) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Banks hereunder that the Borrower will not make such payment in full as and when
required hereunder, the Administrative Agent may assume that the Borrower has
made such payment in full to the Administrative Agent on such date in
immediately available funds and the Administrative Agent may (but shall not be
so required), in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent the Borrower shall not have made such payment in full to the
Administrative Agent, each Bank shall repay to the Administrative Agent on
demand such amount distributed to such Bank, together with interest thereon for
each day from the date such amount is distributed to such Bank until the date
such Bank repays such amount to the Administrative Agent, at the Federal Funds
Rate as in effect for each such day.
2.14 PAYMENTS BY THE BANKS TO THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have received
notice from a Bank at least one Business Day prior to the date of any proposed
Borrowing, conversion of a Swing-Line Advance to an Advance, or negotiation of a
Letter of Credit, that such Bank will not make available to the Administrative
Agent as and when required hereunder the amount of that Bank's Commitment
Percentage thereof, the Administrative Agent may assume that each Bank has made
such amount available to the Administrative Agent in immediately available funds
on such date and the Administrative Agent may (but shall not be so required), in
reliance upon such assumption, make available to the appropriate party on such
date a corresponding amount. If and to the extent any Bank shall not have made
its full amount available to the Administrative Agent in immediately available
funds and the Administrative Agent in such circumstances has made available to
the appropriate party such amount, that Bank shall on the next Business Day
following such date make such amount available to the Administrative Agent,
together with interest at the Federal Funds Rate for and determined as of each
day during such period. A notice of the Administrative Agent submitted to any
Bank with respect to amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available, such payment to the
Administrative Agent shall constitute such Bank's Advance on such date for all
purposes of this Agreement. If, with respect to a Borrowing, such amount is not
made available to the Administrative Agent on the next Business Day following
the date of such Borrowing, the Administrative Agent shall notify the Borrower
of such failure to fund and, upon demand by the Administrative Agent, the
Borrower shall pay such amount to the Administrative Agent for the
Administrative Agent's account, together with 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 Advances comprising such Borrowing.
(b) The failure of any Bank to make any Advance on the
date of any proposed Borrowing, conversion of Swing-Line Advance to an Advance,
or negotiation of a Letter of Credit, shall not relieve any other Bank of any
obligation hereunder to make an Advance on the
38
date thereof, but no Bank shall be responsible for the failure of any other Bank
to make the Advance to be made by such other Bank on the date thereof. The
Administrative Agent shall take such action as the Administrative Agent deems
advisable, or as the Administrative Agent may be directed by the Majority Banks,
pursuant to the Inter-Bank Agreement, to cause such Bank to make such Advance,
or to cause one or more of the other Banks to acquire and assume such Bank's
Advances and Revolving Commitment, or to designate a replacement bank or
financial institution to acquire and assume such Bank's Advances and Revolving
Commitment.
2.15 SHARING OF PAYMENTS, ETC. If, other than with respect to
Swing-Line Advances made by the Administrative Agent, or other than as expressly
provided elsewhere herein, any Bank shall obtain on account of the Advances made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its Commitment Percentage of
payments on account of the Advances obtained by all the Banks, such Bank shall
forthwith (a) notify the Administrative Agent of such fact, and (b) purchase
from the other Banks such participations in the Advances made by them as shall
be necessary to cause such purchasing Bank to share the excess payment ratably
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 Commitment Percentage (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 Borrower agrees
that any Bank so purchasing a participation from another Bank pursuant to this
Section may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off but subject to Section 10.09) with
respect to such participation as fully as if such Bank were the direct creditor
of the Borrower in the amount of such participation. The Administrative Agent
will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased pursuant to this Section and will in
each case notify the Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Subject to subsection 3.01(g), any and all payments
by the Borrower to each Bank or the Administrative Agent under this Agreement
shall be made free and clear of, and without deduction or withholding for, 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 Administrative Agent, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by each Bank's net income by the
jurisdiction under the laws of which such Bank or the Administrative Agent, as
the case may be, is organized or maintains a Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
39
(b) In addition, the Borrower shall pay 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 (hereinafter referred to as "Other
Taxes").
(c) Subject to subsection 3.01(g), the Borrower shall
indemnify and hold harmless each Bank and the Administrative Agent for the full
amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 3.01) paid by any Bank or
the Administrative Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefor or with respect thereto, whether
or not such Taxes or Other Taxes were correctly or legally asserted. Payment
under this indemnification shall be made within 30 days from the date any Bank
or the Administrative Agent makes written demand therefor. If any Taxes or Other
Taxes for which the Borrower have provided an indemnity to any Bank or the
Administrative Agent under this subsection 3.01(c) are found to be incorrectly
or illegally assessed, then, upon the request of the Borrower, such Bank or
Administrative Agent will take such action, if any, as such Bank or the
Administrative Agent may determine in its discretion, exercised in good faith,
to be commercially reasonable to obtain a refund of such Taxes or Other Taxes
and shall promptly remit to the Borrower any refund which the Bank or the
Administrative Agent receives, after deducting from such refund all costs and
expenses incurred (including reasonable attorneys' fees and expenses and
allocated costs of internal legal services) in collecting such refund.
(d) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Bank or the Administrative Agent, then, subject to subsection
3.01(g):
(i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.01) such Bank or the Administrative Agent, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made;
(ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(e) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the Administrative
Agent.
(f) Each Bank which is a foreign person (i.e., a person
other than a United States Person for United States Federal income tax purposes)
agrees that:
40
(i) it shall, no later than the Closing Date
(or, in the case of a Bank which becomes a party hereto pursuant to
Section 10.08 after the Closing Date, the date upon which the Bank
becomes a party hereto) deliver to the Borrower through the
Administrative Agent two accurate and complete signed originals of
Internal Revenue Service Form 4224 or any successor thereto ("Form
4224"), or two accurate and complete signed originals of Internal
Revenue Service Form 1001 or any successor thereto ("Form 1001"), as
appropriate, in each case indicating that the Bank is on the date of
delivery thereof entitled to receive payments of principal, interest
and fees under this Agreement free from withholding of United States
Federal income tax;
(ii) if at any time the Bank makes any changes
necessitating a new Form 4224 or Form 1001, it shall with reasonable
promptness deliver to each of the Borrower through the Administrative
Agent in replacement for, or in addition to, the forms previously
delivered by it hereunder, two accurate and complete signed originals
of Form 4224; or two accurate and complete signed originals of Form
1001, as appropriate, in each case indicating that the Bank is on the
date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United
States Federal income tax;
(iii) it shall, before or promptly after the
occurrence of any event (including the passing of time but excluding
any event mentioned in (ii) above) requiring change in or renewal of
the most recent Form 4224 or Form 1001 previously delivered by such
Bank, deliver to the Borrower through the Administrative Agent two
accurate and complete original signed copies of Form 4224 or Form 1001
in replacement for the forms previously delivered by the Bank; and
(iv) it shall, promptly upon the Borrower's or
the Administrative Agent's reasonable request to that effect, deliver
to the Borrower or the Administrative Agent (as the case may be) such
other forms or similar documentation as may be required from time to
time by any applicable law, treaty, rule or regulation in order to
establish such Bank's tax status for withholding purposes.
(g) The Borrower will not be required to pay any
additional amounts in respect of United States Federal income tax pursuant to
subsection 3.01(d) to any Bank for the account of any Lending Office of such
Bank:
(i) if the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank to comply
with its obligations, if any, under subsection 3.01(f) in respect of
such Lending Office;
(ii) if such Bank shall have delivered to the
Borrower a Form 4224 in respect of such Lending Office pursuant to
subsection 3.01(f), and such Bank shall not at any time be entitled to
exemption from deduction or withholding of United States Federal income
tax in respect of payments by the Borrower hereunder for the account of
such Lending Office for any reason other than a change in United States
law or regulations or in the official interpretation of such law or
regulations by any governmental authority
41
charged with the interpretation or administration thereof (whether or
not having the force of law) after the date of delivery of such Form
4224; or
(iii) if the Bank shall have delivered to the
Borrower a Form 1001 in respect of such Lending Office pursuant to
subsection 3.01(f), and such Bank shall not at any time be entitled to
exemption from deduction or withholding of United States Federal income
tax in respect of payments by the Borrower hereunder for the account of
such Lending Office for any reason other than a change in United States
law or regulations or any applicable tax treaty or regulations or in
the official interpretation of any such law, treaty or regulations by
any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) after
the date of delivery of such Form 1001.
(h) If the Borrower is required to pay additional amounts
to any Bank or the Administrative Agent pursuant to subsection 3.01(d), then
such Bank shall use its reasonable best efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending Office so as
to eliminate any such additional payment by the Borrower which may thereafter
accrue if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank.
3.02 ILLEGALITY.
(a) If any Bank shall determine that the introduction of
any Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its Lending Office to make LIBO Rate Advances, then, on notice
thereof by the Bank to the Borrower through the Administrative Agent, the
obligation of that Bank to make LIBO Rate Advances shall be suspended until that
Bank shall have notified the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exists.
(b) If a Bank shall determine that it is unlawful to
maintain any LIBO Rate Advance, the Borrower shall prepay in full all LIBO Rate
Advances of that Bank then outstanding, together with interest accrued thereon,
either on the last day of the Interest Period thereof if that Bank may lawfully
continue to maintain such LIBO Rate Advances to such day, or immediately, if
that Bank may not lawfully continue to maintain such LIBO Rate Advances,
together with any amounts required to be paid in connection therewith pursuant
to Section 3.04.
(c) If the Borrower is required to prepay any LIBO Rate
Advance immediately as provided in subsection 3.02(b), then concurrently with
such prepayment, the Borrower shall borrow from the Affected Bank, in the amount
of such repayment, a Prime Rate Advance.
(d) If the obligation of any Bank to make or maintain
LIBO Rate Advances has been terminated, the Borrower may elect, by giving notice
to that Bank through the Administrative Agent that all Advances which would
otherwise be made by that Bank as LIBO Rate Advances shall be instead Prime Rate
Advances.
42
3.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Bank shall determine 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 to the extent included the calculation of
the LIBO Rate) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), enacted after
the Closing Date, there shall be any increase in the cost to such Bank of
agreeing to make or making, funding or maintaining any LIBO Rate Advances, then
the Borrower shall be liable for, and shall from time to time, upon demand
therefor by such Bank (with copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Bank, additional amounts
as are sufficient to compensate such Bank for such increased costs.
(b) 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 such Bank (or its Lending Office) or any corporation controlling
such Bank, with any Capital Adequacy Regulation affects or would affect the
amount of capital required or expected to be maintained by such Bank or any
corporation controlling such 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) such Bank determines that the amount of such capital
is increased as a consequence of its commitment to extend credit under this
Agreement, or loans, advances, credits or obligations under this Agreement,
then, upon demand of such Bank (with a copy to the Administrative Agent), the
Borrower shall upon demand pay to such Bank, from time to time as specified by
such Bank, additional amounts sufficient to compensate such Bank for such
increase. Notwithstanding the above, the Borrower shall not be required to pay
to any Bank any amount under this subsection 3.03(b) which reflects compensation
for such increased capital requirement which was effective more than 180 days
prior to the date of such demand, unless such increased capital requirement is
made retroactive by such (i) Capital Adequacy Regulation, (ii) change therein,
(iii) change in the interpretation or administration thereof, or (iv) compliance
with any Capital Adequacy Regulation.
(c) Any Bank claiming reimbursement or compensation
pursuant to this Section 3.03 shall deliver to the Borrower (with a copy to the
Administrative Agent) a certificate setting forth in reasonable detail the
amount payable to such Bank under this Section 3.03 and the basis therefor and
such certificate shall be rebuttable presumptive evidence of such amount.
