EXHIBIT 10.1
CREDIT
AGREEMENT
THIS is an
agreement (the “Agreement”) made this 2nd day of
September, 2009, by FIRST HAWAIIAN BANK, a Hawaii corporation, as
lender, and PACIFIC OFFICE PROPERTIES, L.P., a Delaware limited
partnership, as borrower.
This Agreement
concerns the establishment of a credit facility in the amount of
TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) made available to
the Borrower by the Lender, pursuant to which the Borrower may
obtain Advances from the Lender, and may request the Lender to
issue Letters of Credit for its account, all upon the terms and
conditions set forth below.
In
consideration of the mutual covenants hereinafter set forth, and
intending to be legally bound thereby, the Borrower and the Lender
hereby agree as follows:
SECTION
1. Definitions .
As used in this
Agreement, each of the following terms shall have the meaning set
forth below with respect thereto:
“
Advance ” means a disbursement of loan proceeds
pursuant to the terms and conditions set forth in Section 2 of this
Agreement.
“
Banking Day ” means a day on which First Hawaiian Bank
is open for business in the State of Hawaii.
“
Borrower ”means Pacific Office Properties, L.P., a
Delaware limited partnership
“
Closing Date ” means the date on which the Lender
determines that all of the conditions set forth in Section 4 of
this Agreement have been satisfied.
“
Code ” means the Internal Revenue Code of 1986, as
amended from time to time.
“
Commercial Letter of Credit ” means a Letter of Credit
issued by the Lender, as issuer, for the account of the Borrower,
in favor of a named beneficiary, the purpose of which is to provide
a payment mechanism for the sale of goods by the beneficiary to the
Borrower.
“
Commitment ” means the Lender’s agreement to
make Advances of loan proceeds to the Borrower, and to issue
Letters of Credit for the account of the Borrower, pursuant to, but
subject to the terms and conditions of, this Agreement and, where
the context so requires, the aggregate principal amount of all
Advances disbursed or to be disbursed, and all Letters of Credit
issued or to be issued, thereunder. The amount of the
Commitment shall be TEN MILLION AND NO/100 DOLLARS
($10,000,000.00).
“
Compliance Certificate ” means the certificate in the
form attached hereto as Exhibit “1” and made a part
hereof.
“
Event of Default ” means any of the events described
in Section 7.1 of this Agreement.
“
Expenses ” means the fees, costs and expenses
described in Section 6.7 of this Agreement.
“
GAAP ” means generally accepted accounting
principles.
“
Lender ” means First Hawaiian Bank, a Hawaii
corporation.
“
Letter of Credit ” means a Commercial Letter of Credit
or a Standby Letter of Credit, issued by the Lender at the request
of, and for the account of, the Borrower, as provided in Section
2.3 of this Agreement.
“ Loan
Documents ” means all of the documents and instruments
executed by or for the benefit of the Borrower in connection with
the Commitment, including, without limitation, this Agreement, the
Note, and the Pledge and Security Agreement.
“
Maturity Date ” means (a) September 2, 2011, or (b)
the date, following the occurrence of an Event of Default, on which
the Lender notifies the Borrower that the entire Principal Balance,
together with all accrued interest thereon, the amount of all
outstanding Letters of Credit, and all fees, charges, expenses and
other sums payable under this Agreement and the other Loan
Documents, shall become due and payable.
“
Note ” means the promissory note dated the date of
this Agreement, executed by the Borrower in favor of the Lender,
evidencing the Borrower’s agreement to repay the Principal
Balance hereunder, together with interest thereon, as provided
therein.
“
Pledgor ” means Shidler Equities L.P., a Hawaii
limited partnership
“
Principal Balance ” means (i) the aggregate
outstanding principal balance of all Advances, (ii) the aggregate
principal amount of all Letters of Credit that have been
negotiated, and (iii) upon the occurrence of an Event of Default,
the aggregate principal amount of all Letters of Credit that are
issued and outstanding.
“
Pledge and Security Agreement ” means that certain
Pledge and Security Agreement dated the date of this Agreement,
executed by the Pledgor and the Lender, pledging to the Lender the
Pledgor’s time certificate of deposit in the principal amount
of $10,000,000.00.
“
Standby Letter of Credit ” means a Letter of Credit
issued by the Lender, as issuer, for the account of the Borrower,
in favor of a named beneficiary, the purpose of which is to assure
the performance by the Borrower of certain contractual obligations
of the Borrower to the beneficiary.
