**Exhibit 10.1**

 

Loan Number: 105088

 

 
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AMENDED AND RESTATEDCREDIT AGREEMENT

 

 

Dated as of October 9, 2009

 

 

by and among

 

MAUI LAND & PINEAPPLE COMPANY, INC.,

as Borrower,

 

THE FINANCIAL INSTITUTIONS PARTY HERETO

AND THEIR ASSIGNEES UNDER SECTION 12.6.,

as Lenders,

 

and

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Sole Lead Arranger

 
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|--------|

 

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TABLEOF CONTENTS

 
| Article I.  Definitions                                   | 1                                                                    |
|----------------------------------------------------------------|----------------------------------------------------------------------|
|                                                           |                                                                 |
| Section 1.1.                                              | Definitions                                                          | 1 |
| Section 1.2.                                              | General; References to  Pacific Time                                 | 18 |
|                                                           |                                                                 |   |
| Article II.  Credit Facility                              | 19                                                                   |
|                                                           |                                                                 |   |
| Section 2.1.                                              | Revolving Loans                                                      | 19 |
| Section 2.2.                                              | Letters of Credit                                                    | 20 |
| Section 2.3.                                              | Swingline Loans                                                      | 23 |
| Section 2.4.                                              | Rates and Payment of  Interest on Loans                              | 25 |
| Section 2.5.                                              | Number of Interest  Periods                                          | 26 |
| Section 2.6.                                              | Repayment of Loans                                                   | 26 |
| Section 2.7.                                              | Prepayments                                                          | 26 |
| Section 2.8.                                              | Late Charges                                                         | 26 |
| Section 2.9.                                              | Continuation                                                         | 26 |
| Section 2.10.                                             | Conversion                                                           | 27 |
| Section 2.11                                              | Notes                                                                | 27 |
| Section 2.12                                              | Voluntary Reductions of  the Revolving Commitment                    | 28 |
| Section 2.13.                                             | Expiration or Maturity  Date of Letters of Credit Past Maturity Date | 28 |
| Section 2.14.                                             | Amount Limitations                                                   | 28 |
| Section 2.15.                                             | Funds Transfer  Disbursements                                        | 28 |
| Section 2.16.                                             | Amended and Restated  Obligations                                    | 29 |
|                                                           |                                                                 |   |
| Article III.  Payments, Fees and Other General Provisions | 30                                                                   |
|                                                           |                                                                 |   |
| Section 3.1.                                              | Payments                                                             | 30 |
| Section 3.2.                                              | Pro Rata Treatment                                                   | 30 |
| Section 3.3.                                              | Sharing of Payments,  Etc.                                           | 31 |
| Section 3.4.                                              | Several Obligations                                                  | 32 |
| Section 3.5.                                              | Fees                                                                 | 32 |
| Section 3.6.                                              | Computations                                                         | 32 |
| Section 3.7.                                              | Usury                                                                | 32 |
| Section 3.8.                                              | Statements of Account                                                | 33 |
| Section 3.9.                                              | Defaulting Lenders                                                   | 33 |
| Section 3.10.                                             | Taxes; Foreign Lenders                                               | 34 |
|                                                           |                                                                 |   |
| Article IV. Yield  Protection, Etc.                       | 36                                                                   |
|                                                           |                                                                 |   |
| Section 4.1.                                              | Additional Costs;  Capital Adequacy                                  | 36 |
| Section 4.2.                                              | Suspension of LIBOR  Loans                                           | 37 |
| Section 4.3.                                              | Illegality                                                           | 38 |
| Section 4.4.                                              | Compensation                                                         | 38 |
| Section 4.5.                                              | Treatment of Affected  Loans                                         | 38 |
| Section 4.6.                                              | Change of Lending  Office                                            | 39 |
| Section 4.7.                                              | Assumptions Concerning  Funding of LIBOR Loans                       | 39 |
|                                                           |                                                                 |   |
| Article V.  Conditions Precedent                          | 39                                                                   |
|                                                           |                                                                 |   |
| Section 5.1.                                              | Initial Conditions  Precedent                                        | 39 |
| Section 5.2.                                              | Conditions Precedent to  All Loans and Letters of Credit             | 42 |
| Section 5.3.                                              | Conditions as Covenants                                              | 42 |

 

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| Article VI.  Representations and Warranties | 43                                                                |
|--------------------------------------------------|-------------------------------------------------------------------|
|                                             |                                                              |   |
| Section 6.1.                                | Representations and  Warranties                                   | 43 |
| Section 6.2.                                | Survival of  Representations and Warranties, Etc.                 | 48 |
|                                             |                                                              |   |
| Article VII.  Affirmative Covenants         | 48                                                                |
|                                             |                                                              |   |
| Section 7.1.                                | Preservation of  Existence and Similar Matters                    | 48 |
| Section 7.2.                                | Compliance with  Applicable Law                                   | 49 |
| Section 7.3.                                | Maintenance of Property                                           | 49 |
| Section 7.4.                                | Conduct of Business                                               | 49 |
| Section 7.5.                                | Insurance                                                         | 49 |
| Section 7.6.                                | Payment of Taxes and  Claims                                      | 50 |
| Section 7.7.                                | Books and Records;  Inspections                                   | 50 |
| Section 7.8.                                | Use of Proceeds                                                   | 51 |
| Section 7.9.                                | Environmental Matters                                             | 51 |
| Section 7.10.                               | Further Assurances                                                | 52 |
| Section 7.11.                               | Material Contracts                                                | 52 |
| Section 7.12.                               | Exchange Listing                                                  | 52 |
| Section 7.13.                               | Subdivision Maps                                                  | 53 |
| Section 7.14.                               | Liens                                                             | 53 |
| Section 7.15.                               | Water Delivery  Agreement                                         | 53 |
| Section 7.16.                               | Kahului Prepayment                                                | 53 |
|                                             |                                                              |   |
| Article VII.  Information                   | 54                                                                |
|                                             |                                                              |   |
| Section 8.1.                                | Quarterly Financial  Statements                                   | 54 |
| Section 8.2.                                | Year-End Statements                                               | 54 |
| Section 8.3.                                | Compliance Certificate                                            | 54 |
| Section 8.4.                                | Other Information                                                 | 55 |
| Section 8.5.                                | Electronic Delivery of  Certain Information                       | 57 |
| Section 8.6.                                | Public/Private  Information                                       | 58 |
| Section 8.7.                                | USA Patriot Act Notice;  Compliance                               | 58 |
|                                             |                                                              |   |
| Article IX.  Negative Covenants             | 58                                                                |
|                                             |                                                              |   |
| Section 9.1.                                | Financial Covenants                                               | 58 |
| Section 9.2.                                | Negative Pledge                                                   | 59 |
| Section 9.3.                                | Restrictions on  Intercompany Transfers                           | 59 |
| Section 9.4.                                | Merger, Consolidation,  Sales of Assets and Other Arrangements    | 59 |
| Section 9.5.                                | Plans                                                             | 60 |
| Section 9.6.                                | Fiscal Year                                                       | 60 |
| Section 9.7.                                | Modifications of  Organizational Documents and Material Contracts | 60 |
| Section 9.8.                                | Subordinated Debt  Prepayments; Amendments                        | 61 |
| Section 9.9.                                | Transactions with  Affiliates                                     | 61 |
| Section 9.10.                               | Environmental Matters                                             | 62 |
| Section 9.11.                               | Leases                                                            | 62 |
| Section 9.12.                               | Derivatives Contracts                                             | 62 |
|                                             |                                                              |   |
| Article X. Default                          | 62                                                                |
|                                             |                                                              |   |
| Section 10.1.                               | Events of Default                                                 | 62 |
| Section 10.2.                               | Remedies Upon Event of  Default                                   | 66 |
| Section 10.3.                               | Remedies Upon Default                                             | 67 |

 

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| Section 10.4.                         | Marshaling; Payments  Set Aside                   | 67     |
|--------------------------------------------|---------------------------------------------------|--------|
| Section 10.5.                         | Allocation of Proceeds                            | 68     |
| Section 10.6.                         | Letter of Credit  Collateral Account              | 68     |
| Section 10.7.                         | Rescission of Acceleration by Requisite Lenders   | 69     |
| Section 10.8.                         | Performance by  Administrative Agent              | 70     |
| Section 10.9.                         | Rights Cumulative                                 | 70     |
|                                       |                                              |   |
| Article XI. The  Administrative Agent | 70                                                |
|                                       |                                              |   |
| Section 11.1.                         | Appointment and  Authorization                    | 70     |
| Section 11.2.                         | Wells Fargo as Lender                             | 71     |
| Section 11.3                          | Collateral Matters;  Protective Advances          | 71     |
| Section 11.4.                         | Post-Foreclosure Plans                            | 73     |
| Section 11.5.                         | Approvals of Lenders                              | 74     |
| Section 11.6.                         | Notice of Events of  Default                      | 74     |
| Section 11.7.                         | Administrative Agent’s  Reliance             | 74     |
| Section 11.8.                         | Indemnification of  Administrative Agent          | 75     |
| Section 11.9.                         | Lender Credit Decision,  Etc.                     | 76     |
| Section 11.10.                        | Successor  Administrative Agent                   | 76     |
|                                       |                                              |   |
| Article XII.  Miscellaneous           | 77                                                |
|                                       |                                              |   |
| Section 12.1.                         | Notices                                           | 77     |
| Section 12.2.                         | Expenses                                          | 78     |
| Section 12.3.                         | Stamp, Intangible and  Recording Taxes            | 79     |
| Section 12.4.                         | Setoff                                            | 79     |
| Section 12.5.                         | Litigation;  Jurisdiction; Other Matters; Waivers | 79     |
| Section 12.6.                         | Successors and Assigns                            | 80     |
| Section 12.7.                         | Amendments and Waivers                            | 81     |
| Section 12.8.                         | Nonliability of  Administrative Agent and Lenders | 83     |
| Section 12.9.                         | Confidentiality                                   | 83     |
| Section 12.10.                        | Indemnification                                   | 83     |
| Section 12.11.                        | Termination; Survival                             | 85     |
| Section 12.12.                        | Severability of Provisions                        | 85     |
| Section 12.13.                        | Governing Law                                     | 86     |
| Section 12.14.                        | Counterparts                                      | 86     |
| Section 12.15.                        | Obligations with  Respect to Loan Parties         | 86     |
| Section 12.16.                        | Independence of  Covenants                        | 86     |
| Section 12.17.                        | Limitation of Liability                           | 86     |
| Section 12.18.                        | Entire Agreement                                  | 86     |
| Section 12.19.                        | Construction                                      | 87     |
| Section 12.20.                        | Headings                                          | 87     |
|                                            |                                                   |        |  |

 
| SCHEDULE I        | Commitments                                     |
|-------------------|-------------------------------------------------|
| SCHEDULE  6.1.(b) | Ownership  Structure                            |
| SCHEDULE  6.1.(f) | Properties                                      |
| SCHEDULE  6.1.(g) | Indebtedness  and Guaranties; Total Liabilities |
| SCHEDULE  6.1.(h) | Material  Contracts                             |
| SCHEDULE  6.1.(i) | Litigation                                      |
| SCHEDULE  6.1.(o) | Hazardous  Materials                            |
| SCHEDULE  6.1.(r) | Affiliate  Transactions                         |
| SCHEDULE  12.1    | Notices                                         |

 

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| EXHIBIT  A | Form of  Assignment and Assumption Agreement  |
|------------|----------------------------------------------------|
| EXHIBIT B  | Form of Notice of  Borrowing                  |
| EXHIBIT  C | Form of  Notice of Continuation               |
| EXHIBIT  D | Form of  Notice of Conversion                 |
| EXHIBIT  E | Form of  Notice of Swingline Borrowing        |
| EXHIBIT  F | Form of  Revolving Note                       |
| EXHIBIT  G | Form of  Swingline Note                       |
| EXHIBIT  H | Form of  Transfer Authorizer Designation Form |
| EXHIBIT I  | Form of Compliance  Certificate               |

 

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THISAMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of October 9, 2009 by and among MAUI LAND &PINEAPPLE COMPANY, INC., a corporation formed under the laws of the State ofHawaii (the “Borrower”), each of the financial institutions initially asignatory hereto together with their successors and assignees under Section 12.6.(the “Lenders”), and WELLS FARGO BANK, NATIONALASSOCIATION (“Administrative Agent”).

 

WHEREAS,pursuant to that certain Loan Agreement dated as of November 13, 2007, byand among the Borrower, the Lenders from time to time party thereto, and WellsFargo Bank, National Association, acting in the capacity as AdministrativeAgent for the Lenders (as amended or modified to date, the “Existing CreditAgreement”), the Lenders party thereto agreed to extend credit to the Borroweron the terms and subject to the conditions set forth therein.

 

WHEREAS,the Borrower has requested that  theExisting Credit Agreement be further amended and, for the convenience of theparties, the Lenders and the other parties hereto have agreed to amend andrestate the Existing Loan Agreement in its entirety as set forth herein and to replace andsupersede the Existing Credit Agreement and to amend certain of the other “LoanDocuments” (as that term is used and defined in the Existing Credit Agreement)pursuant to this Agreement and the documents, instruments, and agreementsreferred to herein.

 

WHEREAS,pursuant to this Agreement, the Administrative Agent, the Issuing Bank and theLenders desire to make available to the Borrower a $50,000,000.00 revolving credit facility with a $5,000,000.00 swingline subfacility and a $5,000,000 letter of credit subfacility, on theterms and conditions contained herein.

 

NOW,THEREFORE, for good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged by the parties hereto, the parties hereto agreeas follows:

 

# **ARTICLEI. DEFINITIONS**

# ** **

## **Section 1.1.  Definitions.**

## ** **

Inaddition to terms defined elsewhere herein, the following terms shall have thefollowing meanings for the purposes of this Agreement:

 

“**Additional Costs**” has the meaning given that term in Section 4.1.(b).

 

“**Administrative Agent**” means Wells FargoBank, National Association or any successor Administrative Agent appointed pursuantto Section 11.10.

 

“**Administrative Questionnaire**” means the AdministrativeQuestionnaire completed by each Lender and delivered to the AdministrativeAgent in a form supplied by the Administrative Agent to the Lenders from timeto time.

 

“**Affiliate**” means,with respect to any Person, (a) in the case of any such Person which is apartnership or limited liability company, any partner or member in suchpartnership or limited liability company, respectively, (b) any otherPerson which is directly or indirectly controlled by, controls or is undercommon control with such Person or one or more of the Persons referred to inthe preceding clause (a), (c) any other Person who is an officer,director, trustee or employee of, or partner in, such Person or any Personreferred to in the preceding clauses (a) and (b), (d) any otherPerson who is a member of the immediate family of such Person or of any Personreferred to in the preceding clauses (a) through (c), and

 

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(e) any other Person that is a trust solely forthe benefit of one or more Persons referred to in clause (d) and of whichsuch Person is sole trustee; provided, however, in no event shallthe Administrative Agent, the Issuing Bank or any Lender or any of their respective Affiliates be an Affiliate of Borrower.  For purposes of this definition, “control”(including with correlative meanings, the terms “controlling”, “controlled by”and “under common control with”) means the possession, directly or indirectly,of the power to direct or cause the direction of the management and policies ofa Person, whether through the ownership of voting securities, by contract orotherwise.

 

“**Agreement**” shall have the meaning given to such term in thepreamble hereto.

 

“**Agreement Date**” means the date as of which this Agreement isdated.

 

“**Applicable Law**” means all applicable provisions ofconstitutions, statutes, rules, regulations and orders of any GovernmentalAuthority, including all orders and decrees of all courts, tribunals andarbitrators.

 

“**Applicable Margin**” means 4.25%.

 

“**Appraisal**” means, with respect to the Property, an M.A.I.appraisal commissioned by and addressed to the Administrative Agent (acceptableto the Administrative Agent as to form, substance and appraisal date), preparedby a professional appraiser reasonably acceptable to the Administrative Agent,having at least the minimum qualifications required under Applicable Lawgoverning the Administrative Agent and the Lenders, including withoutlimitation, FIRREA, and determining, without duplication, both the “as is”market value of the Commercial Property and the “as-is” bulk value of the Land,in each case as between a willing buyer and a willing seller.

 

“**Approved Fund**” means any Fund that is administered ormanaged by (a) a Lender, (b) an Affiliate of a Lender, or (c) anentity or an Affiliate of any entity that administers or manages a Lender.

 

“**Assignee**” has the meaning given that term in Section 12.6.(c).

 

“**Assignment and Assumption**” means anAssignment and Assumption Agreement among a Lender, an Assignee and theAdministrative Agent, substantially in the form of Exhibit A.

 

“**Bankruptcy Code**” means the Bankruptcy Code of 1978, asamended.

 

“**Base Rate**” means the LIBOR Market Index Rate; provided, thatif for any reason the LIBOR Market Index Rate is unavailable, Base Rate shallmean the per annum rate of interest equal to the Federal Funds Rate plus oneand one-half of one percent (1.50%).

 

“**Base Rate Loan**” means a Loan bearing interest at a ratebased on the Base Rate.

 

“**Benefit Arrangement**” means at any time an employee benefitplan within the meaning of Section 3(3) of ERISA which is not a Planor a Multiemployer Plan and which is maintained or otherwise contributed to byany member of the ERISA Group.

 

“**Borrower**” has the meaning set forth in the introductoryparagraph hereof and shall include the Borrower’s successors and permittedassigns.

 

2

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“**Business Day**” means (i) a day of the week (but not aSaturday, Sunday or holiday) on which the offices of the Administrative Agentin San Francisco, California are open to the public for carrying onsubstantially all of the Administrative Agent’s business functions, and (ii) ifsuch day relates to a LIBOR Loan, any such day that is also a day on whichdealings in Dollars are carried on in the London interbank market.  Unless specifically referenced in thisAgreement as a Business Day, all references to “days” shall be to calendardays.

 

“**Capitalized Lease Obligation**” means obligations under alease (to pay rent or other amounts under any lease or other arrangementconveying the right to use) that are required to be capitalized for financialreporting purposes in accordance with GAAP. The amount of a Capitalized Lease Obligation is the capitalized amountof such obligation determined in accordance with GAAP.

 

“**Cash Equivalents**” means: (a) securities issued,guaranteed or insured by the United States of America or any of its agencieswith maturities of not more than one year from the date acquired; (b) certificatesof deposit with maturities of not more than one year from the date acquiredissued by a United States federal or state chartered commercial bank ofrecognized standing, or a commercial bank organized under the laws of any othercountry which is a member of the Organization for Economic Cooperation andDevelopment, or a political subdivision of any such country, acting through abranch or agency, which bank has capital and unimpaired surplus in excess of$500,000,000 and which bank or its holding company has a short-term commercialpaper rating of at least A-2 or the equivalent by S&P or at least P-2 orthe equivalent by Moody’s; (c) reverse repurchase agreements with terms ofnot more than seven days from the date acquired, for securities of the typedescribed in clause (a) above and entered into only with commercialbanks having the qualifications described in clause (b) above; (d) commercialpaper issued by any Person incorporated under the laws of the United States ofAmerica or any State thereof and rated at least A-2 or the equivalent thereofby S&P or at least P-2 or the equivalent thereof by Moody’s, in each casewith maturities of not more than one year from the date acquired; and (e) investmentsin money market funds registered under the Investment Company Act of 1940, asamended, which have net assets of at least $500,000,000 and at least 85% ofwhose assets consist of securities and other obligations of the type describedin clauses (a) through (d) above.

 

“**Collateral**” means any real or personal property directly orindirectly securing any of the Obligations or any other obligation of a Personunder or in respect of any Loan Document or Specified Derivatives Contract towhich it is a party, and includes, without limitation, the “**Subject Property**” under and as defined in any Mortgage, andall “**Rents**” as defined in the Mortgage andall other property subject to a lien created by a Security Document.

 

**“Collateral Assignment of Water Delivery Agreement”** means thatcertain Collateral Assignment of Agreement for Water Delivery dated as of November 13,2007, among the Administrative Agent, Leasehold Mortgagor and MPC, as joined byBorrower, as amended by the Amendment of Collateral Assignment dated as of evendate herewith.

 

“**Commercial Property**” means the real property described on Exhibit Ato the Mortgage as Parcel 2, Tax Map Key (2) 4-2-004-024, Parcel 3, TaxMap Key (2) 4-2-004-035, and Parcel 11, Tax MapKey (2) 4-2-004-043, and the portion ofParcel 4, Tax Map Key (2) 4-2-004-036, which constitutes the VillageClubhouse.

 

“**Commitment**” means a Revolving Commitment orany combination thereof (as the context shall permit or require), in anaggregate amount up to, but not exceeding the amount set forth for such Lenderon Schedule I hereto as such Lender’s respective “Revolving Commitment Amount”(as the same may be reduced from time to time pursuant to Section 2.12. orotherwise pursuant to the terms of this Agreement).

 

“**Compliance Certificate**” has the meaning given that term in Section 8.3.

 

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“**Continue**”, “**Continuation**”and “**Continued**” each refers to thecontinuation of a LIBOR Loan from one Interest Period to another InterestPeriod pursuant to Section 2.9.

 

“**Convert**”, “**Conversion**” and“**Converted**” each refers to theconversion of a Loan of one Type into a Loan of another Type pursuant to Section 2.10.

 

“**Credit Event**” means any of the following: (a) themaking (or deemed making) of any Loan, (b) the Conversion of a Loan, (c) theContinuation of a LIBOR Loan and (d) the issuance of a Letter of Credit.

 

“**Default**” means any of the events specified in Section 10.1.,whether or not there has been satisfied any requirement for the giving ofnotice, the lapse of time, or both.

 

“**Defaulting Lender**” has the meaning given that term in Section 3.9.

 

“**Derivatives Contract**” means (a) any transaction(including any master agreement, confirmation or other agreement with respectto any such transaction) now existing or hereafter entered into by the Borroweror any of its Subsidiaries (i) which is a rate swap transaction, swapoption, basis swap, forward rate transaction, commodity swap, commodity option,equity or equity index swap, equity or equity index option, bond option,interest rate option, foreign exchange transaction, cap transaction, floortransaction, collar transaction, currency swap transaction, cross-currency rateswap transaction, currency option, credit protection transaction, credit swap,credit default swap, credit default option, total return swap, credit spreadtransaction, repurchase transaction, reverse repurchase transaction,buy/sell-back transaction, securities lending transaction, weather indextransaction or forward purchase or sale of a security, commodity or otherfinancial instrument or interest (including any option with respect to any ofthese transactions) or (ii) which is a type of transaction that is similarto any transaction referred to in clause (i) above that is currently, orin the future becomes, recurrently entered into in the financial markets(including terms and conditions incorporated by reference in such agreement)and which is a forward, swap, future, option or other derivative on one or morerates, currencies, commodities, equity securities or other equity instruments,debt securities or other debt instruments, economic indices or measures ofeconomic risk or value, or other benchmarks against which payments ordeliveries are to be made, and (b) any combination of these transactions.

 

“**Derivatives Support Document**”****means(i) any credit support annex comprising part of (and as defined in) anySpecified Derivatives Contract, and (ii) any document or agreement, otherthan a Security Document, pursuant to which cash, deposit accounts, securitiesaccounts or similar financial asset collateral are pledged to or made availablefor set-off by, a Specified Derivatives Provider, including any banker’s lienor similar right, securing or supporting Specified Derivatives Obligation.

 

“**Derivatives Termination Value**” means, in respect of any oneor more Derivatives Contracts, after taking into account the effect of anylegally enforceable netting agreement or provision relating thereto, (a) forany date on or after the date such Derivatives Contracts have been terminatedor closed out, the termination amount or value determined in accordancetherewith, and (b) for any date prior to the date such DerivativesContracts have been terminated or closed out, the then-current mark-to-marketvalue for such Derivatives Contracts, determined based upon one or moremid-market quotations or estimates provided by any recognized dealer inDerivatives Contracts (which may include the Administrative Agent, any Lender,any Specified Derivatives Provider or any Affiliate of any thereof).

 

“**Dollars**” or “**$**” means thelawful currency of the United States of America.

 

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“**Effective Date**” means the later of (a) the AgreementDate and (b) the date on which all of the conditions precedent set forthin Section 5.1. shall have been fulfilled or waived.

 

“**Eligible Assignee**” means (a) a Lender, (b) anAffiliate of a Lender, (c) an Approved Fund and (d) any other Person(other than a natural person) approved by (i) the Administrative Agent and(ii) unless a Default or Event of Default exists, the Borrower (each suchapproval not to be unreasonably withheld or delayed); provided thatnotwithstanding the foregoing, “Eligible Assignee” shall not include theBorrower or any of the Borrower’s Affiliates or Subsidiaries.

 

“**Equity Interest**” means, with respect to any Person, anyshare of capital stock of (or other ownership or profit interests in) suchPerson, any warrant, option or other right for the purchase or otheracquisition from such Person of any share of capital stock of (or other ownershipor profit interests in) such Person whether or not certificated, any securityconvertible into or exchangeable for any share of capital stock of (or otherownership or profit interests in) such Person or warrant, right or option forthe purchase or other acquisition from such Person of such shares (or suchother interests), and any other ownership or profit interest in such Person(including, without limitation, partnership, member or trust intereststherein), whether voting or nonvoting, and whether or not such share, warrant,option, right or other interest is authorized or otherwise existing on any dateof determination.

 

“**ERISA**” means the Employee Retirement Income Security Act of1974, as amended.

 

“**ERISA Group**” means the Borrower, any Subsidiary and allmembers of a controlled group of corporations and all trades or businesses(whether or not incorporated) under common control which, together with theBorrower or any Subsidiary, are treated as a single employer under Section 414of the Internal Revenue Code.

 

“**Event of Default**” means any of the events specified in Section 10.1.,provided that any requirement for notice or lapse of time or any othercondition has been satisfied.

 

“**Exchange Act**” means the Securities Exchange Act of 1934, asamended from time to time, together with all rules and regulations issuedthereunder.

 

“**Existing Credit Agreement**” shall have the meaning given suchterm in the recitals of this Agreement.

 

“**Existing Letters of Credit**”shall mean the “Letters of Credit”****issued under andas defined in the Existing Credit Agreement.

 

“**Federal Funds Rate**” means, forany period, a fluctuating interest rate per annum equal for each day duringsuch period to the weighted average of the rates on overnight Federal Fundstransactions withmembers of theFederal Reserve System arranged by Federal Funds brokers, as published for suchday (or, if such day is not a Business Day, for the next preceding BusinessDay) by the Federal Reserve Bank of New York, or, if such rate is not sopublished for any day which is a Business Day, the average of the quotationsfor such day on such transactions received by the Administrative Agent fromthree Federal Funds brokers of recognized standing selected by theAdministrative Agent.

 

“**Fee Letter**” means that certain fee letter dated as of June 17,2009, by and between the Borrower and the Administrative Agent.

 

“**Fees**” means the fees and commissions provided for orreferred to in Section 3.5. and any other fees payable by the Borrowerhereunder, under any other Loan Document or under the Fee Letter.

 

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“**FIRREA**” means the Financial Institution Recovery, Reform andEnforcement Act of 1989, as amended.

 

“**Fund**” means any Person (other than a natural person) that is(or will be) engaged in making, purchasing, holding or otherwise investing incommercial loans and similar extensions of credit in the ordinary course of itsbusiness.

 

“**GAAP**” means United States generally accepted accountingprinciples set forth in the opinions and pronouncements of the AccountingPrinciples Board of the American Institute of Certified Public Accountants andstatements and pronouncements of the Financial Accounting Standards Board or insuch other statements by such other entity as may be approved by a significantsegment of the accounting profession, which are applicable to the circumstancesas of the date of determination.

 

“**Golf Academy Property**”****means the realproperty consisting of approximately 28.9 acres of entitled land described asParcel 4, Tax Map Key (2) 4-2-004-036, on Exhibit A to the Mortgage,except for the portion thereof, consisting of approximately 1.4 acres, which isknown as the Village Clubhouse.

 

“**Governmental Approvals**” means all authorizations, consents,approvals, licenses and exemptions of, registrations and filings with, andreports to, all Governmental Authorities.

 

“**Governmental Authority**” means any national, state or localgovernment (whether domestic or foreign), any political subdivision thereof orany other governmental, quasi-governmental, judicial, administrative, public orstatutory instrumentality, authority, body, agency, bureau, commission, board,department or other entity (including, without limitation, the Federal DepositInsurance Corporation, the Comptroller of the Currency or the Federal ReserveBoard, any central bank or any comparable authority) or any arbitrator withauthority to bind a party at law.

 

“**Guarantor**”means any Person that is party to a Guaranty as a “Guarantor.”

 

“**Guaranty**”, “**Guaranteed**” or to“**Guarantee**” as applied to any obligationmeans and includes:  (a) a guaranty(other than by endorsement of negotiable instruments for collection in theordinary course of business), directly or indirectly, in any manner, of anypart or all of such obligation, or (b) an agreement, direct or indirect,contingent or otherwise, and whether or not constituting a guaranty, thepractical effect of which is to assure the payment or performance (or paymentof damages in the event of nonperformance) of any part or all of suchobligation whether by: (i) the purchase of securities or obligations, (ii) thepurchase, sale or lease (as lessee or lessor) of property or the purchase orsale of services primarily for the purpose of enabling the obligor with respectto such obligation to make any payment or performance (or payment of damages inthe event of nonperformance) of or on account of any part or all of suchobligation, or to assure the owner of such obligation against loss, (iii) thesupplying offunds to or inany other manner investing in the obligor with respect to such obligation, (iv) repaymentof amounts drawn down by beneficiaries of letters of credit (including Lettersof Credit), or (v) the supplying of funds to or investing in a Person onaccount of all or any part of such Person’s obligation under a Guaranty of anyobligation or indemnifying or holding harmless, in any way, such Person againstany part or all of such obligation.  Asthe context requires, “Guaranty” shall also mean any Guaranty of the Obligationwhich may now or in the future be executed.

 

“**Hazardous Materials**” shall have the meaning given such termin Section 6.1(o).

 

“**Hazardous Materials Claims**” shall have the meaning givensuch term in Section 6.1(o).

 

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“**Hazardous Materials Laws**” shall have the meaning given suchterm in Section 6.1(o).

 

“**Indebtedness**” means, with respect to a Person, at the timeof computation thereof, all of the following (without duplication): (a) allobligations of such Person in respect of money borrowed; (b) allobligations of such Person (other than trade debt incurred in the ordinarycourse of business), whether or not for money borrowed (i) represented bynotes payable, or drafts accepted, in each case representing extensions ofcredit, (ii) evidenced by bonds, debentures, notes or similar instruments,or (iii) constituting purchase money indebtedness, conditional salescontracts, title retention debt instruments or other similar instruments, uponwhich interest charges are customarily paid or that are issued or assumed asfull or partial payment for property; (c) Capitalized Lease Obligations ofsuch Person; (d) all reimbursement obligations of such Person under or inrespect of any letters of credit or acceptances (whether or not the same havebeen presented for payment); (e) all Off-Balance Sheet Obligations of suchPerson; (f) all obligations of such Person to purchase, redeem, retire,defease or otherwise make any payment in respect of any Mandatorily RedeemableStock issued by such Person or any other Person, valued at the greater or itsvoluntary or involuntary liquidation preference plus accrued and unpaiddividends; (g) net obligations under any Derivative Contract (which shallbe deemed to have an amount equal to the Derivatives Termination Value thereofat such time but in no event shall be less than zero); and (h) allIndebtedness of other Persons which (i) such Person has Guaranteed or isotherwise recourse to such Person or (ii) is secured by a Lien on any propertyof such Person.  For purposes of thisdefinition, (x) the amount of any Indebtedness represented by a Guarantyor other similar instrument shall be the lesser of the principal amount of theobligations Guaranteed and outstanding and the maximum amount for which theguaranteeing Person may be liable pursuant to the terms of the Guaranty, and (y) theamount of any Indebtedness described in clause (h)(ii) above shall be thelower of the amount of the obligation and the fair market value of the assets securingsuch obligation.

 

Notwithstandingthe foregoing, Indebtedness shall not include any guaranties, contingentliabilities or other obligations relating to, or arising in connection with,Borrowers direct or indirect interests in KBH or W2005 Kapalua.

 

“**Indemnifiable Amounts**” has the meaning given that term in Section 11.8.

 

“**Indemnified Party**” has the meaning given that term in Section 12.10.(a).

 

“**Indemnity Proceeding**” has the meaning given that term in Section 12.10.(a).

 

“**Information Materials**” has the meaning given that term in Section 8.6.

 

“**Intellectual Property**” has the meaning given that term in Section 6.1(s).

 

“**Interest Holdback**” means an amount (equal initially, to $0)sufficient in the reasonable discretion of the Administrative Agent to pay theprojected amount by which interest payable on the aggregate RevolvingCommitments (whether disbursed or not) exceeds or is projected to exceed netoperating income from the Commercial Property through the Maturity Date, whichamount may be reduced or increased at the end of each calendar quarterfollowing the Effective Date as the Administrative Agent deems in itsreasonable discretion is necessary.

 

“**Interest Period**” means, with respect to each LIBOR Loan,each period commencing on the date such LIBOR Loan is made, or in the case ofthe Continuation of a LIBOR Loan the last day of the preceding Interest Periodfor such Loan, and ending on the numerically corresponding day in the first,third or sixth calendar month thereafter, as the Borrower may select in aNotice of Borrowing, Notice of Continuation or Notice of Conversion, as thecase may be, except that each Interest Period that

 

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commenceson the last Business Day of a calendar month (or on any day for which there isno numerically corresponding day in the appropriate subsequent calendar month)shall end on the last Business Day of the appropriate subsequent calendar month**. **In addition to suchperiods, the Borrower may request Interest Periods for LIBOR Loans havingdurations of at least 7, but not more than 30, days no more than ten timesduring any 12-month period beginning during the term of this Agreement but onlyin anticipation of (i) the Borrower’s prepayment of such LIBOR Loans fromequity or debt offerings, financings or proceeds resulting from the sale orother disposition of major assets of the Borrower or any of its Subsidiaries or(ii) changes in the amount of the Lenders’ Commitments associated with amodification of this Agreement; and

 

Notwithstandingthe foregoing: (i) if any Interest Period would otherwise end after theMaturity Date, such Interest Period shall end on the Maturity Date; and (ii) eachInterest Period that would otherwise end on a day which is not a Business Dayshall end on the immediately following Business Day (or, if such immediatelyfollowing Business Day falls in the next calendar month, on the immediatelypreceding Business Day).

 

“**Internal Revenue Code**” means the Internal Revenue Code of1986, as amended.

 

“**Investment**” means, with respect to any Person, anyacquisition or investment (whether or not of a controlling interest) by suchPerson, whether by means of any of the following: (a) the purchase orother acquisition of any Equity Interest in another Person, (b) a loan,advance or extension of credit to, capital contribution to, Guaranty ofIndebtedness of, or purchase or other acquisition of any Indebtedness of,another Person, including any partnership or joint venture interest in suchother Person, (c) the purchase or other acquisition (in one transaction ora series of transactions) of assets of another Person that constitute thebusiness or a division or operating unit of another Person, and (d) anykind of joint venture arrangement with another Person.  Any commitment to make an Investment in anyother Person, as well as any option of another Person to require an Investmentin such Person, shall constitute an Investment. Except as expressly provided otherwise, for purposes of determiningcompliance with any covenant contained in a Loan Document, the amount of anyInvestment shall be the amount actually invested, without adjustment forsubsequent increases or decreases in the value of such Investment.

 

“**Issuing Bank**” means Wells Fargo or any other Lender, each inits capacity as an issuer of Letters of Credit pursuant to Section 2.2.

 

“**Kahului Mortgage**” means that certain Mortgage, Assignment ofLeases and Rents, Security Agreement and Fixture Filing dated as of October 10,2008, made by Borrower, as Mortgagor, in favor of Ramius, as Collateral Agentfor each of the Buyers (as defined therein) and recorded on October 16,2008, as Document No. 2008-159864 in the State of Hawaii Bureau ofConveyances.

 

“**Kahului Notes**” means the “Notes” as defined in the KahuluiSPA.

 

“**Kahului Prepayment**” with respect to the sale or otherdisposition of all or any portion of the Kahului Property, means, for each suchsale or disposition, a payment equal to (x) (i) the amount of anycash and fair value of any non-cash consideration payable in connection withsuch sale or disposition minus (ii) the Kahului Release Pricepayable in connection with such sale or disposition minus (iii) amountsactually paid by Borrower, if any, for the remediation of, and the settlementof claims with respect to, the portion of the Kahului Property being sold priorto the sale thereof minus (iv) customary and reasonable closingcosts actually paid by Borrower in connection with such sale or dispositionincluding escrow, closing, recording, title and legal fees (not to exceed 7.0%of the aggregate value of the consideration in clause (i) above), (y) multipliedby fifty percent (50%).

 

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“**Kahului Property**” means an approximately 25 acre parcellocated in Maui, Hawaii, with a Tax Map Key Number of (2) 3-7-002-001,which is encumbered by the Kahului Mortgage.

 

“**Kahului Release Price**” with respect to the sale or otherdisposition of all or any portion of the Kahului Property, means the lesser of (i) thirtypercent (30%) of the gross proceeds of such sale and (ii) the Asset SaleDeposit Amount (as defined in the Kahului Notes) payable with respect to suchsale or other disposition pursuant to the terms of the Kahului Mortgage and theKahului Notes.

 

“**Kahului SPA**” means that certain Securities PurchaseAgreement dated as of July 27, 2008, by and among the investors identifiedon the signature pages thereof and the Borrower.