3.04 FUNDING LOSSES. The Borrower agrees to reimburse each Bank
and to hold each Bank harmless from any loss or expense which such Bank may
sustain or incur as a consequence of:
(a) the failure of the Borrower to make any payment or
mandatory prepayment of principal of any LIBO Rate Advance (including payments
made after any acceleration thereof);
43
(b) the failure of the Borrower to borrow, continue or
convert an Advance after the Borrower has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Borrower to make any prepayment
after the Borrower has given a notice in accordance with Section 2.08;
(d) the conversion pursuant to Section 2.03(e) or Section
2.06 of any LIBO Rate Advance to a Prime Rate Advance on a day that is not the
last day of the respective Interest Period;
(e) the termination or reduction in the Aggregate
Commitment which is effective, with respect to a LIBO Rate Advance, on a day
that is not the last day of the Interest Period for such LIBO Rate Advance, as
provided in Section 2.07; or
(f) the prepayment (including pursuant to Section 2.08)
of a LIBO Rate Advance on a day which is not the last day of the Interest Period
with respect thereto;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBO Rate Advances hereunder or from
fees payable to terminate the deposits from which such funds were obtained, such
amount or amounts to include, without limitation, an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the amount so
prepaid, not prepaid, not paid, not borrowed, not continued or converted, or
converted at the time of such action or failure to act for the period from the
date of such action or failure to act to the last day of the then current
Interest Period (or, in the case of a failure to borrow, continue or convert,
the Interest Period which would have commenced on the date of such failure) at
the LIBO Rate in effect for such Interest Period over (ii) the amount of
interest which would accrue to such Bank on such amount by placing such amount
on deposit for a comparable period with leading banks in the London Interbank
Market. Such Bank shall deliver to the Borrower (with a copy to the
Administrative Agent) a certificate setting forth in reasonable detail the
amount of such loss, cost or expense and the basis therefor which shall be
rebuttable presumptive evidence of the amount of such loss, cost or expense.
Solely for purposes of calculating amounts payable by the Borrower to the Banks
under this Section 3.04 and under subsection 3.03(a), each LIBO Rate Advance
made by a Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the LIBO Rate
plus the Applicable Margin for such LIBO Rate Advance by a matching deposit or
other borrowing in the London Interbank Market for a comparable amount and for a
comparable period, whether or not such LIBO Rate Advance is in fact so funded.
3.05 INABILITY TO DETERMINE RATES. If the Majority Banks shall have
determined that for any reason adequate and reasonable means do not exist for
ascertaining the LIBO Rate for any requested Interest Period with respect to a
proposed LIBO Rate Advance or that the LIBO Rate applicable pursuant to
subsection 2.10(a) for any requested Interest Period with respect to a proposed
LIBO Rate Advance does not adequately and fairly reflect the cost to such Banks
of funding such Advance, the Administrative Agent will forthwith give notice of
such determination to the Borrower and each Bank. Thereafter, the obligation of
the Banks to make or maintain LIBO Rate Advances hereunder shall be suspended
until the Administrative Agent upon the instruction of the Majority Banks
revokes such notice in writing. Upon receipt of such
44
notice, the Borrower may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Borrower does not revoke
such notice, the Banks shall make, convert or continue the Advances, as proposed
by the Borrower, in the amount specified in the applicable notice submitted by
the Borrower, but such Advances shall be made, converted or continued as Prime
Rate Advances instead of LIBO Rate Advances.
3.06 SUBSTITUTION OF BANKS. Upon the receipt by the Borrower from
any Bank (an "AFFECTED BANK") of a claim for compensation pursuant to Section
3.01 or Section 3.03, or a notice to the Borrower through the Administrative
Agent under Section 3.02(a), unless the Borrower and the Affected Bank have
reached an agreement or are negotiating toward reaching an agreement relative to
alleviating the impact of such claim for compensation or such notice on the
Borrower, the Borrower may: (i) request one or more of the other Banks to
acquire and assume all or part of such Affected Bank's Advances and Revolving
Commitment, which request may be granted or denied in such Bank's sole
discretion; or (ii) designate a replacement bank or financial institution (the
"Substitute Bank") to acquire and assume all or part of such Affected Bank's
Advances and Revolving Commitment. Any such designation of a Substitute Bank
under clause (ii) shall be subject to the prior written consent of the
Administrative Agent (which consent shall not be unreasonably withheld). In the
event of the replacement of an Affected Bank, such Affected Bank agrees to
assign without recourse its rights and obligations hereunder to the Substitute
Bank upon payment by the Substitute Bank to the Affected Bank of the principal
amount of such Affected Banks's outstanding Advances and any accrued and unpaid
interest thereon, and any other amounts owed to such Affected Bank and to
execute and deliver to the Administrative Agent an assignment and acceptance in
form and substance reasonably satisfactory to the Administrative Agent and such
Affected Bank evidencing such assignment and the acceptance by the Substitute
Bank of such Affected Bank's obligations hereunder. The designation of a
Substitute Bank shall not affect the Borrower's obligations to such Affected
Bank hereunder.
3.07 SURVIVAL. The agreements and obligations of the Borrower in
this Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS TO CLOSING. The obligation of each Bank to make its
Revolving Commitment available to the Borrower hereunder is subject to the
condition that the Administrative Agent shall have received on or before the
Closing Date all of the following, in form and substance satisfactory to the
Administrative Agent and each Bank and in sufficient copies for each Bank:
(a) CREDIT AGREEMENT. This Agreement executed by the
Borrower, the Administrative Agent and each of the Banks.
(b) OTHER LOAN DOCUMENTS. The Note executed by the
Borrower, in favor of the Administrative Agent, as agent for the Banks, the
Guaranty executed by the Guarantors, the Inter-Bank Agreement executed by the
Banks and the Agents, and all other Loan Documents.
45
(c) RESOLUTIONS: INCUMBENCY.
(i) Copies of the resolutions of the board of
directors of the Borrower approving and authorizing the execution,
delivery and performance by the Borrower of this Agreement, and the
other Loan Documents to be delivered hereunder by the Borrower,
certified as of the Closing Date by the Secretary or an Assistant
Secretary of the Borrower; and
(ii) Copies of the resolutions of the respective
board of directors of the Guarantors approving and authorizing the
execution, delivery and performance by the Guarantors of the Guaranty,
certified as of the Closing Date by the Secretary or an Assistant
Secretary of such Guarantor; and
(iii) Certificates of the Secretary or Assistant
Secretary of the Borrower and each Guarantor certifying the names and
true signatures of the officers of such entity authorized to execute,
deliver and perform this Agreement, and all other Loan Documents to be
delivered hereunder; and
(iv) Copies of all articles of incorporation and
bylaws (for corporations), and articles of organization and operating
agreements (for limited liability companies), together with any
amendments thereto, of the Borrower and each Guarantor, as applicable;
provided, however, that the Borrower shall not be required to provide
additional copies of any such documents that the Borrower previously
provided to the Administrative Agent in connection with the previous
amendments of this Agreement.
(d) LEGAL OPINION. An opinion of Counsel to the Borrower
and the Guarantors and addressed to the Administrative Agent and the Banks,
substantially in the form of EXHIBIT E.
(e) PAYMENT OF FEES. The Borrower shall have paid all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with fees and disbursements of counsel for First
Hawaiian Bank.
(f) CERTIFICATES. A Borrowing Base Certificate dated
December 31, 2000, an initial Leverage Ratio/Interest Coverage Ratio/Base Grid
Certificate, and a compliance certificate signed by a Responsible Officer of the
Borrower, dated as of the Closing Date, stating that:
(i) the representations and warranties contained
in Article V are true and correct on and as of such date, as though
made on and as of such date;
(ii) no Default or Event of Default exists or
would result from the initial Borrowing; and
(iii) there has occurred since September 30, 2000,
no event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect.
46
(g) FINANCIAL STATEMENTS. Unaudited consolidated
financial statements of the Borrower and its Subsidiaries as of September 30,
2000.
(h) CERTIFICATE OF GOOD STANDING. A certificate of good
standing for the Borrower and each Guarantor, issued by the appropriate agency
of the state of incorporation for such entity and, if qualified to do business
in the State of Hawaii, by the Director of the Department of Commerce and
Consumer Affairs of the State of Hawaii, as of no earlier than January 1, 2001.
(i) TAX CLEARANCE CERTIFICATE. A tax clearance
certificate for the Borrower and each Guarantor, issued as of no earlier than
January 1, 2001, by the appropriate agency of the state of incorporation for
such entity and, if qualified to do business in the State of Hawaii, by the
Department of Taxation of the State of Hawaii, certifying that all taxes due to
the respective state by such entity, up to and including the date of such
certificate, have been paid.
(j) OTHER DOCUMENTS. Such other approvals, opinions,
documents or materials as the Administrative Agent or any Bank may reasonably
request.
4.02 CONDITIONS TO ALL BORROWINGS, SWING-LINE BORROWINGS AND
ISSUANCE OF LETTERS OF CREDIT. The obligation of each Bank to make any Advance
hereunder (including its initial Advance), or to continue or convert any Advance
pursuant to section 2.06, or of the Administrative Agent to make any Swing-Line
Advance hereunder, or of the Administrative Agent or the Issuing Bank to issue
any Letter of Credit hereunder, is subject to the satisfaction of the following
conditions precedent on the relevant date therefor:
(a) NOTICE OF BORROWING OR CONTINUATION/CONVERSION. The
Administrative Agent shall have received a Notice of Borrowing or a Notice of
Swing-Line Borrowing or a Request for Issuance of Letter of Credit or a Notice
of Continuation/Conversion, as applicable;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Borrower herein, and by the
Guarantors in the Guaranty, shall be true and correct on and as of such date,
with the same effect as if made on and as of such date (except to the extent
such representations and warranties expressly refer to an earlier date, in which
case they shall be true and correct as of such earlier date); and
(c) NO EXISTING DEFAULT. No Default or Event of Default
shall exist or shall result from such Borrowing or continuation or conversion.
Each Notice of Borrowing, Notice of Swing-Line Borrowing, Request for Issuance
of Letter of Credit and Notice of Continuation/Conversion submitted by the
Borrower, hereunder shall constitute a representation and warranty by the
Borrower hereunder, as of the applicable effective date thereof, that the
conditions in this Section 4.02 are satisfied.
47
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
each Bank that:
5.01 ORGANIZATION, STANDING AND AUTHORITY.
(a) ▇▇▇▇▇▇▇ HOMES, INC.: ▇▇▇▇▇▇▇ Homes, Inc. is a
Delaware corporation (which will be known as ▇▇▇▇▇▇▇ Residential, Inc. upon the
completion of the Step 1 Merger A Transaction), validly existing and in good
standing under the laws of the State of Delaware, is registered to do business
and in good standing in the State of Hawaii, is solvent, and has all requisite
corporate power and authority to carry on the business and to own the property
that it now carries on and owns. ▇▇▇▇▇▇▇ Homes, Inc. has all requisite corporate
power and authority to execute and deliver this Agreement and the other Loan
Documents and to observe and perform all of the provisions and conditions
thereof. The execution and delivery of the Loan Documents have been duly
authorized by the board of directors of ▇▇▇▇▇▇▇ Homes, Inc., and no other
corporate action of or for such company is requisite to the execution and
delivery of this Agreement and the other Loan Documents.
(b) ▇▇▇▇▇▇▇ HOMES OF CALIFORNIA, INC.: ▇▇▇▇▇▇▇ Homes of
California, Inc. is a California corporation, validly existing and in good
standing under the laws of the State of California, is solvent, and has all
requisite corporate power and authority to carry on the business and to own the
property that it now carries on and owns. ▇▇▇▇▇▇▇ Homes of California, Inc. has
all requisite corporate power and authority to execute and deliver the Guaranty
and to observe and perform all of the provisions and conditions thereof. The
execution and delivery of the Guaranty have been duly authorized by the board of
directors of ▇▇▇▇▇▇▇ Homes of California, Inc., and no other corporate action of
or for such company is requisite to the execution and delivery of the Guaranty.
(c) ▇▇▇▇▇▇▇ HOMES OF OREGON, INC.: ▇▇▇▇▇▇▇ Homes of
Oregon, Inc. is an Oregon corporation, validly existing and in good standing
under the laws of the State of Oregon, is solvent, and has all requisite
corporate power and authority to carry on the business and to own the property
that it now carries on and owns. ▇▇▇▇▇▇▇ Homes of Oregon, Inc. has all requisite
corporate power and authority to execute and deliver the Guaranty and to observe
and perform all of the provisions and conditions thereof. The execution and
delivery of the Guaranty have been duly authorized by the board of directors of
▇▇▇▇▇▇▇ Homes of Oregon, Inc., and no other corporate action of or for such
company is requisite to the execution and delivery of the Guaranty.