“
Standby Letter of Credit Fee ” means an annual fee in
an amount equal to one percent (1%) multiplied by the amount of
each Standby Letter of Credit issued hereunder, payable by the
Borrower to the Lender quarterly in advance, as provided in Section
6.8 of this Agreement.
SECTION
2. The Commitment .
2.1
Amount . The Lender agrees, subject to the terms
and conditions contained in this Agreement, to make Advances to the
Borrower and to issue Letters of Credit for the account of the
Borrower, in the aggregate amount which shall not exceed, at any
one time, the amount of the Commitment. Within the
limits of the Commitment, and subject to the terms and conditions
contained herein, the Borrower may borrow, repay and
reborrow.
2.2
Advances . Applications for each desired Advance
under this Agreement shall be made by the Borrower in accordance
with the terms and provisions of the Note. The Borrower
shall use the proceeds of the Advances for working capital and
general corporate purposes, consistent with its real estate
operations, and for such other purposes as the Lender may
approve.
2.3
Letters of Credit . Applications for each desired
Letter of Credit under this Agreement shall be made by the Borrower
to the Lender on (i) an Application and Agreement for Commercial
Letter of Credit in the form attached hereto as Exhibit
“2” and made a part hereof (as the same may be revised
by the Lender from time to time) or (ii) an Application and
Agreement for Standby Letter of Credit in the form attached hereto
as Exhibit “3” and made a part hereof (as the same may
be revised by the Lender from time to time), delivered to the
Lender no later than three (3) Banking Days prior to the date the
Letter of Credit is desired. Each Letter of Credit shall
be for an amount which is at least $25,000.00. The expiry date of
any Letter of Credit shall be no later than the Maturity Date (
September 2, 2011); provided, however, that for any Letter of
Credit with a expiry date later than the Maturity Date, the
Borrower shall, no later than the date which is thirty (30) days
prior to the Maturity Date, either (a) make arrangements
satisfactory to the Lender for a credit facility to support all
Letters of Credit outstanding as of such date (i.e., the date which
is thirty (30) days prior to the Maturity Date), or (b) deposit
with the Lender cash sufficient to fully collateralize all Letters
of Credit outstanding as of such date (i.e., the date which is
thirty (30) days prior to the Maturity Date). The
aggregate amount of all Letters of Credit issued and outstanding at
any one time may not exceed Two Million Dollars
($2,000,000.00), and the amount of the Commitment
available to the Borrower for Advances shall be reduced by the
aggregate amount of all Letters of Credit issued and outstanding at
any one time. In addition to the Standby Letter of
Credit Fee payable by the Borrower pursuant to Section 6.8 of this
Agreement, for Standby Letters of Credit issued hereunder, the
Borrower shall, at the time of the issuance of each Letter of
Credit, pay to the Lender its standard letter of credit issuance
fee. The Borrower shall also pay to the Lender its
standard amendment and negotiation fees, upon any amendment or
negotiation of any Letters of Credit. Upon the
negotiation of any Letter of Credit and the payment by the Lender
of the amount drawn thereunder, the amount so drawn shall become
and be deemed part of the Principal Balance. Upon the
occurrence of an Event of Default hereunder, the full amount of any
outstanding Letter of Credit shall become and be deemed part of the
Principal Balance. The Letters of Credit shall be issued
for general corporate purposes, consistent with the
Borrower’s real estate operations, and for such other
purposes as the Lender may approve.
2.4
Interest . Interest on the Principal Balance
shall accrue as provided in the Note. Interest shall not
accrue on any Letter of Credit until the same shall have been
negotiated by the beneficiary and paid by the Lender.
2.5
Payments . The Borrower shall pay to the Lender
interest on the Principal Balance as provided in the
Note. The Borrower shall repay the Principal
Balance, all accrued but unpaid interest thereon, and all fees,
charges and other sums payable under the Loan Documents, to the
Lender on the Maturity Date. The Borrower may prepay
principal on the terms and conditions set forth in the
Note.
2.6
Pledge and Security Agreement . In order to
secure the due and punctual payment of the Note, and the observance
and performance by the Borrower of all of its obligations under the
Loan Documents, the Borrower shall, on or before the Closing Date,
deliver to the Lender the Pledge and Security Agreement, duly
executed by the Pledgor, in form and substance satisfactory to the
Lender.
2.7
Closing
. Closing of the Commitment shall be subject to the
satisfaction of all of the conditions precedent set forth in
Section 4 of this Agreement, and shall occur no later than
September 3, 2009.
SECTION
3. Representations and Warranties by the
Borrower .
