REVOLVING LINE OF CREDIT NOTE
$30,000,000.00
San Francisco, California
September 30, 2005
FOR VALUE RECEIVED, the undersigned MATSON NAVIGATION COMPANY,
INC.
("Borrower") promises to pay to the order
of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its San Francisco
U.S. Corporate Banking Office at 550
California Street, MAC A0112-101, San
Francisco, CA 94104, or at such other
place as the holder hereof may designate,
in lawful money of the United States
of America and in immediately available
funds, the principal sum of Thirty
Million Dollars ($30,000,000.00), or so
much thereof as may be advanced and be
outstanding, with interest thereon, to be
computed on each advance from the date
of its disbursement as set forth
herein.
DEFINITIONS:
Capitalized terms defined in the Loan Agreement and used in this
Note
shall have herein the meanings ascribed to
them in the Loan Agreement. As used
herein, the following terms shall have the
meanings set forth after each, and
any other term defined in this Note shall
have the meaning set forth at the
place defined:
(a) "Advance Period" means the period commencing on the date of
this
Note and ending on the Initial Maturity
Date.
(b) "Business Day" means any day except a Saturday, Sunday or any
other
day on which commercial banks in California
are authorized or required by law to
close.
(c) "Fixed Rate Term" means a period commencing on a Business Day
and
continuing for 1, 2, 3, 6 or 12 months as
designated by Borrower, during which
all or a portion of the outstanding
principal balance of this Note bears
interest determined in relation to LIBOR;
provided however, that (i) no Fixed
Rate Term during the Advance Period may be
selected for a principal amount less
than One Hundred Thousand Dollars
($100,000.00); (ii) each Fixed Rate Advance
during the Term Period shall apply to the
then entire outstanding principal
balance of this Note and (iii) no Fixed
Rate Term which commences in the Advance
Period shall extend beyond the Initial
Maturity Date and no Fixed Rate Term
which commences during the Term Period
shall extend beyond the final scheduled
maturity date hereof. If any Fixed Rate
Term would end on a day which is not a
Business Day, then such Fixed Rate Term
shall be extended to the next succeeding
Business Day.
(d) "LIBOR" means the rate per annum determined pursuant to the
following formula:
LIBOR =
Base LIBOR
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100% - LIBOR Reserve Percentage
(i) "Base LIBOR" means the rate per annum for United States
dollar
deposits quoted by Bank as the Inter-Bank
Market Offered Rate, with the
understanding that such rate is quoted by
Bank for the purpose of calculating
effective rates of interest for loans
making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds
on said date for a period of time
approximately equal to the number of days
in such Fixed Rate Term and in an
amount approximately equal to the principal
amount to which such Fixed Rate Term
applies. Borrower understands and agrees
that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such
offers or other market indicators of
the Inter-Bank Market as Bank in its
discretion deems appropriate including, but
not limited to, the rate offered for U.S.
dollar deposits on the London
Inter-Bank Market.
(ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed
by the Board of Governors of the Federal
Reserve System (or any successor) for
"Eurocurrency Liabilities" (as defined in
Regulation D of the Federal Reserve
Board, as amended), adjusted by Bank for
expected changes in such reserve
percentage during the applicable Fixed Rate
Term.
(e) "Loan Agreement" means that certain Loan Agreement between
Borrower
and Bank dated as of September 30, 2005, as
amended from time to time.
(f) "Prime Rate" means at any time the rate of interest most
recently
announced within Bank at its principal
office as its Prime Rate, with the
understanding that the Prime Rate is one of
Bank's base rates and serves as the
basis upon which effective rates of
interest are calculated for those loans
making reference thereto, and is evidenced
by the recording thereof after its
announcement in such internal publication
or publications as Bank may designate.
(g) "Term
Period" means the period commencing on October 1, 2008
and ending on September 30, 2009.
INTEREST:
(a) Interest. The outstanding principal balance of this Note shall
bear
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interest (computed on the basis of a
360-day year, actual days elapsed , during
the Advance Period, (i) either (y) at a
fluctuating rate per annum equal to two
percent and five-hundredths (2.05%) below
the Prime Rate in effect from time to
time, or (z) at a fixed rate per annum
determined by Bank to be four hundred
seventy-five thousandths percent (0.475%)
above LIBOR in effect on the first day
of the applicable Fixed Rate Term, and (ii)
after the Advance Period, at a fixed
rate per annum determined by Bank to be
four hundred seventy-five thousandths
percent (0.475%) above LIBOR in effect on
the first day of the applicable Fixed
Rate Term. When interest is determined in
relation to the Prime Rate, each
change in the rate of interest hereunder
shall become effective on the date each
Prime Rate change is announced within Bank.