(d) ▇▇▇▇▇▇▇ HOMES OF WASHINGTON, INC.: ▇▇▇▇▇▇▇ Homes of
Washington, Inc. is a Washington corporation, validly existing and in good
standing under the laws of the State of Washington, is solvent, and has all
requisite corporate power and authority to carry on the business and to own the
property that it now carries on and owns. ▇▇▇▇▇▇▇ Homes of Washington, Inc. has
all requisite corporate power and authority to execute and deliver the Guaranty
and to observe and perform all of the provisions and conditions thereof. The
execution and delivery of the Guaranty have been duly authorized by the board of
directors of ▇▇▇▇▇▇▇
48
Homes of Washington, Inc., and no other corporate action of or for such company
is requisite to the execution and delivery of the Guaranty.
(e) MELODY HOMES, INC.: Melody Homes, Inc. is a Delaware
corporation, validly existing and in good standing under the laws of the State
of Delaware, and the State of Colorado, as applicable, is solvent, and has all
requisite corporate power and authority to carry on the business and to own the
property that it now carries on and owns. Melody Homes, Inc. has all requisite
corporate power and authority to execute and deliver the Guaranty and to observe
and perform all of the provisions and conditions thereof. The execution and
delivery of the Guaranty have been duly authorized by the board of directors of
Melody Homes, Inc., and no other corporate action of or for such company is
requisite to the execution and delivery of the Guaranty.
(f) ▇▇▇▇▇▇▇ REALTY/MAUI, INC.: ▇▇▇▇▇▇▇ Realty/Maui, Inc.
is a Hawaii corporation, validly existing and in good standing under the laws of
the State of Hawaii, is solvent, and has all requisite corporate power and
authority to carry on the business and to own the property that it now carries
on and owns. ▇▇▇▇▇▇▇ Realty/Maui, Inc. has all requisite corporate power and
authority to execute and deliver the Guaranty and to observe and perform all of
the provisions and conditions thereof. The execution and delivery of the
Guaranty have been duly authorized by the board of directors of ▇▇▇▇▇▇▇
Realty/Maui, Inc., and no other corporate action of or for such company is
requisite to the execution and delivery of the Guaranty.
(g) ▇▇▇▇▇▇▇ REALTY/OAHU, INC.: ▇▇▇▇▇▇▇ Realty/Oahu, Inc.
is a Hawaii corporation, validly existing and in good standing under the laws of
the State of Hawaii, is solvent, and has all requisite corporate power and
authority to carry on the business and to own the property that it now carries
on and owns. ▇▇▇▇▇▇▇ Realty/Oahu, Inc. has all requisite corporate power and
authority to execute and deliver the Guaranty and to observe and perform all of
the provisions and conditions thereof. The execution and delivery of the
Guaranty have been duly authorized by the board of directors of ▇▇▇▇▇▇▇
Realty/Oahu, Inc., and no other corporate action of or for such company is
requisite to the execution and delivery of the Guaranty.
(h) VERTICAL CONSTRUCTION CORPORATION: Vertical
Construction Corporation is a Delaware corporation, validly existing and in good
standing under the laws of the State of Delaware, is registered to do business
and in good standing in the State of Hawaii, is solvent, and has all requisite
corporate power and authority to carry on the business and to own the property
that it now carries on and owns. Vertical Construction Corporation has all
requisite corporate power and authority to execute and deliver the Guaranty and
to observe and perform all of the provisions and conditions thereof. The
execution and delivery of the Guaranty have been duly authorized by the board of
directors of Vertical Construction Corporation, and no other corporate action of
or for such company is requisite to the execution and delivery of the Guaranty.
(i) MELODY MORTGAGE CO.: Melody Mortgage Co. is a
Colorado corporation, validly existing and in good standing under the laws of
the State of Colorado, is solvent, and has all requisite corporate power and
authority to carry on the business and to own the property that it now carries
on and owns. Melody Mortgage Co. has all requisite corporate power and authority
to execute and deliver the Guaranty and to observe and perform all of the
provisions and conditions thereof. The execution and delivery of the Guaranty
have been duly authorized by the
49
board of directors of Melody Mortgage Co., and no other corporate action of
or for such company is requisite to the execution and delivery of the
Guaranty.
(j) SHLR OF WASHINGTON, INC.: SHLR of Washington, Inc. is
a Washington corporation, validly existing and in good standing under the laws
of the State of Washington, is solvent, and has all requisite corporate power
and authority to carry on the business and to own the property that it now
carries on and owns. SHLR of Washington, Inc. has all requisite corporate power
and authority to execute and deliver the Guaranty and to observe and perform all
of the provisions and conditions thereof. The execution and delivery of the
Guaranty have been duly authorized by the board of directors of SHLR of
Washington, Inc., and no other corporate action of or for such company is
requisite to the execution and delivery of the Guaranty.
(k) SHLR OF UTAH, INC.: SHLR of Utah, Inc. is a Utah
corporation, validly existing and in good standing under the laws of the State
of Utah, is solvent, and has all requisite corporate power and authority to
carry on the business and to own the property that it now carries on and owns.
SHLR of Utah, Inc. has all requisite corporate power and authority to execute
and deliver the Guaranty and to observe and perform all of the provisions and
conditions thereof. The execution and delivery of the Guaranty have been duly
authorized by the board of directors of SHLR of Utah, Inc., and no other
corporate action of or for such company is requisite to the execution and
delivery of the Guaranty.
(l) SHLR OF COLORADO, INC.: SHLR of Colorado, Inc. is a
Colorado corporation, validly existing and in good standing under the laws of
the State of Colorado, is solvent, and has all requisite corporate power and
authority to carry on the business and to own the property that it now carries
on and owns. SHLR of Colorado, Inc. has all requisite corporate power and
authority to execute and deliver the Guaranty and to observe and perform all of
the provisions and conditions thereof. The execution and delivery of the
Guaranty have been duly authorized by the board of directors of SHLR of
Colorado, Inc., and no other corporate action of or for such company is
requisite to the execution and delivery of the Guaranty.
(m) SSHI LLC: SSHI LLC is a Delaware limited liability
company, validly existing and in good standing under the laws of the State of
Delaware, is solvent, and has all requisite limited liability company power and
authority to carry on the business and to own the property that it now carries
on and owns. SSHI LLC has all requisite limited liability company power and
authority to execute and deliver the Guaranty and to observe and perform all of
the provisions and conditions thereof. The execution and delivery of the
Guaranty have been duly authorized by the members of SSHI LLC, and no other
company action of or for such company is requisite to the execution and delivery
of the Guaranty.
(n) SHLR OF NEVADA, INC.: SHLR of Nevada, Inc. is a
Nevada corporation, validly existing and in good standing under the laws of the
State of Nevada, is solvent, and has all requisite corporate power and authority
to carry on the business and to own the property that it now carries on and
owns. SHLR of Nevada, Inc. has all requisite corporate power and authority to
execute and deliver the Guaranty and to observe and perform all of the
provisions and conditions thereof. The execution and delivery of the Guaranty
have been duly authorized by the board of directors of SHLR of Nevada, Inc., and
no other corporate action of or for such company is requisite to the execution
and delivery of the Guaranty.
50
(o) SRHI LLC: SRHI LLC is a Delaware limited liability
company, validly existing and in good standing under the laws of the State of
Delaware, is solvent, and has all requisite limited liability company power and
authority to carry on the business and to own the property that it now carries
on and owns. SRHI LLC has all requisite limited liability company power and
authority to execute and deliver the Guaranty and to observe and perform all of
the provisions and conditions thereof. The execution and delivery of the
Guaranty have been duly authorized by the members of SRHI LLC, and no other
company action of or for such company is requisite to the execution and delivery
of the Guaranty.
(p) ▇▇▇▇▇▇▇ HOMES OF ARIZONA, LLC: ▇▇▇▇▇▇▇ Homes of
Arizona, LLC is a Delaware limited liability company, validly existing and in
good standing under the laws of the State of Delaware, is solvent, and has all
requisite limited liability company power and authority to carry on the business
and to own the property that it now carries on and owns. ▇▇▇▇▇▇▇ Homes of
Arizona, LLC has all requisite limited liability company power and authority to
execute and deliver the Guaranty and to observe and perform all of the
provisions and conditions thereof. The execution and delivery of the Guaranty
have been duly authorized by the members of ▇▇▇▇▇▇▇ Homes of Arizona, LLC, and
no other company action of or for such company is requisite to the execution and
delivery of the Guaranty.
(q) SHLR OF CALIFORNIA, INC.: SHLR of California, Inc. is
a California corporation, validly existing and in good standing under the laws
of the State of California, is solvent, and has all requisite corporate power
and authority to carry on the business and to own the property that it now
carries on and owns. SHLR of California, Inc. has all requisite corporate power
and authority to execute and deliver the Guaranty and to observe and perform all
of the provisions and conditions thereof. The execution and delivery of the
Guaranty have been duly authorized by the board of directors of SHLR of
California, Inc., and no other corporate action of or for such company is
requisite to the execution and delivery of the Guaranty.
(r) ▇▇▇▇▇▇▇ MORTGAGE, INC.: ▇▇▇▇▇▇▇ Mortgage, Inc. is a
Delaware corporation, validly existing and in good standing under the laws of
the State of Delaware, is registered to do business and in good standing in the
State of Washington, is solvent, and has all requisite corporate power and
authority to carry on the business and to own the property that it now carries
on and owns. ▇▇▇▇▇▇▇ Mortgage, Inc. has all requisite corporate power and
authority to execute and deliver the Guaranty and to observe and perform all of
the provisions and conditions thereof. The execution and delivery of the
Guaranty have been duly authorized by the board of directors of ▇▇▇▇▇▇▇
Mortgage, Inc., and no other corporate action of or for such company is
requisite to the execution and delivery of the Guaranty.
(s) SHA CONSTRUCTION LLC: SHA Construction LLC is a
Delaware limited liability company, validly existing and in good standing under
the laws of the State of Delaware, is registered to do business and in good
standing in the State of Arizona, is solvent, and has all requisite limited
liability company power and authority to carry on the business and to own the
property that it now carries on and owns. SHA Construction LLC has all requisite
limited liability company power and authority to execute and deliver the
Guaranty and to observe and perform all of the provisions and conditions
thereof. The execution and delivery of the Guaranty
51
have been duly authorized by the members of SHA Construction LLC, and no
other company action of or for such company is requisite to the execution and
delivery of the Guaranty.
5.02 TAX RETURNS AND PAYMENTS. All material tax returns and reports
of the Borrower and its Subsidiaries required by law to be filed have been duly
filed, and all taxes, assessments, contributions, fees and other governmental
charges the liability for which could exceed $100,000 (other than those
presently payable without penalty or interest and those which have been
disclosed to the Banks but which are currently being contested in good faith)
upon the Borrower or any of its Subsidiaries or upon the properties or assets or
income of the Borrower or its Subsidiaries, which are due and payable, have been
paid.
5.03 LITIGATION. There is, to the knowledge of the Borrower, no
action, suit, proceeding or investigation pending at law or in equity or before
any Governmental Authority, or threatened against or affecting the Borrower or
its Subsidiaries, an adverse ruling in which would or might constitute a
Material Adverse Effect.
5.04 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME. Neither
the Borrower nor any of its Subsidiaries are in violation of or in default with
respect to any term or provision of its Articles of Incorporation or Bylaws, and
neither the Borrower or any of its Subsidiaries is, to the best knowledge of the
Borrower, in violation of or in default with respect to any term or provision of
any mortgage, indenture, contract, agreement or instrument applicable to it or
by which it may be bound; and the execution, delivery, performance of and
compliance with each and all of the Loan Documents by the Borrower and the
Guaranty by the Subsidiaries will not result in any such violation, or be in
conflict with or constitute a default under any such term or provision, or
result in the creation of any mortgage, lien or charge on any of the properties
or assets of the Borrower or its Subsidiaries; and there is no term or provision
of the Borrower's or any Subsidiaries' Articles of Incorporation or Bylaws, or
any mortgage, indenture, contract, agreement or instrument applicable to the
Borrower or its Subsidiaries or by which the Borrower or any Subsidiary may be
bound, which may adversely affect the business or prospects or condition
(financial or other) of the Borrower, any of its Subsidiaries, or any of their
respective properties or assets.