 

“**Kapalua Mauka Property**” means the real property consistingof (in aggregate) approximately 927.726 acres of entitled land described on Exhibit Ato the Mortgage as (a) Parcel 1, Tax Map Key (2) 4-2-001-042 (por.)(approximately 740.026 acres), and (b) Parcel 1a, Tax Map Key (2) 4-3-001-008,and Parcel 1b, Tax Map Key (2) 4-3-001-006 (together, approximately 187.70acres).

 

“**KBH**” means Kapalua Bay Holdings, LLC, a Delaware limitedliability company.

 

“**Land**” means the Kapalua Mauka Property and the Golf AcademyProperty.

 

“**Leasehold Mortgagor**” means Kapalua Land Company, Ltd., aHawaii corporation.

 

“**Lender**” means each financial institutionfrom time to time party hereto as a “Lender,” together with its respectivesuccessors and permitted assigns, and, as the context requires, includes theSwingline Lender; provided, however, that the term “Lender” shall except asotherwise expressly provided herein, shall not include any Lender (or itsAffiliates) in its capacity as a Specified Derivatives Provider.

 

“**Lending Office**” means, for each Lender and for each Type ofLoan, the office of such Lender specified in such Lender’s AdministrativeQuestionnaire or in the applicable Assignment and Assumption Agreement, or suchother office of such Lender as such Lender may notify the Administrative Agentin writing from time to time.

 

“**Letter of Credit**” has the meaning given that term in Section 2.2.(a).

 

“**Letter of Credit Collateral Account**” means a special depositaccount maintained by the Administrative Agent and under its sole dominion andcontrol.

 

“**Letter of Credit Documents**” means, with respect to anyLetter of Credit, collectively, any application therefor, any certificate orother document presented in connection with a drawing under suchLetter of Credit and anyother agreement, instrument or other document governing or providing for (a) therights and obligations of the parties concerned or at risk with respect to suchLetter of Credit or (b) any collateral security for any of suchobligations.

 

“**Letter of Credit Liabilities**” means, without duplication, atany time and in respect of any Letter of Credit, the sum of (a) the StatedAmount of such Letter of Credit plus (b) the aggregate unpaid principalamount of all Reimbursement Obligations of the Borrower at such time due andpayable in respect of all drawings made under such Letter of Credit.  For purposes of this Agreement, a Lender(other than the Lender then acting as Issuing Bank) shall be deemed to hold aLetter of Credit Liability in an amount equal to its participation interestunder Section 2.2. in the related Letter of Credit, and the Lender thenacting as the Issuing Bank shall be deemed to hold a Letter of Credit Liabilityin an amount equal to its retained interest in the related Letter of Creditafter giving effect to the acquisition by the Lenders (other than the Lenderthen acting as the Issuing Bank) of their participation interests under suchSection.

 

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“**LIBOR**” means, for the Interest Period for any LIBOR Loan,the rate of interest, rounded up to the nearest whole multiple of one-hundredthof one percent (.01%), obtained by dividing (i) the rate of interest,rounded upward to the nearest whole multiple of one-sixteenth of one percent(0.0625%), referred to as the BBA (British Bankers’ Association) LIBOR rate asset forth by any service selected by the Administrative Agent that has beennominated by the British Bankers’ Association as an authorized informationvendor for the purpose of displaying such rate for deposits in U.S. Dollars atapproximately 9:00 a.m. Pacific time, two (2) Business Days prior tothe date of commencement of such Interest Period for purposes of calculatingeffective rates of interest for loans or obligations making reference thereto,for an amount approximately equal to the applicable LIBOR Loan and for a periodof time approximately equal to such Interest Period by (ii) apercentage equal to 1 minus the stated maximum rate (stated as adecimal) of all reserves, if any, required to be maintained with respect toEurocurrency funding (currently referred to as “Eurocurrency liabilities”) asspecified in Regulation D of the Board of Governors of the Federal ReserveSystem (or against any other category of liabilities which includes deposits byreference to which the interest rate on LIBOR Loans is determined or anyapplicable category of extensions of credit or other assets which includesloans by an office of any Lender outside of the United States of America).  Any change in such maximum rate shall resultin a change in LIBOR on the date on which such change in such maximum rate becomeseffective.

 

“**LIBOR Loan**” means a Loan bearing interest at a rate based onLIBOR.

 

“**LIBOR Market Index Rate**” means, for anyday, LIBOR as of that day for one-month deposits in U.S. Dollars atapproximately 9:00 a.m. Pacific time for such day (or if such day is not aBusiness Day, the immediately preceding Business Day).  The LIBOR Market Index Rate shall bedetermined on a daily basis.

 

“**Lien**” as applied to the property of any Person means:  (a) any security interest, encumbrance,mortgage, deed to secure debt, deed of trust, assignment of leases or rents,pledge, lien, hypothecation, assignment, charge or lease constituting aCapitalized Lease Obligation, conditional sale or other title retentionagreement, or other security title or encumbrance of any kind in respect of anyproperty of such Person, or upon the income, rents or profits therefrom; (b) anyarrangement, express or implied, under which any property of such Person istransferred, sequestered or otherwise identified for the purpose of subjectingthe same to the payment of Indebtedness or performance of any other obligationin priority to the payment of the general, unsecured creditors of such Person; (c) thefiling of any financing statement under the UCC or its equivalent in anyjurisdiction; and (d) any agreement by such Person to grant, give orotherwise convey any of the foregoing.

 

“**Liquidity**” has the meaning given that term in Section 9.1.

 

“**Loan**” means a Revolving Loan or a Swingline Loan or, as thecontext requires, a Revolving Loan and a Swingline Loan.

 

“**Loan Document**” means this Agreement, each Note, eachSecurity Document, each Letter of Credit Document and each other document orinstrument now or hereafter executed and delivered by a Loan Party inconnection with, pursuant to or relating to this Agreement (other than the FeeLetter and any Specified Derivatives Contract).

 

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“**Loan Party**” means each of the Borrower, each other Personwho guarantees all or a portion of the Obligations and/or who pledges anyCollateral to secure all or a portion of the Obligations, including, withoutlimitation, Leasehold Mortgagor.

 

“**Mandatorily Redeemable Stock**” means, with respect to anyPerson, any Equity Interest of such Person which by the terms of such EquityInterest (or by the terms of any security into which it is convertible or forwhich it is exchangeable or exercisable), upon the happening of any event orotherwise, (a) matures or is mandatorily redeemable, pursuant to a sinkingfund obligation or otherwise (other than an Equity Interest to the extentredeemable in exchange for common stock or other equivalent common EquityInterests at the option of the issuer of such Equity Interest), (b) isconvertible into or exchangeable or exercisable for Indebtedness or MandatorilyRedeemable Stock, or (c) is redeemable at the option of the holderthereof, in whole or part (other than an Equity Interest which is redeemablesolely in exchange for common stock or other equivalent common EquityInterests), in each case on or prior to the date on which all Loans arescheduled to be due and payable in full.

 

“**Material Adverse Effect**” means a materially adverse effecton (a) the business, assets, liabilities, condition (financial orotherwise), results of operations or business prospects of the Borrower and itsSubsidiaries taken as a whole, (b) the ability of the Borrower or anyother Loan Party to perform its obligations under any Loan Document to which itis a party, (c) the validity or enforceability of any of the LoanDocuments, (d) the rights and remedies of the Lenders, the Issuing Bankand the Administrative Agent under any of the Loan Documents or (e) thetimely payment of the principal of or interest on the Loans or other amountspayable in connection therewith or the timely payment of all ReimbursementObligations.

 

“**Material Contract**” means any lease, contract or otherarrangement (other than Loan Documents and Specified Derivatives Contracts),whether written or oral, to which the Borrower, any Subsidiary or any otherLoan Party is a party as to which the breach, nonperformance, cancellation orfailure to renew by any party thereto could reasonably be expected to have aMaterial Adverse Effect.]

 

**“Material Indebtedness”**shall have the meaning givensuch term in Section 10.1.(d).

 

“**Material Plan**” means at any time a Plan or Plans havingaggregate Unfunded Liabilities in excess of $1,000,000.

 

“**Maturity Date**” means March 1, 2011.

 

“**Moody’s**” means Moody’s Investors Service, Inc.

 

“**Mortgage**” means the Fee and Leasehold Mortgage with AbsoluteAssignment of Leases and Rents, Security Agreement and Fixture, dated as of November 13,2007, and recorded on November 15, 2007, as Document No. 2007-199589in the State of Hawaii, Bureau of Conveyances, executed by the Borrower andLeasehold Mortgagor in favor of the Administrative Agent for its benefit andthe benefit of the Lenders, the Issuing Bank and each Specified DerivativesProvider in form and substance satisfactory to the Administrative Agent asamended from time to time, including, without limitation, pursuant to aMemorandum of Second Modification Agreement Amending Mortgage, dated as of March 10,2009 and recorded March 13, 2009 as Document Number 2009-038132 in theState of Hawaii Bureau of Conveyances, and a Memorandum of Third ModificationAgreement Amending Mortgage, dated as of March 27, 2009 and recorded March 27,2009 as Document Number 2009-046242 in the State of HawaiiBureau of Conveyances and aMemorandum of Third Modification Agreement Amending Mortgage, dated as of evendate herewith.

 

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“**MPC**” means Maui Pineapple Company, Ltd., a Hawaiicorporation, or a successor entity  whichholds all or substantially all of its assets pursuant to a merger, sale orother transaction which has been approved by the Administrative Agent in itsreasonable discretion.

 

“**Multiemployer Plan**” means at any time a multiemployer planwithin the meaning of Section 4001(a)(3) of ERISA to which any memberof the ERISA Group is then making or accruing an obligation to makecontributions or has within the preceding five plan years made contributions,including for these purposes any Person which ceased to be a member of theERISA Group during such five year period.

 

“**Negative Pledge**” means, with respect to a given asset, anyprovision of a document, instrument or agreement (other than any Loan Documentor Specified Derivatives Contract) which prohibits or purports to prohibit thecreation or assumption of any Lien on such asset as security for Indebtednessof the Person owning such asset or any other Person; provided, however, that anagreement that conditions a Person’s ability to encumber its assets upon themaintenance of one or more specified ratios that limit a Person’s ability toencumber its assets but that do not generally prohibit the encumbrance of itsassets, or the encumbrance of specific assets, shall not constitute a NegativePledge.

 

“**Note**” means a Revolving Note or a Swingline Note.

 

“**Notice of Borrowing**” means a notice substantially in theform of Exhibit B (or such other form reasonably acceptable to theAdministrative Agent and containing the information required in such Exhibit)to be delivered to the Administrative Agent pursuant to Section 2.1.(b) evidencingthe Borrower’s request for a borrowing of Revolving Loans.

 

“**Notice of Continuation**” means a notice substantially in theform of Exhibit C (or such other form reasonably acceptable to theAdministrative Agent and containing the information required in such Exhibit)to be delivered to the Administrative Agent pursuant to Section 2.9.evidencing the Borrower’s request for the Continuation of a LIBOR Loan.

 

“**Notice of Conversion**” means a notice substantially in theform of Exhibit D (or such other form reasonably acceptable to theAdministrative Agent and containing the information required in such Exhibit)to be delivered to the Administrative Agent pursuant to Section 2.10.evidencing the Borrower’s request for the Conversion of a Loan from one Type toanother Type.

 

“**Notice of Swingline Borrowing**” means a notice substantiallyin the form of Exhibit E (or such other form reasonably acceptable to theAdministrative Agent and containing the information required in such Exhibit)to be delivered to the Swingline Lender pursuant to Section 2.3.(b) evidencingthe Borrower’s request for a Swingline Loan.

 

“**Obligations**” means, individually and collectively: (a) theaggregate principal balance of, and all accrued and unpaid interest on, allLoans; (b) all Reimbursement Obligations and all other Letter of CreditLiabilities; and (c) all other indebtedness, liabilities, obligations,covenants and duties of the Borrower or any of the other Loan Parties owing tothe Administrative Agent, the Issuing Bank or any Lender of every kind, natureand description, under or in respect of this Agreement or any of the other LoanDocuments, including, without limitation, the Fees and indemnificationobligations, whether direct or indirect, absolute or contingent, due or notdue, contractual or tortious, liquidated or unliquidated, and whether or notevidenced by any promissory note.  For theavoidance of doubt, “Obligations” shall not include Specified DerivativesObligations.

 

“**Off-Balance Sheet Obligations**” means liabilities and obligations of the Borrower, any Subsidiary orany other Person in respect of “off-balance sheet arrangements” (as defined inItem

 

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303(a)(4)(ii) ofRegulation S-K promulgated under the Securities Act) which the Borrower wouldbe required to disclose in the “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations” section of the Borrower’s reporton Form 10-Q or Form 10-K (or their equivalents) which the Borroweris required to file with the SEC (or any Governmental Authority substitutedtherefor).

 

“**Ownership Share**” means, with respect to any Subsidiary of aPerson (other than a Wholly Owned Subsidiary) or any Unconsolidated Affiliateof a Person, the greater of (a) such Person’s relative nominal direct andindirect ownership interest (expressed as a percentage) in such Subsidiary orUnconsolidated Affiliate or (b) subject to compliance with Section 8.4.(q),such Person’s relative direct and indirect economic interest (calculated as apercentage) in such Subsidiary or Unconsolidated Affiliate determined inaccordance with the applicable provisions of the declaration of trust, articlesor certificate of incorporation, articles of organization, partnershipagreement, joint venture agreement or other applicable organizational documentof such Subsidiary or Unconsolidated Affiliate.

 

“**Participant**” has the meaning given that term in Section 12.6.(b).

 

“**PBGC**” means the Pension Benefit Guaranty Corporation and anysuccessor agency.

 

“**Permitted Investment**”means, without duplication, (a) Investments in cash and Cash Equivalents, (b) Investmentsin negotiable instruments for collection, (c) Investments received insettlement of amounts due to the Borrower effected in the ordinary course ofbusiness or owing to the Borrower upon the foreclosure or enforcement of anyLien in favor of the Borrower, (d) Investments in MPC in the aggregate amountof up to $5,000,000 from and after the Effective Date and (e) Investmentsup to the amount of $3,500,000 made in connection with the purchase (or thetermination or deferral of the commitment to purchase) assets under the SpaAgreement.

 

“**Permitted Liens**” means, with respect to any asset orproperty of a Person, (a)(i) Liens securing taxes, assessments and othercharges or levies imposed by any Governmental Authority (excluding any Lienimposed pursuant to any of the provisions of ERISA or pursuant to any HazardousMaterials Laws) or (ii) the claims of materialmen, mechanics, carriers,warehousemen or landlords for labor, materials, supplies or rentals incurred inthe ordinary course of business, which, in each case, are not at the timerequired to be paid or discharged under Section 7.6.; (b) Liensconsisting of deposits or pledges made, in the ordinary course of business, inconnection with, or to secure payment of, obligations under workers’compensation, unemployment insurance or similar Applicable Laws; (c) Liensconsisting of encumbrances in the nature of zoning restrictions, easements, andrights or restrictions of record on the use of real property, which do notmaterially detract from the value of such property or impair the intended usethereof in the business of such Person; (d) the rights of tenants underleases or subleases not interfering with the ordinary conduct of business ofsuch Person; (e) Liens on amounts deposited in connection with the makingor entering into of  bids, tenders, statutoryobligations, government contracts or leases in the ordinary course of business;(f) Liens on amounts deposited as security for surety or appeal bonds inconnection with obtaining such bonds in the ordinary course of business; (g) allmatters shown on the Title Insurance Policy; (h) Liens in favor of theAdministrative Agent for its benefit and the benefit of the Lenders, theIssuing Bank and each Specified Derivatives Provider, (i) other Lienssecuring Specified Derivatives Obligations pursuant to Derivatives SupportDocuments; and (j) Liens permitted under any Security Documents.

 

“**Person**” means any natural person, corporation, limitedpartnership, general partnership, joint stock company, limited liabilitycompany, limited liability partnership, joint venture, association,company, trust, bank, trustcompany, land trust, business trust or other organization, whether or not alegal entity, or any other nongovernmental entity, or any GovernmentalAuthority.

 

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“**Plan**” means at any time an employee pension benefit plan(other than a Multiemployer Plan) which is covered by Title IV of ERISA orsubject to the minimum funding standards under Section 412 of the InternalRevenue Code and either (i) is maintained, or contributed to, by anymember of the ERISA Group for employees of any member of the ERISA Group or (ii) hasat any time within the preceding five years been maintained, or contributed to,by any Person which was at such time a member of the ERISA Group for employeesof any Person which was at such time a member of the ERISA Group.

 

“**Post-Default Rate**” means, in respect of any principal of anyLoan or any Reimbursement Obligation that is not paid when due, the rateotherwise applicable plus an additional five****percent****5% per annum and with respect to any other Obligation thatis not paid when due (whether at stated maturity, by acceleration, by optionalor mandatory prepayment or otherwise) a rate per annum equal to Base Rate as ineffect from time to time plus five****percent 5.0%.

 

“**Post Foreclosure Plan**” has the meaning given that term in Section 11.4.

 

“**Preferred Stock**” means, with respect to any Person, sharesof capital stock of, or other Equity Interests in, such Person which areentitled to preference or priority over any other capital stock of, or otherEquity Interest in, such Person in respect of the payment of dividends ordistribution of assets upon liquidation or both.

 

“**Principal Office**” means Los Angeles LoanCenter, 2120 East Park Place, Suite 100, El Segundo, CA  90245, Attn: Ivonne Lopez.

 

“**Property**” means all or any of the Kapalua Mauka Property,the Golf Academy Property and the Commercial Property, as the context requires.

 

“**Pro Rata Share**” means, as to each Lender,the ratio, expressed as a percentage of (a) the sum of the amount of suchLender’s Revolving Commitment to (b) the sum of the aggregate amount ofthe Revolving Commitments of all Lenders; provided, however, that if at thetime of determination the Revolving Commitments have terminated or been reducedto zero, the “Pro Rata Share” of each Lender shall be the ratio, expressed as apercentage of (A) the sum of the unpaid principal amount of alloutstanding Revolving Loans, Swingline Loans and Letter of Credit Liabilitiesowing to such Lender as of such date to (B) the sum of the aggregateunpaid principal amount of all outstanding Revolving Loans, Swingline Loans andLetter of Credit Liabilities of all Lenders as of such date.

 

“**Protective Advance**” means all sums expended as determined bythe Administrative Agent to be necessary or appropriate after the Borrowerfails to do so when required: (a) to protect the validity, enforceability,perfection or priority of the Liens in any of the Collateral and theinstruments evidencing the Obligations; (b) to prevent the value of anyCollateral from being materially diminished (assuming the lack of such apayment within the necessary time frame could potentially cause such Collateralto lose value); or (c) to protect any of the Collateral from beingmaterially damaged, impaired, mismanaged or taken, including, withoutlimitation, any amounts expended in connection therewith in accordance with Section 12.2.

 

“**Ramius**” means Ramius Advisors, LLC, a Delaware limitedliability company.

 

“**Regulatory Change**” means, with respect to any Lender, anychange effective after the Agreement Date in Applicable Law (including withoutlimitation, Regulation D of the Board of Governors of the Federal ReserveSystem) or the adoption or making after such date of any interpretation,directive or request applying to a class of banks, including such Lender, of orunder any Applicable Law (whether or not having the force of law and whether ornot failure to comply therewith would be

 

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unlawful)by any Governmental Authority or monetary authority charged with theinterpretation or administration thereof or compliance by any Lender with anyrequest or directive regarding capital adequacy.

 

“**Reimbursement Obligation**” means the obligation of theBorrower to reimburse the Issuing Bank for any drawing honored by the IssuingBank under a Letter of Credit.

 

“**Requisite Lenders**” means, as of any date,Lenders (which shall include the Lender then acting as the AdministrativeAgent) having at least 66-2/3% of the aggregate amount of the RevolvingCommitments, or, if the Revolving Commitments have been terminated or reducedto zero, Lenders holding at least 66 2/3% of the aggregate principal amount ofthe outstanding Revolving Loans, Swingline Loans and Letter of CreditLiabilities; provided that (a) in determining such percentage at any giventime, all then existing Defaulting Lenders will be disregarded and excluded,and the Pro Rata Shares shall be redetermined, for voting purposes only, toexclude the Pro Rata Shares of such Defaulting Lenders, and (b) at alltimes when two or more Lenders are party to this Agreement, the term “RequisiteLenders” shall in no event mean less than two Lenders.

 

“**Restricted Payment**” means: (a) any dividend or otherdistribution, direct or indirect, on account of any shares of any class ofstock or other Equity Interest of the Borrower or any of its Subsidiaries nowor hereafter outstanding, except a dividend payable solely in shares of thatclass of stock to the holders of that class; (b) any redemption,conversion, exchange, retirement, sinking fund or similar payment, purchase orother acquisition for value, direct or indirect, of any shares of any class ofstock or other Equity Interest of the Borrower or any of its Subsidiaries nowor hereafter outstanding; (c) any payment or prepayment of principal of,premium, if any, or interest on, redemption, conversion, exchange, purchase,retirement, defeasance, sinking fund or similar payment with respect to, anySubordinated Debt; and (d) any payment made to retire, or to obtain thesurrender of, any outstanding warrants, options or other rights to acquire anyEquity Interests of the Borrower or any of its Subsidiaries now or hereafteroutstanding.

 

“**Revolving Commitment**” means, as to each Lender, such Lender’sobligation to make Revolving Loans pursuant to Section 2.3., toparticipate in Letters of Credit pursuant to Section 2.2.(i), and toparticipate in Swingline Loans pursuant to Section 2.5.(e), in an amount upto, but not exceeding the amount set forth for such Lender on Schedule I assuch Lender’s “Revolving Commitment Amount”, as the same may be reduced fromtime to time pursuant to Section 2.12. or otherwise pursuant to the termsof this Agreement.

 

“**Revolving Commitment Percentage**” means, as to each Lenderwith a Revolving Commitment, the ratio, expressed as a percentage, of (a) theamount of such Lender’s Revolving Commitment to (b) the aggregate amountof the Revolving Commitments of all Lenders hereunder; provided, however, thatif at the time of determination the Revolving Commitments have been terminatedor been reduced to zero, the “Revolving Commitment Percentage” of each Lenderwith a Revolving Commitment shall be the “Revolving Commitment Percentage” ofsuch Lender in effect immediately prior to such termination or reduction.

 

“**Revolving Loan**” means a loan made by a Lender to theBorrower pursuant to Section 2.1.(a).

 

“**Revolving Note**” means a promissory note ofthe Borrower substantially in the form of Exhibit F, payable to the orderof a Lender in a principal amount equal to the amount of such Lender’sRevolving Commitment.

 

“**SEC**” means the United States Securities and ExchangeCommission.

 

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“**Securities Act**” means the Securities Act of 1933, as amendedfrom time to time, together with all rules and regulations issuedthereunder.

 

“**Security Document**” means the Guaranty, any Mortgage, and anysecurity agreement, pledge agreement, financing statement, or other document,instrument or agreement creating, evidencing or perfecting the AdministrativeAgent’s Liens in any of the Collateral. For the avoidance of doubt, “Security Document” shall not include anyDerivatives Support Document.

 

“**Site Assessment**” shall have the meaning given such term in Section 6.1(o).

 

“**Solvent**” means, when used with respect to any Person, that (a) thefair value and the fair salable value of its assets (excluding any Indebtednessdue from any affiliate of such Person) are each in excess of the fair valuationof its total liabilities (including all contingent liabilities); (b) suchPerson is able to pay its debts or other obligations in the ordinary course asthey mature; and (c) such Person has capital not unreasonably small to carryon its business and all business in which it proposes to be engaged.

 

“**Spa Agreement**” means collectively, the Agreement of Purchaseand Sale relating to the spa improvements, dated as of June 19, 2006, byand between the Borrower and Kapalua Bay, LLC, a Delaware limited liabilitycompany, the Agreement of Purchase and Sale relating to the beach club, datedas of June 19, 2006, by and between the same parties, and the Agreement ofPurchase and Sale relating to the Kapalua general store, dated as of June 19,2006, by and between the same parties, and any amendments to any of suchagreements.

 

“**Specified Derivatives Contract**” means any DerivativesContract, together with any Derivatives Support Document relating thereto, thatis made or entered into at any time, or in effect at any time now or hereafter,whether as a result of an assignment or transfer or otherwise, between theBorrower or any Subsidiary of the Borrower and an Specified DerivativesProvider.

 

“**Specified Derivatives Obligations**” means all indebtedness,liabilities, obligations, covenants and duties of the Borrower or itsSubsidiaries under or in respect of any Specified Derivatives Contract, whetherdirect or indirect, absolute or contingent, due or not due, liquidated orunliquidated, and whether or not evidenced by any written confirmation.

 

“**Specified Derivatives Provider**” means any Lender, or anyAffiliate of a Lender that is a party to a Derivatives Contract at the time theDerivatives Contract is entered into.

 

“**S&P**” means Standard & Poor’s Rating Services, adivision of The McGraw-Hill Companies, Inc.

 

“**Stated Amount**” means the amount available to be drawn by abeneficiary under a Letter of Credit from time to time, as such amount may beincreased or reduced from time to time in accordance with the terms of suchLetter of Credit.

 

**“Subdivision Map”**shall have the meaning givensuch term in Section 7.13.

 

“**Subordinated Debt**” means Indebtedness for money borrowed ofthe Borrower or any of its Subsidiaries that is subordinated in right of paymentand otherwise to the Loans, the other Obligations and the Specified DerivativesObligations, if any, in a manner satisfactory to the Administrative Agent inits sole and absolute discretion.

 

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“**Subsidiary**”means, for any Person, any corporation, partnership, limited liability companyor other entity of which at least a majority of the Equity Interests having bythe terms thereof ordinary voting power to elect a majority of the board ofdirectors or other individuals performing similar functions of suchcorporation, partnership, limited liability company or other entity (withoutregard to the occurrence of any contingency) is at the time directly orindirectly owned or controlled by such Person or one or more Subsidiaries ofsuch Person or by such Person and one or more Subsidiaries of such Person, and shall include all Persons the accountsof which are consolidated with those of such Person pursuant to GAAP.  For the avoidance of doubt, the parties agreethat KBH shall not be deemed to be a Subsidiary.

 

“**Swingline Commitment**” means the Swingline Lender’sobligation to make Swingline Loans pursuant to Section 2.3.****in an amount up to, but not exceeding theamount set forth in the first sentence of Section 2.3.(a), as such amountmay be reduced from time to time in accordance with the terms hereof.

 

“**Swingline Lender**” means Wells Fargo Bank, NationalAssociation, together with its respective successors and assigns.

 

“**Swingline Loan**” means a loan made bythe Swingline Lender to the Borrower pursuant to Section 2.3.

 

“**Swingline Maturity Date**” means the datewhich is seven (7) BusinessDays prior to the Maturity Date.

 

“**Swingline Note**” means thepromissory note of the Borrower substantially in the form of Exhibit G,payable to the order of the Swingline Lender in a principal amount equal to theamount of the Swingline Commitment as originally in effect and otherwise dulycompleted.

 

“**Taxes**” has the meaning given that term in Section 3.10.

 

“**Title Insurance Policy**” means, collectively, six Policies ofTitle Insurance issued by First American Title Insurance Company, all dated November 15,2007, covering the real property described in the Mortgage, having thefollowing Policy Numbers: FCW-000213201 through FCW-000213205, andFCW-000213212, as amended.

 

“**Total Liabilities**” means, as to any Person as of a givendate, all liabilities which would, in conformity with GAAP, be properlyclassified as a liability on a consolidated balance sheet of such Person as ofsuch date.

 

“**Transfer Authorizer Designation Form**” means a formsubstantially in the form of Exhibit H to be delivered to theAdministrative Agent pursuant to Section 2.15, as the same may be amended,restated or modified from time to time with the prior written approval of theAdministrative Agent.

 

“**Type**” with respect to any Loan, refers towhether such Loan is a LIBOR Loan or a Base Rate Loan.

 

“**UCC**” means the Uniform Commercial Code as in effect in anyapplicable jurisdiction.

 

“**Unconsolidated Affiliate**” means, with respect to any Person,any other Person in whom such Person holds an Investment, which Investment isaccounted for in the financial statements of such Person on an equity basis ofaccounting and whose financial results would not be consolidated under GAAPwith the financial results of such Person on the consolidated financialstatements of such Person.

 

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“**Unfunded Liabilities**” means, with respect to any Plan at anytime, the amount (if any) by which (a) the value of all benefitliabilities under such Plan, determined on a plan termination basis using theassumptions prescribed by the PBGC for purposes of Section 4044 of ERISA,exceeds (b) the fair market value of all Plan assets allocable to suchliabilities under Title IV of ERISA (excluding any accrued but unpaidcontributions), all determined as of the then most recent valuation date forsuch Plan, but only to the extent that such excess represents a potentialliability of a member of the ERISA Group to the PBGC or any other Person underTitle IV of ERISA.

 

**“Village Clubhouse”**means an approximately 1.4acre parcel which is a part of the Golf Academy

 

“**W2005 Kapalua**” means W2005 Kapalua/Gengate Hotel Holdings,L.L.C., a Delaware limited liability company.

 

“**Water Delivery Agreement**” shall mean that certain Agreementfor Water Delivery, dated June 21, 2006, but effective as of January 1,2006, between MPC and Leasehold Mortgagor, as amended by that certain Amendmentfor Water Delivery, dated November 7, 2007, and as further amended by thatcertain Second Amendment for Water Delivery, dated March 27, 2009.

 

“**Wells Fargo**” means Wells Fargo Bank, National Association,and its successors and assigns.

 

“**Wholly Owned Subsidiary**” means any Subsidiary of a Person inrespect of which all of the Equity Interests (other than, in the case of acorporation, directors’ qualifying shares) are at the time directly orindirectly owned or controlled by such Person or one or more other Subsidiariesof such Person or by such Person and one or more other Subsidiaries of suchPerson.

 

## **Section 1.2.  General; References to Pacific Time.**

## ** **

Unlessotherwise indicated, all accounting terms, ratios and measurements shall beinterpreted or determined in accordance with GAAP as in effect on the AgreementDate; provided that, if at any time any change in GAAP would affect thecomputation of any financial ratio or requirement set forth in any LoanDocument, and either the Borrower or the Requisite Lenders shall so request,the Administrative Agent, the Lenders and the Borrower shall negotiate in goodfaith to amend such ratio or requirement to preserve the original intentthereof in light of such change in GAAP (subject to the approval of theRequisite Lenders); provided further that, until so amended, (i) suchratio or requirement shall continue to be computed in accordance with GAAPprior to such change therein and (ii) the Borrower shall provide to theAdministrative Agent and the Lenders financial statements and other documentsrequired under this Agreement or as reasonably requested hereunder settingforth a reconciliation between calculations of such ratio or requirement madebefore and after giving effect to such change in GAAP.  References in this Agreement to “Sections”, “Articles”,“Exhibits” and “Schedules” are to sections, articles, exhibits and schedulesherein and hereto unless otherwise indicated. References in this Agreement to any document, instrument or agreement (a) shallinclude all exhibits, schedules and other attachments thereto, (b) shallinclude all documents, instruments or agreements issued or executed inreplacement thereof, to the extent permitted hereby and (c) shall meansuch document, instrument or agreement, or replacement orpredecessor thereto, asamended, supplemented, restated or otherwise modified from time to time to theextent not otherwise stated herein or prohibited hereby and in effect at anygiven time.  Wherever from the context itappears appropriate, each term stated in either the singular or plural shallinclude the singular and plural, and pronouns stated in the masculine, feminineor neuter gender shall include the masculine, the feminine and the neuter.  Unless explicitly set forth to the contrary,a reference to “Subsidiary” means a Subsidiary of the Borrower or a Subsidiaryof such Subsidiary and a reference to an “Affiliate” means a reference to anAffiliate of the Borrower.  Titles andcaptions of Articles, Sections, subsections and clauses in this Agreement arefor convenience only, and neither limit nor amplify the provisions of thisAgreement.  Unless otherwise indicated,all references to time are references to Pacific time.

 

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# **ARTICLEII. CREDIT FACILITY**

# ** **

## **Section 2.1.  Revolving Loans.**

## ** **

(a)           Making of Revolving Loans.  Subject to the terms and conditions set forthin this Agreement, including without limitation, Section 2.14.****below, each Lender severally and not jointly agrees to makeRevolving Loans to the Borrower during the period from and including theEffective Date to but excluding the Maturity Date, in an aggregate principalamount at any one time outstanding up to, but not exceeding, such Lender’sRevolving Commitment; provided, however Revolving Loans shall not be made ifrestricted by the amount limitations set forth in Section 2.14.  Each borrowing of Revolving Loans hereundershall be in an aggregate principal amount of $200,000 and integral multiples of$100,000 in excess of that amount (except that, subject to Section 2.14.,any such borrowing of Revolving Loans may be in the aggregate amount of theRevolving Commitments of all Lenders minus the sum of the aggregateprincipal balance of all Revolving Loans and Swingline Loans outstanding, theLetter of Credit Liabilities and the Interest Holdback, which Revolving Loans,if less than $500,000, must be Base Rate Loans).  Within the foregoing limits and subject tothe terms and conditions of this Agreement, the Borrower may borrow, repay andreborrow Revolving Loans.

 

(b)           Requests for Revolving Loans.  Not later than noon Pacific time at least one(1) Business Day prior to a borrowing of Base Rate Loans and not laterthan noon Pacific time at least three (3) Business Days prior to aborrowing of LIBOR Loans, the Borrower shall deliver to the AdministrativeAgent a Notice of Borrowing.  Each Noticeof Borrowing shall specify the aggregate principal amount of the RevolvingLoans to be borrowed, the date such Revolving Loans are to be borrowed (whichmust be a Business Day), the use of the proceeds of such Revolving Loans, theType of the requested Revolving Loans, and if such Revolving Loans are to beLIBOR Loans, the initial Interest Period for such Revolving Loans.  Each Notice of Borrowing shall be irrevocableonce given and binding on the Borrower. Prior to delivering a Notice of Borrowing, the Borrower may (withoutspecifying whether a Revolving Loan will be a Base Rate Loan or a LIBOR Loan)request that the Administrative Agent provide the Borrower with the most recentLIBOR available to the Administrative Agent. The Administrative Agent shall provide such quoted rate to the Borroweron the date of such request or as soon as possible thereafter.

 

(c)           Funding of Revolving Loans.  Promptly after receipt of a Notice ofBorrowing under the immediately preceding subsection (b),****theAdministrative Agent shall notify each Lender of the proposed borrowing.  Each Lender shall deposit an amount equal tothe Revolving Loan to be made by such Lender to the Borrower with theAdministrative Agent at the Principal Office, in immediately available fundsnot later than noon Pacific time****on the date ofsuch proposed Revolving Loans.  Subjectto fulfillment of all applicable conditions set forth herein, theAdministrative Agent shall make available to the Borrower at the PrincipalOffice on the date of the requested borrowing of Revolving Loans, the proceedsof such amounts received by the Administrative Agent.  No Lender shall be responsible for thefailure of any other Lender to make a Loan or to perform any other obligationto be made or performed by such other Lender hereunder, and the failure of anyLender to make a Loan or to perform any other obligation to be made orperformed by it hereunder shall not relieve the obligation of any other Lenderto make any Loan or to perform any other obligation to be made or performed bysuch other Lender.

 

(d)           Assumptions Regarding Funding byLenders.  With respect to RevolvingLoans to be made after the Effective Date, unless the Administrative Agentshall have been notified by any Lenderthat such Lender will not make available tothe Administrative Agent a Revolving Loan to be made by 

 

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suchLender in connection with any borrowing, the Administrative Agent may assumethat such Lender will make the proceeds of such Revolving Loan available to theAdministrative Agent in accordance with this Section, and the AdministrativeAgent may (but shall not be obligated to), in reliance upon such assumption,make available to the Borrower the amount of such Revolving Loan to be providedby such Lender.  In such event, if suchLender does not make available to the Administrative Agent the proceeds of suchRevolving Loan, then such Lender and the Borrower severally agree to pay to theAdministrative Agent on demand the amount of such Revolving Loan with interestthereon, for each day from and including the date such Revolving Loan is madeavailable to the Borrower but excluding the date of payment to theAdministrative Agent, at (i) in the case of a payment to be made by suchLender, the greater of the Federal Funds Rate and a rate determined by theAdministrative Agent in accordance with banking industry rules oninterbank compensation and (ii) in the case of a payment to be made by theBorrower, the interest rate applicable to Base Rate Loans.  If the Borrower and such Lender shall pay theamount of such interest to the Administrative Agent for the same or overlappingperiod, the Administrative Agent shall promptly remit to the Borrower theamount of such interest paid by the Borrower for such period.  If such Lender pays to the AdministrativeAgent the amount of such Revolving Loan, the amount so paid shall constitutesuch Lender’s Revolving Loan included in the borrowing.  Any payment by the Borrower shall be withoutprejudice to any claim the Borrower may have against a Lender that shall havefailed to make available the proceeds of a Revolving Loan to be made by suchLender.

 

## **Section 2.2.  Letters of Credit.**

## ** **

(a)           Letters of Credit.  Subject to the terms and conditions of thisAgreement, including without limitation, Section 2.14., the Issuing Bank,on behalf of the Lenders, agrees to issue for the account of the Borrowerduring the period from and including the Effective Date to, but excluding, thedate thirty (30) days prior to the Maturity Date, one or more standby lettersof credit (each a “Letter of Credit”) up to a maximum aggregate Stated Amountat any one time outstanding not to exceed $5,000,000as such amount may be reduced from time to time in accordance with the termshereof.