With respect to each LIBOR selection
hereunder, Bank is hereby authorized to
note the date, principal amount,
interest rate and Fixed Rate Term
applicable thereto and any payments made
thereon on Bank's books and records (either
manually or by electronic entry)
and/or on any schedule attached to this
Note, which notations shall be prima
facie evidence of the accuracy of the
information noted.
(b) Selection of Interest Rate Options. At any time any portion of
this
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Note bears interest determined in relation
to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term
applicable thereto so that all or a
portion thereof bears interest determined
in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated
by Borrower. At any time any portion
of this Note bears interest determined in
relation to the Prime Rate, Borrower
may convert all or a portion thereof so
that it bears interest determined in
relation to LIBOR for a Fixed Rate Term
designated by Borrower. At such time as
Borrower requests an advance hereunder or
wishes to select a LIBOR option for
all or a portion of the outstanding
principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give
Bank notice specifying: (i) the
interest rate option selected by Borrower;
(ii) the principal amount subject
thereto; and (iii) for each LIBOR
selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by
telephone (or such other electronic
method as Bank may permit) so long as, with
respect to each LIBOR selection, (A)
if requested by Bank, Borrower provides to
Bank written confirmation thereof not
later than three (3) Business Days after
such notice is given, and (B) such
notice is given to Bank prior to 10:00 a.m.
on the first day of the Fixed Rate
Term, or at a later time during any
Business Day if Bank, at its sole option but
without obligation to do so, accepts
Borrower's notice and quotes a fixed rate
to Borrower. If Borrower does not
immediately accept a fixed rate when quoted by
Bank, the quoted rate shall expire and any
subsequent LIBOR request from
Borrower shall be subject to a
redetermination by Bank of the applicable fixed
rate. If no specific designation of
interest is made at the time any advance is
requested hereunder or at the end of any
Fixed Rate Term, Borrower shall be
deemed to have made a Prime Rate interest
selection for such advance or the
principal amount to which such Fixed Rate
Term applied. Notwithstanding the
foregoing, no Prime Rate-based interest
option shall be available during the
Term Period, and Borrower shall be deemed
to have selected a Fixed Rate Term of
one month duration if Borrower does not
specify otherwise with respect to any
Fixed Rate Term during the Term Period.
(c) Taxes and Regulatory Costs. Borrower shall pay to Bank
immediately
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upon demand, in addition to any other
amounts due or to become due hereunder,
any and all (i) withholdings, interest
equalization taxes, stamp taxes or other
taxes (except income and franchise taxes)
imposed by any domestic or foreign
governmental authority and related in any
manner to LIBOR, and (ii) future,
supplemental, emergency or other changes in
the LIBOR Reserve Percentage,
assessment rates imposed by the Federal
Deposit Insurance Corporation, or
similar requirements or costs imposed by
any domestic or foreign governmental
authority or resulting from compliance by
Bank with any request or directive
(whether or not having the force of law)
from any central bank or other
governmental authority and related in any
manner to LIBOR to the extent they are
not included in the calculation of LIBOR.
In determining which of the foregoing
are attributable to any LIBOR option
available to Borrower hereunder, any
reasonable allocation made by Bank among
its operations shall be conclusive and
binding upon Borrower.
(d) Payment of Interest. Interest accrued on this Note shall be
payable
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on the last day of each calendar quarter,
commencing December 31, 2005.
(e) Default Interest. From and after the maturity date of this
Note, or
----------------
such earlier date as all principal owing
hereunder becomes due and payable by
acceleration or otherwise, the outstanding
principal balance of this Note shall
bear interest until paid in full at an
increased rate per annum (computed on the
basis of a 360-day year, actual days
elapsed, equal to four percent (4%) above
the rate of interest from time to time
applicable to this Note.
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may from time to time during
the
-----------------------
term of this Note borrow, partially or
wholly repay its outstanding borrowings,
and reborrow, subject to all of the
limitations, terms and conditions of this
Note and of any document executed in
connection with or governing this Note;
provided however, that the total
outstanding borrowings under this Note shall
not at any time exceed the principal amount
stated above. The unpaid principal
balance of this obligation at any time
shall be the total amounts advanced
hereunder by the holder hereof less the
amount of principal payments made hereon
by or for any Borrower, which balance may
be endorsed hereon from time to time
by the holder. The outstanding principal
balance of this Note shall be due and
payable in full on the Initial Maturity
Date, or, if Borrower so elects in
accordance with the terms of the Loan
Agreement, in installments, each equal to
one quarter of the outstanding principal
balance of this Note on the Initial
Maturity Date, which installments shall be
due and payable on December 31, 2008,
March 31, 2009, June 30, 2009 and September
30, 2009.