5.05 COMPLIANCE WITH LAW. The consummation of the transactions
contemplated by the Loan Documents will not conflict with or result in a breach
of any law, statute, ordinance, regulation, order, writ, injunction, judgment of
any court or governmental instrumentality, domestic or foreign, applicable to
the Borrower or its Subsidiaries.
5.06 GOVERNMENTAL AUTHORIZATION. No consent, approval or
authorization of, or registration, declaration or filing with, any Governmental
Authority in connection with the valid execution and delivery of each of the
Loan Documents is required or, if required, such consent, approval, order or
authorization shall have been obtained prior to the Closing Date.
5.07 FINANCIAL STATEMENTS. All financial statements heretofore
delivered to the Banks by the Borrower and its Subsidiaries are true and correct
in all respects, and fairly represent the financial condition of the subjects
thereof as of the dates thereof; and no material, adverse changes have occurred
in the financial condition reflected therein since the dates thereof.
52
5.08 BROKERS, FINDERS AND AGENTS. The Borrower has not employed or
engaged any broker, finder or agent who may claim a commission or fee or other
compensation with respect to the Aggregate Commitment or the transactions
described herein. Without in any way limiting the generality of Section 10.05 of
this Agreement, the Borrower will indemnify and hold each Bank harmless from any
and all claims of brokers or other claims for commissions or fees in connection
with the Aggregate Commitment and the transactions described herein, and will
further hold each Bank harmless and indemnify each Bank against all losses,
damages, costs and charges (including attorneys' fees) which such Bank may
sustain because of such claims or in consequence of defending against such
claims.
5.09 COMPLIANCE WITH FUNDING STANDARDS. The Borrower and each
Subsidiary has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan in which it is a member and is in
compliance in all material respects with the currently applicable provisions of
ERISA and the Code, and has not incurred any liability to the PBGC.
5.10 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the
Advances are intended to be and shall be used solely for the purposes set forth
in and permitted by this Agreement, and are intended to be and shall be used in
compliance with Section 7.01. Neither the Borrower nor any of its Subsidiaries
is generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
5.11 NO MATERIAL ADVERSE EFFECT. Since the Closing Date, there has
been no Material Adverse Effect.
5.12 REGULATED ENTITIES. None of the Borrower, any Subsidiary of
the Borrower or any Person controlling the Borrower or any of its Subsidiaries
is (a) an "Investment Company" within the meaning of the Investment Company Act
of 1940; or (b) subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
5.13 FULL DISCLOSURE. None of the representations or warranties
made by the Borrower or any of its Subsidiaries in the Loan Documents as of the
date such representations and warranties are made or deemed made, and none of
the statements contained in each exhibit, report, statement or certificate
furnished by or on behalf of the Borrower or any of its Subsidiaries in
connection with the Loan Documents (including the offering and disclosure
materials delivered by or on behalf of the Borrower to the Banks prior to the
Closing Date), contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.
53
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Bank shall have
any commitment to extend credit hereunder, or any Advance, Swing-Line Advance,
or Letter of Credit shall remain unpaid or unsatisfied, unless the Majority
Banks waive compliance in writing:
6.01 FINANCIAL STATEMENTS. The Borrower shall deliver to the
Administrative Agent in form and detail satisfactory to the Administrative Agent
and the Majority Banks, with sufficient copies for each Bank:
(a) as soon as available, but not later than ninety (90)
days after the end of each fiscal year, (i) a copy of the Borrower's annual 10-K
Report filed with the Securities and Exchange Commission, which includes a copy
of the audited consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such year and the related consolidated statements of income,
shareholders' equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, and
accompanied by the opinion of a nationally-recognized independent public
accounting firm which report shall state that such consolidated financial
statements represent fairly the financial position and results of operations as
of the end of and for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years, (such opinion shall not be qualified or
limited because of a restricted or limited examination by such accountant of any
material portion of the records of the Borrower or its Subsidiaries); and (ii) a
copy of the consolidating reports of the Borrower and all of its Subsidiaries;
(b) as soon as available, but not later than forty-five
(45) days after the end of each Quarter, (i) a copy of the Borrower's quarterly
10-Q Report filed with the Securities and Exchange Commission, which includes a
copy of the unaudited consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such Quarter and the related consolidated
statements of income, shareholders' equity and cash flows for the period
commencing on the first day and ending on the last day of such Quarter, and
certified by an appropriate Responsible Officer of the Borrower as being
complete and correct and fairly presenting, in accordance with Article 10 of SEC
Regulation S-X, the consolidated financial position and the consolidated results
of operations of the Borrower and its Subsidiaries; (ii) a copy of the
consolidating reports of the Borrower and all of its Subsidiaries; and (iii) a
copy of Western Pacific's financial statements for such Quarter.
(c) not later than five (5) days after the filing
thereof, copies of all reports and registration statements which the Borrower
files with the Securities and Exchange Commission or any national securities
exchange.
6.02 CERTIFICATES; OTHER INFORMATION The Borrower shall furnish to
the Administrative Agent, with sufficient copies for each Bank:
(a) not later than forty-five (45) days after the end of
each Quarter, a certificate of a Responsible Officer of the Borrower, in the
form of EXHIBIT F-1 stating that, to the
54
best of such officer's knowledge, the Borrower and its Subsidiaries during
such period, have observed and performed all of their covenants and other
agreements, and satisfied every condition contained in this Agreement to be
observed, performed or satisfied by the Borrower and its Subsidiaries and
that such officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate, which, where a Default or
Event of Default is specified, shall set forth the details of the occurrence
referred to therein, state what action the Borrower or its Subsidiaries
propose to take with respect thereto and at what time, and describe with
particularity any and all applicable clauses or provisions of this Agreement
which have been breached or violated, and, if the Merger A Transaction is
completed, that Western Pacific during such period, has observed and
performed all of its covenants and other agreements, and satisfied every
condition contained in the Western Pacific Credit Agreement to be observed,
performed or satisfied by Western Pacific and that such officer has obtained
no knowledge of any Default or Event of Default (as defined in the Western
Pacific Credit Agreement) except as specified in such certificate, which,
where a Default or Event of Default is specified, shall set forth the details
of the occurrence referred to therein, state what action Western Pacific
proposes to take with respect thereto and at what time, and describe with
particularity any and all applicable clauses or provisions of the Western
Pacific Credit Agreement which have been breached or violated, together with
a calculation of (i) the percentage of common stock in the Borrower (or if
the Merger A Transaction is completed, then the Holding Company) owned by
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as of the end of such Quarter, (ii) the minimum Consolidated
Tangible Net Worth as of the end of such Quarter, (iii) the Consolidated Net
Earnings during such Quarter, (iv) the amount of and net proceeds received
from any Equity Offering (other than the exercise of an employee stock
option) or conversion of a subordinated convertible debenture consummated or
effected during such Quarter, (v) Real Estate Development Assets, Real Estate
Indebtedness, and the Development Ratio as of the end of such Quarter,
(vi) the amount of and purpose for all investments permitted under subsection
(e) of the definition of "Permitted Investment", and (vii) the amount of and
purpose for all indebtedness, investments and advances permitted under
subsection (ii) of the definition of "Permitted Indebtedness", and showing
for each item (i) through (vii) above, the comparison between such Quarter
and previous Quarters (beginning with the Quarter ending September 30, 2000).
(b) not later than forty-five (45) days after the end of
each Quarter a certificate of a Responsible Officer of the Borrower, in the form
of EXHIBIT F-2 for each project in which the Borrower or any of its Subsidiaries
has an investment, relating to the status of all Unentitled Land (location,
purchase price, number of lots and entitlement schedule), Unimproved Land
(location, number of lots and development schedule), and Land Under Development
(location and status of development), as of the end of the previous Quarter.
(c) not later than fifteen (15) days after the end of
each month, provided, however, that if the end of such month is also the end of
a Quarter, then not later than twenty-five (25) days after the end of such
month, a certificate of a Responsible Officer of the Borrower, in the form of
EXHIBIT F-3 for each project in which the Borrower or any of its Subsidiaries
has an investment, relating to the status of all Unsold Homes Under Construction
(location and number of homes), Completed Unsold Homes (location and number of
homes), Completed Unsold Homes Over 180 Days (location and number of homes), and
Contracted Homes (location, number of homes and status of sales), as of the end
of the previous month.
55
(d) not later than fifteen (15) days after the end of
each month, provided, however, that if the end of such month is also the end of
a Quarter, then not later than twenty-five (25) days after the end of such
month, a Borrowing Base Certificate of a Responsible Officer of the Borrower, in
the form of EXHIBIT F-4, containing a detailed listing and a summary of all Real
Estate Development Assets, as of the end of the previous month.
(e) not later than forty-five (45) days after the end of
each Quarter, a Leverage Ratio/Interest Coverage Ratio/Base Grid Certificate of
a Responsible Office of the Borrower, in the form of EXHIBIT F-5, containing a
calculation of the total Indebtedness of the Borrower and its Subsidiaries, and
the Consolidated Tangible Net Worth, as of the end of the previous Quarter,
based on balance sheet information prepared in accordance with GAAP.
(f) as soon as available, but not later than ninety (90)
days after the end of each fiscal year, a projected consolidated balance sheet
of the Borrower and its Subsidiaries for the next three (3) fiscal years,
prepared on a Quarterly basis, and the related projected consolidated statements
of income, shareholders' equity and cash flows for such fiscal years, setting
forth in each case in comparative form the figures for the previous fiscal year
(whether such figures for such previous fiscal year were actual or projected).
(g) if the Merger A Transaction is completed, then not
later than forty-five (45) days after the end of each Quarter, a certificate of
a Responsible Officer of Western Pacific, in the form of EXHIBIT F-6, stating
that, to the best of such officer's knowledge, Western Pacific during such
period, has observed and performed all of its covenants and other agreements,
and satisfied every condition contained in the Western Pacific Credit Agreement
to be observed, performed or satisfied by Western Pacific and that such officer
has obtained no knowledge of any Default or Event of Default (as defined in the
Western Pacific Credit Agreement) except as specified in such certificate,
which, where a Default or Event of Default is specified, shall set forth the
details of the occurrence referred to therein, state what action Western Pacific
proposes to take with respect thereto and at what time, and describe with
particularity any and all applicable clauses or provisions of the Western
Pacific Credit Agreement which have been breached or violated.
(h) if the Merger A. Transaction is completed, then
contemporaneously with delivery by Western Pacific to the "Agent" under the
Western Pacific Credit Agreement, the Borrower shall deliver to the
Administrative Agent, with sufficient copies for each Bank, all financial
statements, certificates and information as required by Section 7.4 of the
Western Pacific Credit Agreement.
(i) promptly, such additional business, financial,
corporate affairs and other information as the Administrative Agent, at the
request of any Bank, may from time to time reasonably request.
6.03 NOTICES. The Borrower shall promptly notify each Bank through
the Administrative Agent:
(a) (i) of the occurrence of any Default or Event of
Default, (ii) of the occurrence or existence of any event or circumstance that
foreseeably is likely to become a
56
Default or Event of Default, and (iii) of the occurrence or existence of any
event or circumstance that would cause the condition to Borrowing, conversion
or continuation set forth in subsection 4.02(b) not to be satisfied if a
Borrowing, conversion or continuation were requested on or after the date of
such event or circumstance;
(b) of any breach or non-performance of, or any default
under, any contractual obligation (including a contractual obligation by which
any of its property is bound) of the Borrower or any of its Subsidiaries which
could result in a Material Adverse Effect;
(c) of the commencement of, or any material development
in, any litigation or proceeding affecting the Borrower or any of its
Subsidiaries which, if adversely determined, would reasonably be expected to
have a Material Adverse Effect; or in which the relief sought is an injunction
or other stay of the performance of this Agreement; and
(d) of any Material Adverse Effect subsequent to the date
of the most recent audited financial statements of the Borrower delivered to the
Banks pursuant to this Agreement;
Each notice pursuant to this Section shall be accompanied by a
written statement by a Responsible Officer of the Borrower setting forth details
of the occurrence referred to therein, and stating what action the Borrower
proposes to take with respect thereto and at what time. Each notice under
subsection 6.03(a) shall describe with particularity any and all clauses or
provisions of this Agreement that have been breached or violated.