 

(b)           Terms of Letters of Credit.  At the time of issuance, the amount, form,terms and conditions of each Letter of Credit, and of any drafts or acceptancesthereunder, shall be subject to approval by the Issuing Bank and theBorrower.  Notwithstanding the foregoing,in no event may (i) the expiration date of any Letter of Credit extendbeyond the Maturity Date, or (ii) any Letter of Credit have an initialduration in excess of one year; provided, however, a Letter of Credit maycontain a provision providing for the automatic extension of the expirationdate in the absence of a notice of non-renewal from the Issuing Bank but in noevent shall any such provision permit the extension of the expiration date ofsuch Letter of Credit beyond the date that is thirty (30) days prior to theMaturity Date.  The initial Stated Amountof each Letter of Credit shall be at least $100,000.

 

(c)           Requests for Issuance of Lettersof Credit.  The Borrower shall givethe Issuing Bank and the Administrative Agent written notice at least ten (10) BusinessDays prior to the requested date of issuance of a Letter of Credit, such noticeto describe in reasonable detail the proposed terms of such Letter of Creditand the nature of the transactions or obligations proposed to be supported bysuch Letter of Credit, and in any event shall set forth with respect to suchLetter of Credit the proposed (i) initial Stated Amount, (ii) beneficiary,and (iii) expiration date. The Borrower shall also execute and deliversuch customary applications and agreements for standby letters of credit, andother forms as requested from time to time by the Issuing Bank.  Provided the Borrower has given the noticeprescribed by the first sentence of this subsection and delivered suchapplication and agreements referred to in the precedingsentence, subject to theother terms and conditions of this Agreement, including the satisfaction of anyapplicable conditions precedent set forth in Article 5.2., the IssuingBank shall issue the requested Letter of Credit on the requested date ofissuance for the benefit of the stipulated beneficiary but in no event

 

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priorto the date ten (10) Business Days following the date after which theIssuing Bank has received all of the items required to be delivered to it underthis subsection.  Upon the writtenrequest of the Borrower, the Issuing Bank shall deliver to the Borrower a copyof (i) any Letter of Credit proposed to be issued hereunder prior to theissuance thereof and (ii) each issued Letter of Credit within a reasonabletime after the date of issuance thereof. To the extent any term of a Letter of Credit Document is inconsistentwith a term of any Loan Document, the term of such Loan Document shallcontrol.  In connection with any issuanceof a Letter of Credit, the Borrower shall pay the fees payable under the lastsentence of Section 3.5.(b).

 

(d)           Reimbursement Obligations.  Upon receipt by the Issuing Bank from thebeneficiary of a Letter of Credit of any demand for payment under such Letterof Credit, the Issuing Bank shall promptly notify the Borrower of the amount tobe paid by the Issuing Bank as a result of such demand and the date on whichpayment is to be made by the Issuing Bank to such beneficiary in respect ofsuch demand.  The Borrower herebyabsolutely, unconditionally and irrevocably agrees to pay and reimburse theIssuing Bank for the amount of each demand for payment under such Letter ofCredit at or prior to the date on which payment is to be made by the IssuingBank to the beneficiary thereunder, without presentment, demand, protest orother formalities of any kind.  Uponreceipt by the Issuing Bank of any payment in respect of any ReimbursementObligation, the Issuing Bank shall promptly pay to each Lender that hasacquired a participation therein under the second sentence of the subsection (i) ofthis Section such Lender’s Revolving Commitment Percentage of suchpayment.

 

(e)           Manner of Reimbursement.  Upon its receipt of a notice referred to inthe immediately preceding subsection (d), the Borrower shall advise theAdministrative Agent and the Issuing Bank whether or not the Borrower intendsto borrow hereunder to finance its obligation to reimburse the Issuing Bank forthe amount of the related demand for payment and, if it does, the Borrowershall submit a timely request for such borrowing as provided in the applicableprovisions of this Agreement.  If theBorrower fails to so advise the Administrative Agent and the Issuing Bank, orif the Borrower fails to reimburse the Issuing Bank for a demand for paymentunder a Letter of Credit, the failure of which the Issuing Bank shall promptlynotify the Administrative Agent, then the Administrative Agent shall give eachLender prompt notice thereof and of the amount of the demand for payment,specifying such Lender’s Revolving Commitment Percentage of the amount of therelated demand for payment and the provisions of subsection (j) ofthis Section shall apply.

 

(f)            Effect of Letters of Credit onRevolving Commitments.  Upon theissuance by the Issuing Bank of any Letter of Credit and until such Letter ofCredit shall have expired or been cancelled, the Revolving Commitment of eachLender shall be deemed to be utilized for all purposes of this Agreement in anamount equal to the product of (i) such Lender’s Revolving CommitmentPercentage and (ii) the sum of (A) the Stated Amount of such Letterof Credit plus (B) any related Reimbursement Obligations then outstanding.

 

(g)           Issuing Bank’s Duties RegardingLetters of Credit; Unconditional Nature of Reimbursement Obligations.  In examining documents presented inconnection with drawings under Letters of Credit and making payments under suchLetters of Credit against such documents, the Issuing Bank shall only berequired to use the same standard of care as it uses in connection withexamining documents presented in connection with drawings under letters ofcredit in which it has not sold participations and making payments under suchletters of credit.  The Borrower assumesall risks of the acts and omissions of, or misuse of the Letters of Credit by,the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of theforegoing, none of the Issuing Bank, AdministrativeAgent or any of the Lenders shall beresponsible for (i) the form, validity, sufficiency, accuracy, genuinenessor legal effects of any document submitted by any party in connection with theapplication for and issuance of or any drawing honored under any Letter ofCredit even if such document should in

 

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factprove to be in any or all respects invalid, insufficient, inaccurate,fraudulent or forged; (ii) the validity or sufficiency of any instrumenttransferring or assigning or purporting to transfer or assign any Letter ofCredit, or the rights or benefits thereunder or proceeds thereof, in whole or inpart, which may prove to be invalid or ineffective for any reason; (iii) failureof the beneficiary of any Letter of Credit to comply fully with conditionsrequired in order to draw upon such Letter of Credit; (iv) errors,omissions, interruptions or delays in transmission or delivery of any messages,by mail, cable, facsimile, electronic mail, telecopy or otherwise, whether ornot they be in cipher; (v) errors in interpretation of technical terms; (vi) anyloss or delay in the transmission or otherwise of any document required inorder to make a drawing under any Letter of Credit, or of the proceeds thereof;(vii) the misapplication by the beneficiary of any Letter of Credit, or ofthe proceeds of any drawing under any Letter of Credit; or (viii) any consequencesarising from causes beyond the control of the Issuing Bank, AdministrativeAgent or the Lenders.  None of the aboveshall affect, impair or prevent the vesting of any of the Issuing Bank’s orAdministrative Agent’s rights or powers hereunder.  Any action taken or omitted to be taken bythe Issuing Bank under or in connection with any Letter of Credit, even ifarising from the negligence of the Issuing Bank (provided it is taken oromitted in the absence of gross negligence or willful misconduct), shall notcreate against the Issuing Bank any liability to the Borrower, theAdministrative Agent or any Lender.  Inthis connection, the obligation of the Borrower to reimburse the Issuing Bankfor any drawing made under any Letter of Credit shall be absolute,unconditional and irrevocable and shall be paid strictly in accordance with theterms of this Agreement or any other applicable Letter of Credit Document underall circumstances whatsoever, including without limitation, the followingcircumstances: (A) any lack of validity or enforceability of any Letter ofCredit Document or any term or provisions therein; (B) any amendment orwaiver of or any consent to departure from all or any of the Letter of CreditDocuments; (C) the existence of any claim, setoff, defense or other rightwhich the Borrower may have at any time against the Issuing Bank, theAdministrative Agent or any Lender, any beneficiary of a Letter of Credit orany other Person, whether in connection with this Agreement, the transactionscontemplated hereby or in the Letter of Credit Documents or any unrelatedtransaction; (D) any breach of contract or dispute between the Borrower,the Issuing Bank, the Administrative Agent, any Lender or any other Person; (E) anydemand, statement or any other document presented under a Letter of Creditproving to be forged, fraudulent, invalid or insufficient in any respect or anystatement therein or made in connection therewith being untrue or inaccurate inany respect whatsoever; (F) any non-application or misapplication by thebeneficiary of a Letter of Credit or of the proceeds of any drawing under suchLetter of Credit; (G) payment by the Issuing Bank under the Letter ofCredit against presentation of a draft or certificate which does not strictlycomply with the terms of the Letter of Credit; and (H) any other act,omission to act, delay or circumstance whatsoever that might, but for theprovisions of this Section, constitute a legal or equitable defense to ordischarge of the Borrower’s Reimbursement Obligations.

 

(h)           Amendments, Etc.  The issuance by the Issuing Bank of anyamendment, supplement or other modification to any Letter of Credit shall besubject to the same conditions applicable under this Agreement to the issuanceof new Letters of Credit (including, without limitation, that the requesttherefor be made through the Issuing Bank), and no such amendment, supplementor other modification shall be issued unless either (i) the respectiveLetter of Credit affected thereby would have complied with such conditions hadit originally been issued hereunder in such amended, supplemented or modifiedform or (ii) the Administrative Agent and Requisite Lenders shall haveconsented thereto.  In connection withany such amendment, supplement or other modification, the Borrower shall paythe fees, if any, payable under the last sentence of Section 3.5.(b).

 

(i)            Lenders’ Participation in Lettersof Credit.  Immediately upon theissuance by the Issuing Bank of any Letter of Credit each Lender shall bedeemed to have absolutely, irrevocably and unconditionally purchased andreceived from the Issuing Bank, without recourse or warranty, an undividedinterest and participation to the extent of such Lender’s Revolving CommitmentPercentage of the liability of the Issuing Bank with respect to such Letter ofCredit and each Lender thereby shall

 

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absolutely,unconditionally and irrevocably assume, as primary obligor and not as surety,and shall be unconditionally obligated to the Issuing Bank to pay and dischargewhen due, such Lender’s Revolving Commitment Percentage of the Issuing Bank’sliability under such Letter of Credit. In addition, upon the making of each payment by a Lender to theAdministrative Agent for the account of the Issuing Bank in respect of anyLetter of Credit pursuant to the immediately following subsection (j),such Lender shall, automatically and without any further action on the part ofthe Issuing Bank, Administrative Agent or such Lender, acquire (i) aparticipation in an amount equal to such payment in the ReimbursementObligation owing to the Issuing Bank by the Borrower in respect of such Letterof Credit and (ii) a participation in a percentage equal to such Lender’sRevolving Commitment Percentage in any interest or other amounts payable by theBorrower in respect of such Reimbursement Obligation (other than the Feespayable to the Issuing Bank pursuant to Section 3.5.(b)).

 

(j)            Payment Obligation of Lenders.  Each Lender severally agrees to pay to theAdministrative Agent, for the account of the Issuing Bank, on demand inimmediately available funds in Dollars the amount of such Lender’s RevolvingCommitment Percentage of each drawing paid by the Issuing Bank under eachLetter of Credit to the extent such amount is not reimbursed by the Borrowerpursuant to the subsection (d) of this Section; provided, however, that inrespect of any drawing under any Letter of Credit, the maximum amount that anyLender shall be required to fund, whether as a Revolving Loan or as aparticipation, shall not exceed such Lender’s Revolving Commitment Percentageof such drawing.  Each Lender’sobligation to make such payments to the Administrative Agent under thissubsection, and the Administrative Agent’s right to receive the same for theaccount of the Issuing Bank, shall be absolute, irrevocable and unconditionaland shall not be affected in any way by any circumstance whatsoever, includingwithout limitation, (i) the failure of any other Lender to make its paymentunder this subsection, (ii) the financial condition of the Borrower or anyother Loan Party, (iii) the existence of any Default or Event of Default,including any Event of Default described in Section 10.1.(e) or (f) or(iv) the termination of the Revolving Commitments.  Each such payment to the Administrative Agentfor the account of the Issuing Bank shall be made without any offset,abatement, withholding or deduction whatsoever.

 

(k)           Information to Lenders.  Promptly following any change in Letters of Creditoutstanding, the Issuing Bank shall deliver to each Lender and the Borrower anotice describing the aggregate amount of all Letters of Credit outstanding atsuch time.  Upon the request of anyLender from time to time, the Issuing Bank shall deliver any other informationreasonably requested by such Lender with respect to each Letter of Credit thenoutstanding.  Other than as set forth inthis subsection, the Issuing Bank shall have no duty to notify the Lendersregarding the issuance or other matters regarding Letters of Credit issuedhereunder.  The failure of the IssuingBank to perform its requirements under this subsection shall not relieve anyLender from its obligations under the immediately preceding subsection (j).

 

## **Section 2.3.  Swingline Loans.**

## ** **

(a)           Swingline Loans.  Subject to the terms and conditions hereof,including without limitation Section 2.14., the Swingline Lender agrees tomake Swingline Loans to the Borrower, during the period from the Effective Dateto but excluding the Swingline Maturity Date, in an aggregate principal amountat any one time outstanding up to, but not exceeding, $5,000,000, as such amount may be reduced from time to time inaccordance with the terms hereof.  If atany time the aggregate principal amount of the Swingline Loans outstanding atsuch time exceeds the Swingline Commitment in effect at such time, the Borrowershall immediately pay the Administrative Agent for the account of the SwinglineLender the amount of such excess. Subject to the terms and conditions of this Agreement, the Borrower mayborrow, repay and reborrow Swingline Loans hereunder

 

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(b)           Procedure for Borrowing SwinglineLoans.  The Borrower shall give theAdministrative Agent and the Swingline Lender notice pursuant to a Notice ofSwingline Borrowing or telephonic notice of each borrowing of a SwinglineLoan.  Each Notice of Swingline Borrowingshall be delivered to the Swingline Lender no later than noon Pacific time onthe proposed date of such borrowing.  Anytelephonic notice shall include all information to be specified in a writtenNotice of Swingline Borrowing and shall be promptly confirmed in writing by theBorrower pursuant to a Notice of Swingline Borrowing sent to the Swingline Lenderby telecopy on the same day of the giving of such telephonic notice.  Not later than 2:00 p.m. Pacific time onthe date of the requested Swingline Loan and subject to satisfaction of theapplicable conditions set forth in Article 5.2. for such borrowing, theSwingline Lender will make the proceeds of such Swingline Loan available to theBorrower in Dollars, in immediately available funds, at the account specifiedby the Borrower in the Notice of Swingline Borrowing.

 

(c)           Interest.  Swingline Loans shall bear interest at a perannum rate equal to the Base Rate as in effect from time to time plus theApplicable Margin or at such other rate or rates as the Borrower and theSwingline Lender may agree from time to time in writing.  All accrued and unpaid interest on SwinglineLoans shall be payable on the dates and in the manner provided in Section 2.4.with respect to interest on Base Rate Loans (except as the Swingline Lender andthe Borrower may otherwise agree in writing in connection with any particular SwinglineLoan).

 

(d)           Swingline Loan Amounts, Etc.  Each Swingline Loan shall be in the minimumamount of $200,000 and integral multiples of $100,000 in excess thereof, orsuch other minimum amounts agreed to by the Swingline Lender and the Borrower.  Any voluntary prepayment of a Swingline Loanmust be in integral multiples of $100,000 or the aggregate principal amount ofall outstanding Swingline Loans (or such other minimum amounts upon which theSwingline Lender and the Borrower may agree) and in connection with any suchprepayment, the Borrower must give the Swingline Lender prior written noticethereof no later than noon Pacific time on the day prior to the date of suchprepayment.  The Swingline Loans shall,in addition to this Agreement, be evidenced by the Swingline Note.

 

(e)           Repayment and Participations ofSwingline Loans.  The Borrower agreesto repay each Swingline Loan within three (3) Business Days of demandtherefor by the Swingline Lender and, in any event, within five (5) Business Days after thedate such Swingline Loan was made; provided, that the proceeds of a SwinglineLoan may not be used to pay a Swingline Loan. Notwithstanding the foregoing, the Borrower shall repay the entireoutstanding principal amount of, and all accrued but unpaid interest on, theSwingline Loans on the Swingline Maturity Date (or such earlier date as theSwingline Lender and the Borrower may agree in writing).  In lieu of demanding repayment of anyoutstanding Swingline Loan from the Borrower, the Swingline Lender may, onbehalf of the Borrower (which hereby irrevocably directs the Swingline Lenderto act on its behalf), request a borrowing of Base Rate Loans from the Lendersin an amount equal to the principal balance of such Swingline Loan.  The amount limitations contained in thesecond sentence of Section 2.1.(a) shall not apply to any borrowingof Base Rate Loans made pursuant to this subsection.  The Swingline Lender shall give notice to theAdministrative Agent of any such borrowing of Base Rate Loans not later thannoon Pacific time at least one (1) Business Day prior to the proposed dateof such borrowing.  Not later than noonPacific time on the proposed date of such borrowing, each Lender will makeavailable to the Administrative Agent at the Principal Office for the accountof the Swingline Lender, in immediately available funds, the proceeds of theBase Rate Loan to be made by such Lender. The Administrative Agent shall pay the proceeds of such Base Rate Loansto the Swingline Lender, which shall apply such proceeds to repay suchSwingline Loan.  If the Lenders areprohibited from making Loans required to be made under this subsection for anyreason whatsoever, including without limitation, the occurrence of any of theDefaults or Events of Default described in Sections 10.1.(e) or (f)),each Lender shall purchase from the Swingline Lender, without recourse orwarranty, an undivided interest and participation to the extent of such Lender’sRevolving Commitment Percentage of such Swingline Loan, by directly purchasinga participation in such Swingline Loan in such

 

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amountand paying the proceeds thereof to the Administrative Agent for the account ofthe Swingline Lender in Dollars and in immediately available funds.  A Lender’s obligation to purchase such aparticipation in a Swingline Loan shall be absolute and unconditional and shallnot be affected by any circumstance whatsoever, including without limitation, (i) anyclaim of setoff, counterclaim, recoupment, defense or other right which suchLender or any other Person may have or claim against the Administrative Agent,the Swingline Lender or any other Person whatsoever, (ii) the occurrenceor continuation of a Default or Event of Default (including without limitation,any of the Defaults or Events of Default described in Sections 10.1. (e) or(f), or the termination of any Lender’s Revolving Commitment, (iii) theexistence (or alleged existence) of an event or condition which has had orcould have a Material Adverse Effect, (iv) any breach of any Loan Documentby the Administrative Agent, any Lender, the Borrower or any other Loan Party,or (v) any other circumstance, happening or event whatsoever, whether ornot similar to any of the foregoing.  Ifsuch amount is not in fact made available to the Swingline Lender by anyLender, the Swingline Lender shall be entitled to recover such amount on demandfrom such Lender, together with accrued interest thereon for each day from thedate of demand thereof, at the Federal Funds Rate.  If such Lender does not pay such amountforthwith upon the Swingline Lender’s demand therefor, and until such time assuch Lender makes the required payment, the Swingline Lender shall be deemed tocontinue to have outstanding Swingline Loans in the amount of such unpaidparticipation obligation for all purposes of the Loan Documents (other thanthose provisions requiring the other Lenders to purchase a participationtherein).  Further, such Lender shall bedeemed to have assigned any and all payments made of principal and interest onits Loans, and any other amounts due it hereunder, to the Swingline Lender tofund Swingline Loans in the amount of the participation in Swingline Loans thatsuch Lender failed to purchase pursuant to this Section until such amounthas been purchased (as a result of such assignment or otherwise).

 

## **Section 2.4.  Rates and Payment of Interest on Loans.**

## ** **

(a)           Rates.  The Borrower promises to pay to theAdministrative Agent for the account of each Lender interest on the unpaidprincipal amount of each Loan made by such Lender for the period from andincluding the date of the making of such Loan to but excluding the date suchLoan shall be paid in full, at the following per annum rates:

 

(i)            during such periodsas such Loan is a Base Rate Loan, at the Base Rate (as in effect from time totime), plus the Applicable Margin;

 

(ii)           during such periodsas such Loan is a LIBOR Loan, at LIBOR for such Loan for the Interest Periodtherefor, plus the Applicable Margin.

 

Notwithstandingthe foregoing, (x) from and after November 13, 2009, in no eventshall the per annum rate of interest described in the immediately precedingclauses (i) and (ii) be less than five and one —half percent (5.50%)and (y) while an Event of Default exists, the Borrower shall pay to theAdministrative Agent for the account of each Lender and the Issuing Bank, asthe case may be, interest at the Post-Default Rate on the outstanding principalamount of any Loan made by such Lender, on all Reimbursement Obligations and onany other amount payable by the Borrower hereunder or under the Notes held bysuch Lender to or for the account of such Lender (including without limitation,accrued but unpaid interest to the extent permitted under Applicable Law).

 

(b)           Payment of Interest. Allaccrued and unpaid interest on the outstanding principal amount of each Loanshall be payable (i) monthly in arrears on the first day of each month,commencing with the first full calendar month occurring after the EffectiveDate and (ii) on any date on which the principal balance of such Loan isdue and payable in full (whether at maturity, due to acceleration orotherwise).

 

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Interestpayable at the Post-Default Rate shall be payable from time to time ondemand.  All determinations by theAdministrative Agent of an interest rate hereunder shall be conclusive andbinding on the Lenders and the Borrower for all purposes, absent manifest error.

 

## **Section 2.5.  Number of Interest Periods.**

## ** **

Theremay be no more than ten (10) different Interest Periods for LIBOR Loansoutstanding at the same time.

 

## **Section 2.6.  Repayment of Loans.**

## ** **

TheBorrower shall repay the entire outstanding principal amount of, and allaccrued but unpaid interest on, the Loans on the Maturity Date.

 

## **Section 2.7.  Prepayments.**

## ** **

(a)           Optional.  Subject to Section 4.4., the Borrowermay prepay any Loan at any time without premium or penalty.  The Borrower shall give the AdministrativeAgent at least three (3) Business Days prior written notice of theprepayment of any Loan.  Each voluntaryprepayment of Loans shall be in an aggregate minimum amount of $200,000 andintegral multiples of $100,000 in excess thereof.

 

(b)           Mandatory. If at any time the aggregate principal amount of all outstandingRevolving Loans and Swingline Loans, together with the aggregate amount of allLetter of Credit Liabilities and the Interest Holdback, exceeds the aggregateamount of the Revolving Commitments, the Borrower shall immediately upon demandpay to the Administrative Agent for the account of the Lenders then holdingRevolving Commitments (or if the Revolving Commitments have been terminated,then holding outstanding Revolving Loans, Swingline Loans and/or Letter ofCredit Liabilities), the amount of such excess. All payments under thissubsection (b) shall be applied in accordance with the last sentence of Section 3.2.

 

## **Section 2.8.  Late Charges.**

## ** **

Ifany payment required under this Agreement is not paid within ten (10) daysafter it becomes due and payable, the Borrower shall pay a late charge for latepayment to compensate the Lenders for the loss of use of funds and for theexpenses of handling the delinquent payment, in an amount equal to fourpercent (4%) of suchdelinquent payment.  Such late chargeshall be paid in any event not later than the due date of the next subsequentinstallment of principal and/or interest. In the event the maturity of the Obligations hereunder occurs or isaccelerated pursuant to Section 10.2., this Section shall apply onlyto payments overdue prior to the time of such acceleration.  This Section shall not be deemed to be awaiver of the Lenders’ right to accelerate payment of any of the Obligations aspermitted under the terms of this Agreement.

 

## **Section 2.9.  Continuation.**

## ** **

Solong as no Default or Event of Default exists, the Borrower may on any BusinessDay, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan or anyportion thereof as a LIBOR Loan by selecting a new Interest Period for such LIBORLoan.  Each Continuation of a LIBOR Loanshall be in an aggregate minimum amount of $200,000 and integral multiples of$100,000 in excess of that amount, and each new Interest Period selected underthis Section shall commence on the last day of the immediately precedingInterest Period.  Each selection of a newInterest Period shall be made by the

 

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Borrowergiving to the Administrative Agent a Notice of Continuation not later than 9:00 a.m.Pacific time on the third Business Day prior to the date of any suchContinuation.  Such notice by theBorrower of a Continuation shall be by telecopy, electronic mail or othersimilar form of communication in the form of a Notice of Continuation,specifying (a) the proposed date of such Continuation, (b) the LIBORLoan and portion thereof subject to such Continuation and (c) the durationof the selected Interest Period, all of which shall be specified in such manneras is necessary to comply with all limitations on Loans outstandinghereunder.  Each Notice of Continuationshall be irrevocable by and binding on the Borrower once given.  Promptly after receipt of a Notice ofContinuation, the Administrative Agent shall notify each Lender of the proposedContinuation.  If the Borrower shall failto select in a timely manner a new Interest Period for any LIBOR Loan inaccordance with this Section, such Loan will automatically, on the last day ofthe current Interest Period therefor, continue as a LIBOR Loan with an InterestPeriod of one month.

 

## **Section 2.10.  Conversion.**

## ** **

Solong as no Default or Event of Default exists, the Borrower may on any BusinessDay, upon the Borrower’s giving of a Notice of Conversion to the AdministrativeAgent by telecopy, electronic mail or other similar form of communication,Convert all or a portion of a Loan of one Type into a Loan of anotherType.  Each Conversion of Base Rate Loansinto LIBOR Loans shall be in an aggregate minimum amount of $200,000 andintegral multiples of $100,000 in excess of that amount, and upon Conversion ofa Base Rate Loan into a LIBOR Loan, the Borrower shall pay accrued interest tothe date of Conversion on the principal amount so Converted in accordance with Section 2.4.  Any Conversion of a LIBOR Loan into a BaseRate Loan shall be made on, and only on, the last day of an Interest Period forsuch LIBOR Loan.  Each such Notice ofConversion shall be given not later than 9:00 a.m. one (1) BusinessDay prior to the date of any proposed Conversion into Base Rate Loans and three(3) Business Days prior to the date of any proposed Conversion into LIBORLoans.  Promptly after receipt of aNotice of Conversion, the Administrative Agent shall notify each Lender of theproposed Conversion.  Subject to therestrictions specified above, each Notice of Conversion shall be by telecopy,electronic mail or other similar form of communication in the form of a Noticeof Conversion specifying (a) the requested date of such Conversion, (b) theType of Loan to be Converted, (c) the portion of such Type of Loan to beConverted, (d) the Type of Loan such Loan is to be Converted into and (e) ifsuch Conversion is into a LIBOR Loan,the requested duration of the Interest Periodof such Loan.  Each Notice of Conversionshall be irrevocable by and binding on the Borrower once given.

 

## **Section 2.11.  Notes.**

## ** **

(a)           Notes.  The Revolving Loans made by each Lendershall, in addition to this Agreement, also be evidenced by a Revolving Note,payable to the order of such Lender in a principal amount equal to the amountof its Revolving Commitment as originally in effect and otherwise dulycompleted.  The Swingline Loans made bythe Swingline Lender to the Borrower shall, in addition to this Agreement, alsobe evidenced by a Swingline Note payable to the order of the Swingline Lender.

 

(b)           Lost, Stolen, Destroyed orMutilated Notes.  Upon receipt by theBorrower of (i) written notice from a Lender that a Note of such Lenderhas been lost, stolen, destroyed or mutilated, and (ii)(A) in the case ofloss, theft or destruction, an unsecured agreement of indemnity from suchLender in form reasonably satisfactory to the Borrower, or (B) in the caseof mutilation, upon surrender and cancellation of such Note, the Borrower shallat its own expense execute and deliver to such Lender a new Note dated the dateof such lost, stolen, destroyed or mutilated Note.

 

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## **Section 2.12.  Voluntary Reductions of the RevolvingCommitment.**

## ** **

TheBorrower may terminate or reduce the amount of the Revolving Commitments (forwhich purpose use of the Revolving Commitments shall be deemed to include theaggregate principal amount of all outstanding Swingline Loans) at any time andfrom time to time without penalty or premium upon not less than five (5) BusinessDays prior notice to the Administrative Agent of each such termination orreduction, which notice shall specify the effective date thereof and the amountof any such reduction (which in the case of any partial reduction of theRevolving Commitments shall not be less than $5,000,000 and integral multiplesof $1,000,000 in excess of that amount in the aggregate) and shall be irrevocableonce given and effective only upon receipt by the Administrative Agent (“CommitmentReduction Notice”); provided, however, the Borrower may not reduce theaggregate amount of the Revolving Commitments below $5,000,000****unless the Borrower is terminating theRevolving Commitments in full.  Promptlyafter receipt of a Commitment Reduction Notice the Administrative Agent shallnotify each Lender of the proposed termination or Revolving Commitmentreduction.  The Revolving Commitments,once reduced pursuant to this Section, may not be increased.  The Borrower shall pay all interest and fees,on the Loans accrued to the date of such reduction or termination of theRevolving Commitments to the Administrative Agent for the account of theLenders, including but not limited to any applicable compensation due to eachLender in accordance with Section 4.4. of this Agreement.

 

## **Section 2.13.  Expiration or Maturity Date of Letters ofCredit Past Maturity Date.**

## ** **

Ifon the date the Revolving Commitments are terminated (whether voluntarily, byreason of the occurrence of an Event of Default or otherwise), there are anyLetters of Credit outstanding hereunder, the Borrower shall, on such date, payto the Administrative Agent, for its benefit and the benefit of the Lenders andthe Issuing Bank, an amount of money equal to the Stated Amount of such Letter(s) ofCredit for deposit into the Letter of Credit Collateral Account.  If a drawing pursuant to any such Letter ofCredit occurs on or prior to the expiration date of such Letter of Credit, theBorrower authorizes the Administrative Agent to use the monies deposited in theLetter of Credit Collateral Account to reimburse the Issuing Bank for thepayment made by the Issuing Bank to the beneficiary with respect to such drawingor the payee with respect to such presentment. If no drawing occurs on or prior to the expiration date of such Letterof Credit, the Administrative Agent shall pay to the Borrower (or to whomeverelse may be legally entitled thereto) the monies deposited in the Letter ofCredit Collateral Account with respect to such outstanding Letter of Credit onor before the date thirty (30) days after the expiration date of suchLetter of Credit.

 

## **Section 2.14.  Amount Limitations.**

## ** **

Notwithstandingany other term of this Agreement or any other Loan Document, (a) no Lendershall make any Loan, and the Issuing Bank shall not issue any Letter of Credit,if immediately after the making of such Loan or issuance of such Letter ofCredit the aggregate principal amount of all outstanding Loans, together withthe aggregate amount of all Letter of Credit Liabilities and the InterestHoldback, would exceed the aggregate amount of all Revolving Loan Commitmentsat such time.

## ** **

## **Section 2.15.  Funds Transfer Disbursements.**

## ** **

(a)           Generally.  The Borrower hereby authorizes theAdministrative Agent to disburse the proceeds of any Loan made by the Lendersor any of their Affiliates pursuant to the Loan Documents as requested by anauthorized representative of the Borrower to any of the accounts designated inthe Transfer Authorizer Designation Form. The Borrower agrees to be bound by any transfer request: (i) authorizedor transmitted by the Borrower; or, (ii) made in the Borrower’s name andaccepted by the

 

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Administrative Agent in good faith and in compliance withthese transfer instructions, even if not properly authorized by theBorrower.  The Borrower further agreesand acknowledges that the Administrative Agent may rely solely on any bankrouting number or identifying bank account number or name provided by theBorrower to effect a wire of funds transfer even if the information provided bythe Borrower identifies a different bank or account holder than named by theBorrower.  The Administrative Agent isnot obligated or required in any way to take any actions to detect errors ininformation provided by the Borrower.  Ifthe Administrative Agent takes any actions in an attempt to detect errors inthe transmission or content of transfer or requests or takes any actions in anattempt to detect unauthorized funds transfer requests, the Borrower agreesthat no matter how many times the Administrative Agent takes these actions theAdministrative Agent will not in any situation be liable for failing to take orcorrectly perform these actions in the future and such actions shall not becomeany part of the transfer disbursement procedures authorized under thisprovision, the Loan Documents, or any agreement between the Administrative Agentand the Borrower.  The Borrower agrees tonotify the Administrative Agent of any errors in the transfer of any funds orof any unauthorized or improperly authorized transfer requests within fourteen(14) days after the Administrative Agent’s confirmation to the Borrower of suchtransfer.

 

(b)           FundsTransfer.  The Administrative Agentwill, in its sole discretion, determine the funds transfer system and the meansby which each transfer will be made.  TheAdministrative Agent may delay or refuse to accept a funds transfer request ifthe transfer would: (i) violate the terms of this authorization (ii) requireuse of a bank unacceptable to the Administrative Agent or any Lender orprohibited by any Governmental Authority; (iii) cause the AdministrativeAgent or any Lender to violate any Federal Reserve or other regulatory riskcontrol program or guideline, or (iv) otherwise cause the AdministrativeAgent or any Lender to violate any Applicable Law or regulation.

 

(c)           Limitation of Liability.  Neither the Administrative Agent, the IssuingBank nor any Lender shall be liable to the Borrower or any other parties for (i) errors,acts or failures to act of others, including other entities, banks,communications carriers or clearinghouses, through which the Borrower’s transfersmay be made or information received or transmitted, and no such entity shall bedeemed an agent of the Administrative Agent, the Issuing Bank or any Lender, (ii) anyloss, liability or delay caused by fires, earthquakes, wars, civildisturbances, power surges or failures, acts of government, labor disputes,failures in communications networks, legal constraints or other events beyondAdministrative Agent’s, Issuing Bank’s or any Lender’s control, or (iii) anyspecial, consequential, indirect or punitive damages, whether or not (x) anyclaim for these damages is based on tort or contract or (y) theAdministrative Agent, the Issuing Bank, any Lender or the Borrower knew orshould have known the likelihood of these damages in any situation.  Neither the Administrative Agent, the IssuingBank nor any Lender makes any representations or warranties other than thoseexpressly made in this Agreement.

 

**Section 2.16.**  **Amended and RestatedObligations**.

 

As of theEffective Date, all “Advances” outstanding under and as defined in the ExistingCredit Agreement shall be deemed to be Revolving Loans under this Agreement andall other “Obligations” outstanding under the Existing Credit Agreement (and asthe term “Obligations” is defined in the Existing Credit Agreement) shallautomatically be deemed to be Obligations outstanding hereunder.  To the extent that changes in the Commitmentsamong the Lenders requires a reallocation of outstanding Revolving Loans, theLenders agree that, on the Effective Date, Revolving Loans shall be purchasedand sold, as all though assignments were made in accordance with Paragraph 12.6without regard to minimum amounts, fees payable upon assignment or execution ofan Assignment and Assumption.  As of theEffective Date, the Existing Letters of Credit shall be deemed “Letters ofCredit” for all purposes of this Agreement and the other Loan Documents.  Effective upon the Effective Date, theIssuing Bank shall be deemed, without further action by any party hereto, tohave unconditionally and

 

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irrevocably sold to eachLender, and each Lender shall be deemed, without further action by any partyhereto, to have unconditionally and irrevocably purchased from the IssuingBank, a participation in such Letter of Credit in proportion to its Pro RataShare, as if such Letter of Credit were issued hereunder on the EffectiveDate.   All issuance fees paid to the “Lenders”under (and as defined in) the Existing Credit Agreement with respect to theExisting Letters of Credit shall be prorated as of the Effective Date and theLenders hereunder allocated their respective Pro Rata Shares thereof by thoseof the Lenders which were “Lenders” under the Existing Credit Agreement.

 

# **ARTICLEIII. PAYMENTS, FEES AND OTHER GENERAL PROVISIONS**

# ** **

## **Section 3.1.  Payments.**

## ** **

(a)           Payments by Borrower.  Except to the extent otherwise providedherein, all payments of principal, interest, Fees and other amounts to be madeby the Borrower under this Agreement, the Notes or any other Loan Documentshall be made in Dollars, in immediately available funds, without setoff,deduction or counterclaim, to the Administrative Agent at the Principal Office,not later than noon Pacific time on the date on which such payment shall becomedue (each such payment made after such time on such due date to be deemed tohave been made on the next succeeding Business Day).  Subject to Section 10.5., the Borrowershall, at the time of making each payment under this Agreement or any otherLoan Document, specify to the Administrative Agent the amounts payable by theBorrower hereunder to which such payment is to be applied.  Each payment received by the AdministrativeAgent for the account of a Lender under this Agreement or any Note shall bepaid to such Lender by wire transfer of immediately available funds inaccordance with the wiring instructions provided by such Lender to theAdministrative Agent from time to time, for the account of such Lender at theapplicable Lending Office of such Lender. Each payment received by the Administrative Agent for the account of theIssuing Bank under this Agreement shall be paid to the Issuing Bank by wiretransfer of immediately available funds in accordance with the wiringinstructions provided by the Issuing Bank to the Administrative Agent from timeto time, for the account of the Issuing Bank. In the event the Administrative Agent fails to pay such amounts to suchLender or the Issuing Bank, as the case may be, within one (1) BusinessDay of receipt of such amounts, the Administrative Agent shall pay interest onsuch amount at a rate per annum equal to the Federal Funds Rate from time totime in effect.  If the due date of anypayment under this Agreement or any other Loan Document would otherwise fall ona day which is not a Business Day such date shall be extended to the nextsucceeding Business Day and interest shall continue to accrue at the rate, ifany, applicable to such payment for the period of such extension.