The Borrower
represents and warrants to the Lender that:
3.1
Organization, Standing and Authority of Borrower
. The Borrower is a Delaware limited partnership duly
registered, validly existing and in good standing under the laws of
the State of Delaware, and has all requisite power and authority to
carry on the business and to own the property that it now carries
on and owns. The Borrower has all requisite power and
authority to execute and deliver the Loan Documents and to observe
and perform all of the provisions and conditions
thereof. The execution and delivery of the Loan
Documents have been duly authorized by the general partner of the
Borrower and no other partnership action of the Borrower is
requisite to the execution and delivery of the Loan
Documents.
3.2
Organization, Standing and Authority of Pledgor
. The Pledgor is a Hawaii limited partnership duly
registered, validly existing and in good standing under the laws of
the State of Hawaii, and has all requisite power and authority to
carry on the business and to own the property that it now carries
on and owns. The Pledgor has all requisite power and
authority to execute and deliver the Pledge and Security Agreement
and to observe and perform all of the provisions and conditions
thereof. The execution and delivery of the Pledge and
Security Agreement have been duly authorized by the general partner
of the Pledgor and no other partnership action of the Pledgor is
requisite to the execution and delivery of the Pledge and Security
Agreement.
3.3
Tax Returns and Payments . All tax returns and
reports of the Borrower required by law to be filed have been duly
filed, and all taxes, assessments, contributions, fees and other
governmental charges (other than those presently payable without
penalty or interest and those which have been disclosed to the
Lender but which are currently being contested in good faith) upon
the Borrower or upon the properties or assets or income of the
Borrower, which are due and payable, have been paid.
3.4
Litigation . There is, to the knowledge of the
Borrower, no action, suit, proceeding or investigation pending at
law or in equity or before any federal, state, territorial,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality or threatened against or
affecting the Borrower, which might materially adversely affect the
Borrower’s ability to perform its obligations under the Loan
Documents.
3.5
Compliance with Other Instruments, None Burdensome
. The Borrower is not in violation of or in default with
respect to any term or provision of its Partnership Agreement or
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 will not result in any such violation or be in
conflict with or constitute a default under any such term or
provision or result in the creation of any mortgage, lien or charge
on any of the properties or assets of the Borrower not contemplated
by this Agreement; and there is no term or provision of the
Partnership Agreement of the Borrower or any mortgage, indenture,
contract, agreement or instrument applicable to the Borrower or by
which it may be bound, which may adversely affect the business or
prospects or condition (financial or other) the Borrower or of any
of its properties or assets. Without limiting the
foregoing, the Borrower is not a party to, or otherwise subject to,
any agreement which limits the amount of, or otherwise imposes
restrictions on, the incurring of indebtedness by the Borrower of
the type contemplated by this Agreement.
3.6
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.
3.7
Governmental Authorization . No consent, approval
or authorization of, or registration, declaration or filing with,
any governmental or public body or authority in connection with the
valid execution and delivery of each of the Loan Documents is
required or, if required, such consent, approval, order or
authorization shall have been obtained prior to the Closing
Date.
3.8
Financial Statements . All financial statements
heretofore delivered to the Lender by the Borrower are true and
correct in all respects (consolidated financial statements of the
Borrower and the general partner of the Borrower), have been
prepared in accordance with GAAP, consistently applied, and fairly
represent the financial condition of the entities described therein
as of the dates thereof; and no material, adverse changes have
occurred in the financial condition reflected therein since the
dates thereof.
3.9.
No Merger, Consolidation, Etc. No proceeding
looking toward the merger, consolidation, sale of assets or
business, or dissolution or liquidation of the Borrower has been
commenced, and no such proceeding is contemplated.
3.10
Brokers, Finders and Agents . The Borrower has
not employed or engaged any broker, finder or agent who may claim a
commission or fee or other compensation with respect to the
Commitment. The Borrower will indemnify and hold the
Lender harmless from any and all claims of brokers or other claims
for commissions or fees in connection with the Commitment and will
further hold the Lender harmless and indemnify the Lender against
all losses, damages, costs and charges (including attorneys’
fees) which the Lender may sustain because of such claims or in
consequence of defending against such claims.
3.11
Character of Representations and Warranties
. None of the financial statements or any certificate or
statement furnished to the Lender by or on behalf of the
Borrower in connection with the Commitment, and none of the
representations and warranties in this Agreement, contains any
untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein or
herein not misleading. To the best knowledge of the
Borrower, there is no fact which materially adversely affects or in
the future (so far as the Borrower can now foresee) may materially
adversely affect the ability of the Borrower to observe or perform
its obligations under the Loan Documents which has not been set
forth herein or in a certificate or opinion of counsel or other
written statement furnished to the Lender by or on behalf of the
Borrower.