6.04 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause
its Subsidiaries to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Borrower or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law
become a lien upon its property; and
(c) all Indebtedness, as and when due and payable, but
subject to the restrictions contained in Section 7.05 of this Agreement.
6.05 COMPLIANCE WITH LAWS. The Borrower shall comply, and shall
cause each of its Subsidiaries to comply, in all material respects with all
Requirements of Law of any Governmental Authority having jurisdiction over them
or their business (including the Federal Fair Labor Standards Act), the breach
of which would have a Material Adverse Effect, except such as may be contested
in good faith or as to which a bona fide dispute may exist.
6.06 INSPECTION OF PROPERTY AND BOOKS AND PROCEEDS. The Borrower
shall maintain and shall cause each of its Subsidiaries to maintain books,
accounts, and records in accordance with GAAP and permit employees or agents of
the Administrative Agent and any Bank, at any
57
reasonable time, to inspect their properties, and permit employees or agents
of the Administrative Agent and any Bank, at any reasonable time, once per
Quarter, to examine and audit their books, accounts, and records and make
copies and memoranda thereof, at such Bank's expense, at such reasonable
times during normal business hours, upon reasonable advance notice to the
Borrower; PROVIDED, HOWEVER, when an Event of Default exists the
Administrative Agent or any Bank may do any of the foregoing at the expense
of the Borrower at any time during normal business hours and without advance
notice.
6.07 MINIMUM TANGIBLE NET WORTH. The Borrower shall maintain the
Consolidated Tangible Net Worth, as at the end of each Quarter, at a level equal
to or greater than (a) $160,000,000, plus (b) fifty percent (50%) of
Consolidated Net Earnings cumulative since January 1, 2000, provided that in no
event shall such amount be decreased as a result of any losses sustained after
such date, plus (c) ninety percent (90%) of net proceeds received from any
Equity Offering, and from any conversion of a subordinated convertible
debenture, consummated or effected after the Closing Date; provided, further,
that if the Merger A Transaction is completed and if Western Pacific shall be in
default under any of its loan obligations, then the dollar amount of any Western
Pacific Advance shall be deducted from Tangible Net Worth for the purpose of
determining the Consolidated Tangible Net Worth, pursuant to Section 7.07(e)(vi)
hereof.
6.08 PRESERVATION OF CORPORATE EXISTENCE. The Borrower shall, and
shall cause each Subsidiary to, maintain its corporate existence in good
standing under the laws of the jurisdiction in which it is incorporated and in
which it conducts business, and shall not, without the prior written consent of
the Majority Banks, make any material amendment to, or modification of, or
terminate, its constituent documents, true and correct copies of which the
Borrower represents have been provided to the Banks; provided, however, that the
Borrower may complete and effect the Merger Transaction subject to the
conditions heretofore set forth..
6.09 APPRAISAL. Independent FIRREA appraisals may be requested from
the Borrower, and the Borrower shall provide such appraisals, if required to
conform with FDICIA guidelines or other banking laws, rules or regulations.
6.10 QUARTERLY MEETINGS. The Borrower shall meet quarterly with the
Banks, either in person or by telephone conference call, on such dates and at
such times as may be mutually agreeable, provided, however, that such meeting
shall held no later than forty-five (45) days after the end of each Quarter, to
discuss the progress of the Borrower in comparison to the Business Plan.
6.11 SUBSIDIARIES. Each Subsidiary of the Borrower shall
unconditionally and jointly and severally guarantee the obligations of the
Borrower under the Loan Documents pursuant to the Guaranty. The guarantee
obligations of each Guarantor will be a Permitted Indebtedness and senior to all
Subordinated Debt, but PARI PASSU with any guaranties of such Subsidiary
provided in support of the Senior Notes. To the extent that the Borrower or its
Subsidiaries are permitted under this Agreement to incorporate or otherwise form
new Subsidiaries, the Borrower agrees that such new Subsidiary shall be added as
a Guarantor under this Agreement and the Guaranty, and shall execute such
Guaranty; provided, however, that the Captive Insurance Subsidiary shall not be
subject to this section.
58
6.12 OWNERSHIP/MANAGEMENT.
(a) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall at all times herein, except
as provided in subsection 6.12(b) hereof, (i) retain ownership and direct
control of at least thirty percent (30%) of the common stock of the Borrower;
and (ii) retain his position as chairman of the board, chief executive
officer and president of the Borrower, and (iii) remain active and involved
in the management of, and formation of policy for, the Borrower; PROVIDED,
HOWEVER, that the death or disability of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall not
constitute an Event of Default under Section 8.01(m) hereof if the Board of
Directors of the Borrower shall, within a reasonable time thereafter, appoint
a successor chairman of the board, chief executive officer and president of
the Borrower, subject to the approval of the Majority Banks, which approval
shall not be unreasonably withheld.
(b) If the Merger A Transaction is completed, then
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall at all times herein, (i) retain ownership and direct
control of at least twenty percent (20%) of the common stock of the Holding
Company, and (ii) retain his position as chairman of the board, chief
executive officer and president of the Borrower and the Holding Company, and
(iii) remain active and involved in the management of, and formation of
policy for, the Borrower and the Holding Company; PROVIDED, HOWEVER, that the
death or disability of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall not constitute an Event of
Default under Section 8.01(m) hereof if the Board of Directors of the
Borrower and of the Holding Company, respectively, shall, within a reasonable
time thereafter, appoint an Eligible Successor, subject to the approval of
the Super Majority Banks, which approval shall not be unreasonably withheld.
6.13 BOARD OF DIRECTORS OF THE HOLDING COMPANY. If the Merger A
Transaction is completed, then the majority of the Board of Directors of the
Holding Company shall be members who have been named, nominated or agreed to in
writing by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
ARTICLE VII
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as any Bank
shall have any commitment to extend credit hereunder, or any Advance, Swing-Line
Advance, or Letter of Credit shall remain unpaid or unsatisfied, unless the
Majority Banks waive compliance in writing:
7.01 USE OF PROCEEDS. The Borrower shall not and shall not suffer
or permit any of its Subsidiaries, or Western Pacific (if pursuant to a Western
Pacific Advance as provided in Section 7.07 (e)) to use any portion of the
proceeds of any Advance, directly or indirectly, (i) to purchase or carry Margin
Stock, (ii) to repay or otherwise refinance indebtedness of the Borrower or
others incurred to purchase or carry Margin Stock, (iii) to extend credit for
the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the
Securities Exchange Act of 1934 and regulations promulgated under such act.
59
7.02 LEVERAGE RATIO.
(a) Subject to the Base Grid as provided in subsection
7.02(b), the Borrower shall not, and shall not permit its Subsidiaries to,
allow the Leverage Ratio, measured as of the end of the Quarter ending
September 30, 2000, and as of the end of each Quarter thereafter, to exceed
1.60 to 1.
(b) Notwithstanding the requirements of the Leverage
Ratio provided hereinabove and the Interest Coverage Ratio provided in
Section 7.04, the Borrower shall not, and shall not permit its Subsidiaries
to, exceed the Base Grid parameters as provided below:
(i) if the Interest Coverage Ratio is greater than or
equal to 1.75 to 1, but less than 2.00 to 1, then the Leverage
Ratio shall be less than or equal to 1.35 to 1;
(ii) if the Interest Coverage Ratio is greater than
or equal to 2.00 to 1, but less than 2.50 to 1, then the
Leverage Ratio shall be less than or equal to 1.50 to 1; and
(iii) if the Interest Coverage Ratio is greater than
or equal to 2.50 to 1, then the Leverage Ratio shall be less
than or equal to 1.60 to 1.
The Borrower shall have the option to exceed the Base Grid
parameters for two consecutive Quarters (the "Carve-Out Period") upon written
notice to the Administrative Agent, provided the following conditions are
satisfied:
(1) during the Carve-Out Period, the Borrower shall
not, and shall not permit its Subsidiaries to, allow the Interest Coverage Ratio
to be less than 1.75 to 1;
(2) during the Carve-Out Period, the Borrower shall
not, and shall not permit its Subsidiaries to, allow the Leverage Ratio to
exceed 1.60 to 1;
(3) the Administrative Agent and the Majority Banks
shall have approved the Borrower's financial statements, certificates (as
required by Sections 6.01 and 6.02), demonstrating the Borrower's compliance
with all other financial covenants contained in Section 7.02 for the Carve-Out
Period, and the Borrower's plan to return to compliance with the Base Grid
parameters; and
(4) the Borrower shall be in compliance with the
Base Grid parameters at the end of the Carve-Out Period.
If the Borrower exercises this option, the Borrower shall be
required to maintain compliance with the Base Grid parameters for a period of at
least four consecutive Quarters before it may be permitted to exercise the
option again.
Notwithstanding the foregoing, the Borrower shall not have the
option to exceed the Base Grid parameters for the Carve-Out Period if such
excess is related to current operating
60
losses; provided, however, that losses resulting from "asset write-downs"
required under GAAP shall not be included in the computation of operating
losses or profits.
(c) If the Merger A Transaction is completed and if
Western Pacific shall be in default under any of its loan obligations, the
dollar amount of all Western Pacific Advances shall be deducted from Tangible
Net Worth for the purpose of determining the Leverage Ratio, pursuant to
Section 7.07(e)(vi) hereof.
7.03 DEVELOPMENT RATIO. The Borrower shall not, and shall not
permit its Subsidiaries to, allow the Development Ratio, measured as of the end
of each Quarter, to be less than 1.50 to 1.
7.04 INTEREST COVERAGE RATIO. Subject to the Base Grid as provided
in Section 7.02(b) the Borrower shall not, and shall not permit its Subsidiaries
to, allow the Interest Coverage Ratio, measured as of the end of each Quarter on
a rolling four (4) Quarters basis, to be less than 1.75 to 1.
7.05 NO REPAYMENT OF SUBORDINATED DEBT. The Borrower shall not
repay or permit any of its Subsidiaries to repay any of the Subordinated Debt,
without the prior written consent of the Banks, which consent may be withheld in
the sole discretion of any Bank.
7.06 ADDITIONAL INDEBTEDNESS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, assume, or become or remain liable
for or committed to incur, directly or indirectly, any Indebtedness or Guaranty
Obligation in excess of an aggregate amount of $10,000,000, other than the
Permitted Indebtedness.
7.07 ADDITIONAL INVESTMENTS AND ACQUISITIONS. The Borrower shall
not, and shall not permit any of its Subsidiaries to, except as provided below,
directly or indirectly, invest in, purchase or acquire any interest in real
property (fee or leasehold) or any stocks, bonds, notes, debentures or other
securities of or acquire by purchase or otherwise all or substantially all of
the business or assets, or stock, partnership interests or other evidence of
ownership (beneficial or otherwise) or make any other investment in, any
corporation, association, partnership, organization or individual; or directly
or indirectly, make or commit to make any loan, advance, guaranty or extension
of credit to any corporation, association, partnership, organization or
individual; or directly or indirectly, assume, endorse, be or become liable for,
or guarantee directly or indirectly any debt or obligation of any corporation,
association, partnership, organization or individual; PROVIDED HOWEVER, that
notwithstanding the foregoing, the Borrower and its Subsidiaries may:
(a) make other real estate investments or
acquisitions, not in contravention of any provision of this Agreement or any
Requirement of Law; provided, however, the Borrower shall notify the Banks
and the Agents of such investments or acquisitions in states where the
Borrower is currently not operating no later than forty-five (45) days after
each Quarter.