 

(b)           Presumptions Regarding Payments byBorrower.  Unless the AdministrativeAgent shall have received notice from the Borrower prior to the date on whichany payment is due to the Administrative Agent for the account of the Lendersor the Issuing Bank hereunder that the Borrower willnot make such payment, the AdministrativeAgent may assume that the Borrower has made such payment on such date inaccordance herewith and may (but shall not be obligated to), in reliance uponsuch assumption, distribute to the Lenders or the Issuing Bank, as the case maybe, the amount due.  In such event, ifthe Borrower has not in fact made such payment, then each of the Lenders or theIssuing Bank, as the case may be, severally agrees to repay to theAdministrative Agent on demand that amount so distributed to such Lender or theIssuing Bank, with interest thereon, for each day from and including the datesuch amount is distributed to it to but excluding the date of payment to theAdministrative Agent, at the greater of the Federal Funds Rate and a ratedetermined by the Administrative Agent in accordance with banking industry rules oninterbank compensation.

 

## **Section 3.2.  Pro Rata Treatment.**

## ** **

Except to the extent otherwise provided herein:  (a) each borrowing from Lenders under Section 2.1.(a),2.2.(e) and 2.3.(e) shall be made from the Lenders, each payment ofthe fees under

 

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Sections 3.5.(a) andthe first sentence of 3.5.(b) shall be made for the account of theLenders, and each termination or reduction of the amount of the RevolvingCommitments under Section 2.12. shall be applied to the respectiveRevolving Commitments of the Lenders, pro rata according to the amounts oftheir respective Revolving Commitments; (b) each payment or prepayment ofprincipal of Revolving Loans by the Borrower shall be made for the account ofthe Lenders pro rata in accordance with the respective unpaid principal amountsof the Revolving Loans held by them, provided that if immediately prior togiving effect to any such payment in respect of any Revolving Loans theoutstanding principal amount of the Revolving Loans shall not be held by theLenders pro rata in accordance with their respective Revolving Commitments ineffect at the time such Loans were made, then such payment shall be applied tothe Revolving Loans in such manner as shall result, as nearly as ispracticable, in the outstanding principal amount of the Revolving Loans beingheld by the Lenders pro rata in accordance with their respective RevolvingCommitments; (c) each payment of interest on Revolving Loans by theBorrower shall be made for the account of the Lenders pro rata in accordance with the amounts of interest onsuch Revolving Loans then due and payable to the respective Lenders; (d) theConversion and Continuation of Loans of a particular Type (other thanConversions provided for by Section 4.1.) shall be made pro rata among theLenders according to the amounts of their respective Loans and the then currentInterest Period for each Lender’s portion of each Loan of such Type shall becoterminous; (e)  the Lenders’ participation in, and paymentobligations in respect of, Swingline Loans under Section 2.3., shall be inaccordance with their respective Revolving Commitment Percentage; and (f) theLenders’ participation in, and payment obligations in respect of, Letters ofCredit under Section 2.2., shall be in accordance with their respectiveRevolving Commitment Percentage.  Allpayments of principal, interest, fees and other amounts in respect of theSwingline Loans shall be for the account of the Swingline Lender only (exceptto the extent any Lender shall have acquired a participating interest in anysuch Swingline Loan pursuant to Section 2.3.(e), in which case suchpayments shall be pro rata in accordance with such participatinginterests).  Any payment or prepayment ofprincipal or interest made (i) during the existence of a Default or Eventof Default or (ii) pursuant to Section 2.7.(b) or Section 7.16,shall be made for the account of the Swingline Lender and the Lenders holdingRevolving Commitments (or, if the Revolving Commitments have been terminated,holding Revolving Loans and Letter of Credit Liabilities) in accordance withthe order set forth in Section 10.5.

 

## **Section 3.3.  Sharing of Payments, Etc.**

## ** **

Ifa Lender shall obtain payment of any principal of, or interest on, any Loanunder this Agreement or shall obtain payment on any other Obligation owing bythe Borrower or any other Loan Party through the exercise of any right ofset-off, banker’s lien, counterclaim or similar right or otherwise or throughvoluntary prepayments directly to a Lender or other payments made by theBorrower or any other Loan Party to a Lender (other than any payment in respectof Specified Derivatives Obligations) not in accordance with the terms of this Agreement and such payment should be distributed to the Lenders inaccordance with Section 3.2. or Section 10.5., such Lender shallpromptly purchase from such other Lenders participations in (or, if and to theextent specified by such Lender, direct interests in) the Loans made by theother Lenders or other Obligations owed to such other Lenders in such amounts,and make such other adjustments from time to time as shall be equitable, to theend that all the Lenders shall share the benefit of such payment (net of anyreasonable expenses which may actually be incurred by such Lender in obtainingor preserving such benefit) in accordance with the requirements of Section 3.2.or Section 10.5., as applicable.  Tosuch end, all the Lenders shall make appropriate adjustments among themselves(by the resale of participations sold or otherwise) if such payment isrescinded or must otherwise be restored. The Borrower agrees that any Lender so purchasing a participation (ordirect interest) in the Loans or other Obligations owed to such other Lendersmay exercise all rights of set-off, banker’s lien, counterclaim or similarrights with the respect to such participation as fully as if such Lender were adirect holder of Loans in the amount of such participation.  Nothing contained herein shall require anyLender to exercise any such right or shall affect the right of any Lender toexercise and retain the benefits of exercising, any such right with respect toany other indebtedness or obligation of the Borrower.

 

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## **Section 3.4.  Several Obligations.**

## ** **

NoLender shall be responsible for the failure of any other Lender to make a Loanor to perform any other obligation to be made or performed by such other Lenderhereunder, and the failure of any Lender to make a Loan or to perform any otherobligation to be made or performed by it hereunder shall not relieve theobligation of any other Lender to make any Loan or to perform any otherobligation to be made or performed by such other Lender.

 

## **Section 3.5.  Fees.**

## ** **

(a)           Closing Fee.  On the Effective Date, the Borrower agrees topay to the Administrative Agent and each Lender all loan fees as have beenagreed to in writing by the Borrower and the Administrative Agent.

 

(b)           Letter of Credit Fees.  The Borrower agrees to pay to theAdministrative Agent for the account of each Lender, as a condition to theissuance of each Letter of Credit, a letter of credit fee equal to threepercent (3.00%) per annum times the Stated Amount of such Letter of Credit forthe period from and including the date of issuance of such Letter of Credit toand including the stated termination date such Letter of Credit (with suchletter of credit fee to be also paid in advance prior to the extension orrenewal (whether by automatic renewal or otherwise) of such Letter of Creditfor the additional term of such Letter of Credit);  provided, however, in no eventshall the aggregate amount of such fee in respectof any Letter of Credit be less than$1,000.  In addition to such fees, theBorrower shall pay to the Issuing Bank solely for its own account, as acondition to the issuance of each Letter of Credit, a fronting fee in respectof each Letter of Credit at the rate equal to one-eighth of one percent(0.125%) per annum on the daily average Stated Amount of such Letter ofCredit.  The fees provided for in theimmediately preceding three sentences shall be nonrefundable and payable inadvance.  The Borrower shall pay directlyto the Issuing Bank from time to time on demand all commissions, charges, costsand expenses in the amounts customarily charged by the Issuing Bank from timeto time in like circumstances with respect to the issuance of each Letter ofCredit, drawings, amendments and other transactions relating thereto including,without limitation, a documentation fee of $500.

 

(c)           Administrative and Other Fees.  The Borrower agrees to pay the administrativeand other fees of the Administrative Agent as provided in the Fee Letter and asmay be otherwise agreed to in writing from time to time.

 

## **Section 3.6.  Computations.**

## ** **

Unlessotherwise expressly set forth herein, any accrued interest on any Loan, anyFees or other Obligations due hereunder shall be computed on the basis of ayear of 360 days and the actual number of days elapsed.

 

## **Section 3.7.  Usury.**

## ** **

Inno event shall the amount of interest due or payable on the Loans or otherObligations exceed the maximum rate of interest allowed by Applicable Law and,if any such payment is paid by the Borrower or any other Loan Party or receivedby any Lender, then such excess sum shall be credited as a payment ofprincipal, unless the Borrower shall notify the respective Lender in writingthat the Borrower elects to have such excess sum returned to it forthwith.  It is the express intent of the partieshereto that

 

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theBorrower not pay and the Lenders not receive, directly or indirectly, in anymanner whatsoever, interest in excess of that which may be lawfully paid by theBorrower under Applicable Law.  Theparties hereto hereby agree and stipulate that the only charge imposed upon theBorrower for the use of money in connection with this Agreement is and shall bethe interest specifically described in Section 2.4.(a)(i) and (ii) and,with respect to Swingline Loans, in Section 2.3.(c).  Notwithstanding the foregoing, the partieshereto further agree and stipulate that all agency fees, syndication fees,facility fees, letter of credit fees, underwriting fees, default charges, latecharges, funding or “breakage” charges, increased cost charges, attorneys’ feesand reimbursement for costs and expenses paid by the Administrative Agent orany Lender to third parties or for damages incurred by the Administrative Agentor any Lender, are charges made to compensate the Administrative Agent or anysuch Lender for underwriting or administrative services and costs or lossesperformed or incurred, and to be performed or incurred, by the AdministrativeAgent and the Lenders in connection with this Agreement and shall under nocircumstances be deemed to be charges for the use of money.  All charges other than charges for the use ofmoney shall be fully earned and nonrefundable when due.

## ** **

## **Section 3.8.  Statements of Account.**

## ** **

TheAdministrative Agent will account to the Borrower monthly with a statement ofLoans, accrued interest and Fees, charges and payments made pursuant to thisAgreement and the other Loan Documents, and such account rendered by theAdministrative Agent shall be deemed conclusive upon the Borrower absentmanifest error.  The failure of theAdministrative Agent to deliver such a statement of accounts shall not relieveor discharge the Borrower from any of its obligations hereunder.

 

## **Section 3.9.  Defaulting Lenders.**

## ** **

(a)           Generally.  If for any reason any Lender (a “DefaultingLender”) shall fail or refuse to perform any of its obligations under thisAgreement or any other Loan Document to which it is a party within the timeperiod specified for performance of such obligation or, if no time period isspecified, if such failure or refusal continues for a period of two****(2) Business Days after notice from the AdministrativeAgent, then, in addition to the rights and remedies that may be available tothe Administrative Agent, the Issuing Bank, or the Borrower under thisAgreement or Applicable Law, such Defaulting Lender’s right to participate inthe administration of the Loans, this Agreement and the other Loan Documents,including without limitation, any right to vote in respect of, to consent to orto direct any action or inaction of the Administrative Agent or to be takeninto account in the calculation of Requisite Lenders, shall be suspended duringthe pendency of such failure or refusal. If for any reason a Lender fails to make timely payment to theAdministrative Agent of any amount required to be paid to the AdministrativeAgent hereunder (without giving effect to any notice or cure periods), inaddition to other rights and remedies which the Administrative Agent, theIssuing Bank or the Borrower may have under the immediately precedingprovisions or otherwise, the Administrative Agent shall be entitled (i) tocollect interest from such Defaulting Lender on such delinquent payment for theperiod from the date on which the payment was due until the date on which thepayment is made at the Federal Funds Rate, (ii) to withhold or setoff andto apply in satisfaction of the defaulted payment and any related interest, anyamounts otherwise payable to such Defaulting Lender under this Agreement or anyother Loan Document and (iii) to bring an action or suit against suchDefaulting Lender in a court of competent jurisdiction to recover the defaultedamount and any related interest.  Anyamounts received by the Administrative Agent in respect of a Defaulting Lender’sLoans shall not be paid to such Defaulting Lender and shall be held uninvestedby the Administrative Agent and either applied against the purchase price ofsuch Loans under the following subsection (b) or paid to such DefaultingLender upon the Defaulting Lender’s curing of its default.

 

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(b)           Purchaseor Cancellation of Defaulting Lender’s Revolving Commitment.  Any Lender who is not a Defaulting Lender shallhave the right, but not the obligation, in its sole discretion, to acquire byassignment all of a Defaulting Lender’s Commitments.  Any Lender desiring to exercise such rightshall give written notice thereof to the Administrative Agent and the Borrowerno sooner than two (2) Business Days and not later than five (5) BusinessDays after such Defaulting Lender became a Defaulting Lender.  If more than one Lender exercises such right,each such Lender shall have the right to acquire an amount of such DefaultingLender’s Commitments in proportion to the Commitments of the other Lendersexercising such right.  If after suchfifth Business Day, the Lenders have not elected to acquire all of theCommitments of such Defaulting Lender, then the Borrower may, by giving writtennotice thereof to the Administrative Agent, such Defaulting Lender and theother Lenders, either (i) demand that such Defaulting Lender assign itsCommitments to an Eligible Assignee subject to and in accordance with theprovisions of Section 12.6.(c) for the purchase price provided forbelow or(ii) terminatethe Commitments of such Defaulting Lender, whereupon such Defaulting Lendershall no longer be a party hereto or have any right or obligation whatsoever toinitiate any such replacement or to assist in finding an EligibleAssignee.  Upon any such assignment, theDefaulting Lender’s interest in the Loans and its rights hereunder (but not itsliability in respect thereof or under the Loan Documents to the extent the samerelate to the period prior to the effective date of the purchase) shallterminate on the date of purchase, and the Defaulting Lender shall promptlyexecute all documents reasonably requested to surrender and transfer suchinterest to the purchaser or assignee thereof, including an appropriateAssignment and Assumption Agreement and, notwithstanding Section 12.6.(c),shall pay to the Administrative Agent an assignment fee in the amount of$10,000.  The purchase price for theCommitments of a Defaulting Lender shall be equal to the amount of theprincipal balance of the Loans outstanding and owed by the Borrower to theDefaulting Lender.  Prior to payment ofsuch purchase price to a Defaulting Lender, the Administrative Agent shallapply against such purchase price any amounts retained by the AdministrativeAgent pursuant to the last sentence of the immediately preceding subsection(a).  The Defaulting Lender shall beentitled to receive any amount owned to it by the Borrower under the LoanDocuments which accrued prior to the date of the default by the DefaultingLender, to the extent the same are received by the Administrative Agent from oron behalf of the Borrower.  There shallbe no recourse against any Lender or the Administrative Agent for the paymentof such sums except to the extent of the receipt of payments from any otherparty or in respect of the Loans.

 

## **Section 3.10.  Taxes; Foreign Lenders.**

## ** **

(a)           Taxes Generally. All payments by the Borrower of principal of, and interest on, the Loansand all other Obligations shall be made free and clear of and without deductionfor any present or future excise, stamp or other taxes, fees, duties, levies,imposts, charges, deductions, withholdings or other charges of any naturewhatsoever imposed by any taxing authority, but excluding (i) franchisetaxes, (ii) any taxes (other than withholding taxes) that would not beimposed but for a connection between the Administrative Agent, the Issuing Bankor a Lender and the jurisdiction imposing such taxes (other than a connectionarising solely by virtue of the activities of the Administrative Agent, theIssuing Bank or such Lender pursuant to or in respect of this Agreement or anyother Loan Document), (iii)  any taxes imposed on or measured by theIssuing Bank’s or any Lender’s assets, net income, receipts or branch profitsand (iv) any taxes arising after the Agreement Date solely as a result ofor attributable to a Lender changing its designated Lending Office after thedate such Lender becomes a party hereto (such non-excluded items beingcollectively called “Taxes”).  If anywithholding or deduction from any payment to be made by the Borrower hereunderis required in respect of any Taxes pursuant to any Applicable Law, then theBorrower will:

 

(i)            pay directly to therelevant Governmental Authority the full amount required to be so withheld ordeducted;

 

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(ii)           promptly forward tothe Administrative Agent an official receipt or other documentationsatisfactory to the Administrative Agent evidencing such payment to suchGovernmental Authority; and

 

(iii)          pay to theAdministrative Agent for its account or the account of the applicable Lender orthe Issuing Bank, as the case may be, such additional amount or amounts as isnecessary to ensure that the net amount actually received by the AdministrativeAgent, the Issuing Bank or such Lender will equal the full amount that theAdministrative Agent, the Issuing Bank or such Lender would have received hadno such withholding or deduction been required.

 

(b)           Tax Indemnification.  If the Borrower fails to pay any Taxes whendue to the appropriate Governmental Authority or fails to remit to theAdministrative Agent, for its account or the account of the Issuing Bank orrespective Lender, as the case may be, the required receipts or other requireddocumentary evidence, the Borrower shall indemnify the Administrative Agent,the Issuing Bank and the Lenders for any incremental Taxes, interest orpenalties that may become payable by the Administrative Agent, the Issuing Bankor any Lender as a result of any such failure. For purposes of this Section, a distribution hereunder by theAdministrative Agent or any Lender to or for the account of any Lender shall bedeemed a payment by the Borrower.

 

(c)           Tax Forms. Prior to the datethat any Lender or Participant organized under the laws of a jurisdictionoutside the United States of America becomes a party hereto, such Person shalldeliver to the Borrower and the Administrative Agent such certificates,documents or other evidence, as required by the Internal Revenue Code orTreasury Regulations issued pursuant thereto (including Internal RevenueService Forms W-8ECI and W-8BEN,as applicable, or appropriate successor forms), properly completed, currentlyeffective and duly executed by such Lender or Participant establishing thatpayments to it hereunder and under the Notes are (i) not subject to UnitedStates Federal backup withholding tax and (ii) not subject to UnitedStates Federal withholding tax under the Code. Each such Lender or Participant shall (x) deliver further copies ofsuch forms or other appropriate certifications on or before the date that anysuch forms expire or become obsolete and after the occurrence of any eventrequiring a change in the most recent form delivered to the Borrower and (y) obtainsuch extensions of the time for filing, and renew such forms and certificationsthereof, as may be reasonably requested by the Borrower or the AdministrativeAgent.  The Borrower shall not berequired to pay any amount pursuant to last sentence of subsection (a) aboveto any Lender or Participant that is organized under the laws of a jurisdictionoutside of the United States of America or the Administrative Agent, if it isorganized under the laws of a jurisdiction outside of the United States ofAmerica, if such Lender, Participant or the Administrative Agent, asapplicable, fails to comply with the requirements of this subsection.  If any such Lender or Participant fails todeliver the above forms or other documentation, then the Administrative Agentmay withhold from such payment to such Lender such amounts as are required bythe Code. If any Governmental Authority asserts that the Administrative Agentdid not properly withhold or backup withhold, as the case may be, any tax orother amount from payments made to or for the account of any Lender, suchLender shall indemnify the Administrative Agent therefor, including allpenalties and interest, any taxes imposed by any jurisdiction on the amountspayable to the Administrative Agent under this Section, and costs and expenses(including all fees and disbursements of any law firm or other external counseland the allocated cost of internal legal services and all disbursements ofinternal counsel) of the Administrative Agent. The obligation of the Lenders under this Section shall survive thetermination of the Commitments, repayment of all Obligations and theresignation or replacement of the Administrative Agent.

 

(d)           USA Patriot Act Notice; Compliance.  In order for the Administrative Agent tocomply with the USA Patriot Act of 2001 (Public Law 107-56), prior to anyLender or Participant that is organized under the laws of a jurisdictionoutside of the United States of America becoming a party hereto, the AdministrativeAgent may request, and such Lender or Participant shall provide to theAdministrative Agent, its name, address, tax identification number and/or suchother identification information as shall be necessary for the AdministrativeAgent to comply with federal law.

 

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# **ARTICLE IV. YIELD PROTECTION, ETC.**

# ** **

## **Section 4.1.  Additional Costs; Capital Adequacy.**

## ** **

(a)           CapitalAdequacy.  If any Lender or anyParticipant in the Loan determines that compliance with any law or regulationor with any guideline or request from any central bank or other GovernmentalAuthority (whether or not having the force of law) affects or would affect theamount of capital required or expected to be maintained by such Lender or suchParticipant, or any corporation controlling such Lender or such Participant, asa consequence of, or with reference to, such Lender’s or such Participant’s orsuch corporation’s Commitments or its making or maintaining Loans below therate which such Lender or such Participant or such corporation controlling suchLender or such Participant could have achieved but for such compliance (takinginto account the policies of such Lender or such Participant or suchcorporation with regard to capital), then the Borrower shall, from time totime, within thirty (30) calendar days after written demand by such Lender orsuch Participant, pay to such Lender or such Participant additional amountssufficient to compensate such Lender or such Participant or such corporationcontrolling such Lender or such Participant to the extent that such Lender orsuch Participant determines such increase in capital is allocable to suchLender’s or such Participant’s obligations hereunder.

 

(b)           AdditionalCosts.  In addition to, and not inlimitation of the immediately preceding clause (a), the Borrower shall promptlypay to the Administrative Agent for the account of a Lender from time to timesuch amounts as such Lender may determine to be necessary to compensate suchLender for any costs incurred by such Lender that it determines areattributable to its making or maintaining of any LIBOR Loans or its obligationto make any LIBOR Loans hereunder, any reduction in any amount receivable bysuch Lender under this Agreement or any of the other Loan Documents in respectof any of such LIBOR Loans or such obligation or the maintenance by such Lenderof capital in respect of its LIBOR Loans or its Commitments (such increases incosts and reductions in amounts receivable being herein called “AdditionalCosts”), resulting from any Regulatory Change that:  (i) changes the basis of taxation of anyamounts payable to such Lender under this Agreement or any of the other LoanDocuments in respect of any of such LIBOR Loans or its Commitments (other thantaxes imposed on or measured by the overall net income of such Lender or of itsLending Office for any of such LIBOR Loans by the jurisdiction in which suchLender has its principal office or such Lending Office), or (ii) imposesor modifies any reserve, special deposit or similar requirements (includingwithout limitation, Regulation D of the Board of Governors of the FederalReserve System or other similar reserve requirement applicable to any othercategory of liabilities or category of extensions of credit or other assets byreference to which the interest rate on LIBOR Loans is determined) relating toany extensions of credit or other assets of, or any deposits with or otherliabilities of, or other credit extended by, or any other acquisition of fundsby such Lender (or its parent corporation), or any commitment of such Lender(including, without limitation, the Commitments of such Lender hereunder) or (iii) hasor would have the effect of reducing the rate of return on capital of suchLender to a level below that which such Lender could have achieved but for suchRegulatory Change (taking into consideration such Lender’s policies withrespect to capital adequacy).

 

(c)           Lender’sSuspension of LIBOR Loans.  Withoutlimiting the effect of the provisions of the immediately preceding subsection (a) and(b), if by reason of any Regulatory Change, any Lender either (i) incursAdditional Costs based on or measured by the excess above a specified level ofthe

 

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amount of a category of deposits or other liabilities of suchLender that includes deposits by reference towhich the interest rate on LIBOR Loans is determined asprovided in  this Agreement or a categoryof extensions of credit or other assets of such Lender that includes LIBORLoans or (ii) becomes subject to restrictions on the amount of such acategory of liabilities or assets that it may hold, then, if such Lender soelects by notice to the Borrower (with a copy to the Administrative Agent), theobligation of such Lender to make or Continue, or to Convert Base Rate Loansinto, LIBOR Loans shall be suspended until such Regulatory Change ceases to bein effect (in which case the provisions of Section 4.5. shall apply).

 

(d)           Additional Costs in Respect ofLetters of Credit.  Without limitingthe obligations of the Borrower under the preceding subsections of this Section (butwithout duplication), if as a result of any Regulatory Change or any risk-basedcapital guideline or other requirement heretofore or hereafter issued by anyGovernmental Authority there shall be imposed, modified or deemed applicableany tax, reserve, special deposit, capital adequacy or similar requirementagainst or with respect to or measured by reference to Letters of Credit and theresult shall be to increase the cost to the Issuing Bank of issuing (or anyLender of purchasing participations in) or maintaining its obligation hereunderto issue (or purchase participations in) any Letter of Credit or reduce anyamount receivable by the Issuing Bank or any Lender hereunder in respect of anyLetter of Credit, then, upon demand by the Issuing Bank or such Lender, theBorrower shall pay immediately to the Issuing Bank or, in the case of suchLender, to the Administrative Agent for the account of such Lender, from timeto time as specified by the Issuing Bank or such Lender, such additionalamounts as shall be sufficient to compensate the Issuing Bank or such Lenderfor such increased costs or reductions in amount.

 

(e)           Notificationand Determination of Additional Costs.  Each of the Administrative Agent, IssuingBank, each Lender, and each Participant, as the case may be, agrees to notifythe Borrower of any event occurring after the Agreement Date entitling theAdministrative Agent, the Issuing Bank, such Lender or such Participant tocompensation under any of the preceding subsections of this Section aspromptly as practicable; provided, however, that the failure of theAdministrative Agent, the Issuing Bank, any Lender or any Participant to givesuch notice shall not release the Borrower from any of its obligationshereunder.  The Administrative Agent, theIssuing Bank, each Lender and each Participant, as the case may be, agrees tofurnish to the Borrower (and in the case of the Issuing Bank, a Lender or aParticipant to the Administrative Agent as well) a certificate setting forththe basis and amount of each request for compensation under this Section.  Determinations by the Administrative Agent, theIssuing Bank, such Lender, or such Participant, as the case may be, of theeffect of any Regulatory Change shall be conclusive and binding for allpurposes, absent manifest error.

 

## **Section 4.2.  Suspension of LIBOR Loans.**

## ** **

Anythingherein to the contrary notwithstanding, if, on or prior to the determination ofLIBOR for any Interest Period:

 

(a)           the AdministrativeAgent reasonably determines (which determination shall be conclusive) thatquotations of interest rates for the relevant deposits referred to in thedefinition of LIBOR are not being provided in the relevant amounts or for therelevant maturities for purposes of determining rates of interest for LIBORLoans as provided herein or is otherwise unable to determine LIBOR, or

 

(b)           the AdministrativeAgent reasonably determines (which determination shall be conclusive) that therelevant rates of interest referred to in the definition of LIBOR upon thebasis of which the rate of interest for LIBOR Loans for such Interest Period isto be determined are not likely to adequately cover the cost to any Lender ofmaking or maintaining LIBOR Loans for such Interest Period;

 

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thenthe Administrative Agent shall give the Borrower and each Lender prompt noticethereof and, so long as such condition remains in effect the Lenders shall beunder no obligation to, and shall not, make additional LIBOR Loans, ContinueLIBOR Loans or Convert Loans into LIBOR Loans and the Borrower shall, on thelast day of each current Interest Period for each outstanding LIBOR Loan,prepay such Loan.

 

## **Section 4.3.  Illegality.**

## ** **

Notwithstanding any otherprovision of this Agreement, if any Lender shall determine (which determinationshall be conclusive and binding) that it is unlawful for such Lender to honorits obligation to make or maintain LIBOR Loans hereunder, then such Lendershall promptly notify the Borrower thereof (with a copy of such notice to theAdministrative Agent) and such Lender’s obligation to make or Continue, or toConvert Loans of any other Type into, LIBOR Loans shall be suspended until suchtime as such Lender may again make and maintain LIBOR Loans (in which case theprovisions of Section 4.5. shall be applicable).

 

## **Section 4.4.  Compensation.**

## ** **

TheBorrower shall pay to the Administrative Agent for the account of each Lender,upon the request of the Administrative Agent, such amount or amounts as theAdministrative Agent shall determine in its sole discretion shall be sufficientto compensate such Lender for any loss, cost or expense attributable to:

 

(a)           any payment or prepayment(whether mandatory or optional) of a LIBOR Loan or Conversion of a LIBOR Loan,made by such Lender for any reason (including, without limitation,acceleration) on a date other than the last day of the Interest Period for suchLoan; or

 

(b)           any failure by the Borrowerfor any reason (including, without limitation, the failure of any of theapplicable conditions precedent specified in Article 5.2. to be satisfied)to borrow a LIBOR Loan from such Lender on the date for such borrowing, or toConvert a Base Rate Loan into a LIBOR Loan or Continue a LIBOR Loan on therequested date of such Conversion or Continuation.

 

Notin limitation of the foregoing, such compensation shall include, withoutlimitation. in the case of a LIBOR Loan, an amount equal to the then presentvalue of (A) the amount of interest that would have accrued on such LIBORLoan for the remainder of the Interest Period at the rate applicable to suchLIBOR Loan, less (B) the amount of interest that would accrue on the sameLIBOR Loan for the same period if LIBOR were set on the date on which suchLIBOR Loan was repaid, prepaid or Converted or the date on which the Borrowerfailed to borrow, Convert or Continue such LIBOR Loan, calculating presentvalue by using as a discount rate LIBOR quoted on such date.  Upon the Borrower’s request, theAdministrative Agent shall provide the Borrower with a statement setting forththe basis for requesting such compensation and the method for determining theamount thereof.  Any such statement shallbe conclusive absent manifest error.

 

## **Section 4.5.  Treatment of Affected Loans.**

## ** **

(a)           If theobligation of any Lender to make LIBOR Loans or to Continue, or to Convert BaseRate Loans into, LIBOR Loans shall be suspended pursuant to Section 4.1.(c),Section 4.2., or Section 4.3. then such Lender’s LIBOR Loans shall beautomatically Converted into Base Rate Loans on 

 

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the last day(s) of the then current Interest Period(s) forLIBOR Loans (or, in the case of a Conversion required by Section 4.1.(c), Section 4.2.,or Section 4.3. on such earlier date as such Lender may specify to theBorrower with a copy to the Administrative Agent) and, unless and until suchLender gives notice as provided below that the circumstances specified in Section 4.1.,Section 4.2., or Section 4.3. that gave rise to such Conversion nolonger exist:

 

(i)            to the extent that suchLender’s LIBOR Loans have been so Converted, all payments and prepayments ofprincipal that would otherwise be applied to such Lender’s LIBOR Loans shall beapplied instead to its Base Rate Loans; and

 

(ii)           all Loans that wouldotherwise be made or Continued by such Lender as LIBOR Loans shall be made orContinued instead as Base Rate Loans, and all Base Rate Loans of such Lenderthat would otherwise be Converted into LIBOR Loans shall remain as Base RateLoans.

 

If such Lender gives notice to the Borrower(with a copy to the Administrative Agent) that the circumstances specified in Section 4.1.(c) or4.3. that gave rise to the Conversion of such Lender’s LIBOR Loans pursuant tothis Section no longer exist (which such Lender agrees to do promptly uponsuch circumstances ceasing to exist) at a time when LIBOR Loans made by otherLenders are outstanding, then such Lender’s Base Rate Loans shall beautomatically Converted, on the first day(s) of the next succeedingInterest Period(s) for such outstanding LIBOR Loans, to the extentnecessary so that, after giving effect thereto, all Loans held by the Lendersholding LIBOR Loans and by such Lender are held pro rata (as to principalamounts, Types and Interest Periods) in accordance with their respectiveCommitments.

 

## **Section 4.6.  Change of Lending Office.**

## ** **

EachLender agrees that it will use reasonable efforts (consistent with its internalpolicy and legal and regulatory restrictions) to designate an alternate LendingOffice with respect to any of its Loans affected by the matters orcircumstances described in Sections 3.10., 4.1. or 4.3. to reduce theliability of the Borrower or avoid the results provided thereunder, so long assuch designation is not disadvantageous to such Lender as determined by suchLender in its reasonable discretion, except that such Lender shall have noobligation to designate a Lending Office located in the United States ofAmerica.

 

## **Section 4.7.  Assumptions Concerning Funding of LIBORLoans.**

## ** **

Calculationof all amounts payable to a Lender under this Article shall be made asthough such Lender had actually funded LIBOR Loans through the purchase ofdeposits in the relevant market bearing interest at the rate applicable to suchLIBOR Loans in an amount equal to the amount of the LIBOR Loans and having amaturity comparable to the relevant Interest Period; provided, however, thateach Lender may fund each of its LIBOR Loans in any manner it sees fit and theforegoing assumption shall be used only for calculation of amounts payableunder this Article.

 

# **ARTICLEV. CONDITIONS PRECEDENT**

# ** **

## **Section 5.1.  Initial Conditions Precedent.**

## ** **

Theobligation of the Lenders to effect or permit the occurrence of the firstCredit Event hereunder, whether as the making of a Loan or the issuance of aLetter of Credit, is subject to the satisfaction or waiver of the followingconditions precedent:

 

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(a)                                  TheAdministrative Agent shall have received each of the following, in form and substancesatisfactory to the Administrative Agent:

 

(i)            counterparts of thisAgreement executed by each of the parties hereto;

 

(ii)           Revolving Notes executed bythe Borrower payable to the Lenders and complying with the terms of Section 2.11.(a) andthe Swingline Note executed by the Borrower;

 

(iii)          an opinion of StradlingYocca Carlson & Rauth, corporate counsel to the Borrower and the otherLoan Parties, and Kiefer & Garneau, LLC, Hawaii counsel to theBorrower and the other Loan Parties, addressed to the Administrative Agent andthe Lenders;

 

(iv)          the certificate or articlesof incorporation, articles of organization, certificate of limited partnership,declaration of trust or other comparable organizational instrument (if any) ofeach Loan Party certified as of a recent date by the Secretary of State of thestate of formation of such Person;

 

(v)           a certificateof good standing (or certificate of similar meaning) with respect to each LoanParty issued as of a recent date by the Secretary of State of the state offormation of each such Person and certificates of qualification to transactbusiness or other comparable certificates issued by each Secretary of State(and any state department of taxation, as applicable) of each state in whichsuch Person is required to be so qualified and where failure to be so qualifiedcould reasonably be expected to have a Material Adverse Effect;

 

(vi)          a certificate of incumbencysigned by the Secretary or Assistant Secretary (or other individual performingsimilar functions) of each Loan Party with respect to each of the officers ofsuch Person authorized to execute and deliver the Loan Documents to which suchPerson is a party, and in the case of the Borrower, authorized to execute anddeliver on behalf of the Borrower Notices of Borrowing, Notices of SwinglineBorrowing, requests for Letters of Credit, Notices of Conversion and Notices ofContinuation;

 

(vii)         copies certified by theSecretary or Assistant Secretary (or other individual performing similarfunctions) of each Loan Party of (A) the by-laws of such Person, if acorporation, the operating agreement, if a limited liability company, thepartnership agreement, if a limited or general partnership, or other comparabledocument in the case of any other form of legal entity and (B) allcorporate, partnership, member or other necessary action taken by such Personto authorize the execution, delivery and performance of the Loan Documents towhich it is a party;

 

(viii)        a Transfer AuthorizerDesignation Form effective as of the Agreement Date;

 

(ix)           copies of all MaterialContracts and Specified Derivatives Contracts in existence on the AgreementDate;

 

(x)            the Fee Letter;

 

(xi)           evidence that the Fees, ifany, then due and payable under Section 3.5., together with all other fees,expenses and reimbursement amounts due and payable to the Administrative Agentand any of the Lenders, including without limitation, the fees and expenses ofcounsel to the Administrative Agent, have been paid;

 

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(xii)         insurancecertificates, or other evidence, providing that the insurance coverage requiredunder section 7.5. (including, without limitation, both property andliability insurance) is in full force and effect and stating that the coverageshall not be cancelable or materially changed without ten (10) days priorwritten notice to the Administrative Agent of any cancellation for nonpaymentor premiums, and not less than thirty (30) days prior written notice to theAdministrative Agent of any other cancellation or any modification (including areduction in coverage), together with appropriate evidence that theAdministrative Agent, for its benefit and the benefit of the Lenders, theIssuing Bank, and the Specified Derivatives Providers is named as a lender’sloss payee and additional insured, as appropriate, on all insurance policiesthat the Borrower, any Loan Party or any other Subsidiary actually maintainswith respect to the Property and improvements on the Property;

 

(xiii)        with respect tothe Property

 

(a) an environmental questionnaire andenvironmental site assessment with respect to the presence, if any, ofHazardous Materials on the Property;

 

(b) copies of all agreements which are materialto the occupancy and operation of the Property;

 

(c) copies of all building permits and otherpermits required in connection with the development of the Property including,without limitation, any documentation relating to the entitlement of KapaluaMauka;

 

(d) copies of any initial study, negative declaration,mitigated negative declaration, environmental impact report, notice ofdetermination or notice of exemption prepared, adopted, certified or filed byor with any Governmental Authority in connection with the Property;

 

(e)  an Appraisal of the Property;

 

(f) endorsements to the Title Insurance Policyas Administrative Agent may request insuring the priority of the Lien of theMortgage and such other matters as Administrative Agent may require;

 

(g) a duly executed Memorandum of Amended andRestated Credit Agreement Amending Mortgage amending the Mortgage; and

 

(xiv)        such otherdocuments, agreements and instruments as the Administrative Agent, or anyLender through the Administrative Agent, may reasonably request includingwithout limitation, subordination agreements, estoppels, and other agreementswith third parties relating to use, occupancy, operation, maintenance,enjoyment or ownership of the Property.

 

(b)                                 In the goodfaith judgment of the Administrative Agent:

 

(i)            there shall not have occurredor become known to the Administrative Agent or any of the Lenders any event,condition, situation or status since the date of the information contained inthe financial and business projections, budgets, pro forma data and forecastsconcerning the Borrower and its Subsidiaries delivered to the AdministrativeAgent and the Lenders prior to the Agreement Date that has had or couldreasonably be expected to result in a Material Adverse Effect;

 

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(ii)           no litigation, action, suit,investigation or other arbitral, administrative or judicial proceeding shall bepending or threatened which could reasonably be expected to (A) result ina Material Adverse Effect or (B) restrain or enjoin, impose materiallyburdensome conditions on, or otherwise materially and adversely affect, theability of any Loan Party to fulfill its obligations under the Loan Documentsto which it is a party;

 

(iii)          the Borrower and the otherLoan Parties shall have received all approvals, consents and waivers, and shallhave made or given all necessary filings and notices as shall be required toconsummate the transactions contemplated hereby without the occurrence of anydefault under, conflict with or violation of (A) any Applicable Law or (B) anyagreement, document or instrument to which any Loan Party is a party or bywhich any of them or their respective properties is bound.