SECTION
4. Conditions of the Lender’s Obligation
.
The
Lender’s obligation to make Advances and to issue Letters of
Credit hereunder, are subject to the fulfillment, to its reasonable
satisfaction, of the following conditions:
4.1
Representations and Warranties True at Closing
. The representations and warranties contained in
Section 3 of this Agreement and otherwise made by or on behalf of
the Borrower in connection with the Commitment shall be true and
correct as of the time of each request by the Borrower for an
Advance or for the issuance of a Letter of Credit hereunder, with
the same effect as if made at such time.
4.2
Execution of Loan Documents . The Borrower shall
have executed and delivered to the Lender and the Lender shall have
approved, all of the Loan Documents.
4.3
Expenses . The Borrower shall have paid to the
Lender on the Closing Date all of the fees and expenses (including,
without limitation, fees and disbursements and expenses of legal
counsel for the Lender) provided for in Section 6.7 which the
Lender shall determine to be due and payable as of the Closing
Date.
4.4
No Event of Default . There shall exist at the
time each Advance is made and at the time each Letter of Credit is
issued, no condition or event which would constitute an Event of
Default or which, after notice or lapse of time, or both, would
constitute an Event of Default.
4.5
Opinion of Counsel . The Borrower shall have
delivered to the Lender, and the Lender shall have approved (a) an
opinion of legal counsel for the Borrower, in substantially the
form set forth in Exhibit “4” attached hereto and made
a part hereof, and (b) an opinion of legal counsel for the Pledgor,
in substantially the form set forth in Exhibit “5”
attached hereto and made a part hereof.
4.6
Partnership Proceedings and Documents . All
partnership proceedings taken by the Borrower in connection with
the Commitment shall be satisfactory in form and substance to the
Lender and its counsel, and the Lender shall have received; (i)
properly certified resolutions of the Board of Directors of the
general partner of the of the Borrower duly authorizing the
execution and delivery of the Loan Documents and the consummation
of the transactions contemplated hereby, (ii) a certificate of good
standing of the Borrower issued by the appropriate official of the
State of Delaware, (iii) a copy of the Partnership
Registration Statement of the Borrower, certified as true and exact
by said official; (iv) a copy of the Partnership Agreement of the
Borrower, certified as true, correct and complete by the general
partner of the Borrower, and (v) such authenticated copies of such
other partnership documents as the Lender may reasonably
request.
SECTION
5. Making of Advances and Issuance of Letters of
Credit .
Each Advance
shall be made and each Letter of Credit shall be issued upon and
subject to the following terms and conditions:
5.1
Application for Advances and Letters of Credit
. Applications for Advances shall be made as provided in
the Note. Applications for issuance of Letters of Credit
shall be made as provided in Section 2.3 hereof. Each
application for an Advance and each application for issuance of a
Letter of Credit shall be deemed a certification by the Borrower
that, as of the date of such application, all representations and
warranties contained in Section 3 are true and correct, and the
Borrower is in compliance with all of the provisions of Sections 4
and 5 of this Agreement. All statements contained in any
such application shall be deemed a representation and warranty
made by the Borrower in connection with the Commitment.
5.2
Conditions Precedent to Each Advance . The
Lender’s obligation to make each Advance hereunder shall be
subject to the fulfillment, to the Lender’s satisfaction, as
of the time of application and as of the time of the Advance, of
all of the conditions precedent set forth in this Section
5.2:
(a)
Representations and Warranties . The
representations and warranties contained in any application for an
Advance, or in Section 3 of this Agreement, or otherwise made by or
on behalf of the Borrower in connection with the Commitment, shall
be true and correct as of the time of each Advance made by the
Lender under this Agreement, with the same effect as if made at
such time.
(b)
No Event of Default . There shall exist at the
time of each Advance no condition which would constitute an Event
of Default or which, after notice or lapse of time, or both, would
constitute an Event of Default.
(c)
Payment of Expenses and Fees . The Borrower shall
have paid to the Lender all expenses provided for in Section 6.7
which the Lender shall determine to be due.
(d)
Insolvency, Bankruptcy, etc. The Borrower shall
not have become insolvent; or made an assignment for the benefit of
creditors; or failed generally to pay its debts as they become due;
or become the subject of an order for relief in an involuntary case
under the bankruptcy laws as now or hereafter constituted, and such
order shall remain in effect and unstayed for a period of sixty
(60) c