(b) Advances. Advances hereunder, to the total amount of the
principal
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sum stated above, may be made by the holder
at the oral or written request of
(i) Matthew J. Cox, Susan Chen, or Timothy
H. Reid, any one acting alone, who
are authorized to request advances and
direct the disposition of any advances
until written notice of the revocation of
such authority is received by the
holder at the office designated above, or
(ii) any person, with respect to
advances deposited to the credit of any
deposit account of Borrower, which
advances, when so deposited, shall be
conclusively presumed to have been made to
or for the benefit of Borrower regardless
of the fact that persons other than
those authorized to request advances may
have authority to draw against such
account. The holder shall have no
obligation to determine whether any person
requesting an advance is or has been
authorized by Borrower.
(c) Application of Payments. Each payment made on this Note shall
be
-----------------------
credited first, to any interest then due
and second, to the outstanding
principal balance hereof. All payments
credited to principal shall be applied
first, to the outstanding principal balance
of this Note which bears interest
determined in relation to the Prime Rate,
if any, and second, to the outstanding
principal balance of this Note which bears
interest determined in relation to
LIBOR, with such payments applied to the
oldest Fixed Rate Term first.
PREPAYMENT:
(a) Prime Rate. Borrower may prepay principal on any portion of
this
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Note which bears interest determined in
relation to the Prime Rate at any time,
in any amount and without penalty.
(b) LIBOR. Borrower may prepay principal on any portion of this
Note
-----
which bears interest determined in relation
to LIBOR at any time and in the
minimum amount of One Hundred Thousand
Dollars ($100,000.00); provided however,
that if the outstanding principal balance
of such portion of this Note is less
than said amount, the minimum prepayment
amount shall be the entire outstanding
principal balance thereof. In consideration
of Bank providing this prepayment
option to Borrower, or if any such portion
of this Note shall become due and
payable at any time prior to the last day
of the Fixed Rate Term applicable
thereto by acceleration or otherwise,
Borrower shall pay to Bank immediately
upon demand a fee which is the sum of the
discounted monthly differences for
each month from the month of prepayment
through the month in which such Fixed
Rate Term matures, calculated as follows
for each such month:
(i)
Determine the amount of interest which would have accrued each
---------
month on the amount prepaid at the interest rate applicable to
such amount had it remained outstanding until the last day of
the Fixed Rate Term applicable thereto.
(ii)
Subtract from the amount determined in (i) above the amount of
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interest which would have accrued for the same month on the
amount prepaid for the remaining term of such Fixed Rate Term
at LIBOR in effect on the date of prepayment for new loans
made for such term and in a principal amount equal to the
amount prepaid.
(iii) If the result
obtained in (ii) for any month is greater than
zero, discount
that difference by LIBOR used in (ii) above.
Borrower acknowledges that prepayment of
such amount may result in Bank
incurring additional costs, expenses and/or
liabilities, and that it is
difficult to ascertain the full extent of
such costs, expenses and/or
liabilities. Borrower, therefore, agrees to
pay the above-described prepayment
fee and agrees that said amount represents
a reasonable estimate of the
prepayment costs, expenses and/or
liabilities of Bank. If Borrower fails to pay
any prepayment fee when due, the amount of
such prepayment fee shall thereafter
bear interest until paid at a rate per
annum two percent (2.00%) above the Prime
Rate in effect from time to time (computed
on the basis of a 365/366-day year,
actual days elapsed). Each change in the
rate of interest on any such past due
prepayment fee shall become effective on
the date each Prime Rate change is
announced within Bank. Prepayments made
during the Term Period shall be applied
to installments of principal then unpaid,
in inverse order of maturity.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and
conditions of the Loan Agreement. Any
default in the payment or performance of
any obligation under this Note, or any
defined event of default under the Loan
Agreement, shall constitute an "Event of
Default" under this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default, the
holder
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of this Note, at the holder's option, may
declare all sums of principal and
interest outstanding hereunder to be
immediately due and payable without
presentment, demand, notice of
nonperformance, notice of protest, protest or
notice of dishonor, all of which are
expressly waived by each Borrower, and the
obligation, if any, of the holder to extend
any further credit hereunder shall
immediately cease and terminate. Borrower
shall pay to the holder immediately
upon demand the full amount of all
payments, advances, charges, costs and
expenses, including reasonable attorneys'
fees (to include outside counsel fees
and all allocated costs of the holder's
in-house counsel), expended or incurred
by the holder in connection with the
enforcement of the holder's rights and/or
the collection of any amounts which become
due to the holder under this Note,
and the prosecution or defense of any
action in any way related to this N