 

## **Section 5.2.  Conditions Precedent to All Loans and Lettersof Credit.**

## ** **

Theobligations of (i) Lenders to make any Loans, and (ii) the IssuingBank to issue Letters of Credit, are each subject to the further conditionsprecedent that: (a) no Default or Event of Default shall exist as of thedate of the making of such Loan or date of issuance of such Letter of Credit orwould exist immediately after giving effect thereto, and no violation of thelimits described in Section 2.14. would occur after giving effect thereto;(b) the representations and warranties made or deemed made by the Borrowerand each other Loan Party in the Loan Documents to which any of them is aparty, shall be true and correct on and as of the date of the making of suchLoan or date of issuance of such Letter of Credit with the same force andeffect as if made on and as of such date except to the extent that suchrepresentations and warranties expressly relate solely to an earlier date (inwhich case such representations and warranties shall have been true andaccurate on and as of such earlier date) and except for changes in factualcircumstances specifically and expressly permitted hereunder and (c) inthe case of the borrowing of Revolving Loans, the Administrative Agent shallhave received a timely Notice of Borrowing, or in the case of a Swingline Loan,the Swingline Lender shall have received a timely Notice of SwinglineBorrowing.  Each Credit Event shallconstitute a certification by the Borrower to the effect set forth in thepreceding sentence (both as of the date of the giving of notice relating tosuch Credit Event and, unless the Borrower otherwise notifies theAdministrative Agent prior to the date of such Credit Event, as of the date ofthe occurrence of such Credit Event).  Inaddition, the Borrower shall be deemed to have represented to the AdministrativeAgent and the Lenders at the time such Loan is made or such Letter of Credit isissued that all conditions to the making of such Loan or issuing of such Letterof Credit contained in this Article V. have been satisfied.

 

## **Section 5.3.  Conditions as Covenants.**

## ** **

Ifthe Lenders permit the making of any Loans, or the Issuing Bank issues a Letterof Credit, prior to the satisfaction of all conditions precedent set forth inSections 5.1. and 5.2., the Borrower shall nevertheless cause suchcondition or conditions to be satisfied within five (5) Business Daysafter the date of the making of such Loans or the issuance of such Letter ofCredit.  Unless set forth in writing tothe contrary, the making of its initial Loan by a Lender shall constitute aconfirmation by such Lender to the Administrative Agent and the other Lendersthat insofar as such Lender is concerned the Borrower has satisfied theconditions precedent for initial Loans set forth in Sections 5.1. and 5.2.

 

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# **ARTICLEVI. REPRESENTATIONS AND WARRANTIES**

# ** **

## **Section 6.1.  Representations and Warranties.**

## ** **

Inorder to induce the Administrative Agent and each Lender to enter into thisAgreement and to make Loans and, in the case of the Issuing Bank, to issueLetters of Credit, the Borrower represents and warrants to the AdministrativeAgent, the Issuing Bank and each Lender as follows:

 

(a)                                  Organization;Power; Qualification.  Each of theLoan Parties and the other Subsidiaries is a corporation, partnership or otherlegal entity, duly organized or formed, validly existing and in good standingunder the jurisdiction of its incorporation or formation, has the power andauthority to own or lease its respective properties and to carry on itsrespective business as now being and hereafter proposed to be conducted and isduly qualified and is in good standing as a foreign corporation, partnership orother legal entity, and authorized to do business, in each jurisdiction inwhich the character of its properties or the nature of its business requiressuch qualification or authorization and where the failure to be so qualified orauthorized could reasonably be expected to have, in each instance, a MaterialAdverse Effect.

 

(b)                                 OwnershipStructure.  Part Iof Schedule 6.1.(b) is, as of the Agreement Date, a complete andcorrect list of all Subsidiaries of the Borrower setting forth for each suchSubsidiary, (i) the jurisdiction of organization of such Person, (ii) eachPerson holding any Equity Interest in such Person, (iii) the nature of theEquity Interests held by each such Person and (iv) the percentage ofownership of such Person represented by such Equity Interests.  As of the Agreement Date, except as disclosedin such Schedule (A), each of the Borrower and its Subsidiaries owns, freeand clear of all Liens, and has the unencumbered right to vote, all outstandingEquity Interests in each Person shown to be held by it on such Schedule, (B) allof the issued and outstanding capital stock of each such Person organized as acorporation is validly issued, fully paid and nonassessable and (C) thereare no outstanding subscriptions, options, warrants, commitments, preemptiverights or agreements of any kind (including, without limitation, anystockholders’ or voting trust agreements) for the issuance, sale, registrationor voting of, or outstanding securities convertible into, any additional sharesof capital stock of any class, or partnership or other ownership interests ofany type in, any such Person.  As of theAgreement Date, Part II of Schedule 6.1.(b) correctly sets forthall Unconsolidated Affiliates of the Borrower, including the correct legal nameof such Person, the type of legal entity which each such Person is, and allEquity Interests in such Person held directly or indirectly by the Borrower.

 

(c)                                  Authorizationof Agreement, Notes, Loan Documents and Borrowings.  The Borrower has the right and power, and hastaken all necessary action to authorize it, to borrow and obtain otherextensions of credit hereunder.  TheBorrower and each other Loan Party has the right and power, and has taken allnecessary action to authorize it, to execute, deliver and perform each of theLoan Documents and the Fee Letter to which it is a party in accordance withtheir respective terms and to consummate the transactions contemplated herebyand thereby.  The Loan Documents and theFee Letter to which the Borrower or any other Loan Party is a party have beenduly executed and delivered by the duly authorized officers of such Person andeach is a legal, valid and binding obligation of such Person enforceableagainst such Person in accordance with its respective terms, except as the samemay be limited by bankruptcy, insolvency, and other similar laws affecting therights of creditors generally and the availability of equitable remedies forthe enforcement of certain obligations contained herein or therein and as maybe limited by equitable principles generally.

 

(d)                                 Compliance ofAgreement, Etc. with Laws.  Theexecution, delivery and performance of this Agreement, the other Loan Documentsto which any Loan Party is a party and the Fee Letter in accordance with theirrespective terms and the borrowings and other extensions of credit hereunder donot and will not, by the passage of time, the giving of notice, or both:  (i) require any Governmental Approval

 

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orviolate any Applicable Law (including all Hazardous Materials Laws) relating toany Loan Party; (ii) conflict with, result in a breach of or constitute adefault under the organizational documents of the Borrower or any other LoanParty, or any indenture, agreement or other instrument to which any other LoanParty is a party or by which it or any of its respective properties may bebound; or (iii) result in or require the creation or imposition of anyLien upon or with respect to the Property now owned or hereafter acquired byany Loan Party other than in favor of the Administrative Agent for its benefitand the benefit of the Lenders and the Issuing Bank.

 

(e)                                  Compliance withLaw; Governmental Approvals.  Each Loan Party and each other Subsidiary isin compliance with each Governmental Approval and all other Applicable Lawsrelating to it (and shall require such compliance from its lessees orlicensees) except for noncompliances which, and Governmental Approvals thefailure to possess which, could not, individually or in the aggregate,reasonably be expected to cause a Default or Event of Default or have aMaterial Adverse Effect.  Withoutlimiting the foregoing, the Property is a legal parcel lawfully created in fullcompliance with all subdivision laws and ordinances, and is properly zoned forthe stated use of the Property as disclosed to Lenders at the time of executionhereof.  Borrower shall not initiate oracquiesce to a zoning change of the Property without prior notice to, and priorwritten consent from Requisite Lenders. Furthermore, Borrower shall not allow changes in the stated use of theProperty from that disclosed to Lenders at the time of execution hereof withoutprior notice to, and prior written consent from, Requisite Lenders.

 

(f)                                    Title to theProperty; Liens.  Schedule6.1.(f) is, as of the Agreement Date, a complete and correct listing ofall real estate assets of the Loan Parties and the other Subsidiaries.  None of the Collateral is subject to any Lienother than Permitted Liens.

 

(g)                                 ExistingIndebtedness; Total Liabilities.  Schedule 6.1.(g) is, as of theAgreement Date, a complete and correct listing of all Indebtedness (includingall Guarantees) of each of the Loan Parties and the other Subsidiaries, and ifsuch Indebtedness is secured by any Lien, a description of all of the propertysubject to such Lien. As of the Agreement Date, the Loan Parties and the otherSubsidiaries have performed and are in compliance with all of the terms of suchIndebtedness and all instruments and agreements relating thereto, and nodefault or event of default, or event or condition which with the giving ofnotice, the lapse of time, or both, would constitute a default or event ofdefault, exists with respect to any such Indebtedness.

 

(h)                                 MaterialContracts. Schedule 6.1.(h) is, as of the Agreement Date, a true, correctand complete listing of all Material Contracts. Except with respect to the Spa Agreement, each of the Loan Parties andthe other Subsidiaries that are parties to any Material Contract has performedand is in compliance with all of the terms of such Material Contract, and nodefault or event of default, or event or condition which with the giving ofnotice, the lapse of time, or both, would constitute such a default or event ofdefault, exists with respect to any such Material Contract.

 

(i)                                     Litigation.  Except as set forth on Schedule 6.1.(i),there are no actions, suits or proceedings pending (nor, to the knowledge ofany Loan Party, are there any actions, suits or proceedings threatened, nor isthere any basis therefor) against or in any other way relating adversely to oraffecting, any Loan Party, any other Subsidiary or any of their respectiveproperty in any court or before any arbitrator of any kind or before or by anyother Governmental Authority which, (i) if adversely determined, couldreasonably be expected to have a Material Adverse Effect or (ii) in anymanner draws into question the validity or enforceability of any Loan Documentsor the Fee Letter.  There are no strikes,slow downs, work stoppages or walkouts or other labor disputes in progressor threatened relating to, any Loan Party or any other Subsidiary.

 

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(j)                                     Taxes.  All federal, state and other tax returns of,each Loan Party and each other Subsidiary required by Applicable Law to befiled have been duly filed, and all federal, state and other taxes, assessmentsand other governmental charges or levies upon, each Loan Party and each otherSubsidiary and their respective properties, income, profits and assets whichare due and payable have been paid, except any such nonpayment or non-filingwhich is at the time permitted under Section 7.6.  As of the Agreement Date, none of the UnitedStates income tax returns of, any Loan Party or any other Subsidiary is underaudit.  All charges, accruals andreserves on the books of the Borrower and each of its Subsidiaries in respectof any taxes or other governmental charges are in accordance with GAAP.

 

(k)                                  FinancialStatements.  TheBorrower has furnished to each Lender copies of (i) the auditedconsolidated balance sheet of the Borrower and its consolidated Subsidiariesfor the fiscal years ended December 31, 2007 and December 31, 2008,and the related consolidated statements of operations, shareholders’ equity andcash flow for the fiscal years ended on such dates, with the opinion thereon ofDeloitte & Touche LLP, and (ii) the unaudited consolidated balancesheet of the Borrower and its consolidated Subsidiaries for the fiscal quarterended June 30, 2009, and the related consolidated statements ofoperations, shareholders’ equity and cash flow of the Borrower and itsconsolidated Subsidiaries for the first fiscal quarter period ended on suchdate.  Such balance sheets and statements(including in each case related schedules and notes) are complete and correctin all material respects and present fairly, in accordance with GAAPconsistently applied throughout the periods involved, the consolidatedfinancial position of the Borrower and its consolidated Subsidiaries as attheir respective dates and the results of operations and the cash flow for suchperiods (subject, as to interim statements, to changes resulting from normalyear-end audit adjustments).  Neither theBorrower nor any of its Subsidiaries has on the Agreement Date any materialcontingent liabilities, liabilities, liabilities for taxes, unusual orlong-term commitments or unrealized or forward anticipated losses from anyunfavorable commitments, except as referred to or reflected or provided for insaid financial statements.

 

(l)                                     No MaterialAdverse Change.  Since June 30,2009, there has been no event, change, circumstance or occurrence that couldreasonably be expected to have a Material Adverse Effect.  Each of the Borrower, the other Loan Partiesand the other Subsidiaries is Solvent except for MPC.

 

(m)                               ERISA.  Each member of the ERISA Group has fulfilledits obligations under the contribution requirements of ERISA and the InternalRevenue Code with respect to each Plan and is in compliance in all materialrespects with the presently applicable provisions of ERISA and the InternalRevenue Code with respect to each Plan. No member of the ERISA Group has (i) sought a waiver of the minimumfunding standard under Section 412 of the Internal Revenue Code in respectof any Plan, (ii) failed to make any contribution or payment to any Planor Multiemployer Plan or in respect of any Benefit Arrangement, or made anyamendment to any Plan or Benefit Arrangement, which has resulted or couldresult in the imposition of a Lien or the posting of a bond or other securityunder ERISA or the Internal Revenue Code or (iii) incurred any liabilityunder Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007of ERISA.

 

(n)                                 Absence ofDefault.  None of the Loan Parties orthe other Subsidiaries is in default under its articles of incorporation,bylaws, partnership agreement or other similar organizational documents, and noevent has occurred, which has not been remedied, cured or waived:  (i) which constitutes a Default or anEvent of Default; or (ii) which constitutes, or which with the passage oftime, the giving of notice, or both, would constitute, a default or event ofdefault by, any Loan Party or any other Subsidiary under any agreement (otherthan this Agreement) or judgment, decree or order to which any such Person is aparty or by which any such Person or any of its respective properties may bebound where such default or event of default could, individually or in theaggregate, have a Material Adverse Effect.

 

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(o)           HazardousMaterials.  Without inany way limiting the other representations and warranties set forth in thisAgreement, and after reasonable investigation and inquiry, Borrower herebyspecially represents and warrants to the best of Borrower’s knowledge as of thedate of this Agreement as follows:

 

(i)            Except as setforth in those certain reports listed on Schedule 6.1(o) attached hereto(the “Site Assessment”), the Property is not and has not been a site for theuse, generation, manufacture, storage, treatment, release, threatened release,discharge, disposal, transportation or presence of any oil, flammableexplosives, asbestos, urea formaldehyde insulation, radioactive materials,hazardous wastes, toxic or contaminated substances or similar materials,including, without limitation, any substances which are “hazardous substances,”“hazardous wastes,” “hazardous materials,” “toxic substances,” “wastes,” “regulatedsubstances,” “industrial solid wastes,” or “pollutants” under the HazardousMaterials Laws, as described below, and/or other applicable environmental laws,ordinances and regulations (collectively, the “Hazardous Materials”).  “Hazardous Materials” shall not includecommercially reasonable amounts of such materials used in the ordinary courseof operation and maintenance of the Property which are used and stored in accordancewith all applicable environmental laws, ordinances and regulations.

 

(ii)           The Property isin compliance with all laws, ordinances and regulations relating to HazardousMaterials (“Hazardous Materials Laws”), including, without limitation:  the Clean Air Act, as amended, 42 U.S.C. Section 7401et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42U.S.C. Section 6901 et seq.; the Comprehensive Environment Response,Compensation and Liability Act of 1980, as amended (including the SuperfundAmendments and Reauthorization Act of 1986, “CERCLA”), 42 U.S.C. Section 9601et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651,the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. Section 300fet seq.; the Hawaii Occupational Safety and Health Law, Haw. Rev. Stat. Chapter392, as amended; Haw. Rev. Stat. Chapters 128D (Environmental Response), 149A(Pesticides), 195D (Conservation), 340A (Solid Waste), 340E (Safe DrinkingWater), 342B (Air Pollution Control), 342D (Water Pollution), 342F (NoisePollution), 342H (Solid Waste Pollution), 342J (Hazardous Waste), 342L(Underground Storage Tanks), and 342P (Asbestos), all as amended; and allcomparable state and local laws, laws of other jurisdictions or orders andregulations.

 

(iii)          There are noclaims or actions (“Hazardous Materials Claims”) pending or threatened againstBorrower, the Property by any governmental entity or agency or by any otherperson or entity relating to Hazardous Materials or pursuant to the HazardousMaterials Laws.

 

(p)           InvestmentCompany.  No Loan Party, nor any otherSubsidiary is (i) an “investment company” or a company “controlled” by an “investmentcompany” within the meaning of the Investment Company Act of 1940, as amended,or (ii) subject to any other Applicable Law which purports to regulate orrestrict its ability to borrow money or obtain other extensions of credit or toconsummate the transactions contemplated by this Agreement or to perform itsobligations under any Loan Document to which it is a party.

 

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(q)                                 Margin Stock.  No Loan Party nor any other Subsidiary isengaged principally, or as one of its important activities, in the business ofextending credit for the purpose, whether immediate, incidental or ultimate, ofbuying or carrying “margin stock” within the meaning of Regulation U ofthe Board of Governors of the Federal Reserve System.

 

(r)                                    AffiliateTransactions.  Except aspermitted by Section 9.9. or as otherwise set forth on Schedule 6.1.(r),no Loan Party nor any other Subsidiary is a party to or bound by any agreementor arrangement (whether oral or written) with any Affiliate.

 

(s)                                  IntellectualProperty.  Each of theLoan Parties and each other Subsidiary owns or has the right to use, undervalid license agreements or otherwise, all patents, licenses, franchises,trademarks, trademark rights, trade names, trade name rights, trade secrets andcopyrights (collectively, “Intellectual Property”) necessary to the conduct ofits businesses, without known conflict with any patent, license, franchise,trademark, trade secret, trade name, copyright, or other proprietary right ofany other Person.  All such IntellectualProperty is fully protected and/or duly and properly registered, filed orissued in the appropriate office and jurisdictions for such registrations,filing or issuances.  No material claimhas been asserted by any Person with respect to the use of any suchIntellectual Property, or challenging or questioning the validity oreffectiveness of any such Intellectual Property.

 

(t)                                    Business.  As of the Agreement Date, the Loan Partiesand the other Subsidiaries are engaged in the business of agriculture, realestate development and property management.

 

(u)                                 Broker’s Fees.  No broker’s or finder’s fee, commission orsimilar compensation will be payable with respect to the transactionscontemplated hereby.  No other similarfees or commissions will be payable by any Loan Party for any other servicesrendered to any Loan Party or any other Subsidiaries ancillary to thetransactions contemplated hereby.

 

(v)                                 Accuracy andCompleteness of Information.  All written information, reports and otherpapers and data furnished to the Administrative Agent or any Lender by, onbehalf of, or at the direction of, any Loan Party or any other Subsidiary were,at the time the same were so furnished, complete and correct in all materialrespects, to the extent necessary to give the recipient a true and accurateknowledge of the subject matter, or, in the case of financial statements,present fairly, in accordance with GAAP consistently applied throughout theperiods involved, the financial position of the Persons involved as at the datethereof and the results of operations for such periods.  No fact is known to any Loan Party which hashad, or may in the future have (so far as any Loan Party can reasonablyforesee), a Material Adverse Effect which has not been set forth in thefinancial statements referred to in Section 6.1.(k) or in suchinformation, reports or other papers or data or otherwise disclosed in writingto the Administrative Agent and the Lenders prior to the Effective Date.  No document furnished or written statementmade to the Administrative Agent or any Lender in connection with thenegotiation, preparation or execution of, or pursuant to, this Agreement or anyof the other Loan Documents contains or will contain any untrue statement of afact material to the creditworthiness of any Loan Party or any other Subsidiaryor omits or will omit to state a material fact necessary in order to make thestatements contained therein not misleading.

 

(w)                               Not PlanAssets; No Prohibited Transactions.  For purposes of ERISA and the InternalRevenue Code, none of the assets of any Loan Party or any other Subsidiaryconstitutes “plan assets”, within the meaning of ERISA and the regulationspromulgated thereunder, of any Plan.  Theexecution, delivery and performance of the Loan Documents and the Fee Letter bythe Loan Parties, and the borrowing, other credit extensions and repayment ofamounts thereunder, do not and will not constitute “prohibited transactions”under ERISA or the Internal Revenue Code.

 

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(x)            OFAC.  None of the Borrower, any of the other LoanParties, any of the other Subsidiaries, or any other Affiliate of the Borrower:(i) is a person named on the list of Specially Designated Nationals orBlocked Persons maintained by the U.S. Department of the Treasury’s Office ofForeign Assets Control (“OFAC”) available athttp://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwisepublished from time to time; (ii) is (A) an agency of the governmentof a country, (B) an organization controlled by a country, or (C) aperson resident in a country that is subject to a sanctions program identifiedon the list maintained by OFAC and available athttp://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwisepublished from time to time, as such program may be applicable to such agency,organization or person; or (iii) derives any of its assets or operatingincome from investments in or transactions with any such country, agency,organization or person; and none of the proceeds from the Loan will be used tofinance any operations, investments or activities in, or make any payments to,any such country, agency, organization, or person

 

(y)           Security Interests.  Each of the Security Documents creates, assecurity for the Obligations and the Specified Derivatives Obligations, a validand enforceable Lien on all of the Collateral, superior to and prior to therights of all third persons and subject to no other Liens (except for PermittedLiens), in favor of the Administrative Agent for its benefit and the benefit ofthe Lenders, the Issuing Bank and each Specified Derivatives Provider.

 

## **Section 6.2.  Survival of Representations and Warranties,Etc.**

## ** **

Allstatements contained in any certificate, financial statement or otherinstrument delivered by or on behalf of any Loan Party or any other Subsidiaryto the Administrative Agent or any Lender pursuant to or in connection withthis Agreement or any of the other Loan Documents (including, but not limitedto, any such statement made in or in connection with any amendment thereto orany statement contained in any certificate, financial statement or otherinstrument delivered by or on behalf of any Loan Party prior to the AgreementDate and delivered to the Administrative Agent or any Lender in connection withthe underwriting or closing the transactions contemplated hereby) shallconstitute representations and warranties made by the Borrower under thisAgreement.  All representations andwarranties made under this Agreement and the other Loan Documents shall bedeemed to be made at and as of the Agreement Date, the Effective Date and atand as of the date of the occurrence of each Credit Event, except to the extentthat such representations and warranties expressly relate solely to an earlierdate (in which case such representations and warranties shall have been trueand accurate on and as of such earlier date) and except for changes in factualcircumstances expressly and specifically permitted hereunder.  All representations and warranties made or, pursuantto the first sentence of this Section, deemed made) under this Agreement andthe other Loan Documents, shall survive the effectiveness of this Agreement,the execution and delivery of the Loan Documents and the making of the Loansand the issuance of the Letters of Credit.

 

# **ARTICLEVII. AFFIRMATIVE COVENANTS**

# ** **

Forso long as this Agreement is in effect, unless the Requisite Lenders (or, ifrequired pursuant to Section 12.7., all of the Lenders) shall otherwiseconsent in the manner provided for in Section 12.7., the Borrower shallcomply with the following covenants:

 

## **Section 7.1.  Preservation of Existence and SimilarMatters.**

## ** **

Exceptas otherwise permitted under Section 9.4., the Borrower shall, and shallcause each other Loan Party and each other Subsidiary to, preserve and maintainits respective existence, rights, franchises, licenses and privileges in thejurisdiction of its incorporation or formation and qualify and remain qualifiedand authorized to do business in each jurisdiction in which the character ofits properties or the nature of its business requires such qualification andauthorization and where the failure to be so authorized and qualified couldreasonably be expected to have a Material Adverse Effect.

 

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## **Section 7.2.  Compliance with Applicable Law.**

## ** **

TheBorrower shall, and shall cause each other Loan Party and each other Subsidiaryto, comply with all Applicable Law, including the obtaining of allGovernmental Approvals, the failure with which to comply could reasonably beexpected to have a Material Adverse Effect.

 

## **Section 7.3.  Maintenance of Property.**

## ** **

Inaddition to the requirements of any of the other Loan Documents, the Borrowershall, and shall cause each other Loan Party and each other Subsidiary to, (a) protectand preserve all of its material properties, including, but not limited to, allIntellectual Property necessary to the conduct of its respective business, andmaintain in good repair, working order and condition all tangible properties,ordinary wear and tear excepted, and (b) from time to time make or causeto be made all needed and appropriate repairs, renewals, replacements andadditions to such properties, so that the business carried on in connectiontherewith may be properly and advantageously conducted at all times.

 

## **Section 7.4.  Conduct of Business.**

## ** **

TheBorrower shall, and shall cause the other Loan Parties and each otherSubsidiary to, carry on its respective businesses as described in Section 6.1.(t) andnot enter into any line of business not otherwise engaged in by such Person asof the Agreement Date.

 

## **Section 7.5.  Insurance.**

## ** **

TheBorrower shall, and shall cause each other Loan Party and each other Subsidiaryto, maintain insurance with insurance companies having Bests Ratings of atleast A-VII against such risks and in such amounts as is customarily maintainedby similar businesses or as may be required by Applicable Law. The Borrowershall from time to time deliver to the Administrative Agent upon request adetailed list, together with copies of all policies of the insurance then ineffect, stating the names of the insurance companies, the amounts and rates ofthe insurance, the dates of the expiration thereof and the properties and riskscovered thereby and/or insurance certificates, in form reasonably acceptable tothe Administrative Agent, providing that the insurance coverage required underthis Section 7.5. (including without limitation, both property andliability insurance) is in full force and effect and stating that coverageshall not be cancelable or materially changed without ten (10) days priorwritten notice to the Administrative Agent of any cancelation for nonpayment orpremiums, and not less than thirty (30) days prior written notice to theAdministrative Agent of any other cancellation or any modification (including areduction in coverage), together with appropriate evidence that theAdministrative Agent, for the benefit of the Lenders, the Issuing Bank and theSpecified Derivatives Providers, is named as lender’s loss payee and additionalinsured, as appropriate, on all insurance policies that the Borrower, any LoanParty or any other Subsidiary actually maintains with respect to the Propertyand Improvements on the Property.  Suchinsurance shall, in any event, include terrorism coverage and all of thefollowing:

 

(a)           Insurance against loss to theProperty on an “all risk” policy form, covering insurance risks no less broadthan those covered under a Special Multi Peril (SMP) policy form, whichcontains a Commercial ISO “Causes of Loss-Special Form,” in the then currentform, and such other risks as Administrative Agent may reasonably require, inamounts equal to the full replacement cost of the Property including fixturesand equipment, Borrower’s interest in leasehold improvements, and the cost ofdebris removal, with, if required by the Administrative Agent, an agreed amountendorsement, and with deductibles of not more than $25,000.00, except that anydeductibles for any insurance covering damage by windstorm may be in amounts upto 5% of the value of the property insured;

 

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(b)           Business income insurance in amountssufficient to pay during any period in which a Property may be damaged ordestroyed, for a period of twelve (12) months; (i) at least 100% of allrents and (ii) all amounts (including, but not limited to, all taxes,assessments, utility charges and insurance premiums) required to be paid bytenants of the Property;

 

(c)           During the making of any alterationsor improvements to a Property, carry or cause to be carried builder’s completedvalue risk insurance against “all risks of physical loss” for the fullreplacement cost of the Property;

 

(d)           Insurance against loss or damage byflood or mud slide in compliance with the Flood Disaster Protection Act of1973, as amended from time to time, if the Property is now, or at any timewhile the Obligations or any portion thereof remains unpaid shall be, situatedin any area which an appropriate Governmental Authority designates as a specialflood hazard area, in amounts equal to the full replacement value of all abovegrade structures on the Property, or as such lesser amounts as may be availableunder federal flood insurance programs;

 

(e)           Commercial general public liabilityinsurance, with the location of the Property designated thereon, against death,bodily injury and property damage arising on, about or in connection with theProperty, with Borrower or the Applicable Subsidiary listed as the namedinsured, with such limits as Borrower or the Applicable Subsidiary mayreasonably require (but in no event less than $5,000,000.00; and

 

(f)            Such other insurance, including,without limitation, earthquake and environmental coverages, relating to theProperty and the uses and operation thereof as Administrative Agent may, fromtime to time, reasonably require.

 

## **Section 7.6.  Payment of Taxes and Claims.**

## ** **

TheBorrower shall, and shall cause each other Loan Party and each other Subsidiaryto, pay and discharge when due (a) all taxes, assessments and governmentalcharges or levies imposed upon it or upon its income or profits or upon anyproperties belonging to it, and (b) all lawful claims of materialmen,mechanics, carriers, warehousemen and landlords for labor, materials, suppliesand rentals which, if unpaid, might become a Lien on any properties of suchPerson; provided, however, that this Section shall not require the paymentor discharge of any such tax, assessment, charge, levy or claim which is beingcontested in good faith by appropriate proceedings which operate to suspend thecollection thereof and for which adequate reserves have been established on thebooks of such Person in accordance with GAAP.

 

## **Section 7.7.  Books and Records; Inspections.**

## ** **

**The Borrower will, and will cause each other Loan Party andeach other Subsidiary to, keep proper books of record and account in whichfull, true and correct entries shall be made of all dealings and transactionsin relation to its business and activities. The Borrower will, and will cause each other Loan Party and each otherSubsidiary to, permit representatives of the**Administrative Agent or anyLender to visit and inspect any of their respective properties, to examine andmake abstracts from any of their respective books and records and to discusstheir respective affairs, finances and accounts with their respective officers,employees and independent public accountants (in the Borrower’s presence if anEvent of Default does not then exist), all at such reasonable times duringbusiness hours and as often as may reasonably be requested and so long as noEvent of Default exists, with reasonable prior notice.  The

 

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**Borrowershall be obligated to reimburse the Administrative Agent and the Lenders fortheir costs and expenses incurred in connection with the exercise of theirrights under this Section only if such exercise occurs while a Default orEvent of Default exists.**

** **

## **Section 7.8.  Use of Proceeds.**

## ** **

TheBorrower will only use the proceeds of Loans only (a) for the payment ofshort-term capital requirements related to real estate activities such aspre-development and development costs, capital improvements and working capitaland (b) to provide for the general working capital needs of the Borrowerand its Subsidiaries and for other general corporate purposes of the Borrowerand its Subsidiaries.  The Borrower shallonly use Letters of Credit for the same purposes for which it may use theproceeds of Loans.  The Borrower shallnot, and shall not permit any other Loan Party or any other Subsidiary to, useany part of such proceeds to purchase or carry, or to reduce or retire orrefinance any credit incurred to purchase or carry, any margin stock (withinthe meaning of Regulation U of the Board of Governors of the Federal ReserveSystem) or to extend credit to others for the purpose of purchasing or carryingany such margin stock.

 

## **Section 7.9.  Environmental Matters.**

## ** **

(a)           Borrower shall not cause or permitthe Property to be used as a site for the use, generation, manufacture,storage, treatment, release, discharge, disposal, transportation or presence ofany Hazardous Materials.

 

(b)           Borrower shall comply and cause theProperty to comply in all material respects with all Hazardous Materials Laws.

 

(c)           Borrower shall immediately notifyAdministrative Agent in writing of:  (i) thediscovery of any Hazardous Materials on, under or about the Property; (ii) anyknowledge by Borrower that the Property does not comply with any HazardousMaterials Laws; and (iii) any Hazardous Materials Claims.

 

(d)           In response to the presence of anyHazardous Materials on, under or about the Property, Borrower shall immediatelytake, at Borrower’s sole expense, all remedial action required by any HazardousMaterials Laws or any judgment, consent decree, settlement or compromise inrespect to any Hazardous Materials Claims, not later than fifteen (15) daysafter written notice from Administrative Agent that it is in default of anysuch obligation.

 

(e)           Upon reasonable prior notice toBorrower and subject to the rights of tenants, Administrative Agent, itsemployees and agents, may from time to time (whether before or after thecommencement of a nonjudicial or judicial foreclosure proceeding) enter andinspect the Property for the purpose of determining the existence, location,nature and magnitude of any past or present release or threatened release ofany Hazardous Materials into, onto, beneath or from the Property.

 

(f)            BORROWER HEREBY AGREES TO DEFEND,INDEMNIFY AND HOLD HARMLESS ADMINISTRATIVE AGENT AND EACH LENDER, AND THEIRRESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS FROMAND AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS, ACTIONS, JUDGMENTS,COURT COSTS AND LEGAL OR OTHER EXPENSES (INCLUDING, WITHOUT LIMITATION,ATTORNEYS’ FEES AND EXPENSES) WHICH ADMINISTRATIVE AGENT AND/OR ANY LENDER MAY INCURAS A DIRECT OR INDIRECT CONSEQUENCE OF THE USE, GENERATION, MANUFACTURE,STORAGE, DISPOSAL, THREATENED DISPOSAL, TRANSPORTATION OR PRESENCE OF HAZARDOUSMATERIALS IN, ON, UNDER OR ABOUT 

 

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THEPROPERTY OR IMPROVEMENTS.  BORROWER SHALLIMMEDIATELY PAY TO ADMINISTRATIVE AGENT AND/OR ANY LENDER, UPON DEMAND, ANYAMOUNTS OWING UNDER THIS INDEMNITY, TOGETHER WITH INTEREST FROM THE DATE THEINDEBTEDNESS ARISES UNTIL PAID AT THE RATE OF INTEREST APPLICABLE TO THEPRINCIPAL BALANCE OF THE LOAN.  BORROWER’SDUTY AND OBLIGATIONS TO DEFEND, INDEMNIFY AND HOLD HARMLESS ADMINISTRATIVEAGENT AND EACH LENDER SHALL SURVIVE THE CANCELLATION OF THE NOTES AND THERELEASE, RECONVEYANCE OR PARTIAL RECONVEYANCE OF THE MORTGAGE.  NOTWITHSTANDING ANYTHING TO THE CONTRARYCONTAINED HEREIN, BORROWER SHALL NOT BE LIABLE FOR ANY HAZARDOUS MATERIALSPLACED IN, UNDER, OVER, FROM OR AFFECTING THE PROPERTY AFTER THE LATER OF SUCHTIME AS BORROWER IS NO LONGER EITHER THE OWNER OF THE PROPERTY OR IN POSSESSIONOF THE PROPERTY; PROVIDED, HOWEVER, THAT (I) THE MIGRATION OF ANY HAZARDOUSMATERIALS PLACED IN, UNDER, OVER, FROM OR AFFECTING THE PROPERTY, WHICHMATERIALS WERE PRESENT PRIOR TO THE LATER OF SUCH TIME WHEN BORROWER IS NOLONGER EITHER THE OWNER OF THE PROPERTY OR IN POSSESSION OF THE PROPERTY SHALLREMAIN THE LIABILITY OF BORROWER; AND (II) BORROWER SHALL HAVE THE BURDENOF PROVING THAT SUCH ENVIRONMENTAL CONDITION OCCURRED SUBSEQUENT TO BORROWER’SOWNERSHIP OR POSSESSION OF THE PROPERTY, AS THE CASE MAY BE.  IT IS EXPRESSLY UNDERSTOOD THAT BORROWER’SDUTY TO INDEMNIFY ADMINISTRATIVE AGENT AND LENDERS HEREUNDER SHALLSURVIVE:  (I) ANY JUDICIAL ORNON-JUDICIAL FORECLOSURE UNDER THE MORTGAGE, OR TRANSFER OF THE PROPERTY INLIEU THEREOF; (II) THE RELEASE AND RECONVEYANCE OR CANCELLATION OF THEMORTGAGE; AND (III) THE SATISFACTION OF ALL OF BORROWER’S OBLIGATIONSUNDER THE LOAN DOCUMENTS.

 

## **Section 7.10.  Further Assurances.**

## ** **

Atthe Borrower’s cost and expense and upon request of the Administrative Agent,the Borrower shall, and shall cause each other Loan Party and each otherSubsidiary to, duly execute and deliver or cause to be duly executed anddelivered, to the Administrative Agent such further instruments, documents andcertificates, and do and cause to be done such further acts that may bereasonably necessary or advisable in the reasonable opinion of theAdministrative Agent to carry out more effectively the provisions and purposesof this Agreement and the other Loan Documents.

 

## **Section 7.11.  Material Contracts.**

## ** **

Exceptwith respect to the Spa Agreement, the Borrower shall, and shall cause eachother Loan Party and each other Subsidiary to, duly and punctually perform andcomply with any and all material representations, warranties, covenants andagreements expressed as binding upon any such Person under any MaterialContract.  The Borrower shall not, andshall not permit any other Loan Party or any other Subsidiary to, do orknowingly permit to be done anything to impair materially the value of any ofthe Material Contracts.

 

## **Section 7.12.  Exchange Listing.**

## ** **

TheBorrower shall maintain at least one class of common shares of the Borrowerhaving trading privileges on the New York Stock Exchange or the American StockExchange or which is subject to price quotations on The NASDAQ Stock Market’sNational Market System, provided, however, that Borrower shall not be indefault of this covenant until it shall not have had such trading privilegesfor thirty consecutive days and, during such thirty day period, RequisiteLenders in their sole discretion shall not have waived compliance with thiscovenant.

 

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## **Section 7.13.  Subdivision Maps.**

 

Priorto recording any final map, plat, parcel map, lot line adjustment or othersubdivision map of any kind covering any portion of the Property (collectively,“Subdivision Map”), Borrower shall submit such Subdivision Map toAdministrative Agent for Administrative Agent’s review and approval, whichapproval shall not be unreasonably withheld. Within ten (10) Business Days after Administrative Agent’s receiptof such Subdivision Map, Administrative Agent shall provide Borrower writtennotice if Administrative Agent disapproves of said Subdivision Map.  Within five (5) Business Days afterAdministrative Agent’s request, Borrower shall execute, acknowledge and deliverto Administrative Agent such amendments to the Loan Documents as AdministrativeAgent may reasonably require to reflect the change in the legal description ofthe Property resulting from the recordation of any Subdivision Map.  In connection with and promptly after therecordation of any amendment or other modification to the Mortgage recorded inconnection with such amendments, Borrower shall deliver to AdministrativeAgent, for the benefit of Lenders, at Borrower’s sole expense, a title endorsementto the title policy insuring the Mortgage in form and substance reasonablysatisfactory to Administrative Agent insuring the continued first priority lienof the Mortgage.  Subject to theexecution and delivery by Borrower of any documents required under thisSection, Administrative Agent, on behalf of Lenders, shall, if required byapplicable law, sign any Subdivision Map approved by Administrative Agentpursuant to this Section.