(b) make other investments in an amount which shall
not exceed $2,000,000 in a Captive Insurance Subsidiary;
61
(c) make any other Permitted Investment, without the
necessity of obtaining the consent of the Majority Banks;
(d) make such guaranties as may be necessary in
support of the Senior Notes; and
(e) upon the completion of the Step1 Merger A
Transaction, make Western Pacific Advances subject to the following
conditions:
(i) the aggregate of such loan advances together
with any other form of credit support provided by the Borrower
or its Subsidiaries to Western Pacific shall not exceed
$25,000,000, provided, however, that such amounts shall
decline as follows:
(1) aggregate of loan advances shall not
exceed $20,000,000 by June 30, 2001;
(2) aggregate of loan advances shall not
exceed $15,000,000 by September 30, 2001; and
(3) aggregate of loan advances shall not
exceed $0 by December 31, 2001;
(ii) the Step 2 Merger A Transaction shall have been
completed;
(iii) Western Pacific shall have increased its
primary banking credit facility by not less than $25,000,000
to $200,000,000;
(iv) Western Pacific shall have made tax
distributions to its existing partners in an amount not to
exceed $43,800,000 during the period from December 1, 2000
through the closing of Merger A;
(v) Western Pacific shall deliver to the Agents a
certificate of a Responsible Officer of Western Pacific, in
the form of EXHIBIT G, stating that Western Pacific is in
compliance with all of the terms and conditions of all of its
loan obligations and no default has occurred thereunder, and
that Western Pacific shall use the proceeds of such Western
Pacific Advance to acquire new and/or improve existing real
property; provided, however, such real property shall not
include land that does not have residential zoning or that
does have residential zoning but does not have the provision
of potable water, sewage or other utilities available to the
boundary of such land;
(vi) if Western Pacific shall be in default under any
of its loan obligations, the dollar amount of all Western
Pacific Advances made by the Borrower or any of its
Subsidiaries to Western Pacific shall be deducted from
Tangible Net Worth for the purpose of determining Consolidated
Tangible Net Worth and Leverage Ratio; and
(vii) notwithstanding any other provision to the
contrary, the Borrower and its Subsidiaries shall not be
permitted to make any other investment, loan,
62
advance or extension of credit to, or guarantee or provide
any other credit enhancement on behalf of, Western Pacific,
except for the Western Pacific Advances permitted hereunder.
If the Borrower wishes to obtain the consent of the Majority Banks for any
proposed deviation from the above, the Borrower shall furnish to the
Administrative Agent, and the Administrative Agent shall forward to the Banks:
(i) a copy of all contracts to be entered into by the Borrower or its
Subsidiaries with respect to the proposed transaction, (ii) a pro forma budget
and cash flow projection for the proposed transaction, (iii) supporting market
studies and projections as deemed necessary by the Majority Banks, and (iv)
supporting appraisals and/or market evaluations, if required by the Majority
Banks. The Administrative Agent shall advise the Borrower of the decision by the
Majority Banks within thirty (30) days after the receipt by the Administrative
Agent of all of the required items described above.
7.08 INVENTORY RESTRICTIONS.
(a) The Borrower shall not, and shall not permit any
of its Subsidiaries to, acquire or obtain any interest in, or contract to
acquire or obtain any interest in, any Unentitled Land.
(b) The Borrower shall not, and shall any permit any
of its Subsidiaries to, allow their inventory of Completed Unsold Homes to
exceed the applicable levels set forth in SCHEDULE 2 attached hereto.
7.09 NEGATIVE PLEDGE. The Borrower and/or any of its Subsidiaries
shall not create, incur, assume, or suffer to exist any lien, encumbrance,
mortgage, security interest, pledge, or charge of any kind (including. without
limitation, any negative pledge, or any "secret", "springing", or other
unrecorded lien) upon any of their property or assets of any character, whether
now owned or hereafter acquired, or transfer any of such property or assets for
the purpose of subjecting the same to the payment of any indebtedness or
performance of any other obligation, or acquire or have an option to acquire any
property or assets upon conditional sale or other title retention agreement,
device or arrangement; provided, however, that the Borrower and its Subsidiaries
may create or incur or suffer to be created or incurred or to exist: (i) liens
for taxes or assessments for governmental charges or levies if payment thereof
shall not at the time be required to be made; (ii) liens in respect of pledges
and deposits under workers' compensation laws or similar legislation, and in
respect of pledges or deposits in connection with appeal or similar bonds
incidental to the conduct of litigation; (iii) liens incidental to the conduct
of the business of the Borrower and its Subsidiaries not incurred in connection
with the borrowing of money or the obtaining of advances or credit and which do
not in the aggregate materially detract from the value of their assets or
property; (iv) mechanics' and materialmen's liens which have attached pursuant
to Chapter 507, Hawaii Revised Statutes, or such similar statutes under the laws
of the applicable state, as long as the Borrower or its Subsidiaries have filed
a bond, sufficient to discharge such lien, with the clerk of the applicable
court, as provided in Section 507-43, Hawaii Revised Statutes, or such similar
statutes under the laws of the applicable state; and (v) liens specifically
allowed with respect to "Permitted Indebtedness". This negative pledge shall not
apply to any portion of the Borrower's or any of its Subsidiaries' property or
assets transferred, assigned or conveyed upon due consideration to a "Third
Party Purchaser". As used
63
herein, the term "Third Party Purchaser" shall mean any individual,
partnership, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture or governmental authority, other
than the Borrower or any of its Subsidiaries, Waiakoa Estates Subdivision
Joint Venture, Iao Partners, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
Goth, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇.
7.10 NO HIGH-RISE CONSTRUCTION. The Borrower shall not, and shall
not permit its Subsidiaries to, engage in any development of a residential or
commercial building having more than four (4) stories, other than Country Club
Village.
7.11 NO TRANSFER OF ASSETS. Except as may be permitted in Section
7.07, the Borrower or any of its Subsidiaries shall not transfer any assets or
property to any of the Borrower's Subsidiaries, without the prior written
consent of the Banks, which consent may be withheld by the Banks in their sole
discretion.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an
"Event of Default":
(a) NON-PAYMENT. The Borrower fails to pay, when and as
required to be paid herein, (i) any amount of principal of any Advance or
Swing-Line Advance; or (ii) any interest, fee or other amount payable hereunder
or pursuant to any other Loan Document, unless such failure to pay such
interest, fee or other charge is remedied within five (5) Business Days after
the due date therefor; or
(b) REPRESENTATION OR WARRANTY. Any representation or
warranty by the Borrower made or deemed made herein or which is contained in any
certificate, document or financial or other statement by or on behalf of the
Borrower, furnished at any time under this Agreement, shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. The Borrower fails to perform or
observe any term, covenant or agreement contained in Section 7.01; or
(d) OTHER DEFAULTS. Except as provided in subsection
8.01(l) below, the Borrower fails to perform or observe any other covenant
contained in this Agreement or any other Loan Document, and such default shall
continue unremedied for a period of 45 days after the earlier of (i) the date
upon which a Responsible Officer of the Borrower knew of such failure or (ii)
the date upon which written notice thereof is given to the Borrower by the
Administrative Agent or any Bank; or
(e) CROSS-DEFAULT. The Borrower or any Subsidiary of the
Borrower (i) fails to make any payment in respect of any other Indebtedness or
Guaranty Obligation having an aggregate principal amount for the Borrower and
such Subsidiaries (including undrawn
64
committed or available amounts and including amounts owing to all creditors
under any combined or syndicate credit arrangement) of more than $5,000,000
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise), if the effect of such failure is to cause the holder
or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to declare such Indebtedness to be due and
payable prior to its stated maturity, or such Guaranty Obligation to become
due and payable or to demand additional collateral therefor; or (ii) fails to
perform or observe in any material respect any other condition or covenant,
or any other event shall occur or condition exist, under any agreement or
instrument relating to any Indebtedness or Guaranty Obligation, if the effect
of such failure is to cause the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to declare
such Indebtedness to be due and payable prior to its stated maturity, or such
Guaranty Obligation to become due and payable or to demand additional
collateral therefor; or (iii) fails to make any payment in respect of or
perform or observe in any material respect any other condition or covenant of
the Senior Notes, if the effect is an event of default under the Senior
Notes; or
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Borrower or
any of its Subsidiaries (i) ceases or fails to be Solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course, except, in connection with a merger or acquisition of substantially all
of the assets of such Subsidiary by the Borrower or another Subsidiary of the
Borrower; (iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing; provided,
however, that the Merger Transaction shall not be considered an Event of Default
hereunder; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the Borrower or any of its
Subsidiaries, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of such party's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Borrower or any of its Subsidiaries admits the material
allegations of a petition against it in any Insolvency Proceeding, or an order
for relief (or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) the Borrower or any of its Subsidiaries acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its property or business; or
(h) ERISA.
(i) there shall exist an accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, with respect to any Plan (other than a
Multi-employer Plan) which does or would be reasonably expected to have
a Material Adverse Effect;
65
(ii) there shall occur a Reportable Event with
respect to any Plan (other than a Multi-employer Plan) which does or
would be reasonably expected to have a Material Adverse Effect;
(iii) any liability to the PBGC shall be incurred by
the Borrower or any of its Subsidiaries with respect to any Plan (other
than a Multi-employer Plan) which does or would be reasonably expected
to have a Material Adverse Effect;
(iv) The Borrower or any of its Subsidiaries shall
incur any withdrawal liability under Title IV of ERISA with respect to
any Multi-employer Plan which does or would be reasonably expected to
have a Material Adverse Effect; or
(i) MONETARY JUDGMENTS. One or more non-interlocutory
judgments, orders or decrees shall be entered against the Borrower or any of
its Subsidiaries involving in the aggregate (existing at any one time for
such entity) a liability (not fully covered by independent third-party
insurance) as to any single or related series of transactions, incidents or
conditions, of $5,000,000 or more, and the same shall remain unsatisfied,
unvacated, unbonded or unstayed pending appeal for a period of 60 days after
the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment,
order or decree shall be rendered against the Borrower or any of its
Subsidiaries which does or would reasonably be expected to have a Material
Adverse Effect, and there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(k) LOSS OF LICENSES. Any Governmental Authority shall
revoke or fail to renew any license, permit or franchise of the Borrower or
any Subsidiary of the Borrower, which revocation or failure to renew does or
would reasonably be expected to have a Material Adverse Effect, or any such
entity shall for any reason lose any license, permit or franchise, and such
loss does or would reasonably be expected to have a Material Adverse Effect;
or any such entity shall suffer the imposition of any restraining order,
escrow, suspension or impound of funds in connection with any proceeding
(judicial or administrative) with respect to any license, permit or franchise
and such imposition does or would reasonably be expected to have a Material
Adverse Effect; or
(l) COMPLETED UNSOLD HOMES. The Borrower fails to
perform or observe any term, covenant or agreement contained in Section
7.08(b), and such failure shall remain unremedied by the end of the next
succeeding Quarter after the earlier of (i) the date upon which a Responsible
Officer of the Borrower knew of such failure or (ii) the date upon which
written notice thereof is given to the Borrower by the Administrative Agent
or any Bank (the "cure period"); provided however that following any such
failure and during any such cure period, a Responsible Officer of the
Borrower shall provide the Administrative Agent with a weekly status report
of all Completed Unsold Homes; and provided further that if at any time
during such cure period the number of Completed Unsold Homes exceeds 110% of
the level set forth in SCHEDULE 2, then the cure period shall automatically
be terminated, and an Event of Default hereunder shall be deemed to have
occurred.
66
(m) OWNERSHIP/MANAGEMENT. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall fail
at any time to retain any ownership or management interests as required by
Section 6.12 hereof; PROVIDED, HOWEVER, that the death or disability of ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ shall not constitute an Event of Default hereunder if the Board of
Directors of the Borrower and of the Holding Company, respectively and as
applicable, shall, within a reasonable time thereafter, appoint an Eligible
Successor, subject to the approval of the Super Majority Banks, which
approval shall not be unreasonably withheld.
(n) ADVERSE CHANGE. There shall occur a Material
Adverse Effect, and the existence thereof shall continue unremedied for a
period of 30 days after the earlier of (i) the date upon which a Responsible
Officer of the Borrower knew of the occurrence of the event resulting in such
Material Adverse Effect or (ii) the date upon which written notice thereof is
given to the Borrower by the Administrative Agent or any Bank.
(o) FAILURE OF STEP 2 MERGER A TRANSACTION. If the
Step 1 Merger A Transaction shall have been completed, and the Step 2 Merger
A Transaction shall fail to be completed pursuant to Section 2.5 of the
Reorganization Plan.