 

## **Section 7.14.  Liens.**

## ** **

Ifa claim of Lien, other than a Permitted Lien, is recorded which affects theProperty, Borrower shall, within twenty (20) calendar days of such recording orservice or within five (5) calendar days of Administrative Agent’s demand,whichever occurs first:  (a) pay anddischarge the claim of Lien; (b) effect the release thereof by recordingor delivering to Administrative Agent a surety bond in sufficient form andamount; or (c) provide Administrative Agent with other assurances whichAdministrative Agent deems, in its reasonable discretion, to be satisfactoryfor the payment of such claim of Lien and for the full and continuousprotection of Administrative Agent and Lenders from the effect of such Lien.

 

**Section 7.15.  Water Delivery Agreement.**

 

Borrowershall, and shall cause, Leasehold Mortgagor, MPC, and each of Borrower’sAffiliates, as necessary, to fully comply with the terms and provisions of, andto fully perform any and all obligations under and as required by, the WaterDelivery Agreement and the Collateral Assignment of Water Delivery Agreement.   Without limitation of any other provision ofthe Loan Documents, this agreement shall survive any judicial or non-judicialforeclosure under the Mortgage, or transfer of the Property in lieu thereof orthe release and reconveyance or cancellation of the Mortgage.

 

**Section 7.16.  Kahului Prepayment.**

 

Notlater than ten (10) days after the sale or other disposition of all or anyportion of the Kahului Property, Borrower shall prepay principal of theObligations in an amount equal to the Kahului Prepayment.** **The Kahului Prepayment (i) shallbe applied in accordance with Sections 3.2. and 10.5, (ii) shallpermanently reduce the Commitment of each Lender in an amount equal to suchLender’s Pro Rata Share of the Kahului Prepayment and (iii) may not bereborrowed .  In the event that theKahului Property is subdivided, the Kahului Prepayment shall be made upon eachsale or other disposition of all or any portion of the Kahului Property.  Borrower shall not amend or modify the termsof the Kahului Mortgage, the Kahului Note or the Transaction Documents (asdefined in the Kahului SPA) in such a manner as to alter the provisionsrelating to the Kahului Property or the terms of its release (including theKahului Release Price) without the prior written consent of the AdministrativeAgent.

 

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# **ARTICLEVIII.  INFORMATION**

 

Forso long as this Agreement is in effect, unless the Requisite Lenders (or, ifrequired pursuant to Section 12.7., all of the Lenders) shall otherwiseconsent in the manner set forth in Section 12.7., the Borrower shallfurnish to the Administrative Agent for distribution to each of the Lenders:

 

## **Section 8.1.  Quarterly Financial Statements.**

## ** **

Assoon as available and in any event within sixty (60) days after the close ofeach of the first, second and third fiscal quarters of the Borrower, theunaudited consolidated balance sheet of the Borrower and its Subsidiaries as atthe end of such period and the related unaudited consolidated statements of operations,stockholders’ equity and cash flows of the Borrower and its Subsidiaries forsuch period, setting forth in each case in comparative form the figures as ofthe end of and for the corresponding periods of the previous fiscal year, allof which shall be certified by the chief financial officer of the Borrower, inhis or her opinion, to present fairly, in accordance with GAAP, theconsolidated financial position of the Borrower and its Subsidiaries as at thedate thereof and the results of operations for such period (subject to normalyear-end audit adjustments).

 

## **Section 8.2.  Year-End Statements.**

## ** **

Assoon as available and in any event within ninety (90) days after the end ofeach fiscal year of the Borrower, the audited consolidated balance sheet of theBorrower and its Subsidiaries as at the end of such fiscal year and the relatedaudited consolidated statements of operations, stockholders’ equity and cashflows of the Borrower and its Subsidiaries for such fiscal year, setting forthin comparative form the figures as at the end of and for the previous fiscalyear, all of which shall be certified by (a) the chief financial officerof the Borrower, in his or her opinion, to present fairly, in accordance withGAAP, the financial position of the Borrower and its Subsidiaries as at thedate thereof and the result of operations for such period and (b) Deloitte &Touche LLP or any other independent certified public accountants of recognizednational standing acceptable to the Requisite Lenders, whose certificate shallbe unqualified and in scope and substance satisfactory to the Requisite Lendersand who shall have authorized the Borrower to deliver such financial statementsand certification thereof to the Administrative Agent and the Lenders pursuantto this Agreement.

 

## **Section 8.3.  Compliance Certificate.**

## ** **

Atthe time the financial statements are furnished pursuant to the immediatelypreceding Sections 8.1. and 8.2., a certificate substantially in the formof Exhibit I (a “Compliance Certificate”) executed on behalf of theBorrower by the chief financial officer of the Borrower (a) setting forthas of the end of such quarterly accounting period or fiscal year, as the casemay be, the calculations required to establish whether the Borrower was incompliance with the covenants contained in Section 9.1.; and (b) statingthat no Default or Event of Default exists, or, if such is not the case,specifying such Default or Event of Default and its nature, when it occurredand the steps being taken by the Borrower with respect to such event, conditionor failure.

 

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## **Section 8.4.  Other Information.**

 

(a)           Promptly upon receipt thereof, copiesof all reports, if any, submitted to the Borrower or its Board of Directors byits independent public accountants including, without limitation, anymanagement report;

 

(b)           Within five (5) Business Days ofthe filing thereof, copies of all registration statements (excluding theexhibits thereto and any registration statements on Form S-8 or itsequivalent), reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and allother periodic reports which any Loan Party or any other Subsidiary shall filewith the SEC (or any Governmental Authority substituted therefor) or anynational securities exchange;

 

(c)           Promptly upon the mailing thereof tothe shareholders of the Borrower generally, copies of all financial statements,reports and proxy statements so mailed and promptly upon the issuance thereofcopies of all press releases issued by the Borrower, any Subsidiary or anyother Loan Party;

 

(d)           Within twenty-five (25) days afterthe end of each fiscal quarter of the Borrower, an operating summary withrespect to the Commercial Property, including without limitation, a quarterlyand year-to-date statement of net operating income and a leasing/occupancystatus report together with a current rent roll for the Commercial Property.

 

(e)           No later than sixty (60) days beforethe end of each fiscal year of the Borrower ending prior to the Maturity Date,projected balance sheets, operating statements, profit and loss projections andcash flow budgets of the Borrower and its Subsidiaries on a consolidated basisfor each quarter****of the next succeeding fiscalyear, all itemized in reasonable detail. The foregoing shall be accompanied bypro forma calculations, together with detailed assumptions, required toestablish whether or not the Borrower, and when appropriate its consolidatedSubsidiaries, will be in compliance with the covenants contained inSections 9.1. and at the end of each fiscal quarter of the next succeedingfiscal year.

 

(f)            No later than thirty (30) daysbefore the end of each fiscal year of the Borrower ending prior to the MaturityDate, a property budget for the Property for the coming fiscal year of theBorrower, together with applicable investment memorandums.

 

(g)           Within ten (10) Business Days ofthe Administrative Agent’s request therefor, a report in form and contentsatisfactory to the Administrative Agent detailing the Borrower’s, togetherwith its Subsidiaries’, projected sources and uses of cash for the period offour consecutive fiscal quarters immediately following the date of theAdministrative Agent’s request.  Suchsources shall include but not be limited to excess operating cash flow,availability under this Agreement, unused availability under committeddevelopment loans, unfunded committed equity and any other committed sources offunds.  Such uses shall include but notbe limited to cash obligations for binding acquisitions, unfunded developmentcosts, capital expenditures, debt service, overhead, dividends, maturing Propertyloans, hedge settlements and other anticipated uses of cash.

 

(h)           If and when any member of the ERISAGroup (i) gives or is required to give notice to the PBGC of any “reportableevent” (as defined in Section 4043 of ERISA) with respect to any Planwhich might constitute grounds for a termination of such Plan under Title IV ofERISA, or knows that the plan administrator of any Plan has given or isrequired to give notice of any such reportable event, a copy of the notice ofsuch reportable event given or required to be given to the PBGC; (ii) receivesnotice of complete or partial withdrawal liability under Title IV of ERISA ornotice that any Multiemployer Plan is in reorganization, is insolvent or hasbeen terminated, a copy of such notice; (iii) receives notice from thePBGC under Title IV of ERISA of an intent to terminate, impose liability (otherthan for premiums under

 

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Section 4007of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy ofsuch notice; (iv) applies for a waiver of the minimum funding standardunder Section 412 of the Internal Revenue Code, a copy of suchapplication; (v) gives notice of intent to terminate any Plan under Section 4041(c) ofERISA, a copy of such notice and other information filed with the PBGC; (vi) givesnotice of withdrawal from any Plan pursuant to Section 4063 of ERISA, acopy of such notice; or (vii) fails to make any payment or contribution toany Plan or Multiemployer Plan or in respect of any Benefit Arrangement ormakes any amendment to any Plan or Benefit Arrangement which has resulted orcould result in the imposition of a Lien or the posting of a bond or othersecurity, a certificate of the controller of the Borrower setting forth detailsas to such occurrence and action, if any, which the Borrower or applicablemember of the ERISA Group is required or proposes to take;

 

(i)            To the extent any Loan Party or anyother Subsidiary is aware of the same, prompt notice of the commencement of anyproceeding or investigation by or before any Governmental Authority and anyaction or proceeding in any court or other tribunal or before any arbitratoragainst or in any other way relating adversely to, or adversely affecting, theany Loan Party or any other Subsidiary or any of their respective properties,assets or businesses which, if determined or resolved adversely to such Person,could reasonably be expected to have a Material Adverse Effect, and promptnotice of the receipt of notice that any United States income tax returns ofany Loan Party or any other Subsidiary are being audited;

 

(j)            A copy of any amendment to thearticles of incorporation, bylaws, partnership agreement or other similarorganizational documents of the Borrower, any other Loan Party or any otherSubsidiary within five (5) Business Days after the effectiveness thereof;

 

(k)           Prompt notice of any change in thesenior management of the Borrower, any Subsidiary or any other Loan Party andany change in the business, assets, liabilities, financial condition, resultsof operations or business prospects of any Loan Party or any other Subsidiarywhich has had or could have Material Adverse Effect;

 

(l)            Prompt notice of the occurrence ofany Default or Event of Default or any event which constitutes or which withthe passage of time, the giving of notice, or otherwise, would constitute adefault or event of default by any Loan Party or any other Subsidiary under anyMaterial Contract to which any such Person is a party or by which any suchPerson or any of its respective properties may be bound;

 

(m)          Promptly upon entering into anyMaterial Contract or Specified Derivatives Contract after the Agreement Date, acopy of such contract;

 

(n)           Prompt notice of any order, judgmentor decree in excess of $100,000 having been entered against any Loan Party orany other Subsidiary or any of their respective properties or assets;

 

(o)           Any notification of a materialviolation of any law or regulation or any inquiry shall have been received by anyLoan Party or any other Subsidiary from any Governmental Authority;

 

(p)           Prompt notice of the acquisition,incorporation or other creation of any Subsidiary, the purpose for suchSubsidiary, the nature of the assets and liabilities thereof and whether suchSubsidiary is a Wholly Owned Subsidiary of the Borrower;

 

(q)           Promptly upon the request of theAdministrative Agent, evidence of the Borrower’s calculation of the OwnershipShare with respect to a Subsidiary or an Unconsolidated Affiliate, such evidenceto be in form and detail satisfactory to the Administrative Agent;

 

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(r)            Reserved;

 

(s)           Promptly, upon each request,information identifying the Borrower as a Lender may request in order to complywith the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,2001));

 

(t)            Promptly, and in any event withinthree (3) business days after the Borrower obtains knowledge thereof, theBorrower shall provide the Administrative Agent with written notice of theoccurrence of any of the following:  (i) theBorrower, any Loan Party or any other Subsidiary shall receive notice that anyviolation of or noncompliance with any Hazardous Materials Law has or may havebeen committed or is threatened; (ii) the Borrower, any Loan Party or anyother Subsidiary shall receive notice that any administrative or judicialcomplaint, order or petition has been filed or other proceeding has beeninitiated, or is about to be filed or initiated against any such Personalleging any violation of or noncompliance with any Hazardous Materials Law orrequiring any such Person to take any action in connection with the release orthreatened release of Hazardous Materials; (iii) the Borrower, any LoanParty or any other Subsidiary shall receive any notice from a GovernmentalAuthority or private party alleging that any such Person may be liable orresponsible for any costs associated with a response to, or remediation orcleanup of, a release or threatened release of Hazardous Materials or anydamages caused thereby; or (iv) the Borrower, any Loan Party or any otherSubsidiary shall receive notice of any other fact, circumstance or conditionthat could reasonably be expected to form the basis of an environmental claim,and**such notice(s), whether individually orin the aggregate, could reasonably be expected to have a Material AdverseEffect; .

 

(u)           Promptly upon the request of theAdministrative Agent, the Derivatives Termination Value in respect of anySpecified Derivatives Contract from time to time outstanding; and

 

(v)           From time to time and promptly uponeach request, such data, certificates, reports, statements, opinions ofcounsel, documents or further information regarding the Property or thebusiness, assets, liabilities, financial condition, results of operations orbusiness prospects of the Borrower, any of its Subsidiaries, or any other LoanParty as the Administrative Agent or any Lender may reasonably request.

 

## **Section 8.5.  Electronic Delivery of Certain Information.**

## ** **

(a)           Documents required to be deliveredpursuant to the Loan Documents shall be delivered by electronic communicationand delivery, including, the Internet, e-mail or intranet websites to which theAdministrative Agent and each Lender have access (including a commercial,third-party website such as www.Edgar.com <http://www.Edgar.com> or awebsite sponsored or hosted by the Administrative Agent or the Borrower)provided that (A) the foregoing shall not apply to notices to any Lender(or the Issuing Bank) pursuant to Article II. and (B) the Lender hasnot notified the Administrative Agent or Borrower that it cannot or does notwant to receive electronic communications. The Administrative Agent or the Borrower may, in its discretion, agreeto accept notices and other communications to it hereunder by electronicdelivery pursuant to procedures approved by it for all or particular notices orcommunications.  Documents or noticesdelivered electronically shall be deemed to have been delivered twenty-four(24) hours after the date and time on which the Administrative Agent orBorrower posts such documents or the documents become available on a commercialwebsite and the Administrative Agent or Borrower notifies each Lender of saidposting and provides a link thereto provided if such notice or othercommunication is not sent or posted during the normal business hours of therecipient, said posting date and time shall be deemed to have commenced asof  9:00 a.m. on the opening ofbusiness on the next business day for the recipient.  Notwithstanding anything contained herein, inevery instance the

 

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Borrowershall be required to provide paper copies of the certificate required by Section 8.3.to the Administrative Agent and shall deliver paper copies of any documents tothe Administrative Agent or to any Lender that requests such paper copies untila written request to cease delivering paper copies is given by theAdministrative Agent or such Lender. Except for the certificates required by Section 8.3., theAdministrative Agent shall have no obligation to request the delivery of or tomaintain paper copies of the documents delivered electronically, and in anyevent shall have no responsibility to monitor compliance by the Borrower withany such request for delivery.  EachLender shall be solely responsible for requesting delivery to it of papercopies and maintaining its paper or electronic documents.

 

(b)           Documents required to be deliveredpursuant to Article II. may be delivered electronically to a websiteprovided for such purpose by the Administrative Agent pursuant to theprocedures provided to the Borrower by the Administrative Agent.

 

## **Section 8.6.  Public/Private Information.**

## ** **

TheBorrower shall cooperate with the Administrative Agent in connection with thepublication of certain materials and/or information provided by or on behalf ofthe Borrower.  Documents required to bedelivered pursuant to the Loan Documents shall be delivered by or on behalf ofthe Borrower to the Administrative Agent and the Lenders (collectively, “InformationMaterials”) pursuant to this Article and shall designate InformationMaterials (a) that are either available to the public or not material withrespect to the Borrower and its Subsidiaries or any of their respectivesecurities for purposes of United States federal and state securities laws, as “PublicInformation” and (b) that are not Public Information as “PrivateInformation”.

 

## **Section 8.7.  USA Patriot Act Notice; Compliance.**

## ** **

TheUSA Patriot Act of 2001 (Public Law 107-56) and federal regulations issued withrespect thereto require all financial institutions to obtain, verify and recordcertain information that identifies individuals or business entities which openan “account” with such financial institution. Consequently, a Lender (for itself and/or as Administrative Agent forall Lenders hereunder) may from time-to-time request, and the Borrower shall,and shall cause the other Loan Parties, to provide to such Lender, such Loan Party’sname, address, tax identification number and/or such other identificationinformation as shall be necessary for such Lender to comply with federallaw.  An “account” for this purpose mayinclude, without limitation, a deposit account, cash management service, atransaction or asset account, a credit account, a loan or other extension ofcredit, and/or other financial services product.

 

# **ARTICLEIX. NEGATIVE COVENANTS**

# ** **

Forso long as this Agreement is in effect, unless the Requisite Lenders (or, ifrequired pursuant to Section 12.7., all of the Lenders) shall otherwiseconsent in the manner set forth in Section 12.7., the Borrower shallcomply with the following covenants:

 

## **Section 9.1.  Financial Covenants.**

## ** **

(a)           Liquidity.  The Borrower shall maintain, as of the end ofeach calendar quarter, Liquidity of not less than $8,000,000.  As used herein, “Liquidity” shall mean thesum of (i) cash, (ii) Cash Equivalents, (iii) publicly tradedand publicly quoted marketable securities acceptable to Administrative Agent inits reasonable discretion, (iv) undisbursed commitment under secured linesof credit available to Borrower including, without limitation, under this Loan,and (v) the amount, if any, not to exceed $2,000,000, by which accountsreceivable of the Borrower exceed accounts payable of the Borrower, net, inconnection with any of the foregoing, of any encumbrance, setoff or claim and minusany unsecured Indebtedness of Borrower.

 

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(b)           Total Liabilities.  The Borrower shall not permit its TotalLiabilities to exceed $240,000,000 at any time, as calculated at the end ofeach fiscal quarter.

 

(c)           Dividends and Other RestrictedPayments.  The Borrower shall notdeclare or make, or incur any liability to make, any Restricted Payments at anytime.  If a Default or an Event ofDefault shall exist, no Subsidiary (other than Wholly Owned Subsidiaries) shalldirectly or indirectly declare or make, or incur any liability to make, anyRestricted Payments without the written consent of the Administrative Agent.

 

(d)           Indebtedness of CertainSubsidiaries.  Without the priorwritten consent of the Administrative Agent, the Borrower shall not permit anySubsidiary (other than a Wholly Owned Subsidiary) to create, assume, incur,permit or suffer to exist any Liabilities, except for Liabilities in existenceon the Effective Date and disclosed in the financial statements delivered tothe Administrative Agent by the Borrower prior to the Effective Date.

 

## **Section 9.2.  Negative Pledge.**

## ** **

TheBorrower shall not, and shall not permit any other Loan Party or Subsidiary to,(a) create, assume, incur, permit or suffer to exist any Lien on theProperty or any direct or indirect ownership interest of the Borrower in anyPerson owning the Property, now owned or hereafter acquired, except forPermitted Liens, (b) permit the Property or any direct or indirectownership interest of the Borrower or in any Person owning a Property, to besubject to a Negative Pledge or (c) create, assume, incur, permit orsuffer to exist any Lien on other Collateral, or any direct or indirectownership interest of the Borrower in any Person owning any Collateral, exceptfor Permitted Liens.

 

## **Section 9.3.  Restrictions on Intercompany Transfers.**

## ** **

TheBorrower shall not, and shall not permit any other Loan Party or any otherSubsidiary to, create or otherwise cause or suffer to exist or become effectiveany consensual encumbrance or restriction of any kind on the ability of anySubsidiary to: (a) pay dividends or make any other distribution on any ofsuch Subsidiary’s capital stock or other equity interests owned by the Borroweror any other Subsidiary; (b) pay any Indebtedness owed to the Borrower orany other Subsidiary; (c) make loans or advances to the Borrower or anyother Subsidiary; or (d) transfer any of its property or assets to theBorrower or any other Subsidiary; other than (i) with respect to clauses (a) –(d) those encumbrances or restrictions contained in  any Loan Document or, (ii) with respectto clause (d), customary provisions restricting assignment of any agreemententered into by the Borrower, any other Loan Party or any Subsidiary in theordinary course of business.

 

## **Section 9.4.  Merger, Consolidation, Sales of Assets andOther Arrangements.**

 

The Borrower shall not, and shall not permitany other Loan Party or any other Subsidiary to, (a) enter into anytransaction of merger or consolidation; (b) liquidate, windup or dissolveitself (or suffer any liquidation or dissolution); (c) convey, sell, lease,sublease, transfer or otherwise dispose of, in one transaction or a series oftransactions, all or any substantial part of its business or assets, or thecapital stock of or other Equity Interests in any of its Subsidiaries, whethernow owned or hereafter acquired; or (d) acquire all or any material portion ofthe assets of, or make an Investment in, any other Person; provided, however,that, so long as, in each case immediately prior to the consummation of any ofthe following, and immediately thereafter and after giving effect thereto, noDefault or Event of Default is or would be in existence:

 

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(i)            any Subsidiary maymerge with a the Borrower or any Wholly Owned Subsidiary so long as theBorrower or such Wholly Owned Subsidiary, as applicable, is the survivor;

 

(ii)           any Subsidiary maysell, transfer or dispose of its assets to the Borrower or a Wholly OwnedSubsidiary;

 

(iii)          with the priorwritten consent of Administrative Agent, any Loan Party (other than theBorrower or the Leasehold Mortgagor) may convey, sell, transfer or otherwisedispose of, in one transaction or a series of transactions, all or anysubstantial part of its business or assets, or the capital stock of or otherEquity Interests in any of its Subsidiaries, and immediately thereafterliquidate, provided that immediately prior to any such conveyance, sale,transfer, disposition or liquidation and immediately thereafter and aftergiving effect thereto, no Default or Event of Default is or would be inexistence;

 

(iv)          withthe prior written consent of the Administrative Agent, any Loan Party and anyother Subsidiary may, directly or indirectly, (A) acquire (whether bypurchase, acquisition of Equity Interests of a Person, or as a result of amerger or consolidation) the assets of, or make an Investment in, any otherPerson and (B) sell, lease or otherwise transfer, whether by one or aseries of transactions, assets (including capital stock or other securities ofSubsidiaries) to any other Person, so long as, in each case;

 

(v)           the Loan Parties and the other Subsidiaries may lease andsublease their respective assets, as lessor or sublessor (as the case may be),in the ordinary course of their business or as otherwise permitted in Section 9.11.;

 

(vi)          the Borrower may (A) convey, sell, transfer, lease orotherwise dispose of, in one transaction or a series of transactions (1) allor any portion of  the assets of MPC, or (2) allor any portion of the Equity Interests it holds in MPC, or (B) liquidate,windup, dissolve or cease the operations of MPC; and

 

(vii)         Permitted Investments.

 

## **Section 9.5.  Plans.**

## ** **

TheBorrower shall not, and shall not permit any Subsidiary to, permit any of itsrespective assets to become or be deemed to be “plan assets” within the meaningof ERISA and the regulations promulgated thereunder for purposes of ERISA andthe Internal Revenue Code.

 

## **Section 9.6.  Fiscal Year.**

## ** **

TheBorrower shall not, and shall not permit any other Loan Party or otherSubsidiary to, change its fiscal year from that in effect as of the AgreementDate.

 

## **Section 9.7.  Modifications of Organizational Documents andMaterial Contracts.**

## ** **

TheBorrower shall not, and shall not permit any other Loan Party or otherSubsidiary to, amend, supplement, restate or otherwise modify its articles ofincorporation or by-laws  without theprior written

 

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consentof the Administrative Agent and the Requisite Lenders unless such amendment,supplement, restatement or other modification is (a) in the case of theBorrower, to increase the amount of sharesof beneficial interests authorized to be issued by the Borrower, or toauthorize the issuance of a class of Preferred Stock by the Borrower, or (b) requiredunder or as a result of the Internal Revenue Code or other Applicable Law.  The Borrower shall not enter into, and shallnot permit any Subsidiary or other Loan Party to enter into, any amendment ormodification to any Material Contract which could reasonably be expected tohave a Material Adverse Effect or default in the performance of any obligationsof any Loan Party or other Subsidiary in any Material Contract or permit anyMaterial Contract to be canceled or terminated prior to its stated maturity.

 

## **Section 9.8.  Subordinated Debt Prepayments; Amendments.**

 

TheBorrower shall not, and shall not permit any other Loan Party or otherSubsidiary to, prepay any principal of, or accrued interest on, anySubordinated Debt or otherwise make any voluntary or optional payment withrespect to any principal of, or accrued interest on, any Subordinated Debtprior to the originally scheduled maturity date thereof or otherwise redeem oracquire for value any Subordinated Debt. Further, the Borrower shall not, and shall not permit any other LoanParty or other Subsidiary to, amend or modify, or permit the amendment ormodification of, any agreement or instrument evidencing any Subordinated Debtwhere such amendment or modification provides for the following or which hasany of the following effects:

 

(a)           increases the rate of interestaccruing on such Subordinated Debt;

 

(b)           increases the amount of any scheduledinstallment of principal or interest, or shortens the date on which any suchinstallment or principal or interest becomes due;

 

(c)           shortens the final maturity date ofsuch Subordinated Debt;

 

(d)           increases the principal amount ofsuch Subordinated Debt;

 

(e)           amends any financial or othercovenant contained in any document or instrument evidencing any SubordinatedDebt in a manner which is more onerous to the Borrower or such Subsidiary orwhich requires the Borrower or such Subsidiary to improve its financialperformance;

 

(f)            provides for the payment ofadditional fees or the increase in existing fees; and/or

 

(g)           otherwise could reasonably beexpected to be adverse to the interests of the Administrative Agent or theLenders.

 

## **Section 9.9.  Transactions with Affiliates.**

## ** **

TheBorrower shall not permit to exist or enter into, and will not permit any LoanParty or other Subsidiary to permit to exist or enter into, any transaction(including the purchase, sale, lease or exchange of any property or therendering of any service) with any Affiliate of any Loan Party or anySubsidiary, except (a) as set forth on Schedule 6.1.(r) or (b) transactionsin the ordinary course of and pursuant to the reasonable requirements of thebusiness of the Borrower, any of its Subsidiaries, or any Loan Party and uponfair and reasonable terms which are no less favorable to the Borrower, suchSubsidiary, or any Loan Party than would be obtained in a comparable arm’slength transaction with a Person that is not an Affiliate.  Notwithstanding the forgoing, no payments maybe made with respect to any items set forth on such Schedule 6.1.(r) if aDefault or Event of Default exists or would result therefrom.

 

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## **Section 9.10.  Environmental Matters.**

## ** **

TheBorrower shall not, and shall not permit any other Loan Party or otherSubsidiary or any other Person to, use, generate, discharge, emit, manufacture,handle, process, store, release, transport, remove, dispose of or clean up anyHazardous Materials on, under or from the Property in material violation of anyHazardous Materials Law or in a manner that could reasonably be expected tolead to any Hazardous Materials Claim. Nothing in this Section shall impose any obligation or liabilitywhatsoever on the Administrative Agent or any Lender.

 

## **Section 9.11.  Leases.**

## ** **

Borrowershall use its commercially reasonable efforts to maintain all leasablecommercial space on the Property leased at no less than fair market rentalrates, except for space utilized by the Borrower and its Affiliates; provided,however, that Borrower shall have fifteen (15) days after written notice fromAdministrative Agent to cure any default under this section (i.e., to commencecommercially reasonable efforts to lease space and/or unwind or amend the termsof any lease to provide for fair market rental rates).  All leases (and lease terminations, modificationsor amendments) of all or any material portion of the Property (each, a “MajorLease”) shall:  (a) be for not lessthan fair market rental rates; and (b) include estoppel, subordination,attornment and mortgagee protection provisions satisfactory to AdministrativeAgent (any such Major Lease which complies with the foregoing clauses (a) and(b), and each other lease (and lease termination, modification or amendment) ofthe Property which is not a Major Lease, is herein referred to as a “PermittedLease”; provided, however, that Borrower shall have fifteen (15) days afterwritten notice from Administrative Agent to cure any default under this section(i.e., to unwind or amend the terms of any Major Lease to provide for fairmarket rental rates and/or estoppel, subordination, attornment and mortgageeprotection provisions satisfactory to Administrative Agent).

 

## **Section 9.12.  Derivatives Contracts.**

## ** **

TheBorrower shall not, and shall not permit any other Loan Party or otherSubsidiary to enter into or become obligated in respect of, DerivativesContracts, other than (a) Specified Derivatives Contracts and (b) DerivativesContracts entered into by the Borrower, Loan Party or such Subsidiary in theordinary course of business and which establish an effective hedge in respectof liabilities, commitments or assets held or reasonably anticipated by theBorrower, a Loan Party or other Subsidiary.

 

# **ARTICLEX. DEFAULT**

# ** **

## **Section 10.1.  Events of Default.**

 

Eachof the following shall constitute an Event of Default, whatever the reason forsuch event and whether it shall be voluntary or involuntary or be effected byoperation of Applicable Law or pursuant to any judgment or order of anyGovernmental Authority:

 

(a)           Default in Payment.  The Borrower shall fail to pay when due underthis Agreement or any other Loan Document (whether upon demand, at maturity, byreason of acceleration or otherwise) the principal of, or any interest on, anyof the Loans, or shall fail to pay any of the other payment Obligations owing bythe Borrower under this Agreement, any other Loan Document or the Fee Letter,or any other Loan Party shall fail to pay when due any payment obligation owingby such Loan Party under any Loan Document to which it is a party.

 

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(b)           Default in Performance.

 

(i)            Any Loan Partyshall fail to perform or observe any term, covenant, condition or agreement onits part to be performed or observed and contained in Article VIII. or Article IX.;or

 

(ii)           Any Loan Partyshall fail to perform or observe any term, covenant, condition or agreementcontained in this Agreement or any other Loan Document to which it is a partyand not otherwise mentioned in this Section and such failure shallcontinue for a period of thirty (30)****calendar daysafter the earlier of (x) the date upon which any Loan Party obtainsknowledge of such failure or (y) the date upon which the Borrower hasreceived written notice of such failure from the Administrative Agent.

 

(c)           Misrepresentations.  Any written statement, representation orwarranty made or deemed made by or on behalf of any Loan Party under thisAgreement or under any other Loan Document, or any amendment hereto or thereto,or in any other writing or statement at any time furnished by any Loan Party tothe Administrative Agent, the Issuing Bank or any Lender, shall at any timeprove to have been incorrect or misleading in any material respect whenfurnished or made or deemed made.

 

(d)           Indebtedness Cross- Default.

 

(i)            The Borrower,any other Loan Party or any other Subsidiary of the Borrower shall fail to makeany payment when due and payable in respect of any Indebtedness (other than theLoans) having an aggregate outstanding principal amount (or, in the case of anyDerivatives Contract, having, without regard to the effect of any close-outnetting provision, a Derivatives Termination Value) of $5,000,000 or more (“MaterialIndebtedness”); or

 

(ii)           (x) Thematurity of any Material Indebtedness shall have been accelerated in accordancewith the provisions of any indenture, contract or instrument evidencing,providing for the creation of or otherwise concerning such MaterialIndebtedness or (y) any Material Indebtedness shall have been required tobe prepaid or repurchased prior to the stated maturity thereof; or

 

(iii)          Any other eventshall have occurred and be continuing which, with or without the passage oftime, the giving of notice, or otherwise, would permit any holder or holders ofany Material Indebtedness, any trustee or agent acting on behalf of such holderor holders or any other Person, to accelerate the maturity of any MaterialIndebtedness or require any Material Indebtedness to be prepaid or repurchasedprior to its stated maturity; or

 

(iv)          There occurs an“Event of Default” under and as defined in any Specified Derivatives Contractas to which the Borrower, any Loan Party or any other Subsidiary of Borrower isa “Defaulting Party” (as defined therein), or there occurs an “EarlyTermination Date” (as defined therein) in respect of any Specified DerivativesContract as a result of a “Termination Event” (as defined therein) as to whichthe Borrower or any of its Subsidiaries is an “Affected Party” (as definedtherein).

 

(e)           Voluntary BankruptcyProceeding.  Except aspermitted by Section 9.4(vi), the Borrower, any other Loan Party or anyother Subsidiary of Borrower shall:  (i) commencea voluntary case under the Bankruptcy Code or other federal bankruptcy laws (asnow or hereafter in effect); (ii) file a petition seeking to takeadvantage of any other Applicable Laws, domestic or foreign, relating tobankruptcy, insolvency, reorganization, winding-up, or composition oradjustment of debts; (iii) consent to, or fail to contest in a timely andappropriate manner, any petition filed against it in an involuntary case undersuch

 

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bankruptcylaws or other Applicable Laws or consent to any proceeding or action describedin the immediately following subsection (f); (iv) apply for or consent to,or fail to contest in a timely and appropriate manner, the appointment of, orthe taking of possession by, a receiver, custodian, trustee, or liquidator ofitself or of a substantial part of its property, domestic or foreign; (v) admitin writing its inability to pay its debts as they become due; (vi) make ageneral assignment for the benefit of creditors; (vii) make a conveyancefraudulent as to creditors under any Applicable Law; or (viii) take anycorporate or partnership action for the purpose of effecting any of theforegoing.

 

(f)            Involuntary BankruptcyProceeding.  Except aspermitted by Section 9.4(vi), a case or other proceeding shall becommenced against the Borrower, any other Loan Party or any other Subsidiary ofBorrower in any court of competent jurisdiction seeking:  (i) relief under the Bankruptcy Code orother federal bankruptcy laws (as now or hereafter in effect) or under anyother Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency,reorganization, winding-up, or composition or adjustment of debts; or (ii) theappointment of a trustee, receiver, custodian, liquidator or the like of suchPerson, or of all or any substantial part of the assets, domestic or foreign,of such Person, and in the case of either clause (i) or (ii) suchcase or proceeding shall continue undismissed or unstayed for a period of sixty(60) consecutive calendar days, or an order granting the relief requested insuch case or proceeding (including, but not limited to, an order for reliefunder such Bankruptcy Code or such other federal bankruptcy laws) shall beentered.

 

(g)           Revocation of Loan Documents.  Any Loan Party shall (or shall attempt to)disavow, revoke or terminate any Loan Document to which it is a party or theFee Letter or shall otherwise challenge or contest in any action, suit orproceeding in any court or before any Governmental Authority the validity orenforceability of any Loan Document or the Fee Letter.

 

(h)           Judgment.   A judgment or order for the payment of moneyshall be entered against the Borrower, any other Loan Party, or any otherSubsidiary of Borrower by any court or other tribunal and (i) suchjudgment or order shall continue for a period of twenty (20) days without beingpaid, stayed or dismissed through appropriate appellate proceedings and (ii) either(A) the amount for which insurance has not been acknowledged in writing bythe applicable insurance carrier (or the amount as to which the insurer hasdenied liability) exceeds, individually or together with all other suchjudgments or orders entered against the Borrower, Loan Parties and the otherSubsidiaries of Borrower, $100,000 or (B) such judgment or order couldreasonably be expected to have a Material Adverse Effect.

 

(i)            Attachment.  A warrant, writ of attachment, execution orsimilar process shall be issued against any property of the Borrower, any otherLoan Party or any other Subsidiary of Borrower, which exceeds, individually ortogether with all other such warrants, writs, executions and processes,$100,000 in amount and such warrant, writ, execution or process shall not bepaid, discharged, vacated, stayed or bonded for a period of twenty (20) days;provided, however, that if a bond has been issued in favor of the claimant orother Person obtaining such warrant, writ, execution or process, the issuer ofsuch bond shall execute a waiver or subordination agreement in form andsubstance satisfactory to the Administrative Agent pursuant to which the issuerof such bond subordinates its right of reimbursement, contribution or subrogationto the Obligations and waives or subordinates any Lien it may have on theassets of the Borrower or any Subsidiary.

 

(j)            ERISA.  Any member of the ERISA Group shall fail topay when due an amount or amounts aggregating in excess of $500,000 which it shallhave become liable to pay under Title IV of ERISA; or notice of intent toterminate a Material Plan shall be filed under Title IV of ERISA by any memberof the ERISA Group, any plan administrator or any combination of the foregoing;or the PBGC shall institute proceedings under Title IV of ERISA to terminate,to impose liability (other than for premiums under Section 4007 of ERISA)in respect of, or to cause a trustee to be appointed to administer

 

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anyMaterial Plan; or a condition shall exist by reason of which the PBGC would beentitled to obtain a decree adjudicating that any Material Plan must beterminated; or there shall occur a complete or partial withdrawal from, or adefault, within the meaning of Section 4219(c)(5) of ERISA, withrespect to, one or more Multiemployer Plans which could cause one or moremembers of the ERISA Group to incur withdrawal liability or a current paymentobligation in excess of $500,000.