(p) FAILURE OF HOLDING COMPANY TO EXECUTE LOAN
DOCUMENTS. If the Merger B Transaction shall have been completed and the
Holding Company shall fail to execute the Fifth Amended and Restated
Revolving Credit Agreement in the form of Exhibit "I" attached hereto and the
Fifth Amended and Restated Promissory Note in the form of Exhibit "J"
attached hereto.
8.02 REMEDIES. If any Event of Default occurs, the Administrative
Agent shall, at the request of the Majority Banks,
(a) declare the Revolving Commitment of each Bank, and
any obligation of such Bank to make Advances hereunder, and any obligation of
the Administrative Agent to make Swing-Line Advances or to issue Letters of
Credit hereunder, to be terminated, whereupon such Revolving Commitments and
obligations shall forthwith be terminated;
(b) declare the amounts of all issued and outstanding
Letters of Credit to be outstanding Advances hereunder (unless the Borrower
shall have deposited with the Administrative Agent cash in an amount sufficient
to fully collateralize all outstanding Letters of Credit as of such date, as
provided in Section 2.05 hereof) and declare the unpaid principal amount of all
outstanding Advances, all interest accrued and unpaid thereon, all Swing-Line
Advances, all interest accrued and unpaid thereon, and all other amounts owing
or payable hereunder or under any other Loan Document, including any fees,
charges and other sums payable pursuant to Section 2.11 hereof or otherwise, 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 Borrower;
and
(c) 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;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in paragraph
(f) or (g) of Section 8.01 (in the case of clause (i) of paragraph (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Advances and of the Administrative
67
Agent to make Swing-Line Advances shall automatically terminate and the
unpaid principal amount of all outstanding Advances (including the amount of
all issued and outstanding Letters of Credit which shall be automatically
deemed to be Advances, unless the Borrower shall have deposited with the
Administrative Agent cash in an amount sufficient to fully collateralize all
outstanding Letters of Credit as of such date, as provided in Section 2.05
hereof) and all outstanding Swing-Line Advances, and all interest and other
amounts as aforesaid, shall automatically become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower, and without further act of the
Administrative Agent or any Bank.
8.03 RIGHTS NOT EXCLUSIVE. The rights 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 IX
THE AGENTS
9.01 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints, designates and authorizes each of the Agents to take such action on
such Bank's 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, neither Agent shall have any duties or responsibilities,
except those expressly set forth herein, nor shall any 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 either
Agent.
9.02 DELEGATION OF DUTIES. The Agents 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 Agents shall not be responsible to the
Banks for the negligence or misconduct of any agent or attorney-in-fact that it
selects with reasonable care, except to the extent such negligence or misconduct
is determined to be gross negligence or willful misconduct.
9.03 LIABILITY OF THE AGENTS. None of the Agent-Related Persons
shall (i) be liable to any of the Banks 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 (except for such Agent-Related Person's own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Banks
for any recital, statement, representation or warranty made by the Borrower, any
Subsidiary or Affiliate of the Borrower, 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
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness,
68
enforceability or sufficiency of this Agreement or any other Loan Document,
or for any failure of the Borrower, its Subsidiaries or any other party to
any Loan Document to perform its obligation 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 Borrower, or any
Subsidiary or any Affiliate of the Borrower.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative 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 Borrower), independent accountants and other
experts selected by the Administrative Agent. The Administrative 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 the Majority Banks (or all of the Banks where this
Agreement expressly so provides) 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 (other
than any portion of such liability or expense resulting solely from the
Administrative Agent's gross negligence or willful misconduct) by reason of
taking or continuing to take any such action. The Administrative 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 the Majority Banks (or all of the Banks where this Agreement
expressly so provides) and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the
conditions specified in Section 4.01, 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
Administrative 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 such Bank.
9.05 NOTICE OF DEFAULT. The Administrative 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 Administrative Agent for the
account of the Banks, unless the Administrative Agent shall have received
written notice from a Bank or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"Notice of Default". In the event that the Administrative Agent receives such
a notice, the Administrative Agent shall give notice thereof to the Banks.
The Administrative Agent shall take such action with respect to such Default
or Event of Default as shall be requested by the Majority Banks in accordance
with Article VIII; PROVIDED, HOWEVER, that unless and until the
Administrative Agent shall have received any such request, the Administrative
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 reasonably deem advisable.
69
9.06 CREDIT DECISION. Each Bank expressly acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it and that
no act by the Administrative Agent hereafter taken, including any review of the
affairs of the Borrower, and each of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Bank. Each Bank represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent 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 Borrower,
and each of its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated thereby, and made its own decision to enter
into this Agreement and extend credit to the Borrower hereunder. Each Bank also
represents that it will, independently and without reliance upon the
Administrative Agent 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 Borrower. Except for notices,
reports and other documents expressly herein required to be furnished to the
Banks by the Administrative Agent (which shall be deemed to include documents
delivered to the Administrative Agent with sufficient copies for each Bank
pursuant to Sections 4.01, 6.01 and 6.02), the Administrative 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 Borrower which may come into the
possession of any of the Agent-Related Persons.
9.07 INDEMNIFICATION. Whether or not the transactions contemplated
hereby shall be consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), ratably
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever which may at any time (including at any time following the
repayment of the Advances and the termination or resignation of the
Administrative Agent) be imposed on, incurred by or asserted against any such
Person in any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any such Person
under or in connection with any of the foregoing; PROVIDED, HOWEVER, that no
Bank shall be liable for the payment of the Agent-Related Persons of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Person's
gross negligence or willful misconduct. Without limiting the foregoing, but
subject to the proviso in the immediately preceding sentence, each Bank shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including fees and disbursements for counsel,
allocated costs for internal legal services, and disbursements of internal
counsel) incurred by the Administrative Agent in 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 Administrative Agent is not reimbursed for such
70
expenses by or on behalf of the Borrower. Without limiting the generality of
the foregoing, if the Internal Revenue Service or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that the
Administrative 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
Administrative 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 Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed
by any jurisdiction on the amounts payable to the Administrative Agent under
this Section, together with all costs and expenses and attorneys' fees
(including fees and disbursements of counsel, allocated costs of internal
legal services, and all disbursements of internal counsel). The obligation of
the Banks in this Section shall survive the payment of all Obligations
hereunder.
9.08 ADMINISTRATIVE AGENT AND DOCUMENTATION AGENT EACH IN
INDIVIDUAL CAPACITY. First Hawaiian Bank and its Affiliates and Bank of America,
N.A. 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 or other business with
the Borrower, and any and all Subsidiaries and Affiliates of the Borrower as
though First Hawaiian Bank was not the Administrative Agent and Bank of America,
N.A. was not the Documentation Agent hereunder and without notice to or consent
of the Banks. With respect to its Advances, First Hawaiian Bank and Bank of
America 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 Administrative Agent
and Documentation Agent, respectively, and the terms "Bank" and "Banks" shall
include First Hawaiian Bank and Bank of America, N.A. in their individual
capacities.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may,
and at the request of all of the other Banks shall, resign as Administrative
Agent upon 30 days' notice to the Banks. If the Administrative Agent shall
resign as Administrative Agent under this Agreement, the Banks (other than the
Administrative Agent) holding 66% of the balance of the Aggregate Commitment
(i.e., the Aggregate Commitment less the Revolving Commitment held by the
Administrative Agent) shall, with the approval of the Borrower, appoint from
among the Banks a successor agent for the Banks. If no successor agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Banks and
the Borrower, a successor agent from among the Banks. 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 Administrative Agent and the
term "Administrative Agent" shall mean such successor agent and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor agent has accepted appointment as Administrative
Agent by the date which is 30 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform
71
all of the duties of the Administrative Agent hereunder until such time, if
any, as a successor agent is appointed, as provided for above.
9.10 DOCUMENTATION AGENT. Bank of America N.A. in its capacity as
the Documentation Agent shall not have any duties or responsibilities except
those that may be required from time to time by the Administrative Agent and
accepted in writing by Bank of America N.A.
ARTICLE X
MISCELLANEOUS
10.01 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 by the Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Majority Banks and the Borrower
and acknowledged by the Administrative Agent, and then such waiver 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 Borrower and acknowledged
by the Administrative Agent, do any of the following:
(a) increase the amount of or extend the term of the
Revolving Commitment of any Bank (or reinstate any commitment terminated
pursuant to subsection 8.02(a)) or subject any Bank to any additional
obligations;
(b) postpone or delay any date fixed 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;
(c) reduce the principal of, or the rate of interest
specified herein on any Advance, or of any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the Commitment Percentage or the percentage of
the Aggregate Commitment which shall be required for the Banks or any of them to
take any action hereunder;
(e) amend this Section 10.01 or Section 2.15 or any
provision providing for consent or other action by all Banks;
(f) discharge any Guarantor;
(g) amend any of the Events of Default set forth in
Section 8.01; or
(h) amend the definition of Majority Banks;
and, PROVIDED FURTHER, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Majority Banks
or all the Banks, as the case may
72
be, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document.
10.02 NOTICES
(a) All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission), provided that any
matter transmitted by the Borrower by facsimile (i) shall be immediately
confirmed by a telephone to the recipient at the number specified on the
applicable signature page hereof, and (ii) shall be followed promptly by a hard
copy original thereof, and, provided further that any notice, request or other
communications by the Borrower hereunder shall be signed by a Responsible
Officer of the Borrower, and mailed, faxed or delivered, to the address or
facsimile number specified for notices on the applicable signature page hereof;
or, if directed to the Borrower or the Administrative Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and if directed to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent.
(b) All such notices, requests and communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date deposited
into the U.S. mail, or if delivered, upon delivery.
(c) The Borrower acknowledges and agrees that any
agreement of the Administrative Agent and the Banks at Article II to receive
certain notices by telephone and facsimile is solely for the convenience and at
the request of the Borrower. The Administrative Agent and the Banks shall be
entitled to rely on the authority of any Person purporting to be a Person
authorized by the Borrower to give such notice and the Administrative Agent and
the Banks shall not have any liability to the Borrower or any other Person on
account of any action taken or not taken by the Administrative Agent or the
Banks in reliance upon such telephonic or facsimile notice. The obligation of
the Borrower to repay the Advances shall not be affected in any way or to any
extent by any failure by the Administrative Agent and the Banks to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Banks of a confirmation which is at variance with
the terms understood by the Administrative Agent and the Banks to be contained
in the telephonic or facsimile notice.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative 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.
10.04 COSTS AND EXPENSES. The Borrower shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) pay or reimburse First Hawaiian Bank (including First
Hawaiian Bank in its capacity as Administrative Agent) within five Business Days
after demand (subject to subsection 4.01(d)) for all reasonable out-of-pocket
costs and expenses incurred by First
73
Hawaiian Bank (including in its capacity as Administrative Agent) in
connection with the development, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any other Loan
Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including the reasonable fees and disbursements of counsel, with
respect thereto; and
(b) pay or reimburse each Bank and the Administrative
Agent within five Business Days after demand (subject to subsection 4.01(d)) for
all reasonable costs and expenses incurred by them, in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
(including in connection with any "workout" or restructuring regarding the
Advances, and including in any Insolvency Proceeding or appellate proceeding)
under this Agreement, any other Loan Document, and any such other documents,
including reasonable fees and disbursements of counsel, the allocated costs of
internal legal services and disbursements of internal counsel incurred by the
Administrative Agent and any Bank.
The agreements in this Section shall survive payment of all other Obligations.
10.05 INDEMNITY. Whether or not the transactions contemplated hereby
shall be consummated: the Borrower shall pay and indemnify and hold harmless
each Bank, the Administrative Agent and each of their respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges, expenses
and disbursements (including all fees and disbursements of counsel, the
allocated costs of internal legal services, and disbursements of internal legal
counsel) of any kind or nature whatsoever arising from claims brought by third
parties (except for such Indemnified Person's own gross negligence or willful
misconduct) with respect to and to the extent arising from the Borrower's
execution, delivery, enforcement or performance of this Agreement and any other
Loan Documents, or the Borrower's use of the proceeds of the Advances, or
arising from the action or failure to act of the Borrower, any of its
Subsidiaries or their respective officers, directors, employees, counsel, agents
or attorneys-in-fact (all the foregoing, collectively, the "Indemnified
Liabilities"). The agreements in this Section shall survive payment of all other
Obligations.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Administrative
Agent nor the Banks shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets in
favor of the Borrower or any other Person or against or in payment of any or all
of the Obligations. To the extent that the Borrower makes a payment or payments
to the Administrative Agent or the Banks, or the Administrative Agent or the
Banks exercise their rights of set-off, and such payment or payments or the
proceeds of such enforcement or 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 Administrative Agent
in its discretion) to be repaid to a trustee, receiver or any other party in
connection with any Insolvency Proceeding, or otherwise, then 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 enforcement or set-off had not occurred.