 

(k)           Loan Documents.  An Event of Default (as defined therein)shall occur under any of the other Loan Documents;

 

(l)            Change of Control/Change in Management.

 

(i)            Any “person” or“group” (as such terms are used in Sections 13(d) and 14(d) of theExchange Act), is or becomes the “beneficial owner” (as defined in Rules 13d-3and 13d-5 under the Exchange Act, except that a Person will be deemed to have “beneficialownership” of all securities that such Person has the right to acquire, whethersuch right is exercisable immediately or only after the passage of time),directly or indirectly, of more than 50% of the total voting power of the thenoutstanding voting stock of the Borrower; provided, however, that the foregoingshall not apply to (A) the ownership of Borrower’s outstanding votingstock by Steve Case regardless of the amount of his beneficial ownership (orthe beneficial ownership of any of his affiliates) from and after the EffectiveDate, and (B) the acquisition of securities that occurs as a result of apublic offering of the Borrower’s securities or any financing transaction orseries of financing transactions;

 

(ii)           During anyperiod of 12 consecutive months ending after the Agreement Date, individualswho at the beginning of any such 12-month period constituted the Board of Directorsof the Borrower (together with any new directors whose election by such Boardor whose nomination for election by the shareholders of the Borrower wasapproved by a vote of a majority of the directors then still in office who wereeither directors at the beginning of such period or whose election ornomination for election was previously so approved) cease for any reason toconstitute a majority of the Board of Directors of the Borrower then in office;or

 

(iii)          If WarrenHaruki or John Durkin cease for any reason to be principally involved in thesenior management of the Borrower, and the Borrower shall have failed toreplace the resulting vacancies in senior management with individualsreasonably acceptable to the Requisite Lenders****withina period of 90 days.

 

(m)          Damage; Strike; Casualty.  Any material damage to, or loss, theft ordestruction of, any Collateral, whether or not insured, or any strike, lockout,labor dispute, embargo, condemnation, act of God or public enemy, or othercasualty which causes, for more than thirty (30) consecutive days beyond thecoverage period of any applicable business interruption insurance, thecessation or substantial curtailment of revenue producing activities of theBorrower, any other Loan Party, or any other Subsidiary of Borrower taken as awhole and only if any such event or circumstance could reasonably be expectedto have a Material Adverse Effect.

 

(n)           Subordinated Debt Documents.  The failure of any Loan Party to comply withthe terms of any intercreditor agreement or any subordination provisions of anynote or other document running to the benefit of the Administrative Agent orLenders, or if any such document becomes null and void or unenforceable againstany lender holding the Subordinated Debt.

 

(o)           Security Documents.  Any provision of any Security Document shallfor any reason cease to be valid and binding on, enforceable against, any LoanParty or any Lien created under any Security Document ceases to be a valid,perfected first priority Lien in any of the Collateral purported to be coveredthereby.

 

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(p)           HazardousMaterials. The discovery of any significant Hazardous Materials in, on or about theProperty subsequent to the Effective Date. Any such Hazardous Materials shall be “significant” for this purpose ifsaid Hazardous Materials, in Administrative Agent’s reasonable discretion,constitute a Materially Adverse Effect.

 

(q)           Property-Liens; Condemnation; Attachment.   (i) The recording of any claim of Lien(other than a Permitted Lien) against the Property and the continuance of suchclaim of Lien for twenty (20) days without discharge, satisfaction or provisionfor payment being made by Borrower in a manner satisfactory to AdministrativeAgent; or (ii) the condemnation, seizure or appropriation of, oroccurrence of an uninsured casualty with respect to any material portion of theProperty; or (iii) the sequestration or attachment of, or any levy orexecution upon any of the Property, any other collateral provided by Borrowerunder any of the Loan Documents or any substantial portion of the other assetsof Borrower, which sequestration, attachment, levy or execution is notreleased, expunged or dismissed prior to the earlier of thirty (30) days or thesale of the assets affected thereby; or

 

## **Section 10.2.  Remedies Upon Event of Default.**

 

Upon the occurrence of an Event of Default thefollowing provisions shall apply:

 

(a)           Acceleration; Termination of Facilities.

 

(i)            Automatic.  Upon the occurrence of an Event of Defaultspecified in Sections 10.1.(e) or 10.1.(f), (1)(A) the principal of,and all accrued interest on, the Loans and the Notes at the time outstanding, (B) anamount equal to the Stated Amount of all Letters of Credit outstanding as of thedate of the occurrence of such Event of Default and (C) all of the otherObligations of the Borrower, including, but not limited to, the other amountsowed to the Lenders and the Administrative Agent under this Agreement, theNotes or any of the other Loan Documents shall become immediately andautomatically due and payable by the Borrower without presentment, demand,protest, or other notice of any kind, all of which are expressly waived by theBorrower, and (2) the Commitments and the Swingline Commitment, theobligation of the Lenders to make Loans hereunder, and the obligation of theIssuing Bank to issue Letters of Credit hereunder, shall all immediately andautomatically terminate.

 

(ii)           Optional.  If any other Event of Default shall exist,the Administrative Agent may, and at the direction of the Requisite Lendersshall:  (1) declare (A) theprincipal of, and accrued interest on, the Loans and the Notes at the timeoutstanding, (B) an amount equal to the Stated Amount of all Letters ofCredit outstanding as of the date of the occurrence of such Event of Defaultand (C) all of the other Obligations, including, but not limited to, theother amounts owed to the Lenders and the Administrative Agent under thisAgreement, the Notes or any of the other Loan Documents to be forthwith due andpayable, whereupon the same shall immediately become due and payable withoutpresentment, demand, protest or other notice of any kind, all of which areexpressly waived by the Borrower, and (2) terminate the Commitments andthe obligation of the Lenders to make Loans hereunder and the obligation of theIssuing Bank to issue Letters of Credit hereunder.  If the Administrative Agent has exercised anyof the rights provided under the preceding sentence, the Swingline Lender shall:  (x) declare the principal of, andaccrued interest on, the Swingline Loans and the Swingline Notes at the timeoutstanding, and all of the other Obligations owing to the Swingline Lender, tobe forthwith due and payable, whereupon the same shall immediately become dueand payable without presentment, demand,

 

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protestor other notice of any kind, all of which are expressly waived by the Borrowerand (y) terminate the Swingline Commitment and the obligation of theSwingline Lender to make Swingline Loans.

 

(b)           Loan Documents.  The Requisite Lenders may direct theAdministrative Agent to, and the Administrative Agent if so directed shall,exercise any and all of its rights under any and all of the other LoanDocuments.

 

(c)           Applicable Law.  The Requisite Lenders may direct theAdministrative Agent to, and the Administrative Agent if so directed shall,exercise all other rights and remedies it may have under any Applicable Law.

 

(d)           Appointment of Receiver.  To the extent permitted by Applicable Law,the Administrative Agent and the Lenders shall be entitled to the appointmentof a receiver for the assets and properties of the Borrower and itsSubsidiaries, without notice of any kind whatsoever and without regard to theadequacy of any security for the Obligations or the solvency of any party boundfor its payment, to take possession of all or any portion of the Collateral, theproperty and/or the business operations of the Borrower and its Subsidiariesand to exercise such power as the court shall confer upon such receiver.

 

(e)           Specified DerivativesContract Remedies. Notwithstanding any other provision of this Agreement or other LoanDocument, each Specified Derivatives Provider shall have the right, with theprompt notice to the Administrative Agent, but without the approval or consentof or other action by the Administrative Agent or the Lenders, and withoutlimitation of other remedies available to such Specified Derivatives Providerunder contract or Applicable Law, to undertake any of the following:  (a) to declare an event of default,termination event or other similar event under any Specified DerivativesContract and to create an “Early Termination Date” (as defined therein) inrespect thereof, (b) to determine net termination amounts in respect ofany and all Specified Derivatives Contracts in accordance with the termsthereof, and to set off amounts among such contracts, (c) to set off orproceed against deposit account balances, securities account balances and otherproperty and amounts held by such Specified Derivatives Provider pursuant toany Derivatives Support Document, including any “Posted Collateral” (as definedin any credit support annex including in any such Derivatives Support Document towhich such Specified Derivatives Provider may be a party), and (d) toprosecute any legal action against the Borrower, any Loan Party or otherSubsidiary to enforce or collect net amounts owing to such SpecifiedDerivatives Provider pursuant to any Specified Derivatives Contract.

 

## **Section 10.3.  Remedies Upon Default.**

## ** **

Uponthe occurrence of a Default specified in Section 10.1.(f), the Commitmentsshall immediately and automatically terminate.

 

## **Section 10.4.  Marshaling; Payments Set Aside.**

## ** **

Noneof the Administrative Agent, the Issuing Bank, any Lender or any SpecifiedDerivatives Provider shall be under any obligation to marshal any assets infavor of any Loan Party or any other party or against or in payment of any orall of the Obligations or the Specified Derivatives Obligations.  To the extent that any Loan Party makes apayment or payments to the Administrative Agent and/or the Issuing Bank and/orany Lender and/or any Specified Derivatives Provider, or the AdministrativeAgent and/or the Issuing Bank and/or any Lender and/or any SpecifiedDerivatives Provider enforce their security interests or exercise their rightsof setoff, and such payment or payments or the proceeds of such enforcement orsetoff or any part thereof are subsequently invalidated, declared to befraudulent or preferential, set aside and/or required to be repaid to atrustee, receiver or any other party under any

 

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bankruptcylaw, state or federal law, common law or equitable cause, then to the extent ofsuch recovery, the Obligations or Specified Derivatives Obligations, or partthereof originally intended to be satisfied, and all Liens, rights and remediestherefor, shall be revived and continued in full force and effect as if suchpayment had not been made or such enforcement or setoff had not occurred.

 

## **Section 10.5.  Allocation of Proceeds.**

## ** **

Ifan Event of Default exists and maturity of any of the Obligations has beenaccelerated or the Maturity Date has occurred, all payments received by theAdministrative Agent under any of the Loan Documents, in respect of anyprincipal of or interest on the Obligations or any other amounts payable by theBorrower hereunder or thereunder, shall be applied in the following order andpriority:

 

(a)           amounts due tothe Administrative Agent, the Issuing Bank and the Lenders in respect ofexpenses due under Section 12.2. until paid in full, and then Fees;

 

(b)           amounts due tothe Administrative Agent and the Lenders in respect of Protective Advances;

 

(c)           payments ofinterest on Swingline Loans;

 

(d)           payments ofinterest (i) on all other Loans and (ii) in respect of any SpecifiedDerivatives Contract, in each case, to be applied for the ratable benefit ofthe Lenders or the applicable Specified Derivatives Providers, in such order asthe Lenders or Specified Derivatives Providers, as the case may be, maydetermine in their sole discretion;

 

(e)           payments ofprincipal on Swingline Loans;

 

(f)            payments ofprincipal of all other Loans and payments of the Derivatives Termination Valuein respect of any and all Specified Derivatives Contracts, to be applied forthe ratable benefit of the Lenders or Specified Derivatives Providers, as thecase may be, in such order as the Lenders or Specified Derivatives Providers,as the case may be, may determine in their sole discretion;

 

(g)           amounts to bedeposited into the Letter of Credit Collateral Account in respect of Letters ofCredit;

 

(h)           amounts due tothe Administrative Agent and the Lenders pursuant to Sections 11.8. and12.10.;

 

(i)            payments of allother amounts due under any of the Loan Documents and Specified DerivativesContracts, if any, to be applied for the ratable benefit of the Lenders and theapplicable Specified Derivatives Providers; and

 

(j)            any amount remainingafter application as provided above, shall be paid to the Borrower or whomeverelse may be legally entitled thereto.

 

## **Section 10.6.  Letter of Credit Collateral Account.**

## ** **

(a)           As collateral security forthe prompt payment in full when due of all Letter of Credit Liabilities, theBorrower hereby pledges and grants to the Administrative Agent, for the benefitof the Administrative Agent, the Issuing Bank and the Lenders as providedherein, a security interest in all of its

 

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right,title and interest in and to the Letter of Credit Collateral Accountestablished pursuant to the requirements of Section 2.13. and the balancesfrom time to time in the Letter of Credit Collateral Account (including the investmentsand reinvestments therein provided for below). The balances from time to time in the Letter of Credit CollateralAccount shall not constitute payment of any Letter of Credit Liabilities untilapplied by the Administrative Agent as provided herein.  Anything in this Agreement to the contrarynotwithstanding, funds held in the Letter of Credit Collateral Account shall besubject to withdrawal only as provided in this Section and in Section 2.13.

 

(b)           Amounts on deposit in theLetter of Credit Collateral Account shall be invested and reinvested by theAdministrative Agent in such Cash Equivalents as the Administrative Agent shalldetermine in its sole discretion.  Allsuch investments and reinvestments shall be under the sole dominion and controlof the Administrative Agent, provided, that all earnings on suchinvestments will be credited to and retained in the Letter of Credit CollateralAccount.  The Administrative Agent shallexercise reasonable care in the custody and preservation of any funds held inthe Letter of Credit Collateral Account and shall be deemed to have exercisedsuch care if such funds are accorded treatment substantially equivalent to thatwhich the Administrative Agent accords other funds deposited with theAdministrative Agent, it being understood that the Administrative Agent shallnot have any responsibility for taking any necessary steps to preserve rightsagainst any parties with respect to any funds held in the Letter of CreditCollateral Account.

 

(c)           If an Event of Default exists,the Administrative Agent may (and, if instructed by the Requisite Lenders,shall) in its (or their) discretion at any time and from time to time elect toliquidate any such investments and reinvestments and credit the proceedsthereof to the Letter of Credit Collateral Account and apply or cause to beapplied such proceeds and any other balances in the Letter of Credit CollateralAccount to the payment of any of the Letter of Credit Liabilities due andpayable.

 

(d)           So long as no Default orEvent of Default exists, the Administrative Agent shall, from time to time, atthe request of the Borrower, deliver to the Borrower, against receipt butwithout any recourse, warranty or representation whatsoever, such of thebalances in the Letter of Credit Collateral Account as exceed the aggregateamount of Letter of Credit Liabilities at such time.  When all of the Obligations shall have beenindefeasibly paid in full and no Letters of Credit remain outstanding, theAdministrative Agent shall deliver to the Borrower, against receipt but withoutany recourse, warranty or representation whatsoever, the balances remaining inthe Letter of Credit Collateral Account.

 

(e)           The Borrower shall pay tothe Administrative Agent from time to time such fees as the AdministrativeAgent normally charges for similar services in connection with theAdministrative Agent’s administration of the Letter of Credit CollateralAccount and investments and reinvestments of funds therein.

 

## **Section 10.7. **Rescissionof Acceleration by Requisite Lenders.

## ** **

Ifat any time after acceleration of the maturity of the Loans and the otherObligations, the Borrower shall pay all arrears of interest and all payments onaccount of principal of the Obligations which shall have become due otherwisethan by acceleration (with interest on principal and, to the extent permittedby Applicable Law, on overdue interest, at the rates specified in thisAgreement) and all Events of Default and Defaults (other than nonpayment ofprincipal of and accrued interest on the Obligations due and payable solely byvirtue of acceleration) shall become remedied or waived to the satisfaction ofthe Requisite Lenders, then by written notice to the Borrower, the RequisiteLenders may elect, in the sole discretion of such Requisite Lenders, to rescindand annul the acceleration and its consequences.  The provisions of the preceding sentence areintended merely to bind all of the Lenders to a decision which may be made atthe election of the Requisite Lenders, and are not intended to benefit theBorrower and do not give the Borrower the right to require the Lenders torescind or annul any acceleration hereunder, even if the conditions set forthherein are satisfied.

 

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## **Section 10.8.  Performance by Administrative Agent.**

 

Ifthe Borrower shall fail to perform any covenant, duty or agreement contained inany of the Loan Documents, the Administrative Agent may perform or attempt toperform such covenant, duty or agreement on behalf of the Borrower after theexpiration of any cure or grace periods set forth herein.  In such event, the Borrower shall, at therequest of the Administrative Agent, promptly pay any amount reasonably expendedby the Administrative Agent in such performance or attempted performance to theAdministrative Agent, together with interest thereon at the applicablePost-Default Rate from the date of such expenditure until paid.  Notwithstanding the foregoing, neither theAdministrative Agent nor any Lender shall have any liability or responsibilitywhatsoever for the performance of any obligation of the Borrower under thisAgreement or any other Loan Document.

 

## **Section 10.9.  Rights Cumulative.**

 

Therights and remedies of the Administrative Agent, the Issuing Bank, the Lendersand the Specified Derivatives Providers under this Agreement, each of the otherLoan Documents, the Fee Letter and Specified Derivatives Contracts shall becumulative and not exclusive of any rights or remedies which any of them may otherwisehave under Applicable Law.  In exercisingtheir respective rights and remedies the Administrative Agent, the IssuingBank, the Lenders and the Specified Derivatives Providers may be selective andno failure or delay by the Administrative Agent, the Issuing Bank, any of theLenders or any of the Specified Derivatives Providers in exercising any rightshall operate as a waiver of it, nor shall any single or partial exercise ofany power or right preclude its other or further exercise or the exercise ofany other power or right.

 

# **ARTICLEXI. THE ADMINISTRATIVE AGENT**

# ** **

## **Section 11.1.  Appointment and Authorization.**

 

EachLender hereby irrevocably appoints and authorizes the Administrative Agent totake such action as contractual representative on such Lender’s behalf and toexercise such powers under this Agreement and the other Loan Documents as arespecifically delegated to the Administrative Agent by the terms hereof andthereof, together with such powers as are reasonably incidental thereto. Not inlimitation of the foregoing, each Lender authorizes and directs theAdministrative Agent to enter into the Loan Documents for the benefit of theLenders.  Each Lender hereby agrees that,except as otherwise set forth herein, any action taken by the Requisite Lendersin accordance with the provisions of this Agreement or the Loan Documents, andthe exercise by the Requisite Lenders of the powers set forth herein ortherein, together with such other powers as are reasonably incidental thereto,shall be authorized and binding upon all of the Lenders.  Nothing herein shall be construed to deem theAdministrative Agent a trustee or fiduciary for any Lender or to impose on theAdministrative Agent duties or obligations other than those expressly providedfor herein.  Without limiting thegenerality of the foregoing, the use of the terms “Agent”, “AdministrativeAgent”, “agent” and similar terms in the Loan Documents with reference to theAdministrative Agent is not intended to connote any fiduciary or other implied(or express) obligations arising under agency doctrine of any ApplicableLaw.  Instead, use of such terms ismerely a matter of market custom, and is intended to create or reflect only anadministrative relationship between independent contracting parties.  The Administrative Agent shall deliver toeach Lender, promptly upon receipt thereof by the Administrative Agent, copiesof each of the financial statements, certificates, notices and other documentsdelivered to the Administrative Agent pursuant to Article VIII. that theBorrower is not otherwise required to deliver directly to the Lenders.  The Administrative Agent will

 

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furnishto any Lender, upon the request of such Lender, a copy (or, where appropriate,an original) of any document, instrument, agreement, certificate or noticefurnished to the Administrative Agent by the Borrower, any Loan Party or anyother Affiliate of the Borrower, pursuant to this Agreement or any other LoanDocument not already delivered to such Lender pursuant to the terms of thisAgreement or any such other Loan Document. As to any matters not expressly provided for by the Loan Documents(including, without limitation, enforcement or collection of any of theObligations), the Administrative Agent shall not be required to exercise anydiscretion or take any action, but shall be required to act or to refrain fromacting (and shall be fully protected in so acting or refraining from acting)upon the instructions of the Requisite Lenders (or all of the Lenders ifexplicitly required under any other provision of this Agreement), and suchinstructions shall be binding upon all Lenders and all holders of any of theObligations; provided, however, that, notwithstanding anything in this Agreementto the contrary, the Administrative Agent shall not be required to take anyaction which exposes the Administrative Agent to personal liability or which iscontrary to this Agreement or any other Loan Document or Applicable Law.  Not in limitation of the foregoing, theAdministrative Agent may exercise any right or remedy it or the Lenders mayhave under any Loan Document upon the occurrence of a Default or an Event ofDefault unless the Requisite Lenders have directed the Administrative Agent otherwise.  Without limiting the foregoing, no Lendershall have any right of action whatsoever against the Administrative Agent as aresult of the Administrative Agent acting or refraining from acting under thisAgreement or any of the other Loan Documents in accordance with theinstructions of the Requisite Lenders, or where applicable, all the Lenders.

 

## **Section 11.2.  Wells Fargo as Lender.**

 

WellsFargo, as a Lender or as a Specified Derivatives Provider, as the case may be,shall have the same rights and powers under this Agreement and any other LoanDocument and under any Specified Derivatives Contract, as the case may be, asany other Lender or Specified Derivatives Provider and may exercise the same asthough it were not the Administrative Agent; and the term “Lender” or “Lenders”shall, unless otherwise expressly indicated, include Wells Fargo in each casein its individual capacity.  Wells Fargoand its affiliates may each accept deposits from, maintain deposits or creditbalances for, invest in, lend money to, act as trustee under indentures of,serve as financial advisor to, and generally engage in any kind of businesswith the Borrower, any other Loan Party or any other affiliate thereof as if itwere any other bank and without any duty to account therefor to the IssuingBank, other Lenders, or any other Specified Derivatives Providers.  Further, the Administrative Agent and anyaffiliate may accept fees and other consideration from the Borrower forservices in connection with this Agreement or any Specified DerivativesContract, or otherwise without having to account for the same to the IssuingBank, the other Lenders or any other Specified Derivatives Providers.  The Issuing Bank and the Lenders acknowledgethat, pursuant to such activities, Wells Fargo or its affiliates may receiveinformation regarding the Borrower, other Loan Parties, other Subsidiaries andother Affiliates (including information that may be subject to confidentialityobligations in favor of such Person) and acknowledge that the AdministrativeAgent shall be under no obligation to provide such information to them.

 

## **Section 11.3.  Collateral Matters; Protective Advances.**

## ** **

(a)           Each Lender hereby authorizes theAdministrative Agent, without the necessity of any notice to or further consentfrom any Lender, from time to time prior to an Event of Default, to take any actionwith respect to any Collateral or Loan Documents which may be necessary toperfect and maintain perfected the Liens upon the Collateral granted pursuantto any of the Loan Documents.

 

(b)           The Lenders hereby authorize theAdministrative Agent, at its option and in its discretion, to release any Liengranted to or held by the Administrative Agent upon any Collateral (i) upontermination of the Commitments and indefeasible payment and satisfaction infull of all of the Obligations

 

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andSpecified Derivatives Obligations; or (ii) as expressly permitted by, butonly in accordance with, the terms of the applicable Loan Document.  Upon request by the Administrative Agent atany time, the Lenders will confirm in writing the Administrative Agent’sauthority to release particular types or items of Collateral pursuant to thisSection.

 

(c)           Upon any sale and transfer ofCollateral which is expressly permitted pursuant to the terms of thisAgreement, and upon at least five (5) Business Days’ prior written requestby the Borrower, the Administrative Agent shall (and is hereby irrevocablyauthorized by the Lenders to) execute such documents as may be necessary toevidence the release of the Liens granted to the Administrative Agent for itsbenefit and the benefit of the Lenders, the Issuing Bank and the SpecifiedDerivatives Providers herein or pursuant hereto upon the Collateral that was soldor transferred; provided, however, that (i) theAdministrative Agent shall not be required to execute any such document onterms which, in the Administrative Agent’s opinion, would expose theAdministrative Agent to liability or create any obligation or entail anyconsequence other than the release of such Liens without recourse or warrantyand (ii) such release shall not in any manner discharge, affect or impairthe Obligations or Specified Derivatives Obligations or any Liens upon (orobligations of the Borrower or any other Loan Party in respect of) allinterests retained by the Borrower or any other Loan Party, including (withoutlimitation) the proceeds of such sale or transfer, all of which shall continueto constitute part of the Collateral.  Inthe event of any sale or transfer of Collateral, or any foreclosure withrespect to any of the Collateral, the Administrative Agent shall be authorizedto deduct all of the expenses reasonably incurred by the Administrative Agentfrom the proceeds of any such sale, transfer or foreclosure.

 

(d)           The Administrative Agent shall haveno obligation whatsoever to the Lenders, the Issuing Bank or the SpecifiedDerivatives Providers or to any other Person to assure that the Collateralexists or is owned by the Borrower, any other Loan Party or any otherSubsidiary or is cared for, protected or insured or that the Liens granted tothe Administrative Agent herein or pursuant hereto have been properly orsufficiently or lawfully created, perfected, protected or enforced or areentitled to any particular priority, or to exercise or to continue exercisingat all or in any manner or under any duty of care, disclosure or fidelity anyof the rights, authorities and powers granted or available to theAdministrative Agent in this Section or in any of the Loan Documents, itbeing understood and agreed that in respect of the Collateral, or any act,omission or event related thereto, the Administrative Agent may act in anymanner it may deem appropriate, in its sole discretion, and that theAdministrative Agent shall have no duty or liability whatsoever to the Lenders,even if resulting from the negligence of Administrative Agent (but except tothe extent resulting from its gross negligence or willful misconduct).

 

(e)           The Administrative Agent may make,and shall be reimbursed by the Lenders (in accordance with their Pro RataShares) to the extent not reimbursed by the Borrower for, Protective Advancesduring any one calendar year with respect to the Property up to the sum of (i) amountsexpended to pay real estate taxes, assessments and governmental charges orlevies imposed upon the Property; (ii) amounts expended to pay insurancepremiums for policies of insurance related to the Property; and (iii) $250,000.   Protective Advances in excess of said sumduring any calendar year for the Property that is Collateral shall require theconsent of the Requisite Lenders.  TheBorrower agrees to pay on demand all Protective Advances.

 

(f)            By their acceptance of the benefitsof the Security Documents, each Lender that is at any time itself a SpecifiedDerivatives Provider, or having an Affiliate that is a Specified DerivativesProvider, hereby, for itself, and on behalf of any such Affiliate, in itscapacity as a Specified Derivatives Provider, irrevocably appoints andauthorizes the Administrative Agent as its collateral agent, to take suchaction as contractual representative on such Specified Derivative’s Provider’sbehalf and to exercise such powers under the Security Documents as are specificallydelegated to the Administrative Agent by the terms of this Section 11.3., Section 11.4.and any Security Document, together with such powers as are

 

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reasonablyincidental thereto; provided, that this subsection (f) shall not affectany of the terms of a Specified Derivatives Contract or restrict a SpecifiedDerivatives Provider from taking any action permitted by a SpecifiedDerivatives Contract.  For the avoidanceof doubt, all references in this Section 11.3. to “Lender” or “Lenders”shall be deemed to include each Lender (and Affiliate thereof) in its capacityas a Specified Derivatives Provider.

 

## **Section 11.4.  Post-Foreclosure Plans.**

## ** **

Ifall or any portion of the Collateral is acquired by the Administrative Agent asa result of a foreclosure or the acceptance of a deed or assignment in lieu offoreclosure, or is retained in satisfaction of all or any part of theObligations and/or Specified Derivatives Obligations, the title to any suchCollateral, or any portion thereof, shall be held in the name of theAdministrative Agent or a nominee or Subsidiary of the Administrative Agent, asadministrative agent, for the ratable benefit of all Lenders, the Issuing Bankand the Specified Derivatives Providers. The Administrative Agent shall prepare a recommended course of actionfor such Collateral (a “Post-Foreclosure Plan”), which shall be subject to theapproval of the Requisite Lenders.  Inaccordance with the approved Post-Foreclosure Plan, the Administrative Agentshall manage, operate, repair, administer, complete, construct, restore orotherwise deal with the Collateral acquired, and shall administer alltransactions relating thereto, including, without limitation, employing amanagement agent, leasing agent and other agents, contractors and employees,including agents for the sale of such Collateral, and the collecting of rentsand other sums from such Collateral and paying the expenses of suchCollateral.  Actions taken by theAdministrative Agent with respect to the Collateral, which are not specificallyprovided for in the approved Post-Foreclosure Plan or reasonably incidentalthereto, shall require the written consent of the Requisite Lenders by way ofsupplement to such Post-Foreclosure Plan. Upon demand therefor from time to time, each Lender will contribute itsshare (based on its Pro Rata Share) of all reasonable costs and expensesincurred by the Administrative Agent pursuant to the approved Post-ForeclosurePlan in connection with the construction, operation, management, maintenance,leasing and sale of such Collateral.  Inaddition, the Administrative Agent shall render or cause to be rendered to eachLender, the Issuing Bank and each Specified Derivatives Provider, on a monthlybasis, an income and expense statement for such Collateral, and each Lendershall promptly contribute its Pro Rata Share of any operating loss for suchCollateral, and such other expenses and operating reserves as theAdministrative Agent shall deem reasonably necessary pursuant to and inaccordance with the approved Post-Foreclosure Plan.  To the extent there is net operating incomefrom such Collateral, the Administrative Agent shall, in accordance with theapproved Post-Foreclosure Plan, determine the amount and timing ofdistributions to the Lenders, the Issuing Bank and the Specified DerivativesProviders.  All such distributions shallbe made to the Lenders in accordance with their respective Pro Rata Shares.  The Lenders, the Issuing Bank and theSpecified Derivatives Providers acknowledge and agree that if title to anyCollateral is obtained by the Administrative Agent or its nominee, suchCollateral will not be held as a permanent investment but will be liquidatedand the proceeds of such liquidation will be distributed in accordance with Section10.5. as soon as practicable.  TheAdministrative Agent shall undertake to sell such Collateral, at such price andupon such terms and conditions as the Requisite Lenders reasonably shalldetermine to be most advantageous to the Lenders, the Issuing Bank and theSpecified Derivatives Providers.  Anypurchase money mortgage or deed of trust taken in connection with thedisposition of such Collateral in accordance with the immediately precedingsentence shall name the Administrative Agent, as agent for the Lenders, as thebeneficiary or mortgagee.  In such case,the Administrative Agent and the Lenders shall enter into an agreement withrespect to such purchase money mortgage or deed of trust defining the rights ofthe Lenders in the same Pro Rata Shares as provided hereunder, which agreementshall be in all material respects similar to this Article insofar as thesame is appropriate or applicable.

 

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## **Section 11.5.  Approvals of Lenders.**

 

Allcommunications from the Administrative Agent to any Lender requesting suchLender’s determination, consent, approval or disapproval (a) shall begiven in the form of a written notice to such Lender, (b) shall beaccompanied by a description of the matter or issue as to which suchdetermination, approval, consent or disapproval is requested, or shall advisesuch Lender where information, if any, regarding such matter or issue may beinspected, or shall otherwise describe the matter or issue to be resolved, (c) shallinclude, if reasonably requested by such Lender and to the extent notpreviously provided to such Lender, written materials and a summary of all oralinformation provided to the Administrative Agent by the Borrower in respect ofthe matter or issue to be resolved, and (d) shall include theAdministrative Agent’s recommended course of action or determination in respectthereof.  Unless a Lender shall givewritten notice to the Administrative Agent that it specifically objects to therecommendation or determination of the Administrative Agent (together with areasonable written explanation of the reasons behind such objection) within ten(10) Business Days (or such lesser or greater period as may bespecifically required under the express terms of the Loan Documents) of receiptof such communication, such Lender shall be deemed to have conclusivelyapproved of or consented to such recommendation or determination.

 

## **Section 11.6.  Notice of Events of Default.**

## ** **

TheAdministrative Agent shall not be deemed to have knowledge or notice of theoccurrence of a Default or Event of Default unless the Administrative Agent hasreceived notice from a Lender or the Borrower referring to this Agreement,describing with reasonable specificity such Default or Event of Default andstating that such notice is a “notice of default.”  If any Lender (excluding the Lender which isalso serving as the Administrative Agent) becomes aware of any Default or Eventof Default, it shall promptly send to the Administrative Agent such a “noticeof default”.  Further, if theAdministrative Agent receives such a “notice of default,” the AdministrativeAgent shall give prompt notice thereof to the Lenders.

 

## **Section 11.7.  Administrative Agent’s Reliance.**

## ** **

Notwithstanding any other provisions of this Agreementor any other Loan Documents, neither the Administrative Agent nor any of itsdirectors, officers, agents, employees or counsel shall be liable for anyaction taken or not taken by it under or in connection with this Agreement orany other Loan Document, even if arising from its or their own negligence (butexcept for its or their own gross negligence or willful misconduct), inconnection with its duties expressly set forth herein or therein.  Without limiting the generality of theforegoing, the Administrative Agent: may consult with legal counsel (includingits own counsel or counsel for the Borrower or any other Loan Party),independent public accountants and other experts selected by it and shall notbe liable for any action taken or omitted to be taken in good faith by it inaccordance with the advice of such counsel, accountants or experts.  Neither the Administrative Agent nor any ofits directors, officers, agents, employees or counsel: (a) makes anywarranty or representation to any Lender, the Issuing Bank or any other Personand shall be responsible to any Lender, the Issuing Bank or any other Personfor any statement, warranty or representation made or deemed made by theBorrower, any other Loan Party or any other Person in or in connection withthis Agreement or any other Loan Document; (b) shall have any duty toascertain or to inquire as to the performance or observance of any of theterms, covenants or conditions of this Agreement or any other Loan Document orthe satisfaction of any conditions precedent under this Agreement or any LoanDocument on the part of the Borrower or other Persons or inspect the property,books or records of the Borrower or any other Person; (c) shall beresponsible to any Lender or the Issuing Bank for the due execution, legality,validity, enforceability, genuineness, sufficiency or value of this Agreementor any other Loan Document, any other instrument or document furnished pursuant

 

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thereto or any Collateral covered thereby or the perfectionor priority of any Lien in favor of the Administrative Agent on behalf of theLenders, the Issuing Bank and the Specified Derivatives Providers in any suchCollateral; (d) shall have any liability in respect of any recitals,statements, certifications, representations or warranties contained in any ofthe Loan Documents or any other document, instrument, agreement, certificate orstatement delivered in connection therewith; and (e) shall incur any liabilityunder or in respect of this Agreement or any other Loan Document by acting uponany notice, consent, certificate or other instrument or writing (which may beby telephone, telecopy or electronic mail) believed by it to be genuine andsigned, sent or given by the proper party or parties.  The Administrative Agent may execute any ofits duties under the Loan Documents by or through agents, employees orattorneys-in-fact and shall not be responsible for the negligence or misconductof any agent or attorney-in-fact that it selects in the absence of grossnegligence or willful misconduct.

 

## **Section 11.8.  Indemnification of Administrative Agent.**

## ** **

Regardlessof whether the transactions contemplated by this Agreement and the other LoanDocuments are consummated, each Lender agrees to indemnify the AdministrativeAgent (to the extent not reimbursed by the Borrower and without limiting theobligation of the Borrower to do so) pro rata in accordance with such Lender’srespective Pro Rata Share, from and against any and all liabilities,obligations, losses, damages, penalties, actions, judgments, suits, costs,expenses or disbursements of any kind or nature whatsoever which may at anytime be imposed on, incurred by, or asserted against the Administrative Agent(in its capacity as Administrative Agent but not as a “Lender”) in any wayrelating to or arising out of the Loan Documents, any transaction contemplatedhereby or thereby or any action taken or omitted by the Administrative Agentunder the Loan Documents including to the extent arising from the negligence ofthe Administrative Agent (collectively, “Indemnifiable Amounts”); provided,however, that no Lender shall be liable for any portion of such IndemnifiableAmounts to the extent resulting from the Administrative Agent’s grossnegligence or willful misconduct as determined by a court of competentjurisdiction in a final, non-appealable judgment; provided, however,that no action taken in accordance with the directions of the Requisite Lenders(or all of the Lenders, if expressly required hereunder) shall be deemed toconstitute gross negligence or willful misconduct for purposes of thisSection.  Without limiting the generalityof the foregoing, each Lender agrees to reimburse the Administrative Agent (tothe extent not reimbursed by the Borrower and without limiting the obligationof the Borrower to do so) promptly upon demand for its ratable share of anyout-of-pocket expenses (including the reasonable fees and expenses of thecounsel to the Administrative Agent) incurred by the Administrative Agent inconnection with the preparation, negotiation, execution, administration, orenforcement (whether through negotiations, legal proceedings, or otherwise) of,or legal advice with respect to the rights or responsibilities of the partiesunder, the Loan Documents, any suit or action brought by the AdministrativeAgent to enforce the terms of the Loan Documents and/or collect anyObligations, any “lender liability” suit or claim brought against theAdministrative Agent and/or the Lenders, and any claim or suit brought againstthe Administrative Agent and/or the Lenders arising under any HazardousMaterials Laws.  Such out-of-pocketexpenses (including counsel fees) shall be advanced by the Lenders on the requestof the Administrative Agent notwithstanding any claim or assertion that theAdministrative Agent is not entitled to indemnification hereunder upon receiptof an undertaking by the Administrative Agent that the Administrative Agentwill reimburse the Lenders if it is actually and finally determined by a courtof competent jurisdiction that the Administrative Agent is not so entitled toindemnification.  The agreements in this Section shallsurvive the payment of the Loans and all other amounts payable hereunder orunder the other Loan Documents and the termination of this Agreement.  If the Borrower shall reimburse theAdministrative Agent for any Indemnifiable Amount following payment by anyLender to the Administrative Agent in respect of such Indemnifiable Amountpursuant to this Section, the Administrative Agent shall share suchreimbursement on a ratable basis with each Lender making any such payment.