74
10.07 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 (i) the Borrower may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent and each Bank, (ii) the
Administrative Agent may not assign or transfer any of its rights or obligations
except as provided in Section 9.09, and (iii) no Bank may assign its rights and
obligations except (a) as provided in Section 2.09, (b) as provided in Section
3.06, and (c) as provided in Section 10.08.
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Upon notice to the Administrative Agent and the
Borrower, any Bank may, as long as no Event of Default has occurred or is
occurring, sell to one or more commercial banks or other Persons not Affiliates
of the Borrower (a "Participant") participating interests in any Advances, the
Revolving Commitment of that Bank and the other interests of that Bank (the
"originating Bank") hereunder and under the other Loan Documents, PROVIDED,
HOWEVER, that the Borrower shall have no additional expense as a result of such
participation, and PROVIDED, FURTHER, that (i) the originating Bank's
obligations under this Agreement shall remain unchanged, (ii) the originating
Bank shall remain solely responsible for the performance of such obligations,
(iii) the Borrower and the Administrative 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
(iv) no Bank shall transfer or grant any participating interest under which the
Participant shall have rights to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan Document. In the case
of any participation, the Participant shall be entitled to the benefit of
Sections 3.01, 3.03 and 10.05 as though it were also a Bank hereunder, and not
have any other rights under this Agreement, or any of the other Loan Documents,
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation; except that, 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.
(b) From time to time following the Closing Date, each
Bank may assign to one or more Eligible Assignee all or any portion of its
Revolving Commitment; PROVIDED that (i) such Eligible Assignee shall be approved
by the Administrative Agent (which approval shall not be unreasonably withheld)
and by the Borrower (which approval shall not be unreasonably withheld and which
approval shall not be necessary after an Event of Default has occurred and is
continuing), (ii) such assignment shall be evidenced by a "Commitment Assignment
and Acceptance" (in the form of Exhibit "H" attached hereto), a copy of which
shall be furnished to the Administrative Agent as hereinbelow provided; (iii)
EXCEPT in the case of an assignment to an Affiliate of an assigning Bank, to
another Bank or of the entire remaining Revolving Commitment of the assigning
Bank, the assignment shall not assign a portion of the Revolving Commitment
which is less than $15,000,000 and that is not an integral multiple of
$5,000,000 (which restrictions shall not apply while an Event of Default has
occurred and is continuing), and (iv) the effective date of any such assignment
shall be as specified in the Commitment Assignment and Acceptance, but not
earlier than the date which is five (5) Business Days after
75
the date the Administrative Agent has received the Commitment Assignment and
Acceptance. Upon the effective date of such Commitment Assignment and
Acceptance, the Eligible Assignee named therein shall be a Bank for all
purposes of this Agreement with the Revolving Commitment therein set forth
and, to the extent of such assigned Revolving Commitment, the assigning Bank
shall be released from its further obligations under this Agreement.
(c) By executing and delivering a Commitment Assignment
and Acceptance, the Eligible Assignee thereunder acknowledges and agrees that:
(i) other than the representation and warranty that it is the legal and
beneficial owner of the Revolving Commitment being assigned thereby free and
clear of any adverse claim, the assigning Bank has made no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness or sufficiency of
this Agreement or any other Loan Document; (ii) the assigning Bank has made no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance by the Borrower of its
obligations under this Agreement; (iii) it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to this Agreement and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Commitment Assignment and Acceptance; (iv) it will, independently and
without reliance upon the Administrative Agent, or any Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) it appoints and authorizes the Administrative Agent to take such
action and to exercise such powers as are delegated to the Administrative Agent
by this Agreement; and (vi) it will perform in accordance with their terms all
of the obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(d) After receipt of a completed Commitment Assignment
and Acceptance executed by an assigning Bank and an Eligible Assignee, and
receipt of an assignment fee of $3,500 from such Eligible Assignee, the
Administrative Agent shall, at least one (1) Business Day prior to the effective
date thereof, provide to the Borrower and the Banks a revised Schedule "1",
giving effect thereto.
(e) Each Bank agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" by the Borrower and provided to it by
the Borrower or any Subsidiaries of the Borrower, or by the Administrative Agent
on the Borrower's or such Subsidiary's behalf, in connection with this Agreement
or any other Loan Document, and neither such Bank nor any of its Affiliates
shall disclose any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement, except to the extent such
information was or becomes generally available to the public other than as a
result of a disclosure by such 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 such 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
Administrative Agent, any Bank or their respective Affiliates may be party; (E)
to the extent
76
reasonably required in connection with the exercise of any remedy hereunder
or under any other Loan Document; and (F) to such Bank's independent auditors
and other professional advisors. Notwithstanding the foregoing, the Borrower
authorizes each Bank to disclose to any assignee and proposed assignee, and
to any Participant and any prospective Participant, such financial and other
information in such Bank's possession concerning the Borrower or its
Subsidiaries which has been delivered to the Administrative Agent or the
Banks pursuant to this Agreement or which has been delivered to the
Administrative Agent or the Banks by the Borrower in connection with the
Banks' credit evaluation of the Borrower prior to entering into this
Agreement; PROVIDED that, unless otherwise agreed by the Borrower, such
recipient agrees in writing to such Bank to keep such information
confidential to the same extent required of the Banks hereunder.
(f) Notwithstanding any other provision contained in this
Agreement or any other Loan Document to the contrary, any Bank may assign all or
any portion of the Advances made by it to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation A of the Federal
Reserve Board and any Operating Circular issued by such Federal Reserve Bank,
provided that any payment in respect of such assigned Advances made by the
Borrower to or for the account of the assigning or pledging Bank in accordance
with the terms of this Agreement shall satisfy the Borrower's obligations
hereunder in respect of such assigned Advances to the extent of such payment. No
such assignment shall release the assigning Bank from its obligations hereunder.
10.09 SET-OFF. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists, each Bank is authorized at any
time and from time to time, without prior notice to the Borrower, any such
notice being waived by the Borrower 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) at any time held by, and other indebtedness at any time
owing to, such Bank to or for the credit or the account of the Borrower against
any and all Obligations owing to such Bank, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Banks shall have
made demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured. Each Bank agrees promptly to notify
the Borrower and the Administrative 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. The rights of each Bank
under this Section are in addition to the other rights and remedies (including
other rights of set-off) which such Bank may have.
10.10 AUTOMATIC DEBITS OF FEES. Upon approval by the Borrower of any
invoice with respect to any fee, or any other cost or expense (including fees
and disbursements of counsel, the allocated costs of internal legal services and
disbursements of internal counsel) due and payable to the Administrative Agent
under the Loan Documents, the Borrower hereby irrevocably authorizes the
Administrative Agent to debit any deposit account of the Borrower with the
Administrative Agent in an amount such that the aggregate amount debited from
all such deposit accounts does not exceed such fee or other cost or expense. If
there are insufficient funds in such deposit accounts to cover the amount of the
fee or other cost or expense then due, such debits will be reversed (in whole or
in part, in the Administrative 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 setoff.
77
10.11 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank
shall notify the Administrative Agent in writing of any changes in the address
to which notices to such Bank should be directed, of addresses of any of its
Lending Offices, of payment instructions in respect of all payments to be made
to it hereunder and of such other administrative information as the
Administrative Agent shall reasonably request.
10.12 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement in any number of 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. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
10.13 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.14 NO THIRD PARTIES BENEFITTED. This Agreement is made and
entered into for the sole protection and legal benefit of the Borrower, the
Banks and the Administrative Agent, 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. Neither the Administrative Agent
nor any Bank shall have any obligation to any Person not a party to this
Agreement or other Loan Documents.
10.15 TIME. Time is of the essence as to each term or provision of
this Agreement and each of the other Loan Documents.
10.16 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF HAWAII; PROVIDED THAT THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE
OF HAWAII OR OF THE UNITED STATES FOR THE DISTRICT OF HAWAII, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS EACH
78
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY
BE MADE BY ANY OTHER MEANS PERMITTED BY HAWAII LAW.
10.17 WAIVER OF JURY TRIAL. THE BORROWER, THE BANKS AND THE
ADMINISTRATIVE AGENT EACH WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE BANKS AND THE
ADMINISTRATIVE AGENT EACH AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY ARE WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 ENTIRE AGREEMENT. This Agreement (together with the Exhibits
and Schedules attached hereto), and the other Loan Documents, embodies the
entire agreement and understanding among the Borrower, the Banks and the
Administrative Agent, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof; PROVIDED, that the agency fee letter agreement
referenced in subsection 2.11(e) shall govern the payment by the Borrower to the
Administrative Agent of such agency fee, and that the relationship between the
Administrative Agent and the Banks, and among the Banks themselves, shall also
be subject to the terms and provisions of the Inter-Bank Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
▇▇▇▇▇▇▇ HOMES, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President of Finance
"Borrower"
79
FIRST HAWAIIAN BANK, as Administrative
Agent and Syndication Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Assistant Vice President
ADDRESS FOR PAYMENTS:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Division
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Division
BANK OF AMERICA, N.A, as Documentation
Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
ADDRESS FOR NOTICES:
Bank of America National Trust and Savings
Association
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
80
FIRST HAWAIIAN BANK, as a Bank
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Assistant Vice President
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Division
DOMESTIC AND OFFSHORE LENDING OFFICE:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Division
ADDRESS FOR PAYMENTS:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Division
81
BANK OF AMERICA N.A, as a Bank
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
ADDRESS FOR NOTICES:
Bank of America National Trust and Savings
Association
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
DOMESTIC AND OFFSHORE LENDING OFFICE:
Bank of America National Trust and Savings
Association
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ADDRESS FOR PAYMENTS:
82
BANK ONE, ARIZONA, NA
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
ADDRESS FOR NOTICES:
Bank One, Arizona, N.A.
Corporate Real Estate
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DOMESTIC AND OFFSHORE LENDING OFFICE:
Bank One, Arizona, N.A.
Corporate Real Estate
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ADDRESS FOR PAYMENTS:
Bank One, Arizona, N.A.
Real Estate Loan Administration
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Real Estate Loan Administration
AZ1-1328
83
FLEET NATIONAL BANK
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
ADDRESS FOR NOTICES:
FLEET NATIONAL BANK
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DOMESTIC AND OFFSHORE LENDING OFFICE:
FLEET NATIONAL BANK
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ADDRESS FOR PAYMENTS:
FLEET NATIONAL BANK
Commercial Loan Services
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
84
BANK OF HAWAII
By /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
ADDRESS FOR NOTICES:
Bank of Hawaii
CIPLD #▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
DOMESTIC AND OFFSHORE LENDING OFFICE:
Bank of Hawaii
CIPLD #366
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
ADDRESS FOR PAYMENTS:
Bank of Hawaii
CIPLD #▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
85
U.S. BANK NATIONAL ASSOCIATION
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
ADDRESS FOR NOTICES:
U.S. Bank National Association
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
DOMESTIC AND OFFSHORE LENDING OFFICE:
U.S. Bank National Association
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
ADDRESS FOR PAYMENTS:
U.S. Bank National Association
Commercial Loan Service Center West
▇▇▇ ▇▇ ▇▇▇ ▇▇-▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
86
COMERICA BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ADDRESS FOR NOTICES:
US Mail: Overnight Mail:
Comerica Bank Comerica Bank
▇.▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ MO 3256
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
DOMESTIC AND OFFSHORE LENDING OFFICE:
Comerica Bank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
ADDRESS FOR PAYMENTS:
Comerica Bank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
87