 

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## **Section 11.9.  Lender Credit Decision, Etc.**

## ** **

Eachof the Lenders and the Issuing Bank expressly acknowledges and agrees thatneither the Administrative Agent nor any of its officers, directors, employees,agents, counsel, attorneys-in-fact or other affiliates has made anyrepresentations or warranties to the Issuing Bank or such Lender and that noact by the Administrative Agent hereafter taken, including any review of theaffairs of the Borrower, any other Loan Party or any other Subsidiary orAffiliate, shall be deemed to constitute any such representation or warranty bythe Administrative Agent to the Issuing Bank or any Lender.  Each of the Lenders and the Issuing Bankacknowledges that it has, independently and without reliance upon theAdministrative Agent, any other Lender or counsel to the Administrative Agent,or any of their respective officers, directors, employees, agents or counsel,and based on the financial statements of the Borrower, the other Loan Parties,the other Subsidiaries and other Affiliates, and inquiries of such Persons, itsindependent due diligence of the business and affairs of the Borrower, theother Loan Parties, the other Subsidiaries and other Persons, its review of theLoan Documents, the legal opinions required to be delivered to it hereunder,the advice of its own counsel and such other documents and information as ithas deemed appropriate, made its own credit and legal analysis and decision toenter into this Agreement and the transactions contemplated hereby.  Each of the Lenders and the Issuing Bank alsoacknowledges that it will, independently and without reliance upon theAdministrative Agent, any other Lender or counsel to the Administrative Agentor any of their respective officers, directors, employees and agents, and basedon such review, advice, documents and information as it shall deem appropriateat the time, continue to make its own decisions in taking or not taking actionunder the Loan Documents.  TheAdministrative Agent shall not be required to keep itself informed as to theperformance or observance by the Borrower or any other Loan Party of the LoanDocuments or any other document referred to or provided for therein or toinspect the properties or books of, or make any other investigation of, theBorrower, any other Loan Party or any other Subsidiary.  Except for notices, reports and otherdocuments and information expressly required to be furnished to the Lenders andthe Issuing Bank by the Administrative Agent under this Agreement or any of theother Loan Documents, the Administrative Agent shall have no duty orresponsibility to provide any Lender or the Issuing Bank with any credit orother information concerning the business, operations, property, financial andother condition or creditworthiness of the Borrower, any other Loan Party orany other Affiliate thereof which may come into possession of theAdministrative Agent or any of its officers, directors, employees, agents,attorneys-in-fact or other Affiliates. Each of the Lenders and the Issuing Bank acknowledges that theAdministrative Agent’s legal counsel in connection with the transactionscontemplated by this Agreement is only acting as counsel to the AdministrativeAgent and is not acting as counsel to any Lender or the Issuing Bank.

 

## **Section 11.10.  Successor Administrative Agent.**

## ** **

TheAdministrative Agent may resign at any time as Administrative Agent under theLoan Documents by giving written notice thereof to the Lenders and theBorrower.  Upon any such resignation, theRequisite Lenders shall have the right to appoint a successor AdministrativeAgent which appointment shall, provided no Default or Event of Default exists,be subject to the Borrower’s approval, which approval shall not be unreasonablywithheld or delayed (except that the Borrower shall, in all events, be deemedto have approved each Lender and any of its affiliates as a successorAdministrative Agent).  If no successorAdministrative Agent shall have been so appointed in accordance with theimmediately preceding sentence, and shall have accepted such appointment,within thirty (30) days after the current Administrative Agent’s giving ofnotice of resignation, then the current Administrative Agent may, on behalf ofthe Lenders and the Issuing Bank, appoint a successor Administrative Agent,which shall be a Lender, if any Lender shall be willing to serve, and otherwiseshall be an Eligible Assignee.  Upon theacceptance of any appointment as Administrative Agent hereunder by a successorAdministrative Agent, such successor Administrative Agent shall thereuponsucceed to and become vested with all the rights,

 

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powers,privileges and duties of the current Administrative Agent, and the currentAdministrative Agent shall be discharged from its duties and obligations underthe Loan Documents.  After anyAdministrative Agent’s resignation hereunder as Administrative Agent, theprovisions of this Article XI. shall continue to inure to its benefit asto any actions taken or omitted to be taken by it while it was AdministrativeAgent under the Loan Documents. Notwithstanding anything contained herein to the contrary, theAdministrative Agent may assign its rights and duties under the Loan Documentsto any of its affiliates by giving the Borrower and each Lender prior writtennotice.

 

# **ARTICLEXII. MISCELLANEOUS**

# ** **

## **Section 12.1.  Notices.**

 

Unlessotherwise provided herein (including without limitation as provided in Section 8.5.),communications provided for hereunder shall be in writing and shall be mailed,telecopied, or delivered as follows:

 

If to the Borrower:

 

Maui Land &Pineapple Company, Inc.

P.O. Box 187

Kahului, Hawaii  96733

Attention:  John Durkin

 

If to the Administrative Agent:

 

Wells Fargo Bank,

National Association

11601 Wilshire Boulevard

17th Floor

Los Angeles, California  90025

Attention: Jon Carrick

 

If to the Issuing Bank:

 

Wells Fargo Bank,

National Association

11601 Wilshire Boulevard

17th Floor

Los Angeles, California  90025

Attention: Jon Carrick

 

If to any other Lender:

 

To such Lender’s address or telecopy number as setforth on Schedule 12.1 attached hereto

 

or,as to each party at such other address as shall be designated by such party ina written notice to the other parties delivered in compliance with thisSection; provided, a Lender or the Issuing Bank shall only be required to givenotice of any such other address to the Administrative Agent and theBorrower.  All such notices and othercommunications shall be effective (i) if mailed, upon the first to occurof receipt or

 

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theexpiration of three (3) days after the deposit in the United States PostalService mail, postage prepaid and addressed to the address of the Borrower orthe Administrative Agent, the Issuing Bank and Lenders at the addressesspecified; (ii) if telecopied, when transmitted; (iii) if handdelivered, when delivered; or (iv) if delivered in accordance with Section 8.5.to the extent applicable; provided, however, that, in the case of theimmediately preceding clauses (i), (ii) and (iii), non-receipt of anycommunication as of the result of any change of address of which the sendingparty was not notified or as the result of a refusal to accept delivery shallbe deemed receipt of such communication. Notwithstanding the immediately preceding sentence, all notices orcommunications to the Administrative Agent, the Issuing Bank or any Lenderunder Article II. shall be effective only when actually received.  None of the Administrative Agent, the IssuingBank or any Lender shall incur any liability to the Borrower (nor shall theAdministrative Agent incur any liability to the Lenders) for acting upon anytelephonic notice referred to in this Agreement which the Administrative Agent,the Issuing Bank or such Lender, as the case may be, believes in good faith tohave been given by a Person authorized to deliver such notice or for otherwiseacting in good faith hereunder.

 

## **Section 12.2.  Expenses.**

## ** **

TheBorrower agrees (a) to pay or reimburse the Administrative Agent for allof its reasonable out-of-pocket costs and reasonable expenses incurred inconnection with the preparation, negotiation and execution of, and anyamendment, supplement or modification to, any of the Loan Documents (includingdue diligence expense and reasonable travel expenses related to closing), andthe consummation of the transactions contemplated thereby, including thereasonable fees and disbursements of counsel to the Administrative Agent andall costs and expenses of the Administrative Agent in connection with theAdministrative Agent’s activities under this Agreement, including the cost ofall Appraisals and the reasonable fees and disbursements of counsel to theAdministrative Agent relating to all such activities, (b) to pay to theIssuing Bank all reasonable out-of-pocket costs and expenses incurred by theIssuing Bank in connection with the issuance, amendment, renewal or extensionof any Letter of Credit or any demand for payment thereunder, (c) to payor reimburse the Administrative Agent, the Issuing Bank and the Lenders for alltheir costs and expenses incurred in connection with the enforcement orpreservation of any rights under the Loan Documents and the Fee Letter,including the reasonable fees and disbursements of their respective counsel(including the allocated fees and expenses of in-house counsel) and anypayments in indemnification or otherwise payable by the Lenders to theAdministrative Agent pursuant to the Loan Documents, (d) to pay, andindemnify and hold harmless the Administrative Agent, the Issuing Bank and theLenders from, any and all recording and filing fees and any and all liabilitieswith respect to, or resulting from any failure to pay or delay in paying,documentary, stamp, excise and other similar taxes, if any, which may bepayable or determined to be payable in connection with the execution anddelivery of any of the Loan Documents, or consummation of any amendment,supplement or modification of, or any waiver or consent under or in respect of,any Loan Document and (e) to the extent not already covered by any of thepreceding subsections, to pay the fees and disbursements of counsel to theAdministrative Agent, the Issuing Bank and any Lender incurred in connectionwith the representation of the Administrative Agent, the Issuing Bank or suchLender in any matter relating to or arising out of any bankruptcy or otherproceeding of the type described in Sections 10.1.(e) or 10.1.(f),including, without limitation (i) any motion for relief from any stay orsimilar order, (ii) the negotiation, preparation, execution and deliveryof any document relating to the Obligations and (iii) the negotiation andpreparation of any debtor-in-possession financing or any plan of reorganizationof the Borrower or any other Loan Party, whether proposed by the Borrower, suchLoan Party, the Lenders or any other Person, and whether such fees and expensesare incurred prior to, during or after the commencement of such proceeding orthe confirmation or conclusion of any such proceeding.

 

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## **Section 12.3.  Stamp, Intangible and Recording Taxes.**

 

TheBorrower will pay any and all stamp, excise, intangible, registration,recordation and similar taxes, fees or charges and shall indemnify theAdministrative Agent and each Lender against any and all liabilities withrespect to or resulting from any delay in the payment or omission to pay anysuch taxes, fees or charges, which may be payable or determined to be payablein connection with the execution, delivery, recording, performance or enforcementof this Agreement, the Notes and any of the other Loan Documents, theamendment, supplement, modification or waiver of or consent under thisAgreement, the Notes or any of the other Loan Documents or the perfection ofany rights or Liens under this Agreement, the Notes or any of the other LoanDocuments.

 

## **Section 12.4.  Setoff.**

## ** **

Subjectto Section 3.3. and in addition to any rights now or hereafter grantedunder Applicable Law and not by way of limitation of any such rights, theAdministrative Agent, each Lender, the Issuing Bank and each Participant ishereby authorized by the Borrower, at any time or from time to time while anEvent of Default exists, without notice to the Borrower or to any other Person,any such notice being hereby expressly waived, but in the case of a Lender, theIssuing Bank or a Participant subject to receipt of the prior written consentof the Administrative Agent and the Requisite Lenders exercised in their solediscretion, to set off and to appropriate and to apply any and all deposits(general or special, including, but not limited to, indebtedness evidenced bycertificates of deposit, whether matured or unmatured) and any otherindebtedness at any time held or owing by the Administrative Agent, the IssuingBank, such Lender, such Participant or any affiliate of the AdministrativeAgent, the Issuing Bank or such Lender, to or for the credit or the account ofthe Borrower against and on account of any of the Obligations, irrespective ofwhether or not any or all of the Loans and all other Obligations have beendeclared to be, or have otherwise become, due and payable as permitted by Section 10.2.,and although such Obligations shall be contingent or unmatured.

 

## **Section 12.5.  Litigation; Jurisdiction; Other Matters;Waivers.**

## ** **

(a)           EACH PARTY HERETOACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE BORROWER, THEADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY OF THE LENDERS WOULD BE BASED ONDIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY ANDEXPENSE TO THE PARTIES.  ACCORDINGLY, TOTHE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ADMINISTRATIVEAGENT, THE ISSUING BANK AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A TRIAL BYJURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNALIN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISINGOUT OF THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENT OR THE FEE LETTER ORIN CONNECTION WITH ANY COLLATERAL OR ANY LIEN OR BY REASON OF ANY OTHER SUIT,CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE BORROWER, THE ADMINISTRATIVEAGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE.

 

(b)           EACH OF THE BORROWER, THEADMINISTRATIVE AGENT, THE ISSUING BANK AND EACH LENDER HEREBY AGREES THAT THEFEDERAL DISTRICT COURT OF THE DISTRICT OF HAWAII OR, AT THE OPTION OF THEADMINISTRATIVE AGENT, ANY STATE COURT LOCATED IN HONOLULU, HAWAII, SHALL HAVEJURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THEBORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY OF THE LENDERS,PERTAINING

 

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DIRECTLYOR INDIRECTLY TO THIS AGREEMENT, THE LOANS AND LETTERS OF CREDIT, THE NOTES ORANY OTHER LOAN DOCUMENT OR THE FEE LETTER OR TO ANY MATTER ARISING HEREFROM ORTHEREFROM OR THE COLLATERAL.  THEBORROWER, THE ISSUING BANK AND EACH OF THE LENDERS EXPRESSLY SUBMIT AND CONSENTIN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCHCOURTS.  THE BORROWER HEREBY WAIVESPERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERSISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT, OR OTHERPROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TOTHE BORROWER AT ITS ADDRESS FOR NOTICES PROVIDED FOR HEREIN.  SHOULD THE BORROWER FAIL TO APPEAR OR ANSWERANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THIRTY (30) DAYSAFTER THE MAILING THEREOF, THE BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDERAND/OR JUDGMENT MAY BE ENTERED AGAINST IT AS DEMANDED OR PRAYED FOR INSUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW ORHEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURTOR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACHAGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMEDTO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT, THE ISSUINGBANK OR ANY LENDER OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY LENDEROF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.

 

(c)           THE PROVISIONS OF THIS SECTION HAVEBEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDINGOF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANSAND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THETERMINATION OR EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THISAGREEMENT.

 

## **Section 12.6.  Successors and Assigns.**

## ** **

(a)           Generally.  The provisions of this Agreement shall bebinding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns, except that the Borrower may not assign orotherwise transfer any of is rights under this Agreement without the priorwritten consent of all the Lenders (and any such assignment or transfer towhich all of the Lenders have not consented shall be void).

 

(b)           Participations.  Any Lender may at any time grant to anaffiliate of such Lender, or one or more banks or other financial institutions(each a “Participant”) participating interests in its Commitments or theObligations owing to such Lender.  Exceptas otherwise provided in Section 12.4. or as otherwise expressly statedherein, no Participant shall have any rights or benefits under this Agreementor any other Loan Document.  In the eventof any such grant by a Lender of a participating interest to a Participant,such Lender shall remain responsible for the performance of its obligationshereunder, and the Borrower and the Administrative Agent shall continue to dealsolely and directly with such Lender in connection with such Lender’s rightsand obligations under this Agreement. Any agreement pursuant to which any Lender may grant such aparticipating interest shall provide that such Lender shall retain the soleright and responsibility to enforce the obligations of the Borrower hereunderincluding, without limitation, the right to approve any amendment, modificationor waiver of any provision of this Agreement; provided, however, such Lendermay agree with the Participant that it will not, without the consent of the

 

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Participant,agree to (i) increase such Lender’s Commitment, (ii) extend the datefixed for the payment of principal on the Loans or portions thereof owing tosuch Lender, or (iii) reduce the rate at which interest is payablethereon.  An assignment or other transferwhich is not permitted by subsection (c) or (d) below shall be giveneffect for purposes of this Agreement only to the extent of a participatinginterest granted in accordance with this subsection (b).

 

(c)           Assignments.  Any Lender may with the prior written consentof the Administrative Agent at any time assign to one or more EligibleAssignees (each an “Assignee”) all or a portion of its rights and obligationsunder this Agreement and the Notes; provided, however, (i) any partialassignment shall be in an amount at least equal to $5,000,000 and after givingeffect to such assignment the assigning Lender retains a Commitment, or if theCommitments have been terminated, holds Notes having an aggregate outstandingprincipal balance, of at least $5,000,000, (ii) if the assigning Lender (orits Affiliate) is a Specified Derivatives Provider and if after giving effectto such assignment such Lender will hold no further Loans or Commitments underthis Agreement, such Lender shall undertake such assignment onlycontemporaneously with an assignment by such Lender (or its Affiliate, as thecase may be) of all of its Specified Derivatives Contracts to the Assignee oranother Lender (or Affiliate thereof) and (iii) each such assignment shallbe effected by means of an Assignment and Assumption Agreement.  Upon execution and delivery of suchinstrument and payment by such Assignee to such transferor Lender of an amountequal to the purchase price agreed between such transferor Lender and suchAssignee, such Assignee shall be deemed to be a Lender party to this Agreementand shall have all the rights and obligations of a Lender with a RevolvingCommitment and/or Loans, as the case may be, as set forth in such Assignmentand Assumption Agreement, and the transferor Lender shall be released from itsobligations hereunder to a corresponding extent, and no further consent oraction by any party shall be required. Upon the consummation of any assignment pursuant to this subsection (c),the transferor Lender, the Administrative Agent and the Borrower shall makeappropriate arrangements so the new Notes are issued to the Assignee and suchtransferor Lender, as appropriate, and shall update Schedule I attachedhereto.  In connection with any suchassignment, the transferor Lender shall pay to the Administrative Agent anadministrative fee for processing such assignment in the amount of$4,500.00.  Anything in this Section tothe contrary notwithstanding, no Lender may assign or participate any interestin any Loan held by it hereunder to the Borrower, or any of its respectiveaffiliates or Subsidiaries.

 

(d)           Federal Reserve BankAssignments.  In additionto the assignments and participations permitted under the foregoing provisionsof the Section, and without the need to comply with any of the formal orprocedural requirements of this Section, any Lender may at any time and fromtime to time, pledge and assign all or any portion of its rights under all orany of the Loan Documents to a Federal Reserve Bank; provided that no suchpledge of assignment shall release such Lender from its obligationsthereunder.  No such pledge or assignmentshall release the assigning Lender from its obligations hereunder.

 

(e)           Information to Assignee, Etc.  A Lender may furnish any informationconcerning the Borrower, any Subsidiary or any other Loan Party in thepossession of such Lender from time to time to Assignees and Participants(including prospective Assignees and Participants).

 

## **Section 12.7.  Amendments and Waivers.**

 

(a)           Generally.  Except as otherwise expressly provided in thisAgreement, (i) any consent or approval required or permitted by thisAgreement or in any Loan Document to be given by the Lenders may be given, (ii) anyterm of this Agreement or of any other Loan Document may be amended, (iii) theperformance or observance by the Borrower or any other Loan Party of any termsof this Agreement or such other Loan Document may be waived, and (iv) thecontinuance of any Default or Event of Default may be waived (either generallyor in a particular instance and either retroactively or prospectively) with,

 

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but only with, the written consent of the Requisite Lenders(or the Administrative Agent at the written direction of the RequisiteLenders), and, in the case of an amendment to any Loan Document, the writtenconsent of each Loan Party which is party thereto.  Notwithstanding the previous sentence, theAdministrative Agent, shall be authorized on behalf of all the Lenders, withoutthe necessity of any notice to, or further consent from, any Lender, to waivethe imposition of the late fees provided in Section 2.8., up to a maximum of 3 times per calendar year.

 

(b)           UnanimousConsent. Notwithstanding the foregoing, no amendment, waiver or consent shall,unless in writing, and signed by all of the Lenders directly affected thereby(or the Administrative Agent at the written direction of the Lenders), do anyof the following:

 

(i)            increase theCommitments of the Lenders (excluding any increase as a result of an assignmentof Commitments permitted under Section 12.6.)****or subject the Lenders to any additional obligations.

 

(ii)           reduce theprincipal of, or interest rates that have accrued or that will be charged onthe outstanding principal amount of, any Loans or other Obligations;

 

(iii)          reduce theamount of any Fees payable to the Lenders hereunder;

 

(iv)          postpone anydate fixed for any payment of principal of, or interest on, any Loans or forthe payment of Fees or any other Obligations, or extend the expiration date ofany Letter of Credit beyond the Maturity Date;

 

(v)           change thedefinitions of Revolving Commitment Percentage or Pro Rata Share;

 

(vi)          amend this Section oramend the definitions of the terms used in this Agreement or the other LoanDocuments insofar as such definitions affect the substance of this Section;

 

(vii)         modify thedefinition of the term “Requisite Lenders” or modify in any other manner thenumber or percentage of the Lenders required to make any determinations orwaive any rights hereunder or to modify any provision hereof;

 

(viii)        release anyGuarantor from its obligations under any Guaranty;

 

(ix)           waive a Defaultor Event of Default under Section 10.1.(a);

 

(x)            amend, or waivethe Borrower’s compliance with, Section 2.14; or

 

(xi)           release ordispose of any collateral unless released or disposed of as permitted by, andin accordance with, Section 11.3.

 

(c)           Amendment of AdministrativeAgent’s Duties, Etc.  Noamendment, waiver or consent unless in writing and signed by the AdministrativeAgent, in addition to the Lenders required hereinabove to take such action,shall affect the rights or duties of the Administrative Agent under thisAgreement or any of the other Loan Documents. Any amendment, waiver or consent relating to Section 2.3. or theobligations of the Swingline Lender under this Agreement or any other LoanDocument shall, in addition to the Lenders required hereinabove to take suchaction, require the written consent of the Swingline Lender.  Any amendment, waiver or consent relating to Section 2.2.or the obligations of the Issuing Bank under this Agreement or any other LoanDocument shall, in addition to the Lenders required hereinabove to take suchaction, require the written consent of the Issuing Bank.  Any amendment, waiver or consent

 

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withrespect to any Loan Document that (i) diminishes the rights of a SpecifiedDerivatives Provider in a manner or to an extent dissimilar to that affectingthe Lenders or (ii) increases the liabilities or obligations of aSpecified Derivatives Provider shall, in addition to the Lenders requiredhereinabove to take such action, require the consent of the Lender that is (orhaving an Affiliate that is) such Specified Derivatives Provider.  No waiver shall extend to or affect anyobligation not expressly waived or impair any right consequent thereon and anyamendment, waiver or consent shall be effective only in the specific instanceand for the specific purpose set forth therein. No course of dealing or delay or omission on the part of theAdministrative Agent or any Lender in exercising any right shall operate as awaiver thereof or otherwise be prejudicial thereto.  Any Eventof Default occurring hereunder shall continue to exist until such time as suchEvent of Default is waived in writing in accordance with the terms of thisSection, notwithstanding any attempted cure or other action by the Borrower,any other Loan Party or any other Person subsequent to the occurrence of suchEvent of Default.  Except as otherwiseexplicitly provided for herein or in any other Loan Document, no notice to ordemand upon the Borrower shall entitle the Borrower to other or further noticeor demand in similar or other circumstances.

 

## **Section 12.8.  Nonliability of Administrative Agent andLenders.**

## ** **

Therelationship between the Borrower, on the one hand, and the Lenders and theAdministrative Agent, on the other hand, shall be solely that of borrower andlender.  Neither the Administrative Agentnor any Lender shall have any fiduciary responsibilities to the Borrower and noprovision in this Agreement or in any of the other Loan Documents, and nocourse of dealing between or among any of the parties hereto, shall be deemedto create any fiduciary duty owing by the Administrative Agent or any Lender toany Lender, the Borrower, any Subsidiary or any other Loan Party.  Neither the Administrative Agent nor anyLender undertakes any responsibility to the Borrower to review or inform theBorrower of any matter in connection with any phase of the Borrower’s businessor operations.

 

## **Section 12.9.  Confidentiality.**

## ** **

Exceptas otherwise provided by Applicable Law, the Administrative Agent, the IssuingBank and each Lender shall utilize all non-public information obtained pursuantto the requirements of this Agreement which has been identified as confidentialor proprietary by the Borrower in accordance with its customary procedure forhandling confidential information of this nature and in accordance with safeand sound banking practices but in any event may make disclosure: (a) toany of their respective affiliates (provided any such affiliate shall agree tokeep such information confidential in accordance with the terms of thisSection); (b) as reasonably requested by any bona fide Assignee, Participantor other transferee in connection with the contemplated transfer of anyCommitment or participations therein as permitted hereunder (provided theyshall agree to keep such information confidential in accordance with the termsof this Section); (c) as required or requested by any GovernmentalAuthority or representative thereof or pursuant to legal process or inconnection with any legal proceedings; (d) to the Administrative Agent’s,Issuing Bank’s or such Lender’s independent auditors and other professionaladvisors (provided they shall be notified of the confidential nature of theinformation); (e) if an Event of Default exists, to any other Person, inconnection with the exercise by the Administrative Agent, the Issuing Bank orthe Lenders of rights hereunder or under any of the other Loan Documents; and (f) tothe extent such information (x) becomes publicly available other than as aresult of a breach of this Section or (y) becomes available to theAdministrative Agent, the Issuing Bank or any Lender on a nonconfidential basisfrom a source other than the Borrower or any Affiliate.

 

## **Section 12.10.  Indemnification.**

## ** **

(a)           The Borrower shall andhereby agrees to indemnify, defend and hold harmless the Administrative Agent,any affiliate of the Administrative Agent, each of the Lenders and the IssuingBank

 

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andtheir respective directors, officers, shareholders, agents, employees andcounsel (each referred to herein as an “Indemnified Party”) from and againstany and all losses, costs, claims, damages, liabilities, deficiencies,judgments or expenses of every kind and nature (including, without limitation,amounts paid in settlement, court costs and the fees and disbursements ofcounsel incurred in connection with any litigation, investigation, claim orproceeding or any advice rendered in connection therewith, but excludinglosses, costs, claims, damages, liabilities, deficiencies, judgments orexpenses indemnification in respect of which is specifically covered by Section 3.10.or 4.1. or expressly excluded from the coverage of such Sections) incurred byan Indemnified Party in connection with, arising out of, or by reason of, anysuit, cause of action, claim, arbitration, investigation or settlement, consentdecree or other proceeding (the foregoing referred to herein as an “IndemnityProceeding”) which is in any way related directly or indirectly to: (i) thisAgreement or any other Loan Document or the transactions contemplated thereby; (ii) themaking of any Loans or issuance of Letters of Credit hereunder; (iii) anyactual or proposed use by the Borrower of the proceeds of the Loans or Lettersof Credit; (iv) the Administrative Agent’s, the Issuing Bank’s  or any Lender’s entering into this Agreement;(v) the fact that the Administrative Agent, the Issuing Bank and theLenders have established the credit facility evidenced hereby in favor of theBorrower; (vi) the fact that the Administrative Agent, the Issuing Bankand the Lenders are creditors of the Borrower and have or are alleged to haveinformation regarding the financial condition, strategic plans or businessoperations of the Borrower and the Subsidiaries; (vii) the fact that theAdministrative Agent, the Issuing Bank and the Lenders are material creditorsof the Borrower and are alleged to influence directly or indirectly thebusiness decisions or affairs of the Borrower and the Subsidiaries or theirfinancial condition; (viii) the exercise of any right or remedy theAdministrative Agent, the Issuing Bank or the Lenders may have under thisAgreement or the other Loan Documents including, but not limited to, theforeclosure upon, or seizure of, any Collateral or the exercise of any otherrights of a secured party, including any Indemnity Proceeding arising from thenegligence of any Indemnified Party; provided, however, that the Borrower shallnot be obligated to indemnify any Indemnified Party for any acts or omissionsof such Indemnified Party in connection with matters described in this clause (viii) thatconstitute gross negligence or willful misconduct; or (ix) any violationor non-compliance by the Borrower or any Subsidiary of any Applicable Lawincluding, but not limited to, any Indemnity Proceeding commenced by (A) theInternal Revenue Service or state taxing authority or (B) any GovernmentalAuthority or other Person under any Hazardous Materials Law, including anyIndemnity Proceeding commenced by a Governmental Authority or other Personseeking remedial or other action to cause the Borrower or its Subsidiaries (orits respective properties) (or the Administrative Agent and/or the Lendersand/or the Issuing Bank as successors to the Borrower) to be in compliance withsuch Hazardous Materials Laws.

 

(b)           The Borrower’sindemnification obligations under this Section shall apply to allIndemnity Proceedings arising out of, or related to, the foregoing whether ornot an Indemnified Party is a named party in such Indemnity Proceeding.  In this connection, this indemnificationshall cover all costs and expenses of any Indemnified Party in connection withany deposition of any Indemnified Party or compliance with any subpoena(including any subpoena requesting the production of documents).  This indemnification shall, among otherthings, apply to any Indemnity Proceeding commenced by other creditors of theBorrower or any Subsidiary, any shareholder of the Borrower or any Subsidiary(whether such shareholder(s) are prosecuting such Indemnity Proceeding intheir individual capacity or derivatively on behalf of the Borrower), anyaccount debtor of the Borrower or any Subsidiary or by any GovernmentalAuthority.

 

(c)           This indemnification shallapply to any Indemnity Proceeding arising during the pendency of any bankruptcyproceeding filed by or against the Borrower and/or any Subsidiary.

 

(d)           All out-of-pocket fees andexpenses of, and all amounts paid to third-persons by, an Indemnified Partyshall be advanced by the Borrower at the request of such Indemnified Party

 

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notwithstandingany claim or assertion by the Borrower that such Indemnified Party is notentitled to indemnification hereunder upon receipt of an undertaking by suchIndemnified Party that such Indemnified Party will reimburse the Borrower if itis actually and finally determined by a court of competent jurisdiction thatsuch Indemnified Party is not so entitled to indemnification hereunder.

 

(e)           An Indemnified Party mayconduct its own investigation and defense of, and may formulate its ownstrategy with respect to, any Indemnity Proceeding covered by this Section and,as provided above, all costs and expenses incurred by such Indemnified Partyshall be reimbursed by the Borrower.  Noaction taken by legal counsel chosen by an Indemnified Party in investigatingor defending against any such Indemnity Proceeding shall vitiate or in any wayimpair the obligations and duties of the Borrower hereunder to indemnify andhold harmless each such Indemnified Party; provided, however, that (i) ifthe Borrower is required to indemnify an Indemnified Party pursuant hereto and (ii) theBorrower has provided evidence reasonably satisfactory to such IndemnifiedParty that the Borrower has the financial wherewithal to reimburse suchIndemnified Party for any amount paid by such Indemnified Party with respect tosuch Indemnity Proceeding, such Indemnified Party shall not settle orcompromise any such Indemnity Proceeding without the prior written consent ofthe Borrower (which consent shall not be unreasonably withheld or delayed).

 

(f)            If and to the extent thatthe obligations of the Borrower hereunder are unenforceable for any reason, theBorrower hereby agrees to make the maximum contribution to the payment andsatisfaction of such obligations which is permissible under Applicable Law.

 

(g)           The Borrower’s obligationshereunder shall survive any termination of this Agreement and the other LoanDocuments and the payment in full in cash of the Obligations, and are inaddition to, and not in substitution of, any of the other obligations set forthin this Agreement or any other Loan Document to which it is a party.

 

Referencesin this Section 12.10. to “Lender” or “Lenders” shall be deemed to includesuch Persons (and their Affiliates) in their capacity as Specified DerivativesProviders.

 

## **Section 12.11.  Termination; Survival.**

## ** **

Atsuch time as (a) all of the Commitments have been terminated, (b) noneof the Lenders is obligated any longer under this Agreement to make any Loansand (c) all Obligations (other than obligations which survive as providedin the following sentence) have been paid and satisfied in full, this Agreementshall terminate. The indemnities to which the Administrative Agent, the IssuingBank and the Lenders are entitled under the provisions of Sections 4.1.,4.4., 11.8., 12.2. and 12.10. and any other provision of this Agreement and theother Loan Documents, and the provisions of Section 12.5., shall continuein full force and effect and shall protect the Administrative Agent, theIssuing Bank and the Lenders (i) notwithstanding any termination of thisAgreement, or of the other Loan Documents, against events arising after suchtermination as well as before and (ii) at all times after any such partyceases to be a party to this Agreement with respect to all matters and eventsexisting on or prior to the date such party ceased to be a party to thisAgreement.

 

## **Section 12.12.  Severability of Provisions.**

## ** **

Ifany provision under this Agreement or the other Loan Documents shall bedetermined by a court of competent jurisdiction to be invalid or unenforceable,that provision shall be deemed severed from the Loan Documents, and thevalidity, legality and enforceability of the remaining provisions shall remainin full force as thought the invalid, illegal, or unenforceable provision hadnever been part of the Loan Documents.

 

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## **Section 12.13.  GOVERNING LAW.**

## ** **

THISAGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OFTHE STATE OF HAWAII APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLYPERFORMED, IN SUCH STATE.

 

## **Section 12.14.  Counterparts.**

## ** **

Tofacilitate execution, this Agreement and any amendments, waivers, consents orsupplements may be executed in any number of counterparts as may be convenientor required.  It shall not be necessarythat the signature of, or on behalf of, each party, or that the signature ofall persons required to bind any party, appear on each counterpart.  All counterparts shall collectivelyconstitute a single document.  It shallnot be necessary in making proof of this document to produce or account formore than a single counterpart containing the respective signatures of, or onbehalf of , each of the parties hereto.

 

## **Section 12.15.  Obligations with Respect to Loan Parties.**

## ** **

Theobligations of the Borrower to direct or prohibit the taking of certain actionsby the other Loan Parties as specified herein shall be absolute and not subjectto any defense the Borrower may have that the Borrower does not control suchLoan Parties.

 

## **Section 12.16.  Independence of Covenants.**

## ** **

Allcovenants hereunder shall be given in any jurisdiction independent effect sothat if a particular action or condition is not permitted by any of suchcovenants, the fact that it would be permitted by an exception to, or beotherwise within the limitations of, another covenant shall not avoid theoccurrence of a Default or an Event of Default if such action is taken orcondition exists.

 

## **Section 12.17.  Limitation of Liability.**

## ** **

Noneof the Administrative Agent, the Issuing Bank or any Lender, or any affiliate,officer, director, employee, attorney, or agent of the Administrative Agent,the Issuing Bank or any Lender shall have any liability with respect to, andthe Borrower hereby waives, releases, and agrees not to sue any of them upon,any claim for any special, indirect, incidental, or consequential damagessuffered or incurred by the Borrower in connection with, arising out of, or inany way related to, this Agreement, any of the other Loan Documents or the FeeLetter, or any of the transactions contemplated by this Agreement or any of theother Loan Documents.  The Borrowerhereby waives, releases, and agrees not to sue the Administrative Agent, the IssuingBank or any Lender or any of the Administrative Agent’s, the Issuing Bank’s orany Lender’s affiliates, officers, directors, employees, attorneys, or agentsfor punitive damages in respect of any claim in connection with, arising outof, or in any way related to, this Agreement, any of the other Loan Documents,the Fee Letter, or any of the transactions contemplated by this Agreement orfinanced hereby.

 

## **Section 12.18.  Entire Agreement.**

## ** **

ThisAgreement, the Notes, the other Loan Documents and the Fee Letter embody thefinal, entire agreement among the parties hereto and supersede any and allprior commitments, agreements, representations, and understandings, whetherwritten or oral, relating to the subject matter hereof and thereof and may notbe contradicted or varied by evidence of prior, contemporaneous, or subsequentoral agreements or discussions of the parties hereto.  There are no oral agreements among theparties hereto.

 

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## **Section 12.19.  Construction.**

## ** **

TheAdministrative Agent, the Issuing Bank, the Borrower and each Lenderacknowledge that each of them has had the benefit of legal counsel of its ownchoice and has been afforded an opportunity to review this Agreement and theother Loan Documents with its legal counsel and that this Agreement and theother Loan Documents shall be construed as if jointly drafted by theAdministrative Agent, the Issuing Bank, the Borrower and each Lender.

 

## **Section 12.20.  Headings.**

## ** **

Theparagraph and section headings in this Agreement are provided for convenienceof reference only and shall not affect its construction or interpretation.

 

[Signatures on Following Pages]

 

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INWITNESS WHEREOF, the parties hereto have caused this Credit Agreement to beexecuted by their authorized officers all as of the day and year first abovewritten.

 
|   | BORROWER:                                     |
|--------|-----------------------------------------------|
|   |                                          |
|   | MAUI LAND & PINEAPPLE COMPANY, INC., |
|   | a  Hawaii corporation                         |
|   |                                          |   |
|   | By:                                           | /S/  JOHN P. DURKIN |
|   |                                          | Name: | John  P. Durkin |
|   |                                          | Title: | Chief  Financial Officer |
|   |                                          |   |
|   | By:                                           | /S/  ADELE H. SUMIDA |
|   |                                          | Name: | Adele  H. Sumida |
|   |                                          | Title: | Controller &  Secretary |

 

 

[Signatures Continued on Next Page]

 

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**Signature Page to Credit Agreement dated as of**

**October 9, 2009****with Maui Land & Pineapple Company, Inc.**

 
|   | WELLS FARGO BANK, NATIONAL  ASSOCIATION, as Administrative Agent and as a Lender |
|--------|----------------------------------------------------------------------------------|
|   |                                                                             |
|   |                                                                             |   |
|   | By:                                                                              | /S/  GUY C. CHURCHILL |
|   |                                                                             | Name: | Guy  C. Churchill |
|   |                                                                             | Title: | Vice  President |

 

 

[Signatures Continued on Next Page]

 

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**Signature Page to Credit Agreement dated as of**

**October 9, 2009****with Maui Land & Pineapple Company, Inc.**

 
|   | AMERICAN  AGCREDIT, PCA |
|--------|-------------------------|
|   |                    |
|   |                    |
|   | By:                     | /S/  GARY VANSCHUYVER |
|   |                    | Name: | Gary  VanSchuyver |
|   |                    | Title: | Vice  President |

 

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**Signature Page to Credit Agreement dated as of**

**October 9, 2009****with Maui Land & Pineapple Company, Inc.**

 
|   | AMERICAN  SAVINGS BANK, F.S.B. |
|--------|--------------------------------|
|   |                           |   |
|   |                           |   |
|   | By:                            | /S/  W. RUSSELL |
|   |                           | Name: | W.  Russell |
|   |                           | Title: | Vice  President |

 

